SAR Action Plan Fiduciary Forum March 26, 2008
Action Plan OverviewEight related sets of Actions • Investigations and Legal Action: GOI and WB • Review of Actions Already Taken • India Joint Health Action Plan • India Systemic Action Plan • SAR Governance Action Plan • Other Countries and Sectors in SAR • OPCS and Bank-wide Implications • Internal Accountability
Projects and DIR Time Line
Actions Already Taken (India)Prior to DIR release • Phase out PSAs – UNOPS, set up EPW • GAAPs for all new health operations • Disclosed Tech Specs for equipment • Mandate for enhanced accountability of GOI programs • Created integrated Financial Management Group and improved Audit TORs • Tighter financial controls in NACO • Tighter selection and oversight of NGOs • Mandatory Pre-award validation of WHO GMP
Actions Already Taken (World Bank)Prior to DIR release • Stronger Overall Approach to Governance • ACGA in Delhi, Guidance notes, Industry structure analytic work, state level interventions • Fraud and Corruption in new Operations • GAAPs for high risk operations • Strengthened Supervision Processes • Increased post procurement reviews and improved complaints management • Better integration of sector and fiduciary teams • Staffing and Training • Governance Advisers, procurement staffing, Anti-corruption training
Investigations • GoI has reviewed DIR in depth. Summary reflected in their comments (already distributed) • Referrals to CBI, and other legal and administrative actions will follow • INT support will provide support to GoI • INT’s own investigations
Joint Health Action Plan • Focused on key actions for future • Working groups formed in MoH • SAR worked together with GoI, under their leadership • Started with review of actions already taken • Plans reviewed and approved at Secretary and Ministerial level • Detailed plans and action behind each summary
Improving Monitoring… and Financial Control • GoI already mandated increased accountability • Community monitoring, 3rd party reviews, facility assessments • Implement & apply GoI mechanisms • Central sponsored and state schemes • Complaints redressal mechanism • Enhanced Financial Management Group and Audit Capacity • Important for institutional accountability • All build on GoI systems
Improving NGO Oversight • NACO has already strengthened NGO selection processes and tightened oversight • Operational Manuals; Financial Controls • Reviews: About 25% terminated • Disclose NGO selection, performance etc • Mainstream annual reviews • Establish Ombudsman • Expand and apply best practice to other programs
Strengthening Centralized Procurement • PSAs already phased out • Continue UNOPS for WB funded central procurement • Strengthen Empowered Procurement Wing • Deploy F&C detection software (already designed) • Train staff in detecting and responding to F&C • Appoint Procurement Audit Agent for all WB funded • Require pre and post shipment inspection • Generic equipment specifications updated • Move to E-procurement (phased, after pilot) • Annual review of drug quality
Strengthening Decentralized Procurement • Build state capacity (w/DFID, WB support) • Certified agent, separate unit • Certify TNMSC (Tamil Nadu) as first case • Full joint review and clarification of WB procurement methods • Greater use of framework & rate contracts • Contract terms and post qualification criteria • Limit WB funds for CSS @ district to operating costs and contractual staff
(Additional) Corrective Actions Five DIR Projects • Specific Actions agreed for three key projects • Food and Drug: close June 08, no new proc., make labs operational, equip/CW surveys • Orissa: Investigations already underway. 3 of 4 hospitals opened, hospital and equipment surveys and rehabilitation underway, audit follow-up, wider governance support • NACP: Reviewed test kits: no health risk; strengthened kit procurement & test strategy
Risk MitigationNine Ongoing Operations • Newer projects had “GAAPs” • Apply thematic measures for each project • Systemic civil works and equipment audits • Joint performance reviews • Complaints redressal • Limit who can do WB procurement • Review of WB procurement methods • Rigorous follow through on post procurement audits
India Systemic Action PlanAt the project/program level (Risk) • Integrated Risk Assessment to identify and mitigate all risks, including fraud and corruption risks, making use of COSO tool. • Invest in smart project design (e.g.output based disbursement) • Increase knowledge of competition, cost and quality standards in industries (market surveys)
India Systemic Action PlanStrengthened supervision • Increase budget by average 30%, target high risk projects • Regular supervision structured around the project supply chain and vulnerable points • Use of multiple triangulated sources of information • Strengthen use of demand-side accountability mechanisms such as project affected communities, third party mechanisms, complaint handling mechanisms • Use of dedicated on-the-ground consultants, random visits in addition to government audits and our own financial and procurement audits. • Review and strengthen staffing and skills mix across sectors
India Systemic Action PlanFor FY08 business plan, and beyond • Reduced number of projects to create space for better follow up on projects under implementation • All projects going to the Board will be explicitly screened for mitigation of risks identified in the DIR (using an integrated risk assessment framework combining safeguards, procurement and financial management in one exercise), and will have a detailed supervision plan.
India Systemic Action PlanAt the strategic level • Next CAS (FY09) under preparation will address - Strength of the institutions we will be working with • Exposure to and the riskiness of the sector • Geographical spread and our ability to design and supervise • Strengthen our operations by promoting transparency and anti corruption, building on Right To Information Act and GoI emphasis in 11th plan on improving governance. • ACGA will play an explicit role in providing advice to the teams on building in anti corruption measures, and to management in better assessing riskiness and mitigation • Enhance engagement on broader governance agenda (PFM reform, e-procurement, oversight entities, demand for good governance, sector governance…)
OPCS Action Plan
SYSTEM-WIDE ISSUES TO BE ADDRESSED BY OPCS AND HDN • Bank wide dissemination of results of this and earlier DIRs and implications • Supervision issues: preparation of new guidance on “smart" supervision and corruption issues • Risk management: assessing and mitigating corruption risks better • Procurement issues, including addressing decentralized procurement more effectively • Shortfalls in quality and scope of financial statement audits • Development of training modules for staff • Protocols with INT, remedies • Accountability
