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International Sports Governing Bodies (“ISGBs”) are diverse in their aims but share a need to maintain a reputation of accountability in the eyes of their stakeholders. While some literature analyses the general governance concerns faced by these organizations, there is limited focus on anti-bribery and corruption (“ABC”) within this sphere. This paper's research aim is an exploratory evaluation of the ABC best practice policies that exist within ISGBs, asking how they can be assessed and what best practice policies currently exist within this framework. This paper undertakes a critical review of the diverse ABC governance policies in the largest ISGBs through content analysis on governance documents publically available on the sample ISGB websites. This review was undertaken twice on the same ISGBs, in 2017 and 2020, and the changes reviewed. The research highlights best practice policies for recommendation to all ISGBs, and illuminates the absence of adequate policies with regards to the risk of bribery in ISGBs. The findings show there was no area within the framework that ISGBs performed well at as a collective, and there was no single ISGB whose anti-bribery policies were strong in all areas. However, the comparison between 2017 and 2020 shows an improvement in ABC policies in some ISGBs over the timeframe analyzed. The implications are a need for sharing best practice in this area of governance, and providing global guidance on ABC policies for ISGBs to ensure integrity in the sector.

Diferentes governos têm adotado a gestão de riscos como parte de um novo padrão de excelência para o controle interno. O modelo de regulação baseado no risco, no entanto, requer a rearticulação do controle em torno de uma nova lógica de accountability, por meio da qual órgãos de controle devem redefinir os limites da ação e responsabilidade pública. As consequências dessa agenda no contexto brasileiro, entretanto, carecem de estudos. Este artigo examina os desafios de implementação da gestão de riscos em um governo estadual, em termos do impacto dessa inovação nas formas de prestação de contas e enforcement de agentes públicos. Com base em 13 rodadas de entrevistas e observação participante, os resultados demonstram que, apesar da gestão de riscos servir para legitimar a expansão do controle interno, a assimilação dessa inovação encontra barreiras na identidade profissional de auditores, na baixa relevância de controles internos e na dificuldade de disclosure de riscos estratégicos. O artigo contribui ao propor que, desacoplada de uma reformulação dos incentivos para a transparência de problemas estruturais, a gestão de riscos tem alcance limitado no enfrentamento de riscos sistêmicos no setor público. Different governments have adopted risk management as part of anew standard of excellence for internal controls. Risk-based regulation, however, implies on the articulation of a new logic of accountability, one where control bodies have to redefine the limits of public action and responsibility. The consequences of this agenda in the Brazilian context, however, remain underexplored. This paper examines the challenges of implementing risk management in a state government, in terms of its impact on the forms of answerability and enforcement of public agents. Based on 13 rounds of interviews and participant observation, findings show that, while risk management served to legitimate the expansion of internal controls, the assimilation of this innovation faces limitations regarding the professional identity of auditors, the low relevance of internal controls, and conflicts of disclosure of strategic risks. The paper contributes by proposing thatrisk management has limited capacity to address systemic risks in thepublic sector, whendecoupled from a reformulation ofincentives for making structural problems transparent.

Purpose This paper aims to explore selected real-world procurement fraud incidents in the US Department of Defense (DoD) and the implications of these incidents to the DoD’s contracting processes and internal controls. Design/methodology/approach This paper analyzes actual procurement fraud incidents and identifies in which phase of the contract management process the fraud occurred and which internal control component was associated with the fraud scheme. Findings The fraud incidents generally occurred during the source selection and the contract administration phases and involved the control activities, monitoring and control environment components of internal control. Research limitations/implications The fraud incidents are analyzed using contract management and internal control frameworks adopted by the US Government. Recommendations are developed for improving contracting processes and internal controls as an approach to deterring and detecting procurement fraud and may be applicable to other international public procurement bodies. Practical implications Governments are ensuring auditability in public procurement as a means of improving agency governance. The research findings suggest that an emphasis on capable contracting processes and effective internal controls should be adopted for fighting procurement fraud. Social implications Ensuring auditability in public procurement has a far-reaching effect in society. The value of capable processes and effective internal controls is gaining much attention in public agencies, as they strive for accountability, integrity and transparency in their governance processes. Originality/value By emphasizing capable processes and effective internal controls, governments can apply a strategic approach to detecting and deterring fraud and thus ensure that government monies are spent in the most effective and efficient ways.

The China Banking Regulatory Commission (CBRC) has maintained its momentum in regulation and supervision in the face of exceptional growth in scale and increasing complexity of the banking system. Equally, the CBRC has risen to the demands of the international regulatory reform agenda, delivering timely revisions to its body of regulations and maturing its supervisory practices through investing in essential new skills, enhancing methodologies, and broadening its interactions with the industry. In this context, the clarity of supervisory requirements and expectations communicated to the industry is a strength of the CBRC. Recent organizational reforms, in 2015, building on other internal reforms, will serve the CBRC well in delivering its supervisory mandate. While pursuit of financial stability is recognized as fundamentally important, concerns must be acknowledged as to whether the CBRC would, in practice, always be able to act on its primary, stability, objective, especially if government policies, whether focused growth and expansion, or social protection, conflicted with prudential considerations. The China Banking Regulatory Commission (CBRC) has achieved a high degree of compliance with the Basel Core Principles for Effective Banking Supervision (BCPs). Notwithstanding the revision to the BCP methodology, which raised the standards expected of supervisory authorities, the CBRC has demonstrated progress in almost all areas. Nevertheless, further maturing is needed, and taken together the recommendations of this report seek to support the CBRC in developing deeper and more comprehensive diagnostic capabilities, which ought to facilitate early, effective and preventative actions as necessary. It is essential that the CBRC’s achievements in recent years are consolidated as new challenges and complexities in the system will continue to emerge. In particular, it is essential that the CBRC obtain the resources to expand its range and depth of skills before developments in the industry leave it unable to maintain meaningful oversight and authority, not least of the four Global Systemically Important Banks (GSIBs). Building on the supervisory vision expressed in prestige CBRC publications such as the Annual Report, a detailed forward strategy for supervision, covering three to five years, would serve as a vehicle for the CBRC to articulate its case for resources.

This study is intended to discuss the issues in mosque fund management systems particularly on accountability and internal control practices. Mosques which are classified as Non–Profit Organizations deal with public funds received from government, corporate and public donations, control over the financial activities in handling funds received and expended by the organizations have become an interesting area to be investigated. Based on the discussion, it is suggested that internal control practices by Jameq Mosques on both receipt of income and funds disbursement require significant attention.

Resumo Este artigo, de caráter exploratório, investiga se a presença de uma Controladoria-Geral na estrutura organizacional dos municípios brasileiros tem surtido efeito quanto à promoção da transparência municipal e ao monitoramento da Lei de Acesso à Informação (LAI). Parte de uma amostra de 34 Controladorias-Gerais de Municípios (CGM), identificada a partir de ferramenta de busca virtual. Pressupondo que municípios com controladorias já estariam adaptados aos requisitos da LAI, este artigo apresenta uma avaliação das solicitações e das respostas a pedidos formais de informação a esses órgãos. Na avaliação da transparência passiva, foram identificados quatro estágios diferenciados de estruturação das prefeituras: a) existência de canais específicos para pedido de informação (e-SIC), com o fornecimento de número de protocolo para o acompanhamento da solicitação; b) existência de canais gerais para pedido de informação (formulários ou e-mail), com encaminhamento de comprovante de recebimento da solicitação; c) existência de canais gerais para pedido de informação sem o encaminhamento de comprovante de recebimento da solicitação; d) inexistência de canais digitais para pedido de informações. Também foram observados quatro estágios diferenciados no atendimento às solicitações de informações: a) retorno à solicitação no prazo de 20 dias, conforme preconizado pela LAI; b) retorno à solicitação dentro do prazo de prorrogação (20 a 30 dias); c) retorno após o prazo máximo estipulado pela LAI; d) ausência de retorno. Conclui-se que, em nível subnacional, faz-se necessário o aprimoramento das instituições de controle interno, para que se avance na cultura da transparência e publicidade previstas na Constituição Federal (CF) de 1988 e em outros atos normativos. Abstract This article, which is of a descriptive and exploratory nature, investigates whether the presence of a General Comptroller's Office within the organizational structure of Brazilian municipalities has had an impact on promoting local transparency and on monitoring compliance with the Access to Information Law (Lei de Acesso à Informação - LAI). It looks at a sample of 34 Municipal General Comptroller's Offices, identified by using a virtual search tool. Assuming that municipalities with comptroller's offices are already in compliance with LAI requirements, this article presents an assessment of the questions and responses provided in formal requests for information addressed to these agencies. When assessing passive transparency, four different types of request channels were identified: a) specific channels for requesting information (e-SIC), which provide a protocol number for monitoring processing of the request; b) general channels for requesting information (forms or e-mail), which provide a request receipt confirmation message; c) the existence of general channels for requesting information that do not provide a request receipt confirmation message; d) and the total lack of any kind of digital channel for requesting information. There were also four different stages for providing the information requested: a) a reply to the request within 20 days, as recommended by the LAI; b) a reply to the request within the extended period (20 to 30 days); c) a reply after the deadline recommended by the LAI; d) no reply whatsoever. The conclusion was, that at the subnational level, there is an urgent need to improve internal controls in many institutions, in order to boost the culture of transparency and openness provided for by the 1988 Brazilian Federal Constitution (FC) and legislation. Resumen Este artículo se basa en un estudio exploratorio que investiga si la existencia de una contraloría-general en la estructura organizacional de los municipios brasileños ha tenido efecto en la promoción de la transparencia y en el cumplimento de la Ley de Acceso a la Información. El estudio utiliza una muestra de 34 contralorías municipales identificadas con un buscador virtual. Teniendo en cuenta que los municipios que tienen contralorías ya estarían adaptados a la Ley de Acceso a la Información, el artículo presenta una evaluación de las solicitudes de información pública y de las respuestas dadas a los solicitantes. Con respecto a la promoción de la transparencia pasiva, fueron identificadas cuatro situaciones diferentes en la estructura de cada contraloría municipal: a) existencia de sistemas informáticos específicos para solicitud de información (e-sic); b) existencia de canales generales para solicitud de información (formulario o email), con el envío de la comprobación del recibimiento de la solicitud; c) existencia de canales generales para la solicitud de información, sin el envío de la comprobación del recibimiento de la solicitud; d) inexistencia de sistemas informáticos o canales digitales para la solicitud de informaciones públicas. Además, fueron identificadas cuatro situaciones distintas en la atención de las solicitudes de informaciones públicas: a) envío de la respuesta en un plazo de 20 días, como prescrito por la Ley; b) envío de la respuesta en un plazo prorrogado (de 20 hasta 30 días); c) envío de la respuesta después del plazo prescrito por la Ley; d) ausencia de respuesta. Como conclusión, el estudio identifica la necesidad de mejorar las instituciones de control interno para que se pueda avanzar en la cultura de transparencia prevista en la Constitución Federal de 1988 y en las otras disposiciones normativas.

In May 2015, the IFC Corporate Governance Group called together 40 experts in the field and members of the IFC Corporate Governance Private Sector Advisory Group. These participants explored key changes in international corporate governance standards and codes of best practice in the wake of the recent global financial crisis and how these changes have helped draw corporate attention to sustainability issues. The group found that many issues that became evident regarding banks in the financial crisis, and led to changes in the governance of banks, also have flowed through into broader corporate governance developments. This publication arises from the issues and information from these discussions. Specifically, part A discusses developments from global or regional groups involved in corporate governance. Part B addresses developments in corporate governance practice, and part C looks at developments in corporate governance codes and standards.

The Montenegrin economy has yet to recover from the collapse of the lending boom in 2008. The financial crisis hit asset quality, weakening banks’ portfolios. The legacy of pre-crisis rapid increase in indebtedness is adding to banking sector vulnerabilities. The crisis triggered a prolonged period of balance sheet deleveraging, which has translated into a near uninterrupted credit contraction. Slow economic growth and gaps in the legal framework have hampered banks’ efforts to reduce the overhang of nonperforming loans (NPLs). The CBM-managed payment and settlement systems are generally efficient. Some adjustments are needed to minimize any residual liquidity risks, such as facilitating the automatic transfer of balances from the reserves account to the settlement account. The CBM oversight function should be strengthened through the formulation of an oversight policy framework along with improvements to interdepartmental communication and exchange of information. The growth of the financial sector has contributed to greater access to finance for individuals and SMEs, but a number of weaknesses in the regulatory and enabling environment need to be addressed.

Bolivia’s distinct characteristics and aspirations are a key for understanding its development trajectory. Bolivia is one of the countries with the highest share of indigenous population, representing a tapestry of different groups with different historical, cultural and economic features, with a significant influence in policy decision making. The country is landlocked and one of the most sparsely populated in the world. As a result, long distances to the nearest seaports and markets and a challenging topography pose important natural constraints to economic expansion, and hamper broad-based and inclusive growth. Bolivia is also wealthy in natural resources, not only in hydrocarbon and in mining but in forestry and arable land, with high potential for growth, which make it vulnerable to commodity price shocks. In addition, in the last decade, the country has experienced a profound economic and political paradigm shift, enshrined in the 2009 Constitution, which has been predominantly driven by a state-led development model geared at addressing the social aspirations of Bolivians. The Agenda Patriótica provides the overall policy vision to 2025 and includes 13 strategic pillars. The PDES contains a five-year rolling plan with policy actions and budgets to operationalize the Agenda Patriótica. The overarching development agenda of the Government is still, by and large, based on an economic model that emphasizes state-led public investment, but which is increasingly opening up to private investment in important areas.

Prior to the political and security crisis of 2012, Mali, a large landlocked country in West Africa already ranked among the poorest countries in the world. In early 2012, the vast northern regions fell under the control of extremist forces, while a coup d’état in Bamako threw the country into political instability and turmoil. A strong international military response in early 2013 prevented further destabilization, though part of the North remains outside government control and insecurity has spread to Bamako and the South. The signing of a peace agreement in June 2015 has revived hopes for peace and stability. The WBG has continued to support Mali throughout the crisis. An Interim Strategy Note (ISN, FY14-15) addressed the root causes of Mali’s underestimated fragility, namely weak governance, extremely high demographic growth and the consequences of climate change. This CPF will continue to address the drivers of Mali’s fragility, with a strong focus on governance, while building on the progress and experience of the ISN. Drawing from the recent Systematic Country Diagnostic (SCD), which stresses the criticality of improving rural livelihoods to sustainable poverty reduction, the Framework intends to contribute to improving rural incomes by increasing productivity and resilience in the four livelihood zones of the country. Accordingly, the CPF proposes orientations for the WBG engagement around three areas of focus: (i) improve governance, by strengthening public resource management at central and local levels and fostering citizen engagement; (ii) create economic opportunities, by enhancing the productive capacity of smallholders, increasing agricultural value added and diversification to catalyze transformation, and improving basic services by developing infrastructure and connectivity; and (iii) build resilience, by developing human capital, strengthening safety nets, improving risk management mechanisms for the poor and vulnerable and mitigating climate shock. A comprehensive program has been proposed for the first two years of the CPF that includes knowledge activities and development policy operations to address the binding constraints to poverty reduction, as well as citizen engagement, investment financing, partner-funded and joint IFC/IDA investments and guarantees. Key areas include the reinsertion of ex-combatants, competitiveness and agricultural productivity, statistical capacity, climate change, water and sanitation, safety nets programs, energy, irrigation and transport.

This assessment of the current state of the implementation of the Basel core principles (BCP) for effective banking supervision in Bulgaria has been completed as a stand-alone report on the observance of standards and codes undertaken by the international monetary fund (IMF) and the World Bank during March of 2015 at the request of the Bulgarian authorities. It reflects the regulatory and supervisory framework in place as of the date of the completion of the assessment. The Bulgarian National Bank (BNB) has an internal governance structure which, by vesting the majority of the powers of supervision in the Deputy Governor for banking supervision, exposes the supervisory function to risks. Under the BNB’s legal structure, supervision and enforcement is dissociated from the Governing Council, and the Governing Council has no right to compel transparency of decision making or to impose a framework to ensure consistency in the use of the enforcement regime. There are material concerns that the BNB is too resource constrained to deliver effective minimum levels of supervision. Despite a broad range of supervisory powers, there are some gaps in the legal framework that unduly restrict the BNB’s locus. The BNB has a good understanding of risk and many strong practices, and also making good use of international standards and guidelines, but there are some important system wide vulnerabilities. The assessment team reviewed the framework of laws, rules, and guidance and held extensive meetings with officials of the BNB, and additional meetings with the Finance Ministry, auditing firms, professional bodies, and banking sector participants. The authorities provided a comprehensive self-assessment of the CPs, as well as detailed responses to additional questionnaires, and facilitated access to supervisory documents and files on a confidential basis as well as staff and systems.

The objective of this report is to assess public financial management (PFM) systems existing at the province level with a particular focus on the health and education sectors, and to understand linkages existing between the institutional settings in these two sectors and PFM processes. By doing so, the report shows the direct impact of poor PFM on service delivery in health and education. Since these two sectors have significant effects on the bottom 40 percent of the population, this will help Argentina’s subnational governments allocate and use public resources more efficiently, and with greater accountability for their expenditure.

This assessment of the current state of the implementation of the Basel core principles (BCP) for effective banking supervision in Bulgaria has been completed as a stand-alone report on the observance of standards and codes undertaken by the international monetary fund (IMF) and the World Bank during March of 2015 at the request of the Bulgarian authorities. It reflects the regulatory and supervisory framework in place as of the date of the completion of the assessment. The Bulgarian National Bank (BNB) has an internal governance structure which, by vesting the majority of the powers of supervision in the Deputy Governor for banking supervision, exposes the supervisory function to risks. Under the BNB’s legal structure, supervision and enforcement is dissociated from the Governing Council, and the Governing Council has no right to compel transparency of decision making or to impose a framework to ensure consistency in the use of the enforcement regime. There are material concerns that the BNB is too resource constrained to deliver effective minimum levels of supervision. Despite a broad range of supervisory powers, there are some gaps in the legal framework that unduly restrict the BNB’s locus. The BNB has a good understanding of risk and many strong practices, and also making good use of international standards and guidelines, but there are some important system wide vulnerabilities. The assessment team reviewed the framework of laws, rules, and guidance and held extensive meetings with officials of the BNB, and additional meetings with the Finance Ministry, auditing firms, professional bodies, and banking sector participants. The authorities provided a comprehensive self-assessment of the CPs, as well as detailed responses to additional questionnaires, and facilitated access to supervisory documents and files on a confidential basis as well as staff and systems.

This study was undertaken under the leadership of the Ministry of Finance and Economic Development (MOFED) to assess fiduciary risks in using country financial management (FM) systems in full, or in part, for implementing Donor and Bank-financed investment projects in Zimbabwe and to identify risk mitigation measures required for such use. Fiduciary risk is the risk that Bank funds (or donor funds) will not be used for their intended purposes or that they will be used without due attention to economy and efficiency. In projects using country FM systems, Bank funds are potentially commingled with the country’s own funds; therefore, a fiduciary risk assessment also needs to consider broader country PFM risks that could affect the fiduciary risk. This assessment uses a risk-based approach consistent with the interim guidance note issued by the FM Sector Board in 2009, entitled ‘assessment of fiduciary risks in the use of country FM systems in bank-financed investment projects’; and supplemented by the framework methodology for channeling investment lending projects through country financial management systems and the approach used for regular FM assessments. The risk-based approach provides a ranking of the fiduciary risks to be managed as high, substantial, moderate, or low. The decision to use country systems for a specific project then rests with the project's task team, guided by the country management team, after taking into account this fiduciary risk assessment and other factors such as the nature and complexity of the project and an assessment of implementing entities.

This Technical Note was prepared in the context of a joint World Bank-IMF Financial Sector Assessment Program mission in Bosnia and Herzegovina during October – November, 2014. The FSAP team found the DIA is to be Compliant or Largely Compliant with 12 out of 16 applicable Core Principles and Materially Non-Compliant with three Core Principles. The team found a number of areas where some deficiencies exist in the deposit insurance system and financial safety-net arrangements and accordingly is proposing a corrective action plan to address these areas.

Bosnia and Herzegovina (BiH) is still dealing with the aftershocks of the global financial crisis that have weakened financial sector asset quality and profitability. System-wide solvency and liquidity indicators appear broadly sound, but significant pockets of vulnerability exist among domestically-owned banks. Banking and insurance oversight have improved since the 2006 financial sector assessment program (FSAP), but a number of important shortcomings in some segments remain. Decisive and immediate actions to deal with weak banks are critical for preserving financial stability. The legal framework governing creditor and debtor relationships is comprehensive, however neither debt resolution, businesses reorganization, nor bankruptcy liquidation work effectively. The financial reporting framework has improved recently and is substantially aligned with the acquis communautaire and harmonized between the two entities. Governance processes of state-owned banks reveal a number of concerns. There is a need to further strengthen the supervisory board selection process and internal audit functions of state banks. The Development Bank of the Federation of BiH is only partially supervised by the Banking Agency of the Federation of BiH (FBA). Specific strategies and exit plans for the Republika Srpska (RS) government’s support of the financial sector are undefined.

This Technical Note was prepared by IMF and WB staff in the context of the Financial Sector Assessment Program in Bosnia and Herzegovina, and overseen by the Monetary and Capital Markets Department, IMF, and the Financial and Private Sector Development Vice Presidency, World Bank. It contains technical analysis and detailed information underpinning the FSAP’s findings and recommendations. A review of supervisory practices was conducted to assess progress towards implementation of the Basel Committee Core Principles for Effective Banking Supervision. The system of banking supervision oversight has significantly improved since the last review in 2006, but shortcomings remain.

This Technical Note evaluates state bank corporate governance practices in Bosnia and Herzegovina. The analysis was completed during October 27-November 18, 2014. This TN is not a formal assessment against the Basel Committee’s Principles for Enhancing Governance; rather, it assesses key issues and provides a set of recommendations to the authorities with the view to strengthen state bank governance and the State’s ownership structures in Bosnia and Herzegovina. The governments of the Federation of Bosnia and Herzegovina (FBiH) and the Republic of Srpska (RS) are involved in their domestic banking systems through equity stakes and subordinated debt investments in certain banking institutions. Banks’ supervisory boards are not performing their intended leadership role.

This report summarizes the experiences of 19 companies from across the region. Each of the case studies highlights the key corporate governance changes made and the positive impacts that resulted, as reported by the company. The companies represent various countries, sectors, types, and sizes. All of the companies featured are former IFC Advisory Services clients. Some are IFC Investment clients as well. IFC conducted an in-depth corporate governance assessment for each of these companies using IFC’s Corporate Governance Methodology. The assessments resulted in specific recommendations on ways to improve each company’s governance framework and identified implementation plans. The assessments were conducted at various points over the past few years. The time taken to implement changes and realize benefits varied. However, all companies reported that governance changes are continuous and the corresponding benefits manifest themselves in different forms over time. This report provides examples of companies in various stages of change – from recent changes (e.g., Medgulf) to ongoing, longer-term changes (e.g., Bank Audi). This report also includes testimony from three MENA private equity firms (all IFC investment clients). Collectively, these firms have worked with 72 investee companies (past and present funds). Selected based on their association with IFC and their willingness to share their insight and experiences, these firms offer a valuable window into the importance of corporate governance from an investor’s perspective. The material in this report is based on feedback gathered through individual interviews with each organization featured, resulting in well-considered responses. The achievements highlighted are all the more notable given that the interviews and information gathering process took place in in late 2009 (first edition) and 2013 (for current edition), when the region was still under the stress of the crisis.

The Republic of Congo (Congo) boasts numerous assets that can be harnessed to build a strong and robust economy. These assets are oil, ore such as iron and potash, arable lands, and a young population. Congo is the fourth largest oil producer among West and Central African countries, both in total production (260,000 barrels per day) and production per capita terms. In addition, the country is endowed with substantial iron and potash that are yet to be exploited; it has a vast arable lands that could be useful for agricultural development; and the country boasts a young population, which, if well-educated, could be a dynamic labor force helping to spur economic growth.

In the past decade, Latin America and the Caribbean has achieved impressive social and economic successes. For the first time in history, more people are in the middle class than in poverty. Inequality, although still high, declined markedly. Growth, jobs and effective social programs have transformed the lives of millions. In a striking departure from the crisis-prone Latin America of the past, the region has shown it is better prepared to weather the brunt of the global economic slowdown. Now, the region faces the challenge of maintaining and expanding its hard won gains in an adverse context of low growth. This is caused in part by a decrease in commodity prices and reduced economic activity in major commercial partners such as China. In such a scenario, achieving development results - and learning from them - becomes more important. This publication showcases stories about people and how their lives have been improved through better health and education, youth employment, disaster recovery and preparedness, infrastructure, and more.

The Report on the Observance of Standards and Codes - Accounting and Auditing (ROSC A&A) program is part of a 12-module joint World Bank-IMF initiative to assist member countries to strengthen their financial systems by improving their capacity to comply with internationally recognized standards and codes. The ROSC A&A program focuses on the institutional framework underpinning national accounting and auditing practices, and degree of conformity with international standards and good practices. This 2014 update to the Report on the Observance of Standards and Codes – Accounting and Auditing (ROSC A&A) assesses the degree to which the policy recommendations of the 2003 ROSC A&A review have been implemented, identifies issues that have emerged since the last review, and proposes a number of policy recommendations aimed at further improving the quality of corporate financial reporting and auditing which contributes to improving country’s business climate, investors’ confidence and economic growth potential of Bangladesh. The policy recommendations should form the basis for a prioritized, stakeholder-driven Country Action Plan (CAP), aimed to assist in further enhancing financial reporting processes in accordance with international standards and good practices, taking into account Bangladesh’s country specific circumstances.

The banking sector in Moldova is in the midst of structural changes with worrisome corporate governance issues at the core. Corporate governance is at the center of a stable and profitable banking sector which is essential to support economic growth and productivity. However, the banking system in Moldova suffers from critical governance weaknesses which the National Bank of Moldova (NBM) has been unable to effectively address. The illicit schemes used to gain control of the majority of the banking sector’s assets have involved raider attacks by unidentified individuals whose subsequent, de facto, related party transactions have caused the deterioration of bank balance sheets. The recent changes in controlling ownership have resulted in nontransparent appointments of board members and Chief Executive Officers (CEOs). This has led to substantial blurring of the roles and responsibilities of ownership, oversight (board), and management, resulting in no clear accountability. The legal and institutional corporate governance framework in Moldova is weak. Sound corporate governance is first and foremost dependent upon the motivations of owners and the resultant business culture they instill through their selection and appointment of board members. In Moldova, a few actors control the majority of the banking system. They demonstrate dubious motives by acting obscurely through others and through companies to own and control important banks. These actions create a system that is held captive to serve the needs and pleasures of a few at the expense of many: the depositors, general public, and ultimately, the taxpayer.

The Timor-Leste health resource tracking study was undertaken in order to improve the flow of critical cash and in-kind resources to districts and health centers by identifying, and proposing how to relieve, the most critical impediments in the public financial management (PFM) cycle. The study follows these three inputs backwards through every stage of the PFM cycle in order to unearth the pertinent issues that impede the timely and sufficient delivery of inputs to frontline providers. It required the collection of data from a wide variety of sources and the use of diverse methodological approaches, including semi-structured district- and facility level surveys, one-to-one interviews, transaction analysis, document review, and analysis of the government's financial management information system (FMIS). The study findings are presented in detail, together with the supporting evidence and key related recommendations, in chapter one, operating cash, chapter two, fuel budget, and chapter three, vehicle repairs and maintenance. Chapter four presents a set of cross-cutting findings that affect all areas of the goods and service budget.

This Report on Observance and Codes-Accounting and Auditing (ROSC-A&A) assesses the corporate sector accounting, financial reporting, and auditing practices in Jamaica. It builds on its predecessor, a 2003 ROSC-A&A, and its aims to assist the Government of Jamaica's efforts to strengthen accounting and auditing practices and to enhance financial transparency in the corporate sector, so as to support the Government's economic reform program and provide greater confidence to current and potential investors with respect to the financial reporting environment. Jamaica has embarked on an economic reform program whose main objectives are to contain the country's growing economic and external vulnerabilities and address economic imbalances, while putting the country on a path to sustainable growth. Important reforms include: (a) strengthening public finances, including through comprehensive tax reform, expenditure rationalization, and improved public debt management and public financial management; (b) enhancing the resilience of the financial sector through strengthened supervisory, regulatory, and crisis-management frameworks; and (c) improving growth generating efficiency through enhancements to the business environment and strengthened institutional capacity and governance.

This assessment of Moldova current state of compliance with the Basel core principles for effective banking supervision (BCPs) was undertaken as part of a joint International Monetary Fund (IMF) - World Bank mission in connection with a broader financial sector assessment program exercise. This version of the assessment has a greater focus on risk management policies and practices implemented by supervised institutions and their assessment by the supervisory authority as well as more emphasis on quality implementation of supervisory standards. The assessment has been conducted in accordance with the revised BCP assessment methodology approved by the Basel committee and was based on extensive discussions with officers and staff members of the Banking Supervision Department in National Bank of Moldova (NBM), and a review of internal supervisory documents, such as manuals, operating policies, examination reports, and external audit reports. The mission reviewed the BCP self-assessment undertaken by NBM preceding this assessment, and detailed responses to a questionnaire addressing supervisory issues. The assessment should provide the Moldovan authorities with an internationally consistent measure of quality of their banking supervision relative to the 2012 revision of the core principles, which are internationally recognized as minimum standards.

Global alliance for vaccines and immunization (GAVI) is the third largest multilateral in the health sector. It has a single-purpose mandate, to increase access to immunization in poor countries. The World Bank is a founding partner to GAVI and remains a major partner, particularly at a financial level by supporting operations of two major innovative financial mechanisms on its behalf. The Bank’s most significant contribution is a key role in the establishment and management of two innovative financing mechanisms (International Finance Facility for Immunisation (IFFIm) and Advanced Market Commitment (AMC)) that have contributed one-third of GAVI’s financial resources from 2000 to 2010. The relationship with GAVI has been collegial and constructive in countries where there is engagement, but in many countries the Bank is not substantially involved in immunization. This review concludes that the status quo leaves organizational synergies untapped, and that stronger Bank involvement, drawing on its strengths in sustainable funding for immunization, addressing inequities in access to immunization, investments in health systems strengthening, and donor coordination in health can help achieve greater development results.

This assessment of accounting and auditing practices in Slovenia is part of a joint initiative of the World Bank and International Monetary Fund (IMF) to prepare Reports on the Observance of Standards and Codes (ROSC). The assessment focuses on the strengths and weaknesses of the accounting and auditing environment that influence the quality of corporate financial reporting and includes a review of both mandatory requirements and actual practice. This is the second A&A ROSC for Slovenia and based on information collected in 2013, early 2014. The first one was published in 2004. As the requirements of the EU acquis communautaire and international standards have already been adopted in the financial sector this assessment focuses on the proper application of these requirements, with the view that improved financial information raises the capacity of regulators to maintain financial stability, and improve the level of trust in the financial system, in the context of an ongoing recapitalization exercise. In the State Owned Enterprises, or SOEs, the report focuses on the requirements applicable to them and how well these are enforced, as well as to what extent the government uses the financial reporting and audit process to monitor SOEs and hold their management teams accountable. This report also considers SMEs financial reporting, including how current requirements compare with the latest revisions to the EU Accounting Directive, which further simplified requirements for smaller companies. Finally, audit oversight and quality assurance systems are assessed, including the feasibility of incorporating the audit oversight body as part of the financial sector supervisor.

This research is focused on developing an understanding of how individuals identify with their assigned roles and responsibility structures within an organization. Additionally it is concerned with how individuals approach their responsibility and accountability for protecting information assets within an organization. We utilize Social Identity Theory and Identity Theory as a lens for analyzing the negotiation process between an organization and their stakeholders, with respect to identifying and creating roles and responsibility structures. The results of this study suggest that a good understanding of this negotiation process will assist organizations in establishing stronger internal controls for the protection of information assets. Classification- JEL

As the importance of Corporate Governance increases, an awareness and understanding of the different relevant regulations becomes of paramount value. The importance and value of Corporate Governance is not the core of this publication. The publication is built around the premise that Corporate Governance is important and increasingly becoming of significant importance for growth, continued success and sustainability. Accordingly, this publication aims to identify, highlight and summarize the different codes of Corporate Governance along with other relevant regulations that impact Corporate Governance that are available in Jordan. The authors intend to address the different codes with respect to the principles of Corporate Governance as defined by the Organization of Economic Cooperation and Development (OECD); namely: ensuring the basis for an effective Corporate Governance framework; the rights of shareholders and key ownership functions; the equitable treatment of shareholders; the role of stakeholders in Corporate Governance; disclosure and transparency; and the responsibilities of the Board. This comparative study will provide an overview of how each code (or relevant regulation) addresses the different principles and to what extent. Since certain Corporate Governance practices tend to overlap across different principles and cover broad practices, we have found that it would be best in this study to provide a detailed assessment of different practices and requirements based on different dimensions. The dimensions the authors use are those defined based on best practices as identified by the International Finance Corporation (IFC) as follows: commitment to Corporate Governance; board functioning; management control environment; disclosure and transparency; and shareholder and stakeholder relations.

International audience; Recent legislations oblige organizations to monitor the effectiveness of internal control mechanisms that are necessary to prevent fraud. However, little is known about the effectiveness of different internal controls. We investigate whether the duty to sign work results--one of the most prominent internal control mechanisms--is effective to prevent fraud under different superior instructions. We use a 2×2 between-subjects experimental design with accountability (duty to sign work results vs. no duty to sign) and superior instructions (with vs. without profit maximization cue) as independent variables. Both manipulations of superior instructions reminded people to respect accounting standards and principles but in one condition, an instruction to increase revenues was integrated as profit maximization cue. We expected this cue to trigger a profit maximization decision frame that increases the likelihood for fraudulent revenue recording. 58 managers from an executive MBA class participated in the experiment. We find that superior instructions interact with accountability. Fraudulent revenue recording was particularly observed when people received instructions to increase revenues and had to sign their work results. Consequently, fraudulent behavior can occur without pressure to commit fraud due to profit maximization cues that are communicated by a superior and despite implemented internal control mechanisms. We discuss possible implications of our results for the prevention of fraudulent behavior.

Afghanistan is in a state of transition which involves the handover of security responsibilities from international forces to the Afghan government. However, at present, Afghanistan's economy is growing strongly as a result of an exceptionally good harvest this year. Real gross domestic product (GDP) growth will most likely close the calendar year at 10 percent, a significant increase from last year's 5.8 percent. The services and construction sectors continue to grow strongly, driven mostly by continued high military spending and external aid. The good harvest has also brought Afghanistan to near food self-sufficiency and slowed inflation to 4.6 percent in July 2012 (y-o-y). Progress in the mining sector is clouded by uncertainty about a new mineral law. While investor interest in the sector is encouraging, gaps in the legal and regulatory framework of the sector do not provide sufficient confidence to investors to start operations or make firm commitments. A new low is in preparation but has also been heavily debated. Afghanistan's economic growth prospects for 2012 give cause for optimism. Although real GDP growth slowed, to around 7 percent in 2011 (from 8 percent the year before), due mainly to unfavorable weather and a poor harvest, the agriculture sector rebounded strongly in 2012 and is expected to boost economic growth to over 10 percent. Agriculture is an important but volatile component of economic growth.

Lesotho is a small landlocked country with a homogenous population of 2.1 million. Lesotho's gross domestic product (GDP) per capita was 1,023 dollars and gross national income (GNI) per capita was 1,080 dollars in 2010. The country also faces numerous challenges to its social and human development. In this context, more attention on the role and quality of public investment is warranted. To improve public accountability and transparency, the Government of Lesotho (GoL) introduced the automated integrated financial management information system (IFMIS) in April 2009. The study directly responds to an explicit request of technical assistance from the ministry of finance and development planning (MoFDP) and aims at supporting the GoL in its major reform efforts to enhance the efficiency of public investment management (PIM) and increase the "value for money" in capital spending. The overarching objective of this study is to support the GoL in its efforts to prioritize public resource allocation and enhance efficiency in capital spending, with the ultimate goal of contributing to improved governance, service delivery, and economic growth. The work is aligned with the World Bank country assistance strategy (CAS) 2010 to 2014, in particular its first pillar on fiscal adjustment and public sector efficiency. This report emphasizes the complementary aspects of the institutions, incentives, capacity, and process-related constraints to the functioning of PIM. The focus of this report will also complement ongoing public financial management (PFM) support by other development partners. The report is presented in four chapters, which are organized as follows: chapter one offers a macro-level country analysis; chapter two presents recent trends in public investments; chapter three focuses on institution mapping and the diagnostic assessment of the PIM system; and chapter four concludes with policy implications.

Mimeo

An international cooperative effort has been focused on the need to reduce financial fragility and systemic risks in global financial markets. Work is proceeding in three different areas: enhancing financial market transparency, improving the international financial architecture, and strengthening financial systems. Strengthening financial systems (the focus of this paper) means cooperating to promote principles and sound practices for financial stability through development of well-functioning financial systems and market discipline. Financial sector reform and development is much more than setting rules, articulating standards, approving legislation, and creating new institutions. All are important but ultimately behavior must be changed if there is to be meaningful and lasting financial reform. For that reason, this paper emphasizes the role of incentives to induce appropriate behavior. Developing countries have made important progress toward improved financial supervision in the past few years. Reforming financial sectors is a lengthy and complex process of institution building and incentive reorientation, whose success requires full ownership of, and participation in, the process by society and its government.

The focus of this paper is on the institutions outside the executive branch that include supreme audit institutions, legislative oversight bodies (such as parliamentary public accounts and budget committees, and ombudsmen), related independent bodies, and civil society organizations. Through their support for accountability, donor countries and international financial institutions seek to help countries: promote voice and accountability as an intrinsic human right, and improve development outcomes in terms of poverty reduction, sustainable development. The report is organized as: first, provide a brief literature review of research on accountability, and how donors and other actors can work to improve it, including a review of the experience of other bilateral and multilateral donors in supporting domestic accountability through their policies, strategies, and behaviors as well as through direct support to accountability actors and systems. Second, briefly review the guidance prepared for Bank staff toward enhancing accountability. Third, review some examples of the Bank's experience in supporting domestic accountability. Finally, we present some conclusions and accountability-related questions for further analysis.

Moldova has suffered over the last two decades from rising poverty, territorial secession, armed conflict, and the spillover effects of a regional financial crisis, with declining population size and life expectancy, and an economy approximately one-half of what it was in 1990. The return of the Moldovan Communist Party (PCRM), which won two major elections after 2001, contributed to increasing centralization of governmental authority along with a reform agenda that emphasized greater state control over the economy, fiscal support to state enterprises and collective farms, land consolidation, economic protectionism, and the tolerance of monopolies in industry and energy. At the same time, the government has increased social expenditures, and taken major steps to improve public financial management. Bank engagement was moderately effective at the country and project levels, and substantially effective at the sector level. There was progress in several aspects of public financial management (PFM). Regulatory streamlining has reduced costs to business, although resistance to civil service reform has left much work to be done. The Bank has also helped achieve progress on Governance and Anticorruption (GAC) issues in primary education, roads, and private sector development. Education progress is highly uneven across regions, for example, overweight trucks continue to tear up roads, and private investment is not enough to make a dent in high unemployment. A graduated approach to country systems and road sector technical audits help address GAC issues at the project level. The overall impact of GAC strategy implementation was moderate. The GAC committees set up at the regional and sectoral Bank department levels are particularly useful mechanisms for disseminating practices from the GAC Council. Staff has been proactive in using Country Governance and Anticorruption (CGAC) resources. However, three applications for window one funding were not approved, reducing the ability of this small program to seize opportunities.

This case study summarizes the findings of desk reviews and a field visit carried out in January 2011 as part of IEG's evaluation of the 2007 Governance and Anticorruption (GAC) strategy. The case study sought to evaluate the relevance and effectiveness of Bank support for GAC efforts over the FY2004-10 period, to assess the contributions of 2007 strategy implementation, and to identify early outcomes and lessons. This Background Paper is based on findings of the mission that visited Liberia in January 2011. The team is particularly grateful for informative meetings with officials from the Government of Liberia, Bank staff, and members of civil society. The evaluation aims to help enhance the Bank's approach to governance and anticorruption and to improve its effectiveness in helping countries develop capable and accountable states that create opportunities for the poor. Pursuant to this objective, the evaluation assessed the relevance of the 2007 GAC strategy and implementation plan, as well as the efficiency and effectiveness of implementation efforts in making Bank engagement with countries and other development partners more responsive to GAC concerns. It also sought to identify early lessons about what works and what does not in helping to promote good governance and reduce corruption. The Liberia case study is based on an extensive desk review as well as a field visit to Monrovia from January 17-22, 2011. It evaluates the relevance and effectiveness of Bank support for governance and anticorruption efforts since the launch of the Bank's GAC strategy in 2007. It elaborates on a desk review of the GAC responsiveness of the Bank's Liberia program and reviews the following GAC entry points: core public sector reform (public financial management and decentralization); demand for good governance (including social accountability issues); GAC in the road sector; and the investment climate. The case study also examines the extent to which the Bank's GAC Strategy has made a difference in staff attitudes toward addressing GAC issues in their operational work. The mission interviewed government, Bank, donor, and nongovernmental organization (NGO) staff based in Washington and in Monrovia.

The Central Bank of Argentina (BCRA) and the Superintendence of Financial Entities (SEFyC) are to be commended on their thorough supervision, their implementation of risk-based supervision, and their thorough examination process. Since the 2001-2002 crises, financial sector indicators have improved significantly and the banking system weathered well the impact of the global financial crisis, with high capital levels, the introduction of a capital buffer, and low Non-Performing Loans (NPLs). This assessment of the state of compliance with the Basel Core Principles (BCPs) in Argentina has been undertaken as part of a World Bank Observance of Standards and Codes (ROSC) mission. The assessment was conducted from May 11 to 26, 2011. It reflects the banking supervision practices of the BCRA as of the end of April 2011. The assessment is based on the following sources: (i) a complete self-assessment prepared by the BCRA; (ii) detailed interviews with the BCRA staff; (iii) review of laws, regulations, and other documentation on the supervisory framework and on the structure and development of the Argentine banking sector; and (iv) meetings with individual banks, the banking associations, the Ministry of Economy and Public Finance (MECON), external auditors, and financial think tanks. This assessment is based solely on the laws, supervisory requirements, and practices that were in place at the time it was conducted.

This paper develops a framework to assess organizational performance in the delivery of social safety nets. Specifically, it provides guidance to task teams and program managers for identifying indicators of governance and service quality in targeted cash transfer programs. The paper identifies governance issues along the results chain of service delivery and suggests policy and performance indicators for assessing program inputs, human resources, financing and resource management; and program activities, operational procedures, Management Information Systems (MIS) and control. It also suggests indicators of organizational performance and the quality of outputs, including demand-side accountability mechanisms.

This paper is aimed at explaining why higher concentrations of the ownership of large firms do not necessarily and automatically facilitate lower risk taking levels – where there is scope for the abuse of powers. As well as illustrating why effective corporate governance systems are essential in facilitating high levels of monitoring, accountability and disclosure, the paper also highlights why a consideration of the costs of ownership concentration and its benefits, is required in determining whether corporate governance systems will be effective or not.

Sustainable investment (SI) has a strong niche foothold in Sub-Saharan Africa, anchored in the region's largest investment market, South Africa. Yet more work is needed, at policy and portfolio levels, to grow this investment theme. This report recommends measures to expand SI in Sub-Saharan Africa. It forecasts that over the next five years there will be considerable growth of environmental, social, and governance (ESG) considerations applied to investment in South Africa, Kenya, and Nigeria. While these three countries form the basis of the study, the lion's share of data and observations emerged from South Africa, which is home to the continent's most developed capital markets.

Indonesian financial sector comprises banks, multi-finance companies, capital market companies, insurance companies, and pension funds. The banking sector accounts for about 80 percent of the financial sector assets. It is dominated by 121 commercial banks, which account for about 98.6 percent of total banking assets (including 5 sharia banks accounting for 1.8 percent market share), with rural banks comprising the remainder of the banking system (about 1.4 percent market share). Bank Indonesia (BI), the central bank, is responsible for regulation and supervision of the banking system. The assessment of compliance with the Basel Core Principles for Effective Banking Supervision (BCP) was carried out within the framework of the Financial Sector Assessment Program (FSAP) between September 29 and October 16, 2009.