FIDUCIARY SYSTEMS ASSESSMENT

Section 1: Integrated Fiduciary Systems Assessment (IFSA)

1.1 Fiduciary Risk Assessment – Reasonable assurance

1. An IFSA of the key selected implementing agencies has been carried out in accordance with
Bank Policy and the Directive for PforR. This Program will be implemented by the DGAS of the MASM.

2. The IFSA assesses whether the fiduciary system and the performance of the Program’s fiduciary
system are adequate and provides reasonable assurance that the funds will be used for the intended
purposes, with due attention to the principles of economy, efficiency, effectiveness, transparency, and
accountability. This IFSA has been conducted through filed visit meetings and discussions with the officials
of implementing agencies (IA). The review relies upon documents and data provided by the MASM (DPAF,
PRMP, MEF/DGB websites, ARMP, IGM/IGF) regarding their fiduciary processes and performance in the
past and also upon the World Bank’s past project experience and understanding of the FM and
procurement systems at the State level.

3. Based on the IFSA and given the single sector and the simplified implementation arrangement
MASM/DGAS engagement for operation and execution) only, the combined fiduciary risk is rated as
“Moderate.�? There is an inherent risk associated with variations in fiduciary capacity, compliance to
agreed FM, and procurement processes. To mitigate fiduciary risk and strengthen the existing systems,
various actions are recommended for completion during implementation as DLIs and a PAP. With the
implementation of recommended mitigation measures and system strengthening actions, during the
program implementation, the capacity and performance of the Program implementing agency is
considered adequate to provide reasonable assurance that the financing proceeds would be used for the
intended purposes, with due attention to the principles of economy, efficiency, effectiveness,
transparency, and accountability. If any significant events and issues become known during program
implementation, additional appropriate mitigation measures will be put in place in consultation with the
Government of Benin.

1.2 Scope of IFSA

4. This is a single sector, sole agency program implemented by the DGAS of the MASM. The
institutional and implementation structure of the Program (DGAS) is embedded within the MASM, and
the Program activities will be implemented by the various departments of the MASM (DPAF, DGAS, PRMP,
IGM, M&E, GUPS, and others). The Program will follow the public expenditures chain involving other
departments of the government such as the DGB, DNCMP, CAA, DGTCP, the MEF, and others. These
departments will be involved in only the review and approval of the operations, and they are not expected
to spend any Program funds.

5. The IFSA covers the following key areas and subareas:
(a) Procurement arrangements: regulatory framework; procurement planning; staffing; capacity of
bidders and staff at the line agencies; standard procurement processes and procedures; standard
bidding document; value of procurement handled; availability of competition; existence of complaint
handling, and resolution system; procurement performance; existence of an MIS; internal controls
mechanism; procurement documentation, review, and audit.
(b) Financial management (FM):
• Planning and budgeting: budget versus expenditure; budget utilization;
transparency.
• Flow of funds: funding flow mechanism; process of receipt of fund; utilization
assurance; fund management; timeliness of utilization of funds.
• Accounting, financial reporting, and internal controls: process of compiling
accounts and preparing financial statements; accounting system being used;
current staffing structure including minimum qualification required, adequacy
and capacity of staff. responsibilities of accounts department; time lag in
preparation of financial statement. existence of segregation of duty; existence of
fixed asset register and physical verification of assets; record keeping.
• Audits, internal and external: Entities responsible for auditing the MASM;
existence of internal audit cell; resolution of audit observations; time lag in
conducting audit.
(c) Governance and accountability:
• Vigilance functions at the MASM and State levels; organizations and structures in charge of
preventing and dealing with corruption and fraud issues.
• Types of complaints that can be registered; mode of complaints; annual data of investigation
undertaken; awareness of fraud and corruption.
1.3 Key Risks and Mitigation Measures

6. The key fiduciary risks identified during the assessment and the mitigating measures are
mentioned below:
(a) Lack of a program coordination unit and POM. A program coordination unit should be set up within
the MASM. This unit should be staffed with qualified and experienced fiduciary staff. A POM should
clarify staff roles and responsibilities for this unit and other departments involved in the
implementation of Program activities. This POM should include Program expenditures financial
reports and ACG reporting templates and protocols.
(b) Strengthen staffing and fiduciary capacity of the implementing agencies: Fiduciary staffing and
capacity of DPAF and PRMP in regard to procurement, financial management, and contract
management aspects need to be strengthened through appropriate and timely
assignments/appointments for the program, to be followed by regular trainings on all fiduciary
aspects, that is, procurement, contract management, fiduciary complaint handling, audits, program
accounting, and submitting DLI claims.
(c) Budget and funds are available on a timely basis to the Program: Share with the World Bank the
MASM N+1 draft budget document (budget program, DPPD) during year N for technical advice and
the cash release plan.
(d) Appoint an external auditor within six months of effectiveness: External auditors are required to
be appointed for review of financial management and procurement aspects within six months of
effectiveness as per agreed terms of reference.
(e) Publish annual reports and audited financial statements within nine months from end of the fiscal
year: Currently, the full-year annual reports, audit reports, and audited financial statements are not
available on the website. The MASM has its own website, but neither performance reports nor
audited financial statements are available on it. The MASM should prepare and publish an annual
performance report along with financial statements and audit reports within nine months from end
of the fiscal year on the website, which will improve transparency by providing data to citizens.
(f) Limited capacities of the internal auditing function and the audit and risk committee of the MASM
(POM). The capacities of the internal auditor appointed within the MASM (IGM) should be
strengthened to ensure the auditor’s work is effective. This can be done through a training and on-
the-job training by working with the IGF’s team on the Program. The audit and risk committees’
members should be trained and equipped to improve their roles and responsibilities. For the first
two years, the internal audit activities will be conducted by the IGF’s team, and reports will be shared
with the World Bank on a semester basis to ensure that capacities are transferred to the IGM.
(g) SAI’s financial auditing capacity is limited because of resource constraints and timing of the
submission of the Program's audit report. The PforR Program’s audit will be conducted according to
the approved ToRs agreed upon with the World Bank for the first two years by a private auditing firm
recruited on a competitive basis. The audit reports should be submitted to the World Bank. After
these two years, the World Bank will assess the capacities of the SAI and decide if the external audit
can be carried out by the SAI. The Fiscal Governance and Service Delivery Program for Results
(P176763; under preparation) includes activities aiming to build the capacities of the SAI.
(h) Fraud and corruption: Risk of fraud and corruption affecting the Program. The HCPC will share with
the World Bank any information on allegations of fraud or corruption using the template agreed on
in the POM on a semiannual reporting basis.
(i) Program-expenditure financial reports should be generated and submitted to the World Bank on
a semester basis. The MASM/CAMO prepares and submits to the World Bank a financial report
tracking the PforR Program expenditures and disbursements through DLIs on a semester basis. The
format of template of the report will be agreed on and incorporate in the POM.

1.4 Procurement Exclusions
7. The Program Expenditure Framework distribution is provided in Table 4.2. The program is not
expected to procure any large contracts valued at or above thresholds (US$75 million for works, US$50
million for goods and non-consulting services, and US$20 million for consultant services), which are based
on a “Substantial�? procurement risk rating. This conclusion is drawn based on the analysis of MASM
procurement data. The Program is not expected to include any large�?value contracts based on the
inherent definition of the Program boundaries. High-value contracts under the Program shall be
monitored through budget execution, audits, and contract management reports to ensure conformity
with the Bank’s policy on PforR.

Section 2. Scope and Program Boundary
2.1 Implementation Arrangements
8. Institutional arrangements. The Program will follow the same institutional arrangements as the
government program (the PSSNP). In that respect, an Inter-Ministerial Steering Committee (IMSC) will be
responsible for strategic oversight of the Program, whereas the MASM will be responsible for the overall
coordination, supervision, and implementation of the Program. The IMSC will be chaired by the MEF and
will comprise, among others, the ministers, or designees responsible for the MASM; the MDGL; the MAEP;
and the MISP. The IMSC will meet twice a year and provide political and strategic orientations for the
Program. The IMSC will be supported by a Technical Program Coordination Committee (TPCC), chaired by
a representative of the MEF and composed of representatives of all the ministries participating in the
IMSC. The TPCC will meet quarterly and review progress and provide quality assurance on technical
aspects of the Program.

9. An operational unit (CAMO) known as the Program Coordination Unit functions within the
MASM to manage the implementation of the Program. Key functions include safety net management;
FM) and M&E; and management of grievances, safeguards monitoring, and reporting. The CAMO will be
staffed with civil servants, some of whom have already been named for transfers from other Directorates
of the MASM or are already working in the DGAS. The CAMO staff will benefit from initial support and
training from the previous social safety nets specialist in the ACCESS Project Implementation Unit. The
CAMO will operate in tandem with the GUPS for day-to-day implementation activities on the ground.
Moreover, the CAMO and the GUPS will work closely with the Women’s Empowerment and Gender
Directorate (Direction de la Promotion de la Femme et du Genre, DPFG) and the MASM’s gender focal
point. The CAMO will act as the TPCC secretariat.

10. Implementation processes. The MASM will have the ultimate responsibility for FM and
procurement activities, in line with existing government regulations. The main processes involved would
be (a) maintaining the existing FM and procurement procedures and regulations for the Program agreed
with the World Bank as being suitable for the PforR financing modality; (b) facilitating the Program flow
of funds from the budget through the existing channels to the final beneficiaries; (c) meeting the reporting
requirements regarding the results on which the Program is based; (d) arranging internal and external
audits; and (e) acting as the contact representative with the World Bank on Program implementation.

11. Implementation of the activities. The implementation of the Program will be managed by the
CAMO, relying on the decentralized network of the CPS (future GUPS) and collaborations with the DGAS,
the ANPS, and the ANPC. In particular, the Program will minimize administrative costs and build on existing
experiences from the ACCESS Project by relying on the network of the CPS and community outreach
agents (Agents de Relais Communautaires) for the implementation of the Gbessoke interventions. The
CPS, with support of the CAMO, will be in charge of outreach, enrollment, grievance management,
beneficiary monitoring, communication activities (particularly for IGA), and referral activities (for instance,
ARCH or Alafia). The CPS reports to the departmental directorates for social protection, who report to the
central DGAS. The activities linked to the RSU and ARCH will be managed by the DGAS in collaboration
with the ANPS and supported by the INSTaD for data collection. Activities linked to the shock response
will be managed by the DGAS in collaboration with the ANPC, according to the MoU to be signed by both
parties.

12. Verification arrangements. The government will hire an IVA to carry out the verification according
to protocols that are specified for each DLR. The DGAS and other relevant entities in the MASM or other
ministries will produce supporting evidence for DLRs for which they have established systems and
procedures. The World Bank will confirm, based on the evidence provided by the government, that the
DLRs are achieved.

13. Budgeting and planning. The Program’s budget is included in the budget of the MASM for 2023.
The Program’s budget and planning are prepared and approved on an annual basis following the budget
procedures for ministries in Benin. There are line items (six-digit or eight-digit codes from the Program
budget of the government) that would constitute the Program Expenditure Framework. These would be
used to define the boundaries of the required audit function.

2.2 Program Boundary and Expenditure Framework
14. The overall government program is US$159 million (“p�?). The MASM/CAMO will develop a POM
outlining the operational details, such as key MASM and entities that will be involved in program
implementation, institutional mechanisms for effective coordination and delivery, annual program
outlays for the next five years, a monitoring and evaluation framework, and oversight arrangements.
Figure 4.1: Government Program – “p�? Vs “P�? (US$, millions)

Government of Benin's program (p) US$158

PforR Program (P) US$128

International
Development US$ 100
Association financing

15. The PforR Program has been carved out of the overall government program . The scope of the
IFSA is limited to the boundary of MASM’s Program. The expenditure framework of the MASM (“P�?),
hereafter “the Program,�? is estimated at US$128 million, of which the World Bank (International
Development Association, IDA) will finance US$100 million.

16. The Program will be a combination of capital expenditure (capex) and operating expenses
(opex) activities to be carried out under the oversight of the CAMO. Any major civil works if included will
be closely monitored throughout the Program implementation. The Program funds will include
rehabilitation and consultancy activities, cash transfers, and procurement of goods and services.

Section 3: Review of Public Financial Management (PFM) Cycle of the Entities Involved in the
Program’s Legislative and Institutional PFM Framework

Overview of the Country’s PFM Cycle

Financial Management

17. Benin’s PFM system is considered adequate with moderate risk. The budget planning framework
remains robust, and the government has shifted since 2022 to a performance-based budget. The annual
budgets are always prepared based on the PIP. The enabling legislative and institutional framework for
FM is contained in the (a) Constitution Law No. 90-032 dated December 11, 1990, revised on November
7, 2019, by Law No. 2019-40 (Article 99 related to Finances Laws including Settlement Laws); (b) Organic
PFM Law No. 2013-14 dated September 27, 2013, which was aligned with the WAEMU directives; (c)
WAEMU directives; and (d) decrees and ordonnances, subsidiary legislations, regulations, and operational
and financial directives, which dictate the day-to-day basis for the management and oversight of public
finances.

18. In general, the legislative and institutional framework for PFM is in place and generally
considered acceptable. This framework is in line with or approximates international standards. In
addition, as mentioned above, Benin has transposed the WAEMU directives, regulations, and rules on
public finances into national law. However, this transition is still in process, with some delays, notably for
the budget, accounting, internal controls, and external auditing. Furthermore, compliance with this
legislative framework as well as the rules and regulations remain a key challenge for the government.

19. The budgets have been approved in a timely manner before January 1 during the last five years
and are available on the MEF website (www.budgetbenin.bj). A Citizens Budget is also prepared and
published on the same website to present key public finance information to a general audience.

20. The government has been implementing a new information management system (Système
Integré de Gestion des Finances Publiques, SIGFIP) that will replace the previous budgeting and
accounting information systems (SIGFIP and ASTER) to underpin the Budget execution process. The
internal audit function has also been reformed with the installment of an internal auditor (IGM), an
internal audit committee, and a risk committee within each sector ministry. Unfortunately, we noted that
these internal audit functions are still experiencing many challenges to operate efficiently. The IGM’s
works are not covering most of the financing within the ministries, and the various committees are not
able to organize the required meetings or do not have the appropriate tools. Through law “2020-38 du 11
février 2021�? a new court of accounts has been created with more independence, even though it is facing
human-resource-capacity challenges (quality and quantity).

Procurement

21. The last comprehensive assessment of the country’s procurement system was completed in
2015 by the World Bank and the African Development Bank. Since that date, the procurement code has
been revised twice, first in 2017 and more recently with law 2020-26 on September 29, 2020. The main
changes introduced by the new procurement code are as follows: (a) introduction of new procurement
methods in line with best international practices; (b) clarification and simplification of procedures for
small contracts; (c) introduction of provisions aimed at digitization; (d) reduction of administrative
requirements for bid submissions; (e) introduction of provisions aimed at facilitating access to micro,
small, and medium enterprises (MSME) to tender documents as free of charge and no bid guarantee; (f)
revision of the rules about the approval of contracts to empower contracting authorities and ensure
greater accountability; and (g) clarification of the rules concerning operations excluded from the scope of
the public procurement code.

22. Applications measures1 of the new procurement code did not change the structure of the
parties involved in the procurement process. These parties include: (a) the ARMP, made up of
representatives of the public sector, the private sector, and civil society; (b) the DNCMP; and (c) a PRMP
and a Public Procurement Control Unit (Cellule de Controle des Marches Publics, CCMP) within each
Contracting Authority.

23. In general, the legal and institutional framework has always been satisfactory . The changes
made in recent years have helped to improve it by aiming for more clarity and simplification and ensuring
modernization. It is important to harmonize procurement instruments such as standard bidding
documents, guidelines, and manuals with the procurement code of September 2020.

24. Since August 2021, the Government of Benin has been engaged in a new evaluation of the public
procurement management system following the MAPS II methodology. To facilitate the transparent and
efficient execution of procurement, the government is developing an electronic procurement system (e-
procurement).

1
On December 23, 2020, the government issued three decrees (2020/595; 2020/596 & 597) on attribution, organization, and
functioning of the ARMP (regulation authority), PRMP (body conducting procurement for contracting authority), and CCMP
(body controlling within contracting authority)
Planning and Budgeting

Adequacy of the Budget

25. The cost of the PforR Program is estimated at US$128 million, of which the IDA will finance
US$100 million, representing approximately 78 percent of the cost. The planning and budgeting
processes of the MASM are acceptable. This project will follow the national budgeting channel. As
mentioned above, the government has shifted since 2022 to performance-based budgeting. Even if some
sector ministries have experienced it as a pilot, this is the first year of implementation of this important
reform of the budgeting approach, making it difficult to appreciate the performance of budget
management by targeted ministries and agencies. In line with the Budget Organic Law, budget planning
tools such as the Program-Budgets, the Medium-Term Expenditure Framework, and the Medium-Term
Budget Framework are elaborated for funds allocation. At the time of the preparation of the PforR, the
Program did not exist. The World Bank assisted the government with preparing the program from which
the Program was extracted. The PforR expenditures, once approved and signed, will be included in
MASM’s budget lines and follow the national planning and budgeting procedures for the existing projects.
Even though the Program cannot be identified in the government‘s current budget, the PforR is aligned
with the MASM priorities as it is a subcomponent of the MASM’s PSSNP.

Table 4.1: Program Financing
Amount
Source % of Total
(US$, million)
Counterpart Funding
Borrower/Recipient 28 22%
International Development Association (IDA)
IDA Credit PforR 100 78%
Total Program Financing 128 100%

26. The government is expected to spend US$128 million under the Program over the next five
years. The World Bank will provide US$98.4 million through the DDLIs2. Funding will be channeled through
the normal budget cycle of the government, and the inclusion of the PSSNP in the national budget will be
rewarded in DLI 3.

Procurement Profile of the Program

27. The detailed review of the Program Expenditure Framework did not reveal potential contracts
with a cost estimate above the OPRC review thresholds. Cash transfers account for about 37 percent of
program expenditures.

2 US$1.6 million will be used to repay the preparation advance.
Table 4.2: PforR Program Expenditures

Source: PSSNP Budget.
Table 4.3: PEF Translated in the MASM’s Budget Lines According to Programmatic and Economic Classifications,
in $US Millions
Programmatic objectives Economic flows Total
Wages and salaries -
Objective 2: Goods and Services 75.13
Development of Recurrent Transfers 3.07
microfinance sector Capital transfers 50.27
Total 128.47
Sources: Prepared by the FSA’s team.

The PforR Program expenditures are linked to the MASM’s programmatic objective 2.

Procurement Planning

28. Article 24 of the new Public Procurement Code 1 states that Contracting Authorities should have
their Procurement Plan (PPM) reviewed and approved by the CCMP for validation within a maximum of
10 calendar days from the approval of their budget by the competent authority. Thereafter, the
procurement plan is examined by the DNCMP for publication. According to the new public procurement
code, the submission, validation, and publication of procurement plans are done electronically. As soon
as the process of developing and approving the PPM is completed, the ProcuPPM will be published on the
Benin Public Procurement Portal ( https://www.marches-publics.bj ) and can be consulted at any time.

29. The process of preparing procurement plans is quite laborious. Based on the relevant budget
estimates, the MASM prepares the work plan and budget and the draft procurement plan. Once the
budgets are approved, the procurement plans of the structures concerned are adjusted to take into
account the gap between the forecasts and execution of the previous year. The PPMs that are supposed
to be published in mid-January are rarely published before the end of the first quarter. Weaknesses were
identified in the preparation and submission of the procurement plans process that lead to late
submissions. These shortcomings are related to the lack of follow-up and limited capacity among staff of
the beneficiary entities and at the central level (within the DNCMP) to review and approve all the
procurement plans coming from the country's contracting authorities. The late notification of the
approved budget to budget users is another major issue to be tackled. For example, the first drafts of the
procurement plans are elaborated based on an indicative annual budget and are considered as basic
documents to be updated during the year by addenda. The final version of the procurement plans is
prepared based on the final budget allocation notified by the MEF, generally at the beginning of January.
Table 4.4: MASM PPMs 2020 to 2022
PPM 2020 published 03/09/2020 PPM 2021 published 01/14/2021 PPM 2022 published 05/13/2022
RFQ 172 RFQ 45 RFQ 30
RFP - RFP - RFP 1
RFB 5 RFB 11 RFB 4
SOP - SOP - SOP 4
DS - DS 1 DS 1
Total 177 Total 57 Total 40
RFQ = Request for Quotations, RFP = Request For Proposals, RFB = Request for Bids, SOP = Solicitation of Prices,
DS= Direct Selection

Budget Execution

30. Adequate Budget execution, accounting, and reporting procedures are in place and in line with
the public expenditures process. The 2021 International Monetary Fund (IMF)’s Fiscal Transparency
Evaluation (FTE) quoted many improvements in Benin’s PFM area. The evaluation highlighted the
following points, among others:
• Production of the annual and mid-year budget execution reports, which provide an overview on
the operations related to the budget and are published on the MEF website.
• Financial reports that present data according to the economic, administrative, functional, and
programmatic classifications, complying with international standards.
• The timelines of the production of these reports have improved.
• The budgets cover all central-level operations, and exhaustive documentation underpins the
budgets.
Overall, the 2021 IMF’S FTE concluded that the budget execution, accounting systems, and reporting are
adequate and acceptable.
31. The MASM’s budget lines comprise operating and capital expenditures. Budget execution is
monitored using the integrated financial management system, and we noted that the government is
implementing a new IFMIS (SIGFP), which has replaced the previous SIGFIP. As it is still being configured,
we cannot provide any expectation for its performance compared against the previous one. The
procedures are globally adequate. However, some specific challenges will need to be addressed.

32. Challenged budget execution capacities. The data collected with the MASM’s team or through
the MEF’s website demonstrated limited budget absorption throughout the last three years. As reported
in the table below, the average budget absorption rating during the three last years is 68.55 percent,
which is low if the MASM is to implement a PforR Program. The budget execution data are reported in the
table below, using data provided by the client:

Table 4.5: MASM’s Budget Execution Rates
2019 2020 2021
Budget 6 173 5 735 10 175
Execution 3 056 4 585 7 751
Budget performance rate 49.51% 79.96% 76.18%
Source: DPAF/MASM.
Table 4.6: MASM’s Detailed Budget Execution Rates for 2021 (In thousands of FCFA)

2021
Objectives Economic flows
Budget Actuals Rate (%)

Objective 1:
Support to services Wages and salaries 922,949.00 999,091.00 108.25%
delivery Goods and Services 2,380,246.00 1,565,488.00 65.77%
Transfers
Total operating cost 3,303,195.00 2,564,579.00 77.64%
Capital expenditures
Capital transfers
Total capital expenses
Total P1 3,303,195.00 2,564,579.00 77.64%
Wages and salaries 278173 37169 13.36%
Goods and Services 823190 672330 81.67%
Objective 2:
Transfers 1,160,000.00 860,000.00 74.14%
Promote socio
economic actions Total operating cost 2,261,363.00 1,569,499.00 69.41%
through vulnerable Capital expenditures 3,552,667.00 2,708,830.00 76.25%
people Capital transfers
Total capital expenses 3,552,667.00 2,708,830.00 76.25%
Total P2 5,814,030.00 4,278,329.00 73.59%
Wages and salaries 89,178.00 9952 11.16%
Goods and Services 134,881.00 64,936.00 48.14%
Recurrent Transfers 833,720.00 833,720.00 100.00%
Total operating cost 1,057,779.00 908,608.00 85.90%
Objective 3:
Development of Capital expenditures 0 0
microfinance Capital transfers 0 0
sector Total capital expenses 0 0
Total P3 1,057,779.00 908,608.00 85.90%
Wages and salaries 1,290,300.00 1,046,212.00 81.08%
Summary Goods and Services 3,338,317.00 2,302,754.00 68.98%
Transfers 1,993,720.00 1,693,720.00 84.95%
Total operating cost 6,622,337.00 5,042,686.00 76.15%
Capital expenditures 3,552,667.00 2,708,830.00 76.25%
Capital transfers - - 0.00%
Total capital expenses 3,552,667.00 2,708,830.00 76.25%
Total 10,175,004.00 7,751,516.00 76.18%
The presentation of the budget execution for 2021, according to the most-used programmatic and
economic classifications in the country. This information can be found on the MEF’s website
(https://budgetbenin.bj/publications/?sub_menu_id=1&mymainlink_id=4).

33. According to the data in the table, budget performance is moderately acceptable over the past
three years, even if we noted slight increases since 2020 explained by the COVID-19 context, where social
contributions to vulnerable people have increased. According to DPAF, this low performance of the
budget execution is due mainly to the challenges using the new procurement framework. The execution
rating related to the budget lines for goods and services and capital investments are lower than the other
ones. The MASM’s procurement unit needs to be strengthened by the appointment of a procurem ent
assistant. These procurement specialists are going to be trained according to the new national
procurement code and procedures. These actions should be complemented by periodic reporting to the
World Bank. A semester-basis financial report should be submitted by the MASM to help to track the level
of Program expenditures.

34. Funding flows for the smooth execution of the Program’s budget will depend on the timely
release of funds by the MEF. According to existing procedures, the release of funds is made quarterly and
based on a treasury forecast that is underpinned by a commitment plan provided by line ministries. We
noted limited issues with the release of the funds to the implementing agencies. The government
overcame this issue by limiting the ceiling of the budget of line ministries. For PforR purposes, the MEF
has decided to create an operating bank account in the central Bank that will receive the disbursement
made after the achievement of the DLIs. This account will receive the funds related to all the active PforR
and the funds will be managed as a pool with cash releases based on cash needs.

Accounting and Financial Reporting

35. The public expenditure chain is computerized. The expenditure chain, which covers the budget
execution and control cycles, is fully computerized and interfaces well with the procurement (SIGMAP)
and treasury (ASTER) systems. In-year budget reports are produced quarterly and published on the MEF’s
website, within about eight weeks of the end of the quarter. The information is extracted from the
budgeting and accounting information systems (SIGFIP and ASTER). Since January 2022, the government
has been implementing a new IFMIS system called SIGFP (Systeme Integre de Gestion des Finances
Publiques). The quarterly budget execution reports are put on the MEF’s website (www.finances.bj). The
implementation of the new accounting software is ongoing.

36. Since 2013, all annual accounts are submitted by the government within four months from the
receipt of financial statements (on time) to account authorities (Cour des comptes). Still, there are some
delays in the approval of state accounts (Comptes de Gestion) by the Supreme Court (which is outside
government control). For the purpose of the Program, the transfer of the budget and funds through the
public expenditure channel will be recorded in the country’s computerized accounting and budget
software, and the MASM will produce quarterly and annual financial reports. Each quarter, the DPAF of
the MASM presents the budget execution with an explanatory note on performance. On an annual basis,
the MASM presents the overall budget for the year and financial performance (including the external fund
managed by the MASM) under the “Tableaux statistiques du Rapport de fin d’annee.�? The 2021 report is
available and can be consulted on the website of the MEF/DGB. The reporting format is acceptable, and
the only missing information is the payment status of invoices. The mitigation measures inserted in the
PAP consisting of the presentation of the Program’s payment status will resolve this weakness.

Disbursement Arrangements

37. DLIs and DLRs. The PforR Program and World Bank financing is composed of a set of four DLIs
relevant to the social protection and human capital agenda in Benin, with 22 DLRs.

38. The Program’s disbursements will be based on the achievement of DLI targets as certified in
accordance with the independent verification protocol. The Association will disburse US$98.4 million
equivalent through four DLIs under the Program, and disbursement will be made only as targets are
achieved. The release of DLI amounts will be done after a verification of DLI evidence by the verification
agency as per the agreed verification protocols.

39. The government can request advances up to 25 percent of the Financing allocated to DLIs that
have not yet been achieved by following the relevant procedures. As prior results have been included,
the total combined amount for these should not exceed 30 percent of the operation. When the DLI against
which an advance has been disbursed is achieved, the amount of the advance will be deducted from the
total amount due to be disbursed under that DLI. The World Bank will record the amount disbursed to
achieve a DLR (“recovered�?) after it has notified the Borrower of its acceptance of the evidence of
achievement of the result.

40. For advances, prior results, and achieved results, the funds will be disbursed to the
government’s Single Treasury Account. Specifically, the government would claim disbursements from the
World Bank as the DLIs are achieved. All DLIs will be independently verified by the IVA. The IVA will prepare
the Results Verification Report, which will be shared by the coordinating unit (CAMO) with the World
Bank. A key use of the Results Verification Report will be to confirm and certify the technical achievement
of the results/indicators. If the World Bank finds that the disbursement request meets the terms of the
Financing Agreement, the World Bank will disburse the corresponding funds to the single treasury account
at the BCEAO.

41. The Program will use the flow of funds arrangements used for the execution of the national
budget and the current resources transfer mechanism between the MEF and MASM. The funds of the
World Bank will be transferred to the Single Treasury Account at the BCEAO, managed by the DGTCP. The
government, through its budget execution procedures, will transfer its contribution to the Program
through the Treasury Account. According to the finance law, the appropriations of each entity are made
on a quarterly basis.

Cash Transfer Arrangements

42. During the assessment we noted that the MASM has limited experiences in managing large cash
transfer operations such as the current operation. The second issue is concerned with the spread of the
beneficiaries around the country making it impossible for the MASM to ensure that the funds reach the
intended beneficiaries. Last but not the least, there are difficulties with reconciling the list of forecasted
beneficiaries and the list of actual beneficiaries.
To mitigate these issues, we agreed on the following with the MASM team:

• Set up a coordinating unit within the MASM to ensure all the activities are well planned and on
track. This unit will be also in charge of the reconciliation of the list of forecasted beneficiaries and
the actual beneficiaries who have been paid correctly.
• Develop an information system (MIS) to help track the list of beneficiaries. This utilization of the
MIS is rewarded in DLI 1.
• Use a mobile money mechanism to transfer the funds to the beneficiaries.
• The operationalization of the payment process will be detailed in the POM that will be approved
by the Bank.

Procurement Processes and Procedures
43. Program contracts will include the following three categories: (a) procurement for small
rehabilitation works of GUPS, goods, and Non-Consulting and Consulting Services; (b) training and capacity
building; and (c) cash transfers. The MASM will simply carry out its routine procurement activities. What
should change is the volume of activity, which should increase thanks to the additional resources that will
be provided by the Program.

44. The methods to be used are the methods defined in the code. Benin is the WAEMU country that
uses the most competitive methods in practice. The new procurement code fixed the ambiguity existing
for small contracts, such as when to use request for quotations (RFQ) and solicitation of prices (SOP). Over
the last three years, the MASM has awarded only small contracts of very small amounts, almost all of
which were awarded through requests for quotation. There were some difficulties in the process such as:
(a) the late start of the preparation of the documents because of the late approval of the procurement
plans; and (b) the limited capacity of the Procurement Officer's Cell (PRMP), which has lacked
responsibility for several months. We noted that the bidding documents and procurement guides have
been revised and adapted to the new procurement code.

45. Another major issue noted is the delays observed in the evaluation of bids and, in particular,
the time taken by the control bodies to provide their feedback. However, the Government of Benin has
made significant improvements related to this point in the recent years. These improvements can be
explained by the reforms made in the legal and institutional frameworks and by the following reasons: (a)
greater autonomy given to internal control bodies, with their review thresholds being increased (CFA 500
million for works, CFA 300 million for supplies, and CFA 200 million for contracts of services [decree
2020/599 of December 23, 2020]); (b) greater autonomy granted to the control bodies of communes
without special status, whose heads of public procurement control units are not delegates of public
procurement control, their examination thresholds being 300 million CFA francs for works, 150 million
CFA francs for supplies and 120 million CFA francs for service contracts (decree 2020/599 of December
23, 2020); (c) greater autonomy given to contracting authorities for the approval of contracts; and (iv) a
regulation paying particular attention to response time, since decree 2020/600 of December 23, 2020, is
devoted only to the time limits for control and approval. Before the publication of the decree the
processing times for public contracts in Benin could reach an average elapsed time of 120 days between
the notification of the contract award and the signing of the contract, so that the entire procedure from
the issuance of the invitation to bid to the signing of the contract rarely took less than 240 days. Today,
the whole procedure takes less time than it would have taken just for the formalities of signing contracts.
If decree 2020/600 of December 23, 2020, is enforced, the completion of open competitions in less than
90 days could become the norm and no longer the exception.

46. Currently, the deadlines set for public procurement organs in the implementation of procedures
are well respected, but the financial resources are not available in time. These deadlines are
• 30 calendar days for the preparation of the draft tender documents before the date of launching
the tender notice provided in the PPM
• 10 working days before the date specified in the contracting authority's PPM for the launch of the
notice
• 2 working days from the date of receipt of the notice from the relevant review body for
consideration of the review body's comments
• 2 working days after the date of obtaining the "Good to go" of the validated file and transmission
of the tender notice for publication
• 10 working days from the deadline for submission of bids for the evaluation of technical and
financial offers and their ranking and preparation of the report
• 1 working day from the date of receipt of the favorable opinion of the competent control body
for the notification of the results to the successful bidder and the other bidders
• 10 calendar days’ waiting period after the publication of the provisional results.

47. Finally, record management (or archiving of procurement documents) remains a major
challenge for most of the procurement units, including the MASM. No significant progress has been
observed in this area recently. It is important to work with the government to fix this issue, as it would be
difficult to conduct procurement audits if the documents are not available or are not easily accessible. It
should be one of the areas where training and capacity building activities in procurement should be
focused.

Contract Administration

48. Articles 105 to 109 of the country’s Procurement Code describe the conditions for monitoring
performance and termination of the contract. The approach described seems simplified and equitable.
The overall payment period is still long despite significant improvements made. The direct consequences
of the delay of payment are:
- The bidders are reticent to participate in tender calls financed through government’s budget; or the
tenders are higher because tenderers justifiably estimate the cost of payment delays and include it in
their proposals (rolling stock securement, storage costs, resources on hold, and possible bank charges
in case of loans and various guarantees);
- Successful bidders with limited financial capacities may have to interrupt the works or confiscate the
supplies to be delivered pending payment, which can lead to serious delays; and
- The Contracting Authorities do not apply penalties on ongoing contracts because the State’s
commitments are not fulfilled and the interests for delayed payments stipulated in the contracts are
never paid.
It is strongly recommended to clarify in the POM the roles and responsibilities related to contract
management, designate a formal contract manager for all works, and identify Key Performance Indicators
(KPIs) and develop manuals defining the circuits, timelines, and supporting documents related to payment
operations from a standpoint of prevention and risk management and specify procedures for contract
management.

Internal Audit and Internal Control

Internal Controls

49. Internal controls are being practiced in the MASM. The internal control framework is embodied
in the financial rules supplemented by the defined delegation of financial powers. These are detailed in
the State financial and procurement rules, and treasury code. Oversight regarding compliance with
internal controls are vested with the head of the Administrative Department and Finance Department,
and these are reviewed for procurement by the ARMP audit and for the FM side during the SAI annual
audits. Unfortunately, we noted that the ARMP is struggling to get appropriate resources to conduct the
required audit of the procurement activities. The SAI also is conducting only juridical auditing. No financial
audits have been carried out, so there have been limited opportunities to assess the effectiveness of the
various controls set up in the different codes, rules, laws, and regulations.

50. Cash transfers activities need a strong internal control to limit funds embezzlement: During the
assessment we noted that the MASM has limited experience in managing large cash transfer operations
like the current operations. A second issue is concerned with the spread of the beneficiaries over the
country, making it impossible for the MASM to ensure that the funds reach the targeted beneficiaries.
Last but not the least, there are difficulties reconciling the list of planned beneficiaries and the list of actual
beneficiaries.
To mitigate these issues, we agreed on the following measures with the MASM team:

Internal Audit

51. Strong internal audit institutions step up unfortunately with the limited capacities of staff
operating them: For the last five years, the government has conducted a large reform of the internal
control function under the leadership of the Presidency’s Office for Analysis and Investigation (Bureau
d’Analyse et d’Investigation, BAI). Through this reform, the internal audit function has been reinforced
within the sector ministries. The role of the IGF was reinforced, and the IGF is coordinating the action of
the IGM. This reform also led to establishment in the line ministries of Risk Management Committees
(Comités Ministeriels de Maitrise des Risques,CMMR) and Internal Audit Committees (Comités Ministériels
d’Audit Interne, CMAI) headed by the General Secretary of the sector ministry, who most of the time has
no competencies or appropriate skills in internal auditing. Our assessment noted that the Internal Audit
Committee held only one meeting in 2021, which explains the limited capacities of the mechanism put in
place. A workshop will be organized to strengthen the capacities of the General Secretaries of the line
ministries in internal auditing and risk management at the start of the project.

52. No internal audit assignments carried out during the last three years and limited capacities of
the IGM based in the MASM: During the assessment the IGM was not able to provide us any internal
audit reports, rather, it will start conducting internal audit activities in 2023. To fix these shortcomings the
IGF to lead the internal audit activities by supporting the IGM to conduct these activities. The mission
should be conducted on a semester basis and should be focused on the Program’s technical, financial, and
procurement aspects. A summary of the internal audit reports presented in an agreed format will be
shared with the World Bank, and the IGM will oversee the follow up of the implementation of audits
recommendations.

Procurement Audit:

53. Procurement Audit and Ex-post control: Procurement audit and ex-post control is the
responsibility of the ARMP. In addition to its advisory role, the ARMP is also mandated to conduct the
mandatory annual audits of contracts awarded by all contracting authorities. In practice, audits are carried
out by private auditing firms recruited by the ARMP on annual basis. Unfortunately, we noted that the
audits are not regular because of a lack of financial resources. For example, the audits of 2018 and 2019
are still pending, as the ARMP did not get the financing to carry out the audits.
54. The government should also demonstrate that it provides sufficient resources to the ARMP to
carry out the mandatory annual audit. A sustainable mechanism of resources mobilization should be set
up to allow the institution to fulfill these mandatory procurement audits. Additionally, for the purpose of
this PforR, the MASM should ensure that the external audit of the Program should cover the procurement
operations. The audit of procurement activities should be included in the external audit’s terms of
references.

55. Citizen control: Citizen control is not effective at the MASM level. During the discussions, we
agreed that this third level of control could improve the transparency and efficiency of the Program
activities. However, the mechanism should be set up and the staff trained. The details of the procedures
will be included in the POM.

Complaint Management

56. Chapters I and II of title V of the country’s procurement code states that in Benin, the provider
may complain both during the procurement phase and during the contract performance period. During
the procurement process, three levels of complaints are possible: (a) appeal to the contracting authority
for reconsideration; (b) contentious appeal to the Dispute Settlement Committee of the ARMP; and (c)
the seeking of legal remedy before the competent courts.

57. The code provides three levels of complaints that can be used during the contract performance,
namely: (a) amicable settlement; (b) arbitration; and (c) the competent administrative courts. The ARMP
publishes on its website all decisions taken by the Dispute Settlement Commission (Commission de
Règlement des Différends, CRD) related to dispute settlement. In the past, there were delays in complaints
resolution. Currently, the ARMP is working to meet these deadlines set up by the regulations. The Benin
procurement code of October 2017 established processing times for handling complaints. The ARMP has
endeavored to respect these deadlines as shown by the tables below. As a result, the complaints system
seems to be gaining credibility, and the number of complaints doubled from 2019 to 2021. From 2019 to
2020, the number of cases handled by the ARMP should increase by almost 50 percent.

Table 4.7: Mapping of Decisions Rendered by the ARMP in 2019 within Seven Days
Type of Number of decisions Decisions rendered within 7 days
decisions rendered
Number Percentage
Arbitration 1 1 100%
Self-referral 2 2 100%
Conciliation 4 1 25%
Denunciation 12 4 33%
Recourse 44 32 73%
Total 63 40 63%
Source: ARMP

Table 4.8: Mapping of Decisions Rendered by the ARMP in 2020 within Seven Days
Type of Number of decisions Decisions rendered within 7 days
decisions rendered
Number Percentage
Arbitration 2 2 100%
Self-referral 15 11 73%
Conciliation 21 13 62%
Denunciation 6 5 83%
Recourse 59 47 80%
Total 103 78 76%
Source ARMP

Table 4.9: Breakdown by Type of Case Investigated by the ARMP in 2021
Type of case Number Percentage
Self-referral 22 11,22
Request for opinion 42 21,43
Conciliation 22 11,22
Arbitration 5 2,57
Recourse 105 53,57
Total 196 100
Source: ARMP/DRAJ/DSISASE/SSA

External Auditing - PforR Program Financial Statements

58. The audit of PforR Program will be carried out by a private auditing firm instead of the SAI : In
line with the constitution revision in 2019, the SAI was set up, and the Organic Law of the Cour des
Comptes (Law 2020-38) was adopted by the parliament at the end of 2020. The new Cour des Comptes
was installed, and the first President of the Court was appointed on April 21, 2021; the Court is now
operational but still faces human resources challenges. According to the Organic Law of the Cour des
Comptes, the new institution will be in charge of account certification, advising on internal control and
management control.

59. The Cour des Comptes (SAI) is mandated to audit all public revenues and expenditures but
encounters human resources capacity constraints that could prevent a timely financial audit of the
Program. The SAI has a threefold mission: (a) a jurisdictional mission to verify the public accounts; (b)
responsibility for the external audit of all structures benefiting from public funding; and (c) a mission to
support and advise Parliament. The SAI has developed an acceptable audit methodology compliant with
the International Standards of Supreme Audit Institutions, but staffing constraints and limited financial
independence could prevent the SAI from auditing the Program adequately and providing timely audit
reports. At the date of the FSA, the SAI is not conducting financial auditing. That means it is not expressing
an opinion on government financial statements. This situation limited the capacities of the SAI’s team to
conduct any financial audit of the Program audit. To address this shortcoming, on the one hand, we agreed
with the government, for the first two years, the SAI will recruit an external auditor (a private auditing
firm acceptable to the Bank to carry out the audit of the Program under its oversight with the ToRs agreed
upon with the World Bank. The external auditor should be appointed within six months of effectiveness.
On the other hand, the government and the World Bank are starting preparation of a new operation
(P176763) that is supposed to contribute to strengthening the PFM chain, including the oversight
institution (SAI).

60. The program audit report needs to be submitted within nine months from end of the financial
year for the government. The audit reports shall be submitted by the SAI to the World Bank not later than
nine months after the end of the fiscal year. These audits should cover the procurement activities. In
compliance with the World Bank’s policy on access to information dated July 2010, the audited financial
statement of the Program will be publicly disclosed. For this purpose, the government should display the
Program audit report on the MASM websites.

Program Governance and Anticorruption Arrangements

61. The Government of Benin is committed to ensuring that the Program’s results are not impacted
by fraud and corruption. The anti-corruption and fraud mechanisms are in place and the government has
also ratified the United Nations Anticorruption Convention. In 2011, an Anti-Corruption Law3 was passed
that criminalizes fraud, embezzlement, misuse of public funds, influence peddling, party and electoral
financing, abuse of public procurement, and nepotism in hiring practices. This legislation foresees stiff
penalties, particularly for those in key positions within the government. In addition to the legislative
framework, the government has also strengthened the institutional framework through the creation of
several entities in charge of tackling corruption. These include the ARMP, the National Anti-Money
Laundering Unit (Cellule nationale de traitement des information financières, CENTIF), the Ombudsman’s
Office (Mediateur de la Republique de Benin), the Court of repression of economic and terrorism crimes
(Cour de Répression des Infractions Economiques et du Terrorisme, CRIET, and the Economic and Financial
Brigade (Brigade Economique et Financière, BEF). At the center of the anti-corruption institutional
framework is the HCPC, which has replaced the National Anti-Corruption Authority (Autorité nationale de
la lute contre la corruption, ANLC). The settlement of this institution is ongoing.

62. The CRIET and BEF have jurisdiction and power to undertake an enquiry or cause an
enquiry/investigation to be made on any information that a public servant has exercised or refrained
from exercising his powers, for improper or corrupt purposes. It also has powers to call for any
information from any department or undertaking of the state government or from any public servant on
matters within its jurisdiction. Government departments can also initiate disciplinary proceedings against
the public servants on charges of misconduct, possessing disproportionate assets and violation under
respective Civil Services (conduct) Rules.

Table 4.10: Some Recently Prosecuted Cases of Corruption and Sanctions Made Public
Sector/company Persons concerned Period Sources
Education The person responsible for January https://24haubenin.bj/?Plusieurs-
Infrastructure public procurement, 2022 responsables-de-l-ACISE-arretes
Construction operations managers, and
Agency (ACISE) project managers
The BEF BEF accountant and May 2022 https://www.24haubenin.info/?La-
husband in prison comptable-de-la-BEF-et-son-epoux-en-
(17 million FCFA) prison
National Fund for The Director General of the October https://www.24haubenin.info/?Le-DG-
Agricultural National Fund for 2022 du-FNDA-et-certains-de-ses-
Development Agricultural Development collaborateurs-arretes
(FNDA) (FNDA) and three of his
collaborators are in custody
at the Economic and
Financial Brigade (BEF)

3
Law 2011-20 of October 12, 2011 on the fight against corruption and other related offenses in the Republic of Benin ( Loi 2011-
20 du 12 octobre 2011 portant lutte contre la corruption et autres infractions connexes en République du Bénin.)
Société des Dg-de-la-SIRAT-et-4-agents November https://24haubenin.info/?Des-sanctions-
Infrastructures 2022 contre-le-Dg-de-la-SIRAT-et-4-agents
routiers et de
l'aménagement
du territoire
(SIRAT S.A.)
ARMP Public Agents excluded December https://armp.bj/des-agents-publics-
from public procurement in 2022 exclus-de-la-commande-publique-en-
Benin for ten years republique-du-benin/
63. A special online grievance redressal system that is open to the public will be set up and any
individual who feels adversely affected by the Program can register a complaint/grievance online and can
track the action taken on it.

64. The World Bank “Guidelines on Preventing and Combating Fraud and Corruption in Program for
Results Financing�? dated February 1, 2012, and revised on July 10, 2015, shall apply to all activities
within the Program Boundary. As there is no distinction between World Bank–financed activities and
Government of Benin–financed activities within the Program boundary, these guidelines shall be applied
in an unrestricted manner on all activities within the Program boundary. Requirements under these
guidelines include but are not limited to (a) borrower’s obligation on informing the World Bank about all
fraud- and corruption-related allegations and investigations, (b) the World Bank’s right to conduct
administrative enquiries, and (c) ineligibility of debarred firms for contract awards. In the context of the
Program, the Government of Benin will inform the World Bank of any indication of fraud and corruption
and will cooperate with the Bank in any investigation into indications of fraud and corruption. The
Government of Benin will also ensure that any person or entity debarred or suspended by the Bank is not
awarded a contract or allowed to participate in the Program during the period of the debarment. This
information could be found in this link:
https://www.worldbank.org/en/projectsoperations/procurement/debarred-firms.

65. The Government of Benin commits to sharing complaints information with the Bank, which may
be derived from a variety of sources, including the complaints handling system. The HCPC will share with
the World Bank information on the allegations in the Program and how they are being addressed through
the semi-annual reports during Program implementation. The reporting format will include the following:
(a) location and date of the complaint; (b) description of allegation; (c) description of progress in
investigation; and (d) investigation outcome. A protocol will be prepared laying out the role and
responsibilities of the different actor. This protocol will be included in the operation manual. There was
no clear protocol designed in the first PforR project that is currently implementing in Benin. The
shortcoming was only addressed in the additional financing. The discussions with the HCPC to agree on
the format and the content of the reporting tool is still ongoing.

66. Implementing agencies shall implement its respective activities under the Program, in
compliance with the Anti-Corruption Guidelines for the Program. A workshop to sensitize States and IAs
on applicability of anti-corruption guidelines and protocol to be followed will be organized as part of the
project launch.

Procurement and Financial Management Capacity – Staffing

67. Based on the interactions, it is understood that the PRMP carries out procurement and contract
management functions. To accelerate and improve the smooth implementation of the Program
expenditures, there is a need for dedicated qualified and experienced procurement staff members (civil
servants) to be appointed within the CAMO who are well versed with procurement and contract
management. The staff needs to receive specialized training on various procurement and contract
management aspects so that they can carry out procurement with minimum disruptions.

68. In the case of FM, staff available within the DPAF have limited capacities, as FM civil servant
recruitments are not based on FM skills and experiences. The MASM should nominate staff who will be
responsible for program accounting and who will coordinate with all the agencies involved in the Program.
The accountants would preferably have project FM experience to facilitate FM reporting and audit. FM
staff will need training on accounting for program expenditure, DLI disbursements, and other FM
requirements. Program can also hire staff from the labor market on a contractual basis if required and
charge the cost to the Program.

Implementation Support

69. The World Bank will review the agreed PAPs and other mitigations during every mission and agree
on an action plan based on the work done by the project. Continuous support would be given to the client
for implementing the PAP. The mission would review implementation progress report on a timely basis
and monitor the findings of the PPR and audit reports on a regular basis. The mission would review the
fiduciary risk including relevant legal covenants. The mission would also review the program expenditure
on a regular basis.

70. The World Bank will carry out regular implementation missions to support the implementing
agencies to achieve results. The progress on agreed PAPs will be reviewed, and any changes to the action
plan will be made during the implementation phase. The MASM will regularly share KPI reports with the
World Bank to monitor the FM and procurement performance, identify gaps, and recommend actions.
These reports will be reviewed, and issues identified will be addressed appropriately.

71. The World Bank will monitor the following performance indicators:

Table 4.11: Performance Metrics
Indicator Measure Timeline
Adequate monitoring of • Percentage of contracts awarded and completed within the Annually
procurement original contract period
activities • Average number of quotation/bids received
• Percentage of contracts by value requiring amendment
towards extension of time more than 30 days
• Percentage of contracts by value requiring amendment
towards cost escalation (in percentage terms)
• Number of procurement-related complaints received and
upheld
• No contract exceeds the threshold for high-value contracts
Adequate monitoring of • Budget allocation as per annual work plan Every
FM activities • Release of funds on timely basis Mission
• Payments done on timely basis And annually
• Accounting system operational and Program reports are
generated on timely basis
• Audits completed on timely basis and reports submitted to the
Bank on timely basis
Program Risks and Mitigation Measures

72. Based on the fiduciary assessment, the key risks and mitigation actions are presented below.

Table 4.12: Key Issues, Risks, and Mitigation Measures

Risk/Weaknesses Mitigation Actions Responsible Deadline
Lack of program Set up a Program Coordination Unit. MASM
coordination unit Elaborate a Program Operation Manual, By effectiveness
including financial reports, ACG protocols, and
financial reporting of the Program Expenditures
templates.
Limited fiduciary The MASM’s fiduciary team should be MASM No later than
capacities (procurement strengthened. three months
and FM staff have limited - Additional procurements staffs should be after
capacities to handle the appointed to assist the current PRMP. effectiveness
Program activities) - Experienced and qualified FM civil servants
should be appointed to the DPAF to improve the
FM
Program expenditure Prepare and submit to the World Bank a MASMS/CAMO During Program
financial reports financial report tracking the PforR program implementation
expenditures and the disbursements through
DLIs on semester basis. The template of the
report will be agreed and incorporate in the
POM
Limited capacities of the The capacities of internal auditor appointed MASM During Program
internal audit function within the MASM (IGM) to ensure effectiveness implementation
and the audit committee of the auditor's work. This can be done through
of the MASM a training and on-the-job training by working
with the IGF’s team on existing project.
The audit and risks committee members should
be trained and equipped with appropriate tools
to facilitate their work.
For the first two years, the internal audit
activities will be conducted by the IGF’s team
and reports shared with the Bank on a semester
basis to ensure capacities transfer to the IGM.
Appropriate shares of the Share with the World Bank, MASM N+1 draft MEF By September
PEF are not included in the budget document (Budget program, DPPD) of Year N.
MASM annual budgets, during the third quarter of year N for technical
which can limit the advice.
smooth implementation
of PEF and will lead to
significant gap between
the actual Program
expenditures and total
Bank disbursements at
the end of the Program.
SAI’s financial audit The PforR Program’s audit will be conducted MASM Auditor should
capacity is limited by according to the approved specifications ToRs be recruited no
resource constraints and agreed upon with the World Bank for the first later than six
untimely submissions of two years by private audit firm recruited on months after
the Program’s audit competitive basis. The audit reports should be effectiveness
report submitted to the World Bank. After these two
years, the World Bank will assess the capacities Nine months
of the SAI and decide if the external audit can be after the end of
carried out by the SAI. The Fiscal Governance fiscal year.
and Service Delivery Program for Results
(P176763; under preparation) includes
components aiming to build the capacities of the
SAI.
Fraud and corruption: Risk The HCPC will share, with the World Bank, HCPC During Program
of fraud and corruption information on the allegations of fraud and implementation
affecting the Program corruption using the template agreed in the
POM on a semi-annual report basis.