Government of Sierra Leone

1. Harmonization & alignment of development partners' financial management arrangements Health Systems Funding Platform and Compact Joint Financial Management Assessment Preliminary findings March 9, 2012 Government of Sierra Leone

2. Background Global level Paris Declaration, Accra Agenda for Action, IHP+ Health Systems Funding Platform Harmonization and alignment under HSFP Exercise conducted by GAVI, Global Fund and the World Bank with facilitation from WHO Country level Compact Platform partners’ commitment to compact approach National Health Sector Strategic Plan 3-year Joint Program of Work and Funding Results and accountability framework

3. Financial Management Assessment: Objectives Understand government fiduciary framework and arrangements, strengths, and challenges, and reform underway Understand donors requirements and identify: similarities allowing harmonization and design of arrangements to be adopted and used similarities with government arrangements, allowing alignment with government Recommendations for action by parties Agree on next steps

4. Joint financial management assessment (FMA) What is it Risk based, assesses the risk and suggests mitigation Identifies strengths, areas for alignment or for harmonization What is it not Not an audit Not a pass or fail or approval or rejection for funding Does not look at quality of plans and expenditures

5. Joint Financial Management Assessment (FMA) Outputs Risk measurement and mitigating measures and immediate, short and medium-term actions Recommendations to improve; sequenced for planning and execution Draft MOU containing description of processes/procedures/mechanisms to be commonly used (commonly known as MOU-JFA) Proposed options for flow of funds to facilitate participation of most donors (pooling and non-pooling) Proposed model financial statement for single reporting Draft ToRs for comprehensive audit by the same auditors for all participating development partners

6. Joint financial management assessment (FMA) Outcome Alignment with Gov., where possible Harmonize among participating development partners around common framework Potential Benefits Reduced burden and costs on government and development partners Improved effectiveness of technical assistance provision Improved risk management and enhanced fiduciary oversight Improved coordination, planning, management

7. JOINT FMA mission: Process

8. Preliminary findingsCompliance, Prevention, Detection, Sanction Financial Regulations are good (need some updating) But need an FM manual to operationalize; Different approaches for financial management by stakeholders, sometimes weakening fiduciary (eg. bank accounts; one or more FM manual per DP) Off-budget and off-treasury – contrary to country laws, some creating high risk to donor funds (bank accounts opened at very low levels: unclear account names); Cumbersome Multiple reporting requirements; Fragmented TA /capacity building, supervision, not sustainable capacity; Fragmented audit arrangements; another high risk of undetected duplication and double dipping opportunity; Internal and external auditors lack resource & capacity.

9. Joint FMA mission: Preliminary findings Planning and budgeting Good process, but issues: Completeness -- off-budget funding Reliability/predictability – allocation Credibility – releases and information flow 3 issues: Classification and linkages– need for a tool to convert JPWF  government budget Reprioretization – needs versus resources (build 3 scenarios ; maybe MBB) To get everything on budget and into IFMIS

10. Joint FMA mission: Preliminary findings Internal Controls and Internal Audit Internal Controls - Design of financial regulations - Adherence to financial regulations - Donor financial management manuals Internal Audit - Organization structure - Role & scope - Audit plan & approach - Capacity & limitations

11. JOINT FMA – Preliminary Findings Stores/Assets Management Lack of National logistic management information system at both national and district level. - Coordination between CMS and other projects such as global fund regarding stock level and distribution Challenges: - Lack of vehicles - HR capacity - Lack of adequate storage facilities - Issues with funding from Government

12. JOINT FMA – Preliminary Findings Spending (technical) Units: DPC Preference to tap into donor funding rather than government funding - Quicker process with donor process - History of inefficient government process of funding - Issues with reporting from DPC to MOH

13. Donor financial management Global Fund Funding to NAS with MOH as sub recipient Lack of transparency with funds received by MOH Inefficient funds transfer mechanism Recommendation: Create/ Reinforce Financial Management Unit Create an efficient financial management system Harmonization of donor requirements (manuals, reports etc)

14. Documentation, Accounting and Financial Reporting PET forms process too lengthy (designed by donors but their funded operations bypass it) Lack of transparency in payment of form II No threshold, everything signed by high level officials IFMIS and PETRA (robustness, access/usage, flexibility, future) Good tools but not fully deployed (no. of authorized, few modules only) No interface between the two; multi currency insufficient Weak capacity and training If reports tailored, can produce good reports Warning : GIGO

15. EXTERNAL AUDIT AND SCRUTINY Auditor General and ASSL... Mandate Independence Capacity Practices Involvement/information about DP projects at late stage

16. Next steps Joint financial management assessment (5-14 March 2012) FM Questionnaire and other documents Joint FMA final report with recommended action plan (end May 2012) Draft document containing proposed joint financing arrangements (MoU) (end May 2012) Joint Assessment of National Health Strategy (JANS) to complete sector assessment? Signing of MOU for joint financing agreement