Presented by Patrick Umah Tete, World Bank on May 20, 2014 during the launch of the project in Abuja, Nigeria Financial Management for Africa Centers of.

Financial Management for Africa Centers of Excellence Project

Presented by Patrick Umah Tete, World Presented by Patrick Umah Tete, World Bank on May 20, 2014 during the launch Bank on May 20, 2014 during the launch

of the project in Abuja, Nigeriaof the project in Abuja, Nigeria

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Overview of the session • What is good Financial Management

Practice for an ACE?• Submitting Withdrawal Applications• Project Implementation Plan Financial

Management Contents• Addressing ACE Financial Management

Gaps• Benefiting from Financial Management

Disbursement Linked Indicators (DLIs)

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Good FM Practice for ACE• Have a work plan that shows how you plan to use

ACE funds.• Have a budget which costs the annual work plan.

The budget should be approved before the year of its operation and monitored at least every quarter comparing actual expenditure with the budget and taking action on any significant variances.

• Accounts should be prepared monthly and every quarter, you need to send an Interim Financial Report to the Ministry of Education and World Bank within 45 days after the end of the quarter.

• Having a computerized accounting information system is an advantage compared to a manual accounting system as accounts are prepared efficiently with minimal errors.

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Good FM Practice for ACEs• Compliance with International Public Sector Accounting

Standards or International Financial Reporting Standards is highly recommended.

• Having a good Financial Management Manual, Operations Manual and Project Implementation Manual provides financial discipline as it defines the mode of operation.

• Having an internal audit department that audits the ACE regularly based on a risk based approach and writes reports that are acted upon by management is a very strong internal control system.

• Having an audit committee made up of non executive members and meets at least every quarter to follow up on both internal and external audit issues and actions taken by management is also a very strong internal control system.

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Good FM Practice for ACEs• Regularly submitting withdrawal applications to the Bank

to ensure the ACE is well funded to operate effectively. • Having the annual financial statements prepared within 3

months after the end of the financial year and submitting them for audit.

• Appointing the external auditors in time to conduct the audit or communicating to the Supreme Audit Institution to plan for the audit is highly recommended.

• Submitting the audit report to the Ministry of Education and World Bank within 6 months after the end of the financial year.

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Submitting Withdrawal Applications

• Do read the Disbursement Letter – example shared.• Submit withdrawal application as guided by the Disbursement

Letter, Project Appraisal Document and Project Implementation Plan.

• Accounts supporting disbursement reimbursements should be supported by Eligible Expenditure Programs (Salaries for ACE staff plus operating expenditure).

• During implementation, withdrawal applications should be submitted with interim financial reports showing how ACE funds are being used (comparing actual expenditure with the budget). Example to be shared.

• Should you have any challenges submitting withdrawal applications please get in touch asap with the Country Financial Management Specialist at the World Bank.

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Project Implementation Plan – FM Contents

• It should refer to the accounting policies and procedures in the University or ACE or Government FM Manual (Institutional Manuals) to be used for the project .

• It should cover the gaps between the existing institutional FM Manuals and the Financing Agreements with the World Bank. These areas include:– Detailing how the ACE funds (US$8 million) will be used. Should include an account for

ACE revenue generated.– How the financing covenants on ensuring satisfactory FM systems are maintained

through out the project, Interim Financial Reports and annual audit reports are submitted on time to the Ministry of Education and World Bank will be complied with.

– Describe in detail the funds flow arrangements and the signatories for the ACE project. Reference to the PAD to be made.

– How ACE FM action plans will be addressed.– How FM DLIs will be implemented.

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Addressing ACE FM Gaps Action Date due by Responsible 1 IFR formats and Audit ToRs: Agree with the Bank the

format of the Interim Financial Reports and the external audit terms of reference.

Negotiation Condition

All implementing entities

2 Project Implementation Plan: Prepare and agree the Project Implementation Manual (PIM).

Effectiveness Condition

All implementing entities

3 Accounting policies and procedures: Universite Cheikh Anta Diop, Senegal to prepare and agree the Financial Management Manual with IDA in order to have adequate FM procedures and guidelines for the project. (included in PIP)

Effectiveness Condition

Universite Cheikh Anta Diop, Senegal

4 Audit Report backlog: University of d’Abomey-Calavi, Benin & Université de Lomé, Togo to address the backlog of audited accounts for 2012 and 2013. (included in PIP)

Effectiveness Condition

University of d’Abomey-Calavi, Benin & Université de Lomé, Togo

5 Accounting Staff: University of Yaounde 1 (CETIC), Cameroon; University of Ghana, WACCI; and Universite Cheikh Anta Diop, Senegal that need to recruit a qualified and experienced accountant to strengthen accountability of project funds.

Within 3 months after effectiveness (Dated Covenant)

University of Yaounde 1 (CETIC), Cameroon; University of Ghana, WACCI; and Universite Cheikh Anta Diop, Senegal

6 Internal Audit Staff: Recruit an internal audit staff to strengthen the internal audit arrangements.

Within 3 months after effectiveness (Dated Covenant)

Universite Cheikh Anta Diop, Senegal; African University of Science and Technology, Abuja, Nigeria; and Association of African Universities.

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Addressing FM ACE Gaps Action Date due by Responsible 7 Accounting information system:

(a) University of Yaounde I (CETIC), Cameroon; Universite Cheikh Anta Diop, Senegal; and University of d’Abomey-Calavi, Benin to acquire an accounting information system to prepare the project’s accounts in an efficient and effective manner. This will also avoid errors in the accounts.

(b) Federal University of Agriculture, Abeokuta, Nigeria and Université de Lomé, Togo need to upgrade their computerized accounting system to be satisfactory to prepare project accounts.

(c) Ahmadu Bello University, Zaria, Nigeria, Redeemers University and University of Benin which are both in Nigeria do not have accounting information systems but implementation is underway and needs to be monitored and completed.

(d) University of Port Harcourt, Nigeria needs to strengthen the capacity of the team managing the accounting information system (Peachtree) as their capacity is low.

Within 6 months after effectiveness (Dated Covenant)

(a)University of Yaounde I (CETIC), Cameroon; Universite Cheikh Anta Diop, Senegal; and University of d’Abomey-Calavi, Benin. (b) Federal University of Agriculture, Abeokuta, Nigeria and Université de Lomé, Togo. (c) Ahmadu Bello University, Zaria, Nigeria; Redeemers University; and University of Benin all in Nigeria. (d) University of Port Harcourt, Nigeria.

8 Audit Committee: Put in place a functional audit committee that will follow up audit recommendations to ensure they are addressed appropriately by management.

Within 6 months after effectiveness (Dated Covenant)

All implementing entities except University of Benin, Nigeria and University of Ghana.

9 Strengthen governance and anti-corruption systems: This will need to be done by putting in place a functional and independent complaint handling mechanism; setting up a functional risk management and anti-corruption committee; and publishing budgets, financial reports and audited accounts on their websites to promote transparency and accountability.

During Implementation

All implementing entities but University of Benin and Federal University of Agriculture, Abeokuta, both in Nigeria are exempt from setting an anti-corruption committee.

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Addressing ACE FM Gaps Action Date due by Responsible 10 Internal audit reporting: Internal Audit units are

encouraged to report on a quarterly basis on the project using a risk based approach.

During Implementation

All implementing entities

11 Strengthen internal audit skills: Internal audit units are encouraged to strengthen their systems by improving their internal audit manuals with good practices issued by the Institute of Internal Auditors; acquiring internal audit software to be more efficient and effective when conducting audits; train in performance auditing to strengthening value for money auditing; and train in risk based auditing to strengthen internal audit skills.

During Implementation

All implementing entities

12 Internal Audit work plan: Internal Audit units to include the project in their annual work plan to ensure audits are done based on a risk based approach.

During Implementation

All implementing entities

13 Strengthening internal control system (a) Strengthen Internal Control Systems related to

preparing timely bank reconciliations, updating/coding fixed assets and providing explanations for variances between actual and budgeted expenditure.

(b) Address internal audit issues in a timely manner.

During Implementation

(a) Ahmadu Bello University and African University of Science and Technology both in Nigeria. (b)Jos University, Nigeria.

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Benefiting from FM DLI#3These are: •ACEs submitting timely withdrawal applications supported by financial reports showing how funds have been utilized. •Universities under the university council having functioning audit committee that will amongst other assignments follow up audit issues related to the ACE.•Universities having functioning internal audit units that will support the ACEs. •ACEs publishing annual work plans, budgets, interim financial reports and audited reports on their websites to promote transparency and accountability.

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Thanks for listening to me.

Email contact: pumahtete@worldbank@org