1. RAPMAN-PRIMA: The New Frontiers Fiduciary Forum March 2008

2. Overview Prima: Development Status Prima: What is it? Prima: Statistics & Usage Prima: Changes Prima: Remaining Challenges Prima: The New Frontiers

3. Development Status Risk And Portfolio Management System (RAPMAN] went live in ECA & MNA in April 2004 Portfolio and Risk Management System [PRIMA] developed for AFR, EAP, LCR & SAR in March 2007` Corruption Risk Module (ECA) in January 2007 Implementation of PRIMA since July 2007 FM Notes on ‘PRIMA: Systematic Tracking Highlights Risks and Aligns Resources’ published July 2007 Ongoing enhancements

4. Risk Management is a balancing act

5. Why Risk Management in FM?

6. What is Rapman-Prima?  An integrated Intranet-based web application consisting of 2 modules  FM risk database for all investment operations  Portfolio management  Interfaces with other operational systems (e.g. SAP, ISR, ARCS)

7. FM Risk Management - Overview  Using qualitative/quantitative approach  Risk based approach, managing risks throughout project  Systematic workflows on fiduciary controls in response to IDA 14 Control Review  Supports risk-based approach to the allocation of FM resources  Clearly defined roles o Country FMS to identify risk and recommend mitigation measures o QA FMS assists country FMS on risk management o Peer review on complex or specialized projects o High risk projects – require ‘review’ by FM Manager  Offers a rich data source for useful data-mining

8. The Risk Model International Best Practices – COSO Framework PCN Appraisal/Supervision Supervision Inherent Risk Control Risk Detection Risk  Inherent Risk: Risks associated with the country, sector, entity, and project – inherent to a project  Control Risk: Risks controlled and managed by the Borrower  Detection (Supervision) Risk: Risks which can be managed through the Bank’s supervision efforts

9. Portfolio Management Module  Monitoring of ISR FM and FP ratings, and comparison with FMS proposals  Tracking of FMRs/IFRs  Tracking of use of country system  Tracking of FM requirements – confirmation of DPL tranche releases, FM supervision issues, and operational reviews  Monitoring of supervision effort (frequency, resources, scope)  Links to ARCS information  Facilitating “data mining” of portfolio FM performance

10. Workflow  All investment operations flow from SAP – daily update  Risk ratings updated at each of the following stages – PCN, Negotiations, Board, on-site supervision, ad hoc events  Risk-based clearance required pre-Negotiations, pre- Board, and for each supervision (FMS, QA FMS, FM Manager)  E-mail reminders prior to Negotiations, Board, planned supervision dates  System records history of risk ratings and clearances throughout the project cycle  Exception/management reports generated and reviewed on a regular basis

11. Risk Information Updated

12. Statistics of Usage (3 weeks)

13. Major Recent Changes Performance Improvement Customized welcome page Flexible workflow arrangements Minimum controls on risk rating in Prima IDF projects in risk and portfolio module Enhanced and customized reports

14. Coming Changes Inclusion of PCN stage in risk assessment Supplemental projects linkage Flexible FMR start date Clearance history for project Region specific reports On going performance improvement

15. Remaining Challenges Continuous Performance Improvement Migration to OPCFM – an institutional system Trust Fund Institutional and dashboard reports Loading and verifying risk and portfolio data Monitoring risk and portfolio performance Integrated fiduciary project reports ? Integration with Bank’s systems – procurement, disbursement, project portal, ISR, ARCS

16. The New Frontiers 1 st risk based operational system Pioneering systematic fiduciary risk and portfolio management From regional developed system to an institutional system (October 2008) Managing corruption risk? Integrated fiduciary system? Other opportunities …..