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  • Romania – 12the largest country in Europe, territory = 238,391 km² , 40 counties plus Bucharest
  • .

Transcript

  • 1. Grant Funds Flow and Sub-recipient Management ROMANIA – THE MINISTRY OF HEALTH EXPERIENCE
  • 2. ROMANIA ROUND 2 GRANTS - BASIC FACTS
    • HIV Grant (1 Jan 04 – 31 Dec 08)
    • - $26.8 for five years
    • - 29 sub-recipients (11 Gov & 18 NGOs)
    • SRs Budget @ 30/06/07
    • $ 23,3 mil
    • SRs Expenditure @ 30/06/07
    • $ 21,5 mil
    • spending rate ~ 92%
    • TB Grant (1 Feb 04 – 31 Jan 08)
    • - $16.7 for four years
    • - 8 sub-recipients (4 Gov & 4 NGOs)
    • SRs Budget @ 30/06/07
    • $ 15,0 mil
    • SRs Expenditure @ 30/06/07
    • $ 13,3 mil
    • spending rate ~ 89%
  • 3. What were we facing at the start?
    • Country-wide program implementation
    • Multitude of program activities
    • HIV – (1) Prevention programs for vulnerable groups;
    • (2) Care and support for PLWHA;
    • (3) HIV/AIDS/STIs and related national
    • surveillance system strengthening
    • TB – (1) DOTS expansion;
    • (2) MDR-TB management
    • (3) National Surveillance system strengthening
    • New principle in action - Reaching results and utilizing financial resources against schedule
    • New challenge to the MOH - decentralized financial management by both government and non-government implementers
    • Financial accountability and transparency
  • 4. Before getting the funds to the SRs …
    • … we had to have in place
    • Well-organized and functional financial department of the PR
    • SR Agreements - clearly outlined responsibilities of the PR and the SRs
    • Assessment of the SRs’ financial capacities
  • 5. The PR’s Financial Department
    • Establishing the flow of activities and documentation
    • within the PR (incl. with SRs, national authorities, within the MOH)
    • Internal Control System
        • - Segregation of Duties
        • “ Double Eye”
        • Three “E” – Efficiency, economy, effectiveness
    • Establish clear job descriptions
    • Capacity of human resources and additional needs for capacity building
        • Recruitment of qualified team members
        • Build the capacity
  • 6. The SR Agreements – Financial and Operating Arrangements
    • SR Agreements signed in USD (to minimize the inflation impact)
    • Annexes to each SR agreement
      • - Budget (standard format)
      • - Disbursement procedure – advances to SRs
      • - Reporting procedure – quarterly financial reports
    • SR’s special bank account (local currency) – funds receipt, payments, and interest
    • Provisions for non-compliance with the terms of the PR-SR agreement (e.g. reduction of future advances, refunds to the PR)
  • 7. Funds transfers to the SRs and Accountability – Key elements
    • Budget development and management system
    • (2) Efficient disbursement system
    • (3) Rigorous payment system
    • (4) SR’s financial reporting
    • (5) Financial monitoring system
  • 8. The Budget Development and Management System
    • Budget Development – prior to signing SR agreements
    • Clear definition of budget categories
    • Budget template form
    • PR-SR Budget negotiations
      • - The SR’s proposal = starting point
      • - Project workplan – what will the SR do?
      • - Budget – what kind of expenses and how much will it cost?
      • - Consistency with the SR’s M&E plan, Procurement plan and project workplan
      • Double Eye!!!
    • Budget vs Actual Variance Analysis – SRs do quarterly budget updates
    • Standard form for budget modification ( Form FR 4 )
  • 9. Disbursements to SRs
    • For each quarter the SRs submit a set of standard forms :
    • List of expenditures by budget categories for the reporting period (FR 3) (incl. VAT, name of supplier, contract # and date), in accordance with “three E” principle
    • Forecast for next quarter plus one month as a buffer (FR4) ensuring sustainability during the reporting period and performance based funding
    • Financial Report form (FR 2) (summary - cumulative period) by budget categories- ensuring the reconciliation with SR’s project financial cumulative data
    • Bank account reconciliation form (FR 5) – checking the closing balance data
    • Quarterly exchange rate (FR 7) - avoiding exchange rate speculations
    • Advance Request (FR 1) – in USD
  • 10. Disbursements to SRs (cont.)
    • PR Review Process and Authorization of SR advance payment (= disbursements to SRs)
      • Availability of funds in the PR’s account?
      • Achievement of the expected results (performance based funding)?
      • Review and acceptance of the expenditure report for the previous advance
      • In line with the SR’s quarterly budget?
      • In line with the SR’s quarterly work plan?
      • In line with the SR’s procurement plan?
      • Approved budget modifications (flexibility), if any?
      • => Separate sign-off by PR’s M&E, Procurement and Finance officers
  • 11. Payment System
    • Advance Payment Execution
      • Payments to SRs in local currency
      • Payment orders – “double eye”
      • Advance Exchange rate – will be used in FR7 for establishing the reporting exchange rate ( excludes the exchange rate speculations)
      • Funds transferred to the SR’s special bank account
    • Advance Payment booking - Booking in the SR special account in USD or Euro and in local currency
  • 12. Financial Reporting – Who? What? When?
    • SRs’ program and financial reports - due to the PR within 10 days after the end of the reporting quarter
    • SRs financial reports = set of standard forms
    • SRs expenditures reported in local currency and in USD
    • Exchange rate of the advance = the one on the day of the advance payment (copy of the bank statement)
    • PR’s cross-functional review - M&E, Procurement and Financial officers (within 20 days of receipt of SR’s reports)
      • - Achievement of the expected results and activities ( performance based funding)
      • - Eligibility of SR expenditures,
      • - Budget utilization
      • - Accuracy of financial reports
      • - Approved budget reallocations (if any)
  • 13. Financial Monitoring System
    • Monitoring Procedure
      • Set of standardized Forms ( transparency and uniformity)
      • Quarterly submission of reporting forms
      • Review by M&E, Procurement and Financial officers
      • Clear sign-off stages
    • Site visits to SRs
      • Financial officers conduct checks at SRs locations - SRs financial documentation or types of expenses
      • Site visits to locations across the country
      • Plans - minimum one visit per SR every six months
      • Site visit reports prepared and findings/recommendations shared with SRs
    • SR annual audits by external auditors
  • 14. National Finance Reporting Requirements
    • National legislation and financial procedures
    • National co-financing and currency estate reporting system
  • 15. Key Challenges
    • Program preparation period for capacity building and staff training
    • PR team members’ continuous training
    • Training and Technical assistance for SRs
    • Lack of understanding the need to computerize the whole financial process which includes also an online financial monitoring procedure which could support speedy decisions.
    • Staff turnover at the PR and the SR levels
    • Changes in the legal environment with financial implications
    • Delays in signing SR agreements
    • Non-compliance of SRs to the terms of the agreements or the procedures (additional clarifications/iterations with SRs)
    • Delays in SR reporting or incomplete/incorrect reports or advance requests
  • 16. Lessons learned
    • PR and SRs capacity building budget, period and work plan
    • Invest in the SRs at the start and throughout the program implementation – meet the SRs, e-mail communications, phone follow-up, workshops, standard forms
    • Regular coordination of M&E, Finance and Procurement Officers
    • Regular and timely communications
    • Presence at the SR sites matters!
    • Regular revisions of SR budgets
    • Necessity of a computerized financial process with on line monitoring procedure for transparency and speedy process