Disbursement Policies and Procedures Applicable To Multi-Country HIV/AIDS Program (MAP)

1. Disbursement Policies and Procedures Applicable To Multi-Country HIV/AIDS Program (MAP) Breakfast Presentation on Fiduciary Management in Multi-Country HIV/AIDS Program (MAP) January 27, 2004

2. Agenda • Disbursement issues in MAPs • LOA clarification note • Funds flow and CDD • Special account arrangements • Other disbursement arrangements • LOA contacts Disbursement Policies and Procedures Applicable to MAPs

3. Disbursement issues in MAPs • Slow disbursement • poor funds flow • liquidity problems • Recognition of expenditures • Documentation of expenditures • Weak capacity at community level Disbursement Policies and Procedures Applicable to MAPs

4. LOA clarification note • Issued November 4, 2003 • Respond to task teams, fiduciary staff • Clarify the disbursement policies and procedures that apply • Highlight that there is flexibility within current policies • Identify LOA support/contact persons Disbursement Policies and Procedures Applicable to MAPs

5. Funds flow and CDD … • Complex funds flow arrangements (dispersed beneficiaries, small transactions, layers of accountability) • Practice to date - await full accounting for advances before submitting applications to the Bank • Delays and liquidity problems at the NAC level Disbursement Policies and Procedures Applicable to MAPs

6. Funds flow and CDD … • CDD Guidelines apply • De-link disbursement from reporting and monitoring • For disbursement: • advances to community groups = eligible expenditures • supporting documentation = simple summary statement Disbursement Policies and Procedures Applicable to MAPs

7. … Funds flow and CDD • Monitoring and control • form and content appropriate to the project: e.g, progress and completion reports, technical inspection certificates, minutes of community meetings, memoranda of receipts and expenses • determined by the FMS and TTL • not submitted to the Bank Disbursement Policies and Procedures Applicable to MAPs

8. Special account arrangements … • Bank policies allow more flexibility than is generally used by staff • Policy limits: • Traditional disbursement – 10% of loan amount • PMR disbursement – 20% of loan amount • Report-based disbursement (using FMRs) – forecast for next two reporting periods Disbursement Policies and Procedures Applicable to MAPs

9. … Special account arrangements • When limits are too low • flexibility available to increase SA under traditional and PMR disbursements • subject to approval by Loan Department • TTLs & FMSs evaluate cash needs and accounting controls, justify and request increase • amendment to legal agreement Disbursement Policies and Procedures Applicable to MAPs

10. Other disbursement mechanisms • Reimbursement • NAC/government pre-finances • Direct payment • To suppliers, or exceptionally: • directly to NAC, or • to subprojects • Special Commitments Disbursement Policies and Procedures Applicable to MAPs

11. Summary • HIV/AIDS projects have unique funds flow arrangements • CDD guidelines apply – disbursements are de-linked from reporting • SA policies do provide flexibility • Flexibility available in other disbursement policies Disbursement Policies and Procedures Applicable to MAPs

12. Where to get more information … • LOA Finance Officer • LOA HIV/AIDS Coordinator • Blanshard Marke • LOA Policy Officer • Ivonna Kratynski • LOA Booklet (in progress) • Q&A Disbursement Policies and Procedures Applicable to MAPs