Resource information
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.
