Management 5-Point Action Plan Summary

1. II. Strengthen risk management capacity, incentives and accountability at the project and institutional levels At the project level: 5. Review lines of accountability at the management and staff level 6. Introduce incentives and greater management support and oversight and communicate expectations to staff At the institutional level: 7. Prepare an annual Integrated Risk Report 8. Review QAG, to inform a broader assessment of gaps and overlaps Management 5-Point Action PlanSummary October 2010 Timeline Completed/Implemented Completion by June 2011 Problem Identified Corrective Action Inefficiencies and gaps in control framework governing investment lending (IL) (i) non-rationalized “one-size-fits all ”requirements irrespective of risks (ii) over-focus on project preparation at theexpense of implementation, and (iii) outdated and complex policy framework • I. Improve efficiency, effectiveness and controls for IL • Match the demands of the process to the level of risk and focus resources on higher risk projects • Strengthen IL supervision by increasing resources, support and management oversight of project implementation • Tailor design and financing options under the IL instrument more closely to the needs, capacity and risk profile of clients • Consolidate multiple rules into clear key principles to inform design and processing     Diffused management and staff accountability and responsibilities for operational quality Inadequate mechanisms for institutional risk identification monitoring and management     • III. Better integrate fraud and corruption prevention into operations • Establish clear responsibilities and accountability for addressing F&C issues • Establish appropriate protocols of cooperation between INT and the regions • Promote ‘good practices’ across the Bank Group’s work • Improve tools such as smart project design • Prepare and monitor specific action plans for following up on INT reports • Issue OPCS Guidance on addressing GAC issues in projects. Inadequate integration of fraud and corruption issues in daily operations       Issues relating to fiduciary controls in the areas of financial management and procurement, particularly during project implementation • IV. Tighten Fiduciary controls: • In financial management (FM) • Institute corporate monitoring of quality • Integrate IT systems tracking project performance • Ensure that all records relating to quality arrangements for FM are maintained and up to date • In procurement • Ensure more consistent follow through and establish clear mechanisms to resolve disagreements • Update procurement policy to incorporate risk management, enhance complaints handling and mainstream risk-base procurement assessment      IT system vulnerability Difficulties in timely accessibility to operational documents Mismatch between AAA types & processes • V. Strengthen role of IT in risk management and improve AAA processes : • Prevent password sharing and strengthen controls to privileged systems • Improve accessibility of operational documents through automation • Rationalize processes and controls governing AAA, address compliance issues identified by IEG and QAG; improve system support and monitoring   