The Bank should strengthen its oversight and risk management of GRPPs by: Establishing and maintaining a definitive, continuously updated, and searchable database of the GRPPs in which the Bank is currently engaged Requiring standard terms of reference for Bank staff serving on partnership boards Preparing Bank-wide guidelines for task team leaders of GRPPs. Providing sufficient budgetary resources for effective oversight and risk management. Requiring each vice presidency to produce an annual report on its involvement in GRPPs, including new entrants and exits.
Original Response: Partially Agreed. Management agrees that strengthening oversight and risk management is needed. Guidelines for GRPP task team leaders will be prepared as part of a broader exercise to strengthen the overall partnership management framework (see response to recommendation 2 above), linking selectivity, quality assurance, resources and risk management, monitoring and reporting, and governance (including clearly defined roles and responsibilities). Management agrees that Bank staff serving on partnership boards should have terms of reference, following standard Bank policies; however, Management disagrees that all terms of reference have to be standard. Management does not agree to mandating an annual report on GRPPs from each VPU. Instead, the immediate focus is better placed on developing better systems for information flows, and for management reporting and decision-making. Establishing a separate, definitive, searchable database is not warranted. However, Management will explore ways to improve current information systems and reporting so that relevant information on partnerships can be incorporated into and then easily retrieved from other existing reporting mechanisms.
IEG continues to be somewhat concerned that oversight and risk management of the portfolio of partnership programs continues to be less systematic than ideal. Many Bank staff engage with partners and work on activities that are part of formal and informal partnerships. IEG reviews have found that the Bank makes outstanding contributions to a number of partnership programs. Yet no mechanisms are in place to ensure this happens consistently. Management often approach partnership issues from the trust fund perspective, as evidenced also in the annual update. This approach makes for strong systems around financial flows and the attendant fiduciary controls, but it does not necessarily translate into consistently effective engagement in partnerships and oversight of their development results. There are hence risks that the Bank could be less effective than desired in its partnership engagements and fail to achieve results. The Bank could also incur reputational risks if its engagement in partnerships is inconsistent. It is unclear if the budgeting process described in the annual management update will result in adequate budgets for oversight of and engagement with partnerships.
This being said, a number of steps and changes influence this area. The GPs are taking steps to strengthen and consolidate their management and oversight of trust funds and partnerships. The ongoing trust fund consolidation supports this process. The new guidance issued by DFI on FIFs will contribute to strengthen oversight and risk management within the FIF portfolio.
Several concrete steps were taken in FY15 to further implement the 2013 Management Framework for World Bank Partnership Programs and Financial Intermediary Funds (FIFs). Revisions to the Trust Fund Handbook were published as a Bank Guidance on January 8, 2015. A Bank Directive and a Bank Policy on a Management Framework for World Bank Financial Intermediary Funds, and a Bank Guidance on Initiation of FIFs were issued on February 9, 2015, providing a current approach to the Banks overall engagement strategy with GRPPs. Specifically to the issues raised in this Recommendation, Bank staff serving on GRPP governing bodies have been provided with a terms of reference (via a Guidance Note on Terms of Reference for Bank Staff Representing the Trustee in FIF Governing Bodies issued on January 9, 2015), which explains the broad roles and responsibilities of Bank staff representing the World Bank as Trustee in FIF governing bodies. Secondly, in light of the changes in the global external environment such as the development of the SDGs, the WB is designing and implementing significant reforms of the World Banks external funds portfolio. One component of these reforms is the management and external reporting of this portfolio. One of the findings of the Deep Dive analysis commissioned by DFI shows that multiple and duplicative reporting is being issued on the trust fund portfolio. As such, all routine and existing reports have been suspended until the new Management Reporting framework and components can be developed. With regard to providing sufficient budgetary resources for effective oversight and risk management, VPUs are accountable for ensuring that the Bank's responsibilities are met with respect to the trust funds under their management, and that adequate management and control structures are maintained for proper implementation and oversight of TF activities, and that there is sufficient administrative and budgetary support for carrying out these tasks. The introduction of multi-year, integrated budgets ensure that external financing becomes subject of institutional dialogue between GPs and RVPs throughout the business planning and budget forecasting processes.
Additional Information:
As part of the World Bank corporate restructuring, all existing trust funds have been mapped to the new corporate structure. Following this, the senior management of all Global Practices are in the process of reviewing their portfolio of partnership programs and looking at opportunities for rationalization and consolidation. For instance, the Water GP is currently actively working to close down many of its existing programs and consolidate them under an umbrella facility. Moreover, as noted in our additional update on recommendation 71, the set of Bank Procedure, Directive and Guidance related to the Management Framework for FIF, all published in FY15, is a very significant and tangible achievement in the path towards improving management oversight of partnership programs. These document address specifically some of the challenges noted by IEG in this recommendation (i.e., providing terms of reference for Bank staff representing the Trustee in Financial Intermediary Fund Governing Bodies). While it is correct that they only apply to FIF, however this family of trust funds represent 67% of total assets under management ($33 billion out of $49 billion) and 57% of FY15 trust fund disbursements ($5.8 billion out of $10.1 billion). Management is planning to build on this achievement to continue improving Bank oversight of other partnership programs.
Management's actions in response to IEG's evaluation are a work in progress. IEG agrees with Management's ratings as indicative of where more work is currently being done those areas rated 'substantial as opposed to medium. IEG reserves judgment on the outcomes of this work, such as the preparation of the new Partnership Program Management Framework (PPMF) and the revision the DGF eligibility criteria, until these are completed and start to be implemented by the Network and Regional VPUs responsible for partnership programs and by the programs themselves. Overall, IEG is pleased to see that Management is doing a substantial amount of work on implementing its policy agenda to promote effective partnership arrangements in comparison with the previous 23 years.
IEG also interprets these ratings against what Management agreed in the cases where Management did not fully agree with IEG's recommendations. For example, IEG recommended that the Bank should develop a formal policy on engaging with GRPPs a recommendation with which the majority of EDs who commented on the recommendation agreed. IEG hopes that the preparation of the Partnership Program Management Framework will end up being the first step towards a formal policy. IEG remains doubtful that the Bank's accountability for governance, management, and results of the GRPPs in which it is involved will be sufficiently accepted and exercised Bank-wide in a decentralized Bank in the absence of a formal policy, like, for example, OP/BP 14.40 on trust funds. IEG sees a particular and pressing need for a formal policy on hosting the management units (secretariats) of GRPPs in the Bank in order to address the existing confusions regarding their status.
IEG agrees that systems, databases, and business processes for engaging with GRPPs should be linked to the ongoing work on Trust Fund and DGF reforms. There should be one reliable Bank-wide system for tracking GRPPs and the sources of funds that finance their activities. However, trust funds and DGF grants are not programs in and of themselves, although they have often been labeled as such. They are dedicated sources of funds to support GRPPs and other activities agreed between the donors, the Bank, and other partners. They are like the fuel in an automobile. And like a car and its driver who steers the car towards a destination, it is the programs, their governance and their management that produce the results with the aid of the fuel provided by trust funds, DGF grants, and other resources dedicated to the programs. Partnerships are first and foremost about building relationships among the partners, and IEG found in its recent evaluation that past systems, databases, and business processes had put excessive emphasis on the funding of the programs to the relative neglect of forging strong institutional relationships among the program partners.
The essence of partnership programs, as opposed to other activities that trust funds and DGF grants support, is shared governance. IEG continues to recommend that the PPMF should focus, at least in the first instance, on partnership programs with shared governance, for the three reasons given on pages 1214 of our evaluation: (a) such programs challenge the Bank's traditional programmatic and financial accountability mechanisms; (b) the Bank is dedicating increasing amounts of senior management time to their governance; and (c) the Bank expects the programs activities to be appropriately linked to the Bank's country operational work. In addition, the Bank can reasonably expect more requirements from such programs when they are established, such as a charter or some other constitutive document which defines the partnership.
Everyone in the Bank, including IEG, is dependent on the systems and databases that Bank Management establishes to keep track of the Bank's activities, in this case GRPPs. Since Bank Management appears to have decided to include partnerships without shared governance in the Bank-wide database, IEG would ask that those partnership programs with shared governance should be readily identifiable, and extractable from the database. This involves each program answering a simple question: Is the consultative group, program council, or steering committee, etc. that has been established to oversee the program a collaborative or a consultative body Do the members of the body have shared responsibility for programmatic oversight and shared accountability for results (collaborative), or does one partner, i.e. the Bank in the case of in-house programs, simply listen to what the other partners have to say while continuing to make the major governance and management decisions and to accept accountability for results (consultative). Authority and accountability should be aligned. Each partnership should have to declare on which side of this collaborative-consultative fence it stands, so that the Bank can avoid the continuation of situations in which it has little or no authority but most of the accountability.
IEG also hope that processes will finally be put in place to ensure that TTLs provide both CFP and IEG with electronic copies of recently completed evaluations within one month of their completion, and that copies of these evaluations will be easily accessible on the Bank's intranet. IEG has recently shared its own database of recently completed evaluations of GRPPs with CFP as a foundation on which to build this system.
These are some of the things that IEG will be looking for when the new Partnership Program Management Framework is presented for Bank-wide review and to the Board.
This report, which is an assessment of the Bank's engagement in a subset of partnership programs of global and regional scope, was issued in spring 2011. The Management Response expresses appreciation for IEG's work in this area, and indicates that most of the recommendations are partially to substantially agreed. Some of IEG's recommendations contain sub-recommendations, some of which Management plans to fully adopt and some not. Hence, the actions to be taken under these recommendations in the coming years may respond more to the spirit than the letter.
Overall, Management agrees with IEG's message that stronger oversight over partnership programs is warranted, including upfront selectivity and ongoing management of both individual programs and wider portfolios. To achieve this, Management is currently preparing a Partnership Program Management Framework paper, to be discussed by the Board in H2FY12. However, Management's view of these programs is also hat they are closely related to their funding instruments and other Bank operational work. Hence, systems, databases, business process, and strategy development needs to be linked to the ongoing work on Trust Fund Reform and on the Bank's operational and strategic agendas, as opposed to freestanding approaches.
The population of GRPPs identified by IEG includes both internally and externally managed programs, and they are supported by Trust Funds, Financial Intermediary Funds, and the Bank's Development Grant Facility. Intensive work has been carried out on all three types of funding instruments in recent years. The DGF Reform process has resulted in a more dynamic portfolio in line with DGF's intended catalytic role, with exits of longstanding recipients. IEG has recommended revisiting the DGF criteria (the one recommendation to which Management fully agreed), and Management will raise this topic with the DGF Council. The next phase of DGF reform is focusing on better results frameworks for programs receiving DGF grants. A FIF Framework paper is currently under preparation by Management, and FIFs provide the largest volume of funding to the GRPP portfolio. Finally, the Board is regularly briefed on the Trust Fund Reform process, which is also increasingly focused on mainstreaming trust funds into Bank operations and on efforts to improve results and reporting.
The forthcoming new Partnership Program Management Framework will build on this work by creating guidelines for program-level aspects of GRPPs and other similar programs. These guidelines will cover selectivity criteria, the applicability of Bank policies and procedures, managing partnership structures (including secretariats), providing appropriate Terms of Reference for Bank staff involved in governing bodies, and promoting global-country linkages. While much of this work pertains to internal Bank procedures, external partners are also being consulted to prepare this Framework.
IEG looks forward to seeingthe searchable on-line database created in May 2013; this was not yet available on the Bank's intranet. The inventory of GRPPs presented to the Bank's Board in July 2012 was based on a survey that is now two years out of date and contains many errors and omissions. Among other things, it does not include4 DGF-supported programs whose support has been channeled through other programs, nor 18 former DGF-supported programs in which the Bank was still involved (as of June 2011). On the other hand, the list includes 2 country-specific trust funds, 30 single-donor trust funds that are little more than bilateral arrangements between the Bank and a single donor,30 multi-donor trust funds, some of which do not have Partnership Bodies, and two competitive grant programs (the Development Marketplace and the Margaret McNamara Fellowship Program) that have not previously been regarded as Partnership Programs. IEG is pleased that the Bank's representatives on partnership governing bodies will have to have a TOR issued by their line managers, but questions whether this requirement should be applied to all the programs in CFP's list, such as the 30 single-donor trust funds.
Management discussed with the Board in a Technical Briefing in July 2012 the Board paper on "Partnership Programs: An Information Note", which provides a comprehensive inventory of all global and regional partnership programs in the Bank.In May 2013, Management has created a searchable on-line database based on this inventory of partnership programs. The implementation plan for the forthcoming Management Framework for Partnership Programs and Financial Intermediary Funds (July 2013) will include procedures and guidance tools for Bank units and staff involved in managing the Bank's engagement in Partnership Programs funded by trust funds, DGF, and FIFs. High emphasis is being placed in transparent risk identification and management. The framework establishes the need for standard terms of reference for Bank staff serving on partnership governance bodies. Bank-wide guidelines and standard engagement models will be provided to task team leaders overseeing partnership programs as part of the implementation roll-out of the new Framework.
IEG is concerned that oversight and risk management of GRPPs remain quite inadequate. Crucial steps to operationalize the Management Framework have yet to be finalized and communicated. Bank staff serving on partnership boards have not, to IEG's knowledge, been issued terms of reference. IEG has not seen improvements in systems for information flows, management reporting and decision-making (although efforts to strengthen data systems are underway, as noted by Management). The searchable database of partnership programs contains a mix of single and multi-donor programs and does not provide Management with a strong tool to monitor the portfolio.
This rating is based on the non-implementation of the Management Framework for partnerships and trust funds which was discussed by the Board in June 2013 but has yet to be implemented in a meaningful way. Promised next steps -- the risk frameworks, guidance to staff, and steps to enhance reporting and oversight around partnerships -- have not materialized. Representatives on partnership programs boards have not been issued TORs, to IEG's knowledge. IEG is also not aware of action on guidelines and strengthened quality assurance mentioned in the original management response. In IEG's view, presenting the Management Framework was a useful first step, but management was always clear that it needed specific follow up actions to strengthen oversight and risk management. These are now overdue, and hence IEG is taking the step to rate this action lower.
The Management Framework, referenced in response to MAR Recommendation 66, provides a frame of reference for a strengthened approach to risk management and oversight of GRPPs; in addition, applying the ADM framework, engaging GPs, Regions, and CMUs are all part of the broader approach on governance and oversight. In addition, Management is currently working on an integrated analytics platform that will greatly enhance data on trust-funded partnership programs and providing more dynamic reporting capability in order to improve strategic oversight over these programs.