The 2019 Annual Meetings of the African Development Bank Group will be held from 11-14 June 2019, in Malabo, Republic of Equatorial Guinea. Find out more
Project loans provide funding for specific investments designed to achieve clearly defined goals, including specified financial and economic goals. Where the Executing Agency (EA) is a unit of the government, it would be expected to follow the financial management policies and practices of the government.
The purpose of the financial management assessment of the executing agency during the appraisal is to ascertain whether its systems are consistent with government systems and to evaluate the EA’s accounting systems and internal control systems to verify that the EA’s standards are adequate for effective project implementation.
The Bank requires that a programme or project be designed, developed and implemented within the framework of national financial policies, strategies and systems. These are prescribed by the institutions of the member country, responsible for national economic and financial planning. Where use of country systems is not feasible, additional safeguards and measures are to be established in ways that strengthen rather than undermine country systems and procedures.
Monitoring and evaluation constitute the process by which the Bank reviews the activities of the EA and the project in relation to the stated goals of the Bank’s intervention. The Bank recognizes the need for a sound system of financial monitoring and evaluation of a project and its EA to assist the borrower in managing the implementation of the project and its continuing financial well being and the Bank in monitoring the progress of project implementation and operation through the use of Performance Monitoring Techniques in Project Management.
The Bank requires borrowers to submit audited project financial statements on an annual basis as part of its reporting requirements done by auditors who should meet the Bank’s required standards in terms of independence, experience and competence. The borrower is responsible for the selection and Appointment of an Auditor who will carry out the audit in accordance with a Terms of Reference (TOR) acceptable to the Bank. The auditor’s opinion is necessary to establish the credibility, or otherwise, of the financial statements of an EA and should include a report on the veracity, accuracy and fairness as regards the presentation of the financial statements of an EA. The auditor should also provide a Management Letter on the internal controls and operating procedures of the entity, covering all aspects included during the normal course of the audit.