1. Loan Administration Change Initiative (LACI): Improving Development Effectiveness through Better Financial Management Presentation to Agencies Implementing World Bank Financed Projects

6. LACI Project Overview Phase I Phase II Phase III Stakeholder Analysis Current State Analysis Vision Creation Process Design Phase IV Pilot Testing & Evaluation APR ‘96 MAY JUN JUL AUG SEP OCT NOV DEC JAN..……...…….. DEC ‘97 Phase V Transition and Implementation

9. LACI Process Overview Yes Project Implementation no Monitor Project Financial & Physical Implementation Disburse to Special Account A Quarterly Borrower submission and Bank review of Project Management Report Determine Reporting/Monitoring Requirements are met Borrower and Bank coordinate to resolve impediment projects with strong financial management systems

10. Attributes of a Strong Financial Management System Loan Administration Change Initiative (LACI) Internal Control Project Financial Management Indicators Audit Arrangements Reports that Link Financial and Physical Progress -corresponds to agreed format/applicable standards financial information: -is relevant to decision makers -is timely -- submission dates set and adhered to -is accurate and reliable -is independently audited in a timely manner -includes explanation of significant variances there is appropriate segregation of duties and responsibilities there are clear, written procedures and responsibilities that are adhered to there is a critical mass of sufficient qualified/trained staff and supervisors there is adequate: -asset control -control over bank and cash accounts - maintenance and easily available access to supporting documents  auditors are: -capable and experienced with respect to specific project -independent of the entity/project audited -competent and follow acceptable auditing standards/practices      Project Accounting Project Financial Management and Other Related Staffing

11. Quarterly Project Management Report (to support withdrawal application) The Bank will provide example reporting modules and create an enabling environment for receipt of electronic transactions  minimum requirements: -sources and uses of funds statement -expenditures by category and project activity statements - special account reconciliation -expenditure forecast  Project Progress Report Financial Statements Procurement Management Report -procurement status report -contract commitment/expenditure report, including source of supply data for contracts above the prior review threshold, as well as post-review contracts above $100,000. comparison of actual physical and financial progress vs. forecasts 