The document discusses Financial Monitoring Reports (FMR) that are required to be submitted to the World Bank Fund by projects receiving financing at regular intervals of no more than 6 months. The FMR provide fiduciary assurance to the Fund and use the borrower's own accounting/reporting systems. They include financial reports showing cash flows, expenditures by activity, physical progress reports linking costs to outputs, and procurement reports on status and performance compared to the plan. Key aspects that can be customized include format, content, frequency and indicators for monitoring progress.

1. Financial Management Report

2. Periodic Progress Reports Projects typically produce 3 types of reports: “ ad hoc” regular periodical progress reports annual reports Fund-financed projects are required to submit to the Fund at regular intervals, not more than 6 months, periodic progress reports, FMR FMR stands for Financial Monitoring Reports

3. Characteristics of FMR The distinguishing characteristics of FMR are: Distinction between project management (by Borrower) and project monitoring (by lender) New emphasis on maximum reliance on borrower’s Accounting/reporting systems/format Format, content, and frequency more flexible Reflecting project size, sector, and complexity

4. Guiding Principles of FMR The overall objective is to provide regular information that gives necessary fiduciary assurance to the Fund FMR will be less detailed than the report prepared for project management Borrower’s own system should be used as far as possible in producing FMRs

5. Guiding Principles of FMR (cont.) The same structure of financial information should normally be used for project planning, monitoring reports and annual audited financial statements, and Implementation Completion Reports (ICRs) As far as possible, borrowers should not be required to provide the Fund with information already available to the Fund The requirements for financial and procurement monitoring should, as far as possible, be aligned with other Fund requirements for project progress reporting and monitoring

6. Guiding Principles of FMR (cont.) While the reports to be submitted to the Fund should meet certain minimum requirements, they should be flexible and customized to each project or where possible, to each country and/or sector Monitoring expenditures in relation to physical progress is a key aspect of ensuring that the project is under proper financial control Wherever possible, common reporting and monitoring arrangements should be agreed with other donors involved in the project

7. Structure of the FMR The FMR should normally include: Financial reports Physical progress reports, and Procurement reports

8. FMR – Financial Reports Financial reports should show: Cash inflows and outflows for the period (e.g., quarter), and cumulatively for the project life Expenditures should be reported according to project activities, not according to procurement/disbursement categories (although this may be reported as an addition)

9. Physical Progress Report Physical progress reports should link physical outputs or implementation progress to costs of achieving them Indicators of physical progress and outputs should be selected during project preparation, stated in the Project Implementation Plan (PIP)

10. Procurement Report The procurement report: shows the status of procurement of goods, works, services, and consultants compares the actual procurement performance with the plan agreed with the Fund at negotiations or in a subsequent review highlights specific problems (e.g., staffing or training needs)

11. Matters to be agreed at negotiations Explains deviations from plan, and proposes solutions to problems identified Format, content, frequency, and currency of reports Project outputs and other indicators for monitoring physical or other progress toward achieving project results How to deal with multiple implementation agencies, scattered project locations, and community-based project activities