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Key Text Country Financial Accountability Assessment Guidelines to Staff

Author: World Bank
Date: 2002
Size: 40 pages (55.5 KB)

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Summary

The Country Financial Accountability Assessment (CFAA) is a diagnostic tool designed to enhance the World Bank’s knowledge of public financial management and accountability arrangements in client countries. Being formally introduced in 2000 it is currently updated to reflect recent experiences and changes in the World Bank’s policy.

These revised guidelines prepared by the Financial Management Sector Board of the World Bank in 2002, aim at assisting financial management staff in carrying out the CFAA. Changes in the Bank’s business over the years have reduced the relative importance of tracking individual borrower transactions as a source of fiduciary assurance and increased the importance of assessing the country’s own public financial management system. The Bank’s development and fiduciary objectives are increasingly aligned. The CFAA is thus an important knowledge tool, providing the Bank with a sound understanding of the broader financial accountability environment within which its funds are spent. The scope of CFAA include coverage of subnational governments, nongovernmental organisations, public enterprises, World Bank-financed investment projects, private sector accounting and auditing, and official corruption. The content of CFAA covers such areas as budget development, execution and monitoring; external fiscal reporting and transparency; internal and external auditing; and legislative scrutiny of budget execution. Individual regions may provide additional guidelines to staff to reflect particular circumstances in client countries or in the Bank’s administrative process in that region.

A key issue in the CFAA is assessing the risk to World Bank funds. In development terms, the risk is that the World Bank, as part of the budget flowing through the country’s financial management system, will not be well spent on poverty reduction. The key components of the risk are:

The budget is not implemented as passed
Significant parts of government activity are not covered by the budget
There is insufficient reliable information on budget execution
Funds are diverted or wasted through corrupt practices
Practices do not match rules.

A key point in the process for carrying out a Financial Accountability Assessment is the close involvement of the country team with the CFAA team. To achieve this, World Bank staff should:

Pay close attention to the CFAA team composition and allocate an adequate budget for the CFAA work
Collaborate with the client country’s government and other donors
Undertake preparatory steps such as gathering background information, preparing initiating memorandum, and providing a pre-mission questionnaire before launching CFAA
Enhance the quality of the CFAA by involving peer reviewers to evaluate the project
Discuss the project with government and other partners
Make CFAA reports publicly and widely available and provide follow up recommendations for the Bank and the country’s government.

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Source: World Bank, 2002, 'Country Financial Accountability Assessment Guidelines to Staff', Financial Management Sector Board, World Bank, Washington, D.C.
Author: Sarah Bennett , sara_bennett@abtassoc.com