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Speaker: Dr. César Arias Auditor General of the Republic of Argentina

FINANCIAL AUDITS OF MULTILATERAL CREDIT AGENCIES LOANS WITH PARTICULAR REFERENCE TO THE WORLD BANK AND THE INTER-AMERICAN DEVELOPMENT BANK. Speaker: Dr. César Arias Auditor General of the Republic of Argentina. CREATION OF THE WORLD BANK AND THE INTER-AMERICAN DEVELOPMENT BANK.

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Speaker: Dr. César Arias Auditor General of the Republic of Argentina

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  1. FINANCIAL AUDITS OF MULTILATERAL CREDIT AGENCIES LOANS WITH PARTICULAR REFERENCE TO THE WORLD BANK AND THE INTER-AMERICAN DEVELOPMENT BANK Speaker: Dr. César Arias Auditor General of the Republic of Argentina

  2. CREATION OF THE WORLD BANK AND THE INTER-AMERICAN DEVELOPMENT BANK • WORLD BANK: BRETTON WOODS CONFERENCE, 1944 FORMED BY THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND THE INTERNATIONAL DEVELOPMENT ASSOCIATION • INTER-AMERICAN DEVELOPMENT BANK, 1959 FORMED BY THE INTER-AMERICAN INVESTMENT CORPORATION AND THE MULTILATERAL INVESTMENT FUND • OBJETIVES: PROMOTING THE DEVELOPMENT OF REGIONAL ECONOMIES PROVIDING LOW INTEREST LOANS, GRANTS AND FINANCIAL AID

  3. PROGRAMS APPROVED FOR ARGENTINA

  4. AUDIT GUIDELINES • Should comply with International Audit Standards and those issued by organizations such as INTOSAI Exceeds the parameters of a financial audit since it also requires: • A more detailed review of the eligibility of the expenses reported to the Bank. • An opinion on the agency’s compliance with the terms of the loan agreement and with the applicable laws and regulations • A report on the project’s internal controls, and, as may be the case, disclosure of the current situation of the findings and recommendations made by previous audits. • Include a summary of the audit procedures that were completed

  5. An Audit Report on Multilateral Credit Organizations’ projects includes: • Reports on financial statements. • Report on disbursement requests. • Report on degrees of compliance with contractual clauses. • Report on internal control (memorandum). • Statement of auditing procedures. • Certifications of disbursement requests (ex-post analysis).

  6. OBSERVATIONS USUALLY DETECTED IN THE REPORTS

  7. COMMITMENT FEES • These are fees paid on the non-disbursed loan amounts • In case of implementation delays, the disbursements are delayed and the fees to be paid are considerably increased • The responsibility for under-execution falls on the borrowing countries, although the design of the Programs is developed and imposed by the Lender

  8. AVERAGE RATE OF ARGENTINE PUBLIC DEBT INSTRUMENTS

  9. EXAMPLES IN ARGENTINAIDB LOAN ENVIRONMENTAL MANAGEMENT “ MATANZA-RIACHUELO BASIN” • LOAN AMOUNT: Originally USD 250,000,000. Reduced to USD 100,000,000. • Under-execution of the Program resources, with the consequent financial cost and inefficiency this implies. Only flood control and ship removal works were carried out. • Program budget amount USD 100,000,000 from IDB and USD 91,633,742.47 of Local Counterpart. • AMOUNT DISBURSED AS AT 12/31/2005: IDBUSD 9,988,371.68 AND USD 75,926,519.94 Local Counterpart. • As at 12/31/2001 the Bank had disbursed USD 7,077,360 and on said amount, as evidenced by the accounting information, as at that date financial charges for USD 8,964,712 had accrued (126.6% of the disbursed amount). • AMOUNT EXECUTED AS AT 12/31/2005: IDB USD 9,751,591 and Local Counterpart USD 75,908,136 of which 40 % is pending recognition by the IDB.

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