GAVI’s Transparency & Accountability Policy & financial management assessment (FMA)

Santiago Cornejo

Cash-based support is now a major part of GAVI programmes(will be 1/3 by 2010)

Evidence from phase 1 suggests countries are not always using their own public financial management systems/regulations for GAVI funds

Recent high-level case of ISS misuse

Better align GAVI support with country systems (Paris Declaration on Aid Effectiveness)

Why did GAVI introduce TAP?

Transparency & Accountability Policy - overview

Took effect 1 January 2009

Covers ONLY to cash-based support; vaccines not effected

Primary goal: to limit fiduciary risk while maintaining flexibility/programme effectiveness

Secondary objective: support harmonisation and alignment agenda. Countries encouraged to use national PFM systems and/or joint financing mechanisms

Principles of the policy

Build upon countries’ systems

Be consistent with the Paris Declaration, including the principle of mutual accountability

Apply a country-by-country approach; no “one size fits all” solution

Be based on minimum standards: Funding used in accordance with programme objectives

Accurate and verifiable financial reports

Funds managed in accounts that meet national requirements

How is GAVI implementing TAP?

Strengthened financial management sections in all new proposals and annual progress reports;

Financial management experts on the Independent Review Committee

An early warning system that allows GAVI to identify risks pre-emptively

The financial management assessment (FMA)

Strengthened financial management section: NEW PROPOSALS

Mechanisms must meet the “minimum standards” for financial management

Countries asked to provide as much information as possible on financing mechanism(s) proposed (refer to detailed questions in handout)

Countries can still propose separate financing mechanisms for HSS & ISS

Countries strongly encouraged to use joint financing mechanisms, where available, especially for HSS

Strengthened financial management section: ANNUAL PROGRESS REPORTS

For existing programmes, countries are not required to change their systems for funds management (may be required following an FMA)

Countries asked to provide as much information as possible on existing financing mechanism(s) (refer to detailed questions in handout)

Countries for which little information exists may be prioritised for financial management assessments

In accordance with old guidelines, reports on HSS must be accompanied by certified financials and available external audit reports.

The financial management assessment (FMA)

Baseline understanding of financial managemnet in health – how will strengths/weaknesses impact GAVI funds?

Identify best mechanism(s) for GAVI cash support & additional assurances (if any)

Relies on existing information & assessments

Starting point: financing mechanism(s) proposed or already in use

Intensity varies depending on information available/government’s preferred funding mechanism

Single FMA covers both ISS and HSS

The FMA methodology

Two stages:

1. Desk review (of existing assessments & info)

2. In-country review (varying levels of intensity)

Indicators in 6 key dimensions:

budget credibility;

budget comprehensiveness and transparency;

policy based-budgeting;

predictability and control in budget execution;

adequate accounting, recording and reporting;,

external scrutiny and audit

Additional qualitative interview questions

The FMA methodology cont.

The in-country review: should remain as ‘light-touch’ as possible

Levels of intensity:

1. Low intensity – info on financial management in health available, other partners currently working in this area, government has proposed strong financing mechanism

2. Medium intensity – some info available, but more analysis likely needed in health sector

3. High intensity -- little info available on public financial management at national level, no assessments for the health sector; government has proposed parallel mechanism

Phasing in the FMA

Prioritise countries with new proposals for HSS & ISS

Then move on to higher risk existing programmes

Aiming to conduct all in two years, subject to capacity

Countries will determine exact timing

Aide memoire/FMA outcomes considered by IRCFMA timing

agreed w/country

IRC/Board can approve

FMA completed prior to IRC

IRC/Board can only approve with clarifications

FMA pending during IRC

FMA completed, Management can approve

First tranche of funding released

Responding to countries’ questions/concerns

The FMA does not establish conditionality

A country cannot “fail” an FMA

GAVI pays FMA costs; can fund some limited assurance activities

Outcome should strike right balance – financial management and programme effectiveness

Countries with total cash grants ≤ 100 K do not need FMA