The UNESCO Supervising Entity - Project Management and Review for 2013

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1 Internal Oversight Service Audit Section IOS/AUD/2013/07 Original: English Financial Risk & Control Assessment: Civil Societies Education Fund Project (Implemented by the Global Campaign for Education with UNESCO as Supervising Entity) October 2013 Prepared by: Craig Nordby Teisha Mott

2 Key Results The $14.5 million CSEF project provides funding and assistance to national coalitions to foster better engagement of civil society organizations as advocates for Education for All. Project delivery involves a relatively complex hierarchy of global, regional and national entities with the World Bank serving as trustee for the funds and UNESCO as the Supervising Entity for the project. In assuming this role, UNESCO s Education Sector requested IOS to assess the project s framework for managing financial risks and to formulate recommendations where improvements are needed. Overall, the project s financial control framework is designed to reasonably ensure that funds are used for authorized purposes. Preventative controls are largely reliant on the financial management capacities of the participating organizations at the global and regional levels. While these capacities are sufficiently demonstrated based on past performance, a number of positions foreseen in the project design are vacant at the global and regional levels, and these should be addressed as a priority. Detective controls centre on the (i) careful monitoring and liquidation of instalment payments and (ii) completion of a schedule of independent audits of the global and regional entities. The Education Sector will need to work closely with the Global Campaign for Education to ensure that these audits are completed as planned. This report makes ten recommendations to enhance financial controls where needed. Background 1. In 2008, the Global Partnership for Education (GPE) agreed to support the Global Campaign for Education (GCE) to scale up support to national civil society education coalitions in eligible countries. Between 2009 and 2012, the CSEF program was funded principally by GPE (USD 17.6 million) with additional funding provided by AusAID (AUD 5.0 million). 2. Three regional CSEFs were established in Latin America, Africa and Asia Pacific to provide grants to national education coalitions with action plans aligned to the objectives of the CSEF. These objectives are to: Provide support to the core work of national education coalitions so they can fully engage in the development of education programs with governments and donors and track the progress of governments and donors in working towards the Education for All goals. Ensure that Civil Society Organizations (CSOs) can fully assume their roles as effective and knowledgeable advocates for EFA that they are expected to play according to the Dakar Framework for Action and in respect to the Global Partnership for Education country-level processes. This includes: Building the capacity of CSOs in developing, monitoring, and evaluating education sector plans, engaging in policy discussions and strengthening the consensus-building process around education sector plans; and Providing resources for training in project development, finance management, policy-oriented research, budget work, and campaign design. 3. National education coalitions in 45 countries received grants from the regional CSEFs. Additionally, the GCE provides a support programme through the CSEF aimed 2

3 at building the capacities of national education coalitions to perform as effective partners at the national level. 4. The CSFE partners are Africa Network Campaign on Education for All (ANCEFA), Asia South Pacific Association for Basic and Adult Education (ASPBAE), Campaña Latinoamericana por el Derecho a la Education (CLADE), Arab Coalition for Education for All (ACEA), ActionAid Americas (AAA), Education International Asia Pacific (EIAP), Oxfam GB (OGB) West Africa, and Global Campaign for Education (GCE). The detailed structure of the CSEF Project is outlined in Annex 1 of this document. 5. For the period 2013 to 2014, the GPE board has approved an allocation of US$14.5 million to the CSEF. UNESCO is the Supervising Entity responsible for the implementation of these funds. Objectives of this Review 6. los assessed the adequacy of the financial control framework foreseen under the Civil Society Education Fund Programme for This work was undertaken at the request of UNESCO s Education Sector in light of UNESCO s role as the project s Supervising Entity. 7. The assessment focused on GCE and the Regional CESF Financial Management Agencies, as they have responsibility for the disbursement of the funds to the National Education Coalitions, and includes recommendations which will serve to improve the Programme s financial management framework where needed. Methodology 8. The assessment methodology included review and understanding of the overall project design and the individual roles of the two global entities (GCE and UNESCO) as well as the three Regional Financial Management Agencies (OGB, EIAP and AAA) and the four Regional Secretariats (ANCEFA, ASPBAE, ACEA and CLADE). For each entity, we interviewed the respective financial manager and gathered relevant documentation such as financial manuals, banking records, legal charters, project agreements and audit reports. We then assessed the adequacy of foreseen controls for project funds and identified any gaps between the expected and actual controls. Where gaps were noted, we formulated recommendations to UNESCO s project managers. UNESCO s Role as Supervising Entity 9. As agreed with the GPE and GCE, UNESCO is to assume the following responsibilities as Supervising Entity: Fiduciary Responsibilities: This includes the maintenance of books, records, documents and other evidence in accordance with UNESCO s usual accounting procedures to sufficiently substantiate the use of the transferred funds. Programme Implementation Monitoring: This includes: Further development, in cooperation with GCE and the GPE Secretariat, of the Milestones and the Implementation Plan Finalising a grant agreement for the CSEF programme with GCE to which the revised programme document, implementation plan and detailed budget will be annexed Establishing financial and implementation reporting templates and timelines, in accordance with UNESCO s rules and procedures 3

4 Monitoring the implementation of the CSEF programme against the detailed Results Matrix for the four objectives and the detailed Implementation Plan and Budget, on the basis of continuous communication between UNESCO Headquarters and the GCE Secretariat and of periodic formal reports submitted by GCE Holding regular review meetings with the GCE Secretariat and provide support and recommendations to improve the programme, its implementation and management, as necessary Collecting information on the implementation and impact of programme activities at regional and national level through its Regional Bureaux which will also provide technical support to the Regional Secretariats, as necessary Undertaking supervision missions, as necessary. Reporting: UNESCO is to submit to the GPE Secretariat reports as required in the Operational Manual for the Global and Regional Activities Program, the Terms of Reference for SEs and the different fiduciary documents of the Trustee. A first implementation progress report will be submitted in September 2013, in time for the second face-to-face meeting of the Board of Directors, as per the GPE Board decision BOD/2012/12-1(d). 10. The assessment of UNESCO s Education Sector s capacity to carry out its financial management accountabilities for the project is outlined in Annex 2 of this document. The Global Campaign for Education 11. The Global Campaign for Education (GCE) is an international non-profit organization registered in South Africa with the aim of alleviating the global education crisis. Membership is comprised of over 120 national coalitions and international and regional organizations that advocate for quality public Education for All. GCE members are based in nearly 100 countries around the world, comprised of a variety of national, regional and international civil society organisations, teachers unions and child rights campaigners. GCE was established in 1999 and delivered a united civil society voice during the World Education Forum in Dakar in 2000 to influence the six Education for All goals. 12. GCE, as the Global Secretariat for CSEF, is responsible for overall delivery of the CSEF programme, results and financial management. GCE has day-to-day responsibility for CSEF strategic management, programme implementation, organizational learning and capacity building and global coordination, engagement and advocacy. GCE will report to UNESCO as the Supervising Entity and the CSEF Oversight Committee. 13. The assessment of GCE s capacity to carry out its financial management accountabilities for the project is presented in Annex 3 of this document. Regional Financial Management Agencies 14. The Regional Financial Management Agencies (RFMAs) are to be international civil society organizations in each region with a strong reputation for financial management and transparency and which operate independently from the Regional Secretariats, national coalitions and the Global Secretariat. The role of the RFMAs includes receiving and disbursing grant funding to national coalitions, reviewing and reconciling national coalition quarterly reports, leading coalition grant close-out and liquidation, maintaining all financial records for coalition grants and providing capacitybuilding in financial management to the coalitions. 4

5 15. The three Regional Financial Management Agencies are Oxfam GB (West Africa), Education International Asia Pacific and ActionAid Americas. The assessment of the capacities of these organizations to carry out their financial management accountabilities for the project is outlined in Annex 4 of this document. Regional Secretariats 16. Working in conjunction with and independent from the RFMAs, four Regional Secretariats are responsible for providing capacity building and implementation support to the National Coalitions and for supporting the Funding Committees. GCE provides project funding to these bodies for their associated operating costs. The assessment of the capacities of these organizations to carry out their financial management accountabilities for the project is outlined in Annex 5 of this document. Conclusions and Recommendations 17. Overall, the project s financial control framework is designed to reasonably ensure that funds are used for authorized purposes. Preventative controls are largely reliant on the financial management capacities of the participating organizations at the global and regional levels. While these capacities are sufficiently demonstrated based on past performance, a number of positions foreseen in the project design are vacant at the global and regional levels, and these should be addressed as a priority. GCE will also need to finalize its Financial Policies and Procedures Manual to ensure an effective control framework is in place. Detective controls centre on the monitoring and liquidation of instalment payments and the completion of an agreed schedule of independent audits of the global and regional entities. The Education Sector will need to work closely with the Global Campaign for Education to ensure that these audits are completed as planned and that actions are taken where indicated by the audits. The Education Sector should ensure that the recommendations below are addressed as a priority. Table of Recommendations Recommendation No. 1: UNESCO Education Sector to finalize the recruitment of the Project Assistant foreseen to support the project management. Recommendation No. 2: UNESCO Education Sector to institute detailed financial monitoring responsibilities for the periodic reporting required from GCE in the IPA. Recommendation No. 3: UNESCO Education Sector to establish, in collaboration with GCE, a schedule of financial audits required at the various levels of the project and institute monitoring responsibilities for ensuring these audits take place as planned and are distributed and, as needed, acted upon. Recommendation No. 4: UNESCO Education Sector to ensure that indicators with baselines and targets are established to monitor progress towards achievement of the project s expected results. Recommendation No. 5: UNESCO Education Sector to ensure that GCE completes the ongoing recruitment of two foreseen project staff (CSEF Programme Manager and CSEF Programme Officer). Recommendation No. 6: UNESCO Education Sector, in consultation with BFM, to ensure that GCE finalizes its Financial Policies and Procedures Manual. Recommendation No. 7: UNESCO Education Sector to ensure that the Regional Financial Management Agency for Africa (Oxfam) completes the recruitment of the Senior Finance Officer and Programme Assistant foreseen for the project. 5

6 Recommendation No. 8: UNESCO Education Sector to ensure that the Regional Financial Management Agency for Asia and the Pacific (EIAP) completes the recruitment of the Assistant Accountant foreseen for the project. Recommendation No. 9: UNESCO Education Sector to ensure that the Regional Financial Management Agency for Latin America (ActionAid) completes the recruitment of the Project Accountant foreseen for the project. Recommendation No. 10: UNESCO Education Sector to engage with GCE in the selection process should any additional Regional Financial Management Agencies be added to the project structure. 6