Bank Financial Management Book

[Jon Followell]

Atthe country level, FM staff collaborate across the WBG, and with international accounting and auditing bodies and donor partners to help countries strengthen their FM capacity in both the public and private sectors. FM specialists focus on helping countries develop sound financial systems and practices, including a strong accountancy profession with quality corporate financial reporting, efficient delivery of services, and enhanced accountability and transparency in the use of public resources.

At the international level, the WBG engages in global partnerships with development partner organizations to promote FM standards and FM capacity development initiatives. Staff also play leadership roles in partnerships with bilateral and multilateral donors to coordinate and harmonize FM policy and operational practices, which enhances development effectiveness.

The World Bank supports development initiatives through project, policy, and program financing. The Bank Directive on Financial Management in Bank-Financed Operations and Other Operational Matters sets out the FM staff roles and responsibilities in operations financed by the Bank through IPF, DPF and PforR (Bank-financed operations) and operational FM rules applicable across Bank-financed operations. The key elements of the Financial Management (FM) approach with the different types of operations are detailed below.

At the identification stage, the Bank works with the borrowing country to determine a clear definition and scope of the government program and the part of the program or sub-program to be financed by the Bank. Once agreed, the Bank identifies key results in terms of outputs and outcomes, as well as the related disbursement linked indicators (DLIs) to be used to determine the timing and amount of each disbursement.

FM, Procurement, and Governance specialists conduct a joint Fiduciary Systems Assessment (FSA) of program fiduciary systems and program arrangements. The FSA considers whether program systems provide reasonable assurance that the financing proceeds will be used for intended purposes, with due attention to the principles of economy, efficiency, transparency, and accountability.

The Public Expenditure and Financial Accountability (PEFA) Program is a multi-donor partnership which assesses the condition of country public expenditure, procurement and financial accountability systems, and develops a practical sequence for reform and capacity-building actions.

Within PEFA, the Public Financial Management Performance Measurement Framework (PEFA Framework) provides an integrated and harmonized approach for measuring and monitoring PFM performance progress, while supporting country-led PFM reform programs. The framework, covering the entire budget cycle, incorporates a set of high-level indicators that draw on international standards, and a PFM performance report that enables the indicators to be read and understood in context.

A supreme audit institution (SAI) in a country undertakes the external audit of government bodies. The Bank works closely with SAIs through arrangements designed to enhance country capacity and strengthen global institutions.

World Bank Financial Management (FM) staff actively engage with colleagues from other development partner organizations, including multilateral development banks (MDBs), the International Organization of Supreme Audit Institutions (INTOSAI), the International Federation of Accountants (IFAC), and the United Nations (UN) family when working on FM policy and institutional and operational issues. The aim of these partnerships is to have a coordinated approach on FM policies, procedures, and practices as part of the global harmonization initiative.

The Financial Management Harmonization Working Group (FMHWG) consists of representatives from five multilateral development banks (MDBs): World Bank (current chair), African Development Bank, Asian Development Bank, Inter-American Development Bank, Islamic Development Bank, International Fund for Agricultural Development (IFAD), New Development Bank (NDB), and European Investment Bank (EIB). The Group meets quarterly to promote the harmonization of their policies and practices in financial management, and to operationalize the development effectiveness agenda. The Group also focuses on fostering collaboration in FM diagnostic work, financial reporting and auditing, fiduciary risk assessments, FM capacity building in client countries, and use of country public financial management systems.

Cooperation between the World Bank and INTOSAI is primarily governed by the INTOSAI-Donor Cooperation Memorandum of Understanding (MoU). The MoU strives to augment and strengthen support to the supreme audit institution (SAI) community, and recognizes the value of SAIs in strengthening governance, accountability, and poverty reduction.

Strategic guidance and implementation of the MoU is governed by a steering committee, which comprises all donor signatories to the MoU and SAIs appointed by INTOSAI. The Steering Committee is jointly chaired by one INTOSAI and one donor representative. Currently, the SAI of Saudi Arabia and the World Bank hold the position of joint chairs, while the United States Government Accountability Office (GAO) and the UK Department for International Development (DFID) hold the positions of vice-chairs.

For direct grants to UN Agencies, FM arrangements are governed by two methods: the United Nations Fiduciary Principles Accord (UN FPA), and the Financial Management Framework Agreement (FMFA). While the FPA is limited in its application to country-specific single- and multi-country donor trust funds (TFs) established to support recovery programs in weak capacity environments with crisis and emergency situations, the FMFA can apply to all operations funded by trust funds, the International Development Association (IDA), and the International Bank for Reconstruction and Development (IBRD).

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1 APY = Annual Percentage Yield. Minimum deposit of $5,000 required to open new certificate at promotional rate. Balances less than $5,000 are subject to lower APY. A First Financial checking account is required to open this certificate. 5-month special certificate will renew to standard 3-month CD product at maturity, 11-month special certificate will renew to standard 9-month CD product at maturity, all with the interest rate fixed based on the applicable rate at the time of renewal. A penalty may be imposed for early withdrawal. Fees may reduce earnings. Limited time only. First Financial Bank reserves the right to end the offer at any time.

2 APY = Annual Percentage Yield. Client must have a First Financial checking account, excluding an existing money market account. Requires an increase in total deposit balances of $25,000 (including checking, savings, and CDs with same ownership) with First Financial. Limited time only. For personal accounts, special rate is secured by maintaining minimum daily collected balance of $25,000 in Money Market account. For business accounts, special rate is secured by maintaining minimum daily collected balance of $25,000 and less than $2,000,000 in Money Market account. Special rate ends November 30, 2024 and at that time, personal accounts will transition to our standard (3B) f1RST Money Market (or equivalent) and all account structures, including, but not limited to the rate structure of the f1RST Money Market; business accounts will transition to our standard (6A) Business Money Market (or equivalent) and all account structures, including, but not limited to the rate structure of the Business Money Market. Limit one Business Money Market Special account per tax ID. Call or visit a local financial center for additional details. First Financial Bank reserves the right to end the offer at any time.

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