Quarter 3 Activity Report

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized Quarter 3 Activity Report Fiscal Year 2017 Public Disclosure Authorized Internal Audit Vice Presidency As of April 15, 2017 Public Disclosure Authorized

2 Contents Quarter s Engagements 2 Annex: List of Engagements in the FY17 Q3 Activity Report 5 About IAD The Internal Audit Vice Presidency (IAD) is an independent, objective assurance and consulting activity that helps to improve WBG operations. It assists the institution in accomplishing its objectives by evaluating the effectiveness of WBG governance, risk management, and control processes. Furthermore, IAD advises management in developing control solutions, and monitors the implementation of management s corrective actions. IAD s work is carried out in accordance with the Institute of Internal Auditors (IIA) International Professional Practices Framework. IAD s Quarterly Activity Report summarizes IAD s engagement results for the quarter. 1

3 1. Special Review of Management s Processes for Integrating Select IFC/Bank Advisory Services The objective of the Special Review of Management s Processes for Integrating Select IFC/Bank Advisory Services was to provide feedback on management s progress towards implementing the process changes necessary for the integration of the IFC/Bank public sector-facing advisory services within the two Joint Global Practice (Joint GP) units of Finance and Markets (F&M) and Trade and Competitiveness (T&C); and identify areas for management s attention and consideration as part of their integration efforts. IAD s review indicated that the Joint GPs have been successfully implementing key steps toward integrated service delivery, from formulating strategy to defining program delivery. Progress includes: Joint GPs have each developed a strategy to deliver on the Joint GP vision and objective, and accordingly have updated their service offerings. The foundation has also been laid for oversight and accountability with the creation of a Joint GP Steering Committee in mid-2015 that acts as the governing body. To strengthen the collaboration with IFC, Joint GPs have established Memoranda of Understanding (MOUs) with IFC regional directors to promote a work focus that will serve the priorities of both IFC and IBRD in each region. However, the change journey has faced significant challenges relating to: (i) Strategy & Oversight the need for a consistent understanding of the institutional vision and future direction of Joint GPs; (ii) Program Planning the need for consistent processes to coordinate business planning and work program development with the regions, sectors, and industries; (iii) Progress Management the need for a consistent method and metrics to measure progress; and (iv) Institutional Operational Support the need for long-term solutions to address inefficiencies that have arisen in the areas of budget, IT, and human resources. 2

4 2. Audit of WBG s Business Solutions Delivery & Project Governance (Operations & Corporate Lines of Business) The objective of the Audit of WBG s Business Solutions Delivery & Project Governance (Operations & Corporate Lines of Business) was to assess the adequacy and effectiveness of the governance, risk management, and controls over the WBG s Business Solutions Delivery & Project Governance processes within the Operations and Corporate lines of business. The audit concluded that World Bank Operations and Corporate (ITSOC) Business Solutions Center is delivering business solutions that largely meet the needs of Operations and Corporate Units, with business solution projects being delivered by experienced and knowledgeable ITS delivery teams. Over the past few years, processes have evolved from a highly prescriptive and template-based approach to introducing greater flexibility and adaptability, with the end-goal of increasing throughput and speed in delivering business solutions. However, the audit identified several areas where improvements in controls could support better management of project and portfolio risks including: Consistent use of the Systems Development Life Cycle (SDLC) methodology, which prescribes the control activities for developing and implementing business solutions, and the clear definition and communication of the roles, responsibilities, and expectations between ITS project teams and the business sponsors; Enhanced monitoring of Business Solution Projects and Portfolio for value (i.e. benefits realized) and quality (i.e. technical quality, project management quality, etc.) to provide full insight on whether projects will deliver intended business outcomes; and Full operationalization of the system performance monitoring processes across all of ITSOC s applications within the portfolio. 3. Audit of MIGA s Management of Credit Enhancement Products The objective of the audit of MIGA s management of Credit Enhancement Products was to evaluate the design adequacy and operating effectiveness of controls geared towards mitigating risks in the end-to-end lifecycle of MIGA s non-honoring (NH) product category, i.e., sovereign, sub-sovereign, and state-owned enterprise (SOE) products. The audit noted that MIGA has designed and implemented a robust framework for managing NH products, covering credit risk assessment, environmental and social sustainability (E&S) and integrity due diligence (IDD), management review and approval, and portfolio monitoring throughout the life of a project. In addition, the credit risk inherent in NH guarantees is well assessed and monitored in a manner consistent with MIGA s risk appetite. Furthermore: MIGA s senior management is closely involved in the approval process for each project; The current IT systems are adequate to support effective implementation of the framework; MIGA risk management officers are in regular dialogue with staff in various risk functions of the WBG to exchange information and leverage WBG intelligence on country credit risks; and A separate SOE credit team has been created by MIGA to assess the creditworthiness of SOEs and assign a rating following an established analytical framework. 3

5 4. Advisory Review of the Bank s Country Engagement (CE) Budget Allocation under the New Operating Model The objective of the advisory review of the Bank s Budget Allocation under the New Operating Model was to evaluate the implementation experience of the budget allocation and monitoring process for the Country Engagement (CE) envelopes (which fund the preparation and supervision work with respect to financial, knowledge and convening services in client countries), and the extent to which the process is aligned with corporate strategic priorities and commitments. The review covered FY16 and FY17 budget processes and included both Bank Budget and External Funds. The review noted that: i. The budget allocation process is highly participatory, and this ensures that the perspectives of relevant key stakeholders are considered in the process of determining the CE envelopes; ii. The CE envelopes are only allocated to fund programs identified in Country Partnership Frameworks (CPFs), thus ensuring that the budget allocation process is aligned with select institutional thematic and Global Public Goods (GPG) priorities; and iii. Geographical and functional priorities agreed upon during the early stages of the budget allocation process serve as the basis for allocating additional resources to specified regions or functions. IAD made the following recommendations: Strengthen the linkage between the CE envelope allocation process and thematic and GPG priorities; Continue to strengthen the integration of External Funds early in the strategic budget planning process; and Improve documentation of information around the budget process. 4

6 Annex: List of Engagements in the FY17 Q3 Activity Report Engagement 1. Special Review of Management s Processes for Integrating Select IFC/Bank Advisory Services Report No. WBG FY Audit of WBG's Business Solutions Delivery & Project Governance (Operations & Corporate Lines of Business) WBG FY Audit of MIGA's Management of Credit Enhancement Products MIGA FY Advisory Review of Bank s Country Engagement Budget Allocation under the New Operating Model IBRD FY