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The Design of NCFs: focusing on fiduciary standards and monitoring evaluation

The Design of NCFs: focusing on fiduciary standards and monitoring evaluation. The case of The Micronesia Conservation Trust. Fund … at a glance. Fund name: The Micronesia Conservation Trust

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The Design of NCFs: focusing on fiduciary standards and monitoring evaluation

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  1. The Design of NCFs:focusing on fiduciary standards and monitoring evaluation The case of The Micronesia Conservation Trust

  2. Fund … at a glance • Fund name: The Micronesia Conservation Trust • Country: Federated States of Micronesia (Incorporated), Republic of the Marshall Islands, Republic of Palau, US Territory of Guam, Commonwealth of the Northern Mariana Islands. • Objective: To provide sustainable financing and support for biodiversity conservation, related sustainable development and environmental education. • Governing body: Board of Trustees – 7 Regional Members, 2 International Members, 1 Honorary Member (Donor Representative) • Legal status: MCT is a charitable and irrevocable corporation incorporated under the laws of the Federated States of Micronesia. 2002. • Capital: 10.5 million (endowment) • Beneficiaries: Conservation NGOs, local governments, local communities and technical partners.

  3. Fiduciary Standards Financial management and integrity Discussion can include how your fund: • records transactions and balances in a manner that adheres to broadly accepted good practices? What standards are applied? • MCT follows the Generally Accepted Accounting Principals maintained by the US Financial Accounting Standards Board. • The Board of Trustees has primary responsibility for setting and maintaining MCT’s fiduciary policies, standards and procedures. • MCT maintains a Segregation of Duties so that no financial transaction is handled by only one person from beginning to end. • Financial reports generated by the Finance Officer are regularly reviewed by the Board Treasurer and presented to the Board of Trustees on a quarterly basis. • is audited periodically by an independent firm or organization MCT contracts an external financial audit for every fiscal year. Currently we use Deloitte & Touche LLP. • manages and disburses funds efficiently and with safeguards to recipients on a timely basis Fund distribution for advised sinking funds governed by grant agreements and generally involves the Call for proposals process. Fund distribution from the Micronesia Challenge Endowment Fund revenues is governed by MOUs between MCT and the jurisdictions.And by MCT Investment Policy. • MCT is also a 501c3 and adheres to US IRS reporting standards, which are filed annually

  4. Fiduciary Standards • What are the procurement procedures applied in your fund that ensure transparent practices? • Procurement policy expanded and improved in new Policy and Operations Manual. • Conflict of Interest Policy provisions apply. • Procurement committee formed: ED, DED, Program Manager, Board Treasurer. • Method for handling complaints also laid out in policy. • Procurement Amount Required Authorization Up to $500 Deputy Director (or designee) $501 to $3,000 Executive Director (or designee) $3,001 to $10,000 Internal Procurement Committee Above $10,001 Board of Trustees • How to manage and oversee the execution of the project including ability to manage sub-projects and resource to support project delivery and implementation? • Periodic Project monitoring trips by MCT Staff. • Participatory monitoring and evaluation form and procedure. • Review of reports submitted and check against approved performance based budget and project plans and objectives. • Maintain regular contact with grantees – email, telephone, Skype, site visits, training activities. • Individual Program staff assigned project management responsibilities from start (contract approval) to finish (final reports from sub-grantees and preparation of draft reports to donors). Program Manager responsible for completing CFP process, assignment of project responsibilities and has ultimate responsibility for final project reports to donors.

  5. Fiduciary Standards Transparency and self - investigative powers • What are the procedures to deal with financial mis-management and other forms of malpractice? • In addition to the Deloitte annual financial audits of MCT accounts, we have Developed agreement with FSM National Auditor to assume responsibility for MCT’s Internal and performance Audits. • BOT Governance Committee responsible for overseeing internal controls procedures. • Conflict of Interest Policy applies to Board, Staff and Grantees. • Board Treasurer reviews all financial reports on a quarterly basis before they are submitted to the full board

  6. Monitoring and Evaluation: Financial • What type of programmatic or financial information should be reported? How often should information be reported and to whom should the reports be sent? • Will audits be undertaken? By whom? • Annual Financial Audits conducted by Deloitte and Touche. • External Evaluation to be contracted out. TOR under development. • External Audits to be conducted for LifeWeb project. (Earnst and Young) and GEF project (TBA).

  7. Monitoring and Evaluation: Technical • How to monitor the technical achievement of projects financed by the fund? • Project implementation measured against approved workplans, goals and objectives. • Project documents (above) reviewed and approved by Technical Committee, Conservation Program Staff, Board of Trustees. • Project reports required and reviewed by Conservation Program Staff as implementation underway. • Technical partners PICRC and PMRI are helping to measure success of our funded grants and assisting with the capacity building work for our grantees. • The Micronesia Challenge Measures team is developing uniform indicators to measure the success of conservation work across the sub-region towards the goals of the MC. • What is the system to assess the impacts of projects financed by the fund? • Reports/data collected from sub-grantees. Collated and reported to donors against project plans and objectives. • Developing TOR for external review. • Upcoming learning exchange with “mature” trust to learn how they do this.

  8. Lesson learned • Maintaining a balance between sophistication required to meet international standards and simplicity/efficiency appropriate to small size of fund and commitment to maintaining small staff and minimal management overhead costs. • Growth (budgets and staff) opportunistic at the beginning but becoming more strategic – makes fiduciary matters more important and more focused. • Level of staffing and staff capacity essential/key.

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