An Evaluation of the World Bank's Trust Fund Portfolio

allows it to retain and provide a career path for specialized staff infinancial management and procurement, generating a level ofprofessionalism that no bilateral donor could possibly replicate. Somerecipient officials, while criticizing the slowness of the Bank’sdisbursement procedures, recognized that the Bank’s tight controlframework could potentially encourage donors to provide morefunds than they otherwise might. 44.6 The Bank has introduced three measures aimed at giving trustfund donors additional assurances about staff compliance withfiduciary rules: 5CHAPTER 4MANAGEMENT AND ACCOUNTABILITYTrust Fund Quality Assurance and Compliance Unit: Thisunit was created to ensure trust funds’ quality and compliancewith rules, provide ex-post review, and advise seniormanagement on controls, compliance, and risk issues.Accreditation: All staff who manage trust funds are requiredto be trained and tested on the relevant rules and procedures.Compliance with this requirement is tracked and reportedannually.Letter of Representation: Staff who manage a trust fund mustsign a trust fund letter of representation each year, confirmingthat (1) trust fund disbursements have been made inaccordance with the terms of trust fund agreements withdonors, and (2) that effective internal control systems havebeen maintained by the task team leaders’ respective businessunits to ensure compliance with this obligation. 6 Theseindividual letters of representation are rolled into an annual“Single Audit” that contains management’s assertions on theeffectiveness of internal controls over the preparation of trustfund reports. 7 This process is managed by the chief financialofficer.The Bank hasintroducedmeasures togive trust funddonorsassurancesaboutcompliance withfiduciary rules.4.7 Although this evaluation did not assess the Bank’s fiduciarymanagement of trust funds, 8 it encountered no reported instance offinancial mismanagement either in the country studies or the randomsample. This performance is consistent with the results of compliancetesting by the Bank’s Accounting Department: virtually no sampledtrust fund transactions (0.5 percent for BETFs and 0.0 percent forRETFs) in fiscal 2009 involved an error resulting in reimbursement. 9Following the end-FY10 Letter of Representation exercise,management attested inter alia that trust fund disbursements followrelevant Bank policies and procedures and that financial reportingcomplies with the requirements set forth in the legal agreementsentered into with the donors. Outside auditors have deemed thisassertion to be fairly stated. 1051