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1.5, Dr. Angrej Singh

1.5, Dr. Angrej Singh

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management ppt
management ppt

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SAJMMR Volume 1, Issue 1 (October, 2011) ISSN 2249-877X
 
South Asian Academic Research Journalshttp://www.saarj.com- 46 -
Published by: South Asian Academic Research Journals
 
SAJMMR:
South Asian Journal of Marketing & ManagementResearchAN APPRAISAL AND POLICY ANALYSIS OF FINANCIALMANAGEMENT IN INDIA
DR. ANGREJ SINGH*; PRIYANKA MISHRA**; NIDHI MISHRA***
*Associated Professor, Department of Economics,Upadhi Mahavidhalaya, PBT, India.**Research Scholar, Department of Economics,Upadhi Mahavidhalaya, PBT, India.***Research Scholar, Department of Economics,Upadhi Mahavidhalaya, PBT, India.
ABSTRACT
Financial management project is essential information needed by those who manage,implement and supervise projects including government oversight agencies and  financing institutions. The borrower country, lenders and donors community that  funds have been used efficiently and for the purposes intended. The evaluation of therisks associated with project financial management system and identified in thelarger government system .Financial management risks identified in the CFAA and CPFA.
 KEYWORDS:
Financial data, Corruption bank projects, Track records, Project management report, Project appraisal document.
 _____________________________________________________________________________________
INTRODUCTION
It has been observed that, according to the Bank Policy and Procedures ,all project appraisedfrom July 1, 1998 onwards are required to have a financial management specialists (FMS) as amember of the project cycle. The FMS is required to review the project financial management
system including the project’s ability to produce a project management report (PMR).Ideally,
the assessment should begin during early stages of project preparation and should take intoaccount any Country Financial Accountability Assesment (CFAA) that may have been produced.Early action enables the timely identification and introduction of system changes and/ordevelopment where necessary.
 
SAJMMR Volume 1, Issue 1 (October, 2011) ISSN 2249-877X
 
South Asian Academic Research Journalshttp://www.saarj.com- 47 -
Country Financial Accountability Assesment provide for a review of the private and publicsector financial management systems of the country and the regulatory frame work . Focus onthe country helps identify those countries with specific financial management capacity buildingneeds serves as a mechanism for building appropiate technical assistance into the leadingportfolio.
CFAA’s also provide a framework in which the requirements of project financial
mangement can be better understood. It identifies major issues affecting financial managementin the country ans any departures from international standards.
CFAA’s are important because they provide the context ,without which an assesment of the
financial management system of a project lacks country ---specific underplanning. Specifically,the CFAA can provide information on topics such as the strength of the local accountingprofession ,the nature of accounting auditing standards ,the capacity of the supreme auditinstitution, and the quality and reliability of government accounting.Such detail provides a goodbasis for assessing project financial management systems.It is therefore , recommended thatthose who assest project financial management system refer to the CFAA , as well as to thecountry Assistance Strategy (CAS) which may also raise relevant issues.Assessment of the project financial management system may comprise features of both reviewand design ,the financial management system depends ,on the nature of the project and of itsimplementing entity ,which could be self-standing project implementing unit (PIU) , agovernment ministry department or agency or a commercial entity ,where a project isimplemented by a government department or agency ,its likely that the projects will use the
government’s standard financial management .A review of this system would be best carried
out as a part of a CFAA , so that the project review can be limited to those aspects which areproject specific .However, where a CFAA does not exits ,the review should cover interrelationships between the financial management systems of the project and of government.Institutional strengthning can take several years to achieve .The best way to achieve this is toaddress not only the needs of the project but also those of the wider environment in which it islocated .An exclave or ring fence approach , provides only for the financial management needsof the project while ignoring the needs of the larger environment .Treating the project and itsaccounting system.,procedures and controls as separate may help in the short-term to achieveacceptable standards for the project .But in the longer term ,ring fencing is likely to beinaffective .Therefore ,when planning ,technical assistance ,attention should also be given tofinancial management system is a priority.Before assessing the project financial management system ,the FMS ,working with the task teamleader (TL) , acquires a thorough understanding of the project concept including its objectives,components ,costs , implementing ,agencies ,cost-sharing arrangements and procurement profile.Starting with the fundamentals premise that sounds financial management is essential for projectsuccess , the FMS looks for a system that is able to provide timely and reliable information givewarning of problems in projects implementation and allow borrower and Bank staff to monitor
the project’s progress towa
rd its agreed objectives:Does the PIU have available an adequate number and mix of skilled and experiencedfinancial management staff.
 
SAJMMR Volume 1, Issue 1 (October, 2011) ISSN 2249-877X
 
South Asian Academic Research Journalshttp://www.saarj.com- 48 -
Does the internal control system ensure the conduct of an orderly and efficient paymentand procurement process and proper recording and safe guarding of assests andresources.Is the accounting system able produce financial reports that show budgeted and actualexpenditures for the quarters and for the year to date.Are financial data linked to measure of output of the projects , andIs an independent ,qualified auditor in place to review the project internal controls andreporting requirements.Every efforts should be made to harmonize the accounting classification and headings in theprojects charts of accounts with those used by government or incase of implementation by arevenue- earning entity,with its classification and headings .Frequantly , government internalcontrol systems prove to be adequate ,but the accounting system cannot provide the level of information required for project ,even though this may result in an accounting system runningparallel to that required by the government .More detail on the design and assessment of afinancial management system.The assessment is the evaluation of the risks associated with the project financial managementsystem and/or identified in the larger government system .As most sysytems have someinadequates ,it is important that the FMS and other member f the Task team together applyexperienced and professional judgement to this aspect .The risks and their likely impact on theproject should be evaluated from both fiduciary and management viewpoints.If the adequaciesare found to be minor ,the system can be certified as ready for PMR- based disbursement ussingAnnex 4A of the LIH , f major, Annex 4B or 4C applies. Assessing the risks involved and theirmateriality helps in choosing the appropiate course of action with respect to the project financialmanagement system .The following are important for assessing the extent of risks :---Financial management risks identified in the CFAA or CPFA.Track record of the implementing agency with other bank projects.Level of corruption as indicated by the corruption perception index of transparencyInternational or by other means.Reports of the supreme audit institutions.Timeliness and reliability of government accounts .Strength of internal control system in the public sector , andOverall level of accountability and transparency concerning the use of public funds.It is important that controls and other initiatives be considered to mitigate the likelyimpact , if the risks identified are significant.Remedial actions to address identified

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