Planning and budgeting Inadequate budget appropriation for the project High Ensure that financing agreement binds GoM to full appropriation of loan proceeds over the life of the project. Low Project implementation may be delayed as a result of late appropriation Moderate Procedures to proceed with project implementation need to be agreed with the MEPD and MOF, until such time as the project can be included in the estimates for Parliamentary approval. Low Diversion of project funds Moderate Protection of project funding against virement needs to be agreed and controls need to be established, also in the IFMIS. Moderate Overall Moderate Low Accounting and reporting Delays in recording of transactions Low Set up in IFMIS specific bank accounts, expenditure accounts, access controls, accounting responsibilities and reconciliation controls for each project. Low Weak audit trail Moderate Low Unauthorized access and unreliable data Substantial Moderate Unreliable and late financial statements Low Define project reporting requirements directly in the IFMIS, or reporting could be supported outside of the IFMIS with a template into which the required project revenue and expenditure data is exported. Non-compliance with acceptable accounting standards Substantial Agree standards and format of the project annual financial statements. Moderate Overall Substantial Moderate Treasury and funds flow Inadequate funds available Low Establish authority, capacity and process to timely submit withdrawal applications and the required documentation to the Bank. Low Unpredictability in the availability of funds Moderate Low Diversion of project funds Moderate A project specific bank account (designated account) needs to be opened, incorporated into the IFMIS, and the requisite reconciliation procedures and responsibilities need to be agreed. Low Inability of Treasury and RBM to support project banking needs Low Low No access to project funds over year-ends Moderate End-of-year procedures for the project need to be agreed, including treatment of project cash balances. Low Overall Moderate Low Internal control and internal audit Ineffective control framework and procedures Moderate Normal project expenditure procedures and controls prescribed in the PFM Act, regulations and other instructions will be applied to the project, subject to compliance to procurement arrangements agreed in the Financing Agreement. The development and maintenance of fixed asset registers for projects needs to be agreed. Moderate Ineffective internal audit Substantial Agree specific internal audit requirements for each project, which could include scope, approach and reporting requirements. Provide Central Internal Audit Unit ( CIAU) with appropriate capacity development support. Moderate Overall Substantial Moderate External audit Delayed submission of audit reports Low Agree specific external audit requirements for each project, which could include scope, approach and reporting requirements. Provide NAO with appropriate capacity development Low Low capacity and skills at the NAO to Substantial Moderate
List of ongoing projects with details of extent of use of country PFM systems Annex 1 Project ID Project Name Implementing Agency USD m Closing Part of National Budget Accounting & Reporting on IFMIS Follows Government Internal Controls Day-to-Day Payments By Treasury Audited By NAO P070823 MW-Education Sec Support SIL 1 (FY05) Ministry of Education, Science and Technology 32 Sept.2010 Yes No No No No P073821 MW-Multi-sectoral AIDS - MAP (FY04) Ministry of Health 30 Dec.2012 Yes No Partial Partial Yes, subcontracted P075247 MW-Community Based Rural Land Development (FY04) Ministry of Lands, Housing and Urban Development 10 Sept.2011 Yes No Partial Yes Yes P078408 MW-Fin Mgmt, Transpar & Account (FY03) Office of the President and Cabinet 25 Sept.2009 Yes No Yes Yes Yes P084148 MW-Irrigation, Rural Livelihoods & Agriculture Development Project SIL (FY06) Ministry of Agriculture and Food Security 40 June.2012 Yes No Yes No Yes P096336 MW-Second National Water Development Project SIL (FY07) Ministry of Irrigation and Water Development 50 Oct.2012 Yes No Partial Partial Yes P103773 MW-Business Environment Strengthening SIL (FY07) Ministry of Industry and Trade 15 Dec.2012 Yes No No No Yes, subcontracted P105256 MW-Agricultural Sector Development SIL (FY08) Ministry of Agriculture and Food Security 32 Sept.2013 Yes Yes No No Yes P106671 MW-Agriculture Development GEF (FY09) Ministry of Agriculture and Food Security Sept.2013 Yes Yes Yes Yes Yes P110157 MW-Second National Water Development - ACGF (FY08) Ministry of Irrigation and Water Development 25 Oct.2012 Yes No Partial No Yes P110446 MW-3rd Social Action Fund APL II (FY08) Ministry of Finance 50 Sept.2013 Yes No Yes Yes Yes
P057761 Infrastructure Services Project Ministry of Development Planning and Cooperation 40 Nov.2011 Yes No Partial No Yes P111432 Regional Communications Infrastructure Project Ministry of Finance Privatization Commission 18 Feb.2015 Yes No Partial Partial No PRSG 2 Ministry of Finance 54 Sept.2010 Yes Yes Yes Yes Yes Moz-Mw Transmission Interconnection Project Ministry of Energy 40 June.2013 Eskom N/A N/A N/A N/A Regional Trade Facilitation Project Ministry of Industry and Trade 10 June.2011 No No No No No
Annex 2 Summary of PEFA PFM Performance Assessments Indicator 2005 PEFA 2006 PEFA 2008 PEFA 2011 Credibility of the Budget P 1 - Aggregate expenditure out-turn compared to original approved budget C+ A A B P 2 - Composition of expenditure out-turn compared to original approved budget D+ D D C+ P 3 - Aggregate revenue out-turn compared to original approved budget D A A D P 4 – Stock and monitoring of expenditure payment arrears C D+ <NS> NS Comprehensiveness and transparency of the budget P 5 – Classification of the budget B B B A P 6 - Comprehensiveness of information included in budget documentation C+ B B A P 7 - Extent of unreported government operations B B <NS> NS P 8 – Transparency of inter-governmental fiscal relations D C B+ B P 9 - Oversight of aggregate fiscal risk from other public sector entities. D+ D+ C+ B P 10 – Public access to key fiscal information D+ B C C Policy-based budgeting P 11 - Orderliness and participation in the annual budget process D+ B C+ B P 12 - Multi-year perspective in fiscal planning, expenditure policy and budgeting D D+ B C+ Predictability and control in budget execution P 13 - Transparency of taxpayer obligations and liabilities D+ C B B P 14 - Effectiveness of measures for taxpayer registration and tax assessment D C C+ D+ P 15 - Effectiveness in collection of tax payments D D D+ NS P 16 - Predictability in the availability of funds for commitment of expenditures D+ C+ B B P 17 - Recording and management of cash balances, debt and guarantees C+ C A A P 18 - Effectiveness of payroll controls D+ C+ C+ B+ P 19 – Competition, value for money and controls in procurement D+ D NS D+ P 20 - Effectiveness of internal controls for non-salary expenditure D+ B C+ C+ P 21 - Effectiveness of internal audit D+ D+ C+ D+ Accounting, recording and reporting P 22 - Timeliness and regularity of accounts reconciliation C+ B B+ D P 23 - Availability of information on resources received by service delivery units D D D D P 24 – Quality and timeliness of in-year budget reports D C+ C+ C+ P 25 – Quality and timeliness of annual financial statements D+ D+ C+ C+ External scrutiny and audit P 26 – Scope, nature and follow-up of external audit D D+ D+ D+