Fiduciary Principles & Standards of the GCF Obadiah K. Mungai Chief Environmental Economist & Chair NIE/AE Steering Committee, NEMA November 2017
Introduction Entities seeking accreditation to the GCF in order to access its resources will be assessed against: GCF’s initial fiduciary principles and standards (including q the Interim Policy on Prohibitive Practices) q GCF’s interim environmental and social safeguards (ESS) (including GCF’s Information Disclosure Policy with requirements to disclose E&S reports for certain categories of E&S risk), and q GCF’s gender policy . Visit theAccreditationSelf-assessmentTool
GCF’s Fiduciary Standards: q The Fund’s fiduciary principles and standards form the fiduciary criteria of the Fund to assess Implementing Entities (IEs) and intermediaries for accreditation to the Fund, and will be applied according to the fit-for-purpose accreditation approach. q Once accredited, IEs and intermediaries will be required to fully meet these criteria for as long as the entity intends to retain its accreditation status with and commitments to the Fund.
GCF’s Fiduciary Standards: GCF_B.07_11 – Decision of the Board – Seventh meeting of the Board – 18- 21 May 2014 – Annex II – Initial fiduciary principles and standards of the Fund – to be reviewed within three years Basic Fiduciary Standards q Key administrative and financial capacities q T ransparency and accountability Specialized Fiduciary Standards q Project management q Grant award and/or funding allocation mechanisms q On-lending and/or blending Refer to page 15 of GCF/B.07/11 on the purpose and scope of the FSs * For more details, refer to the Fiduciary Standards
Basic Fiduciary Standards Required Competency Underlying Principles Specific Requirement scope Financial inputs and outputs are properly Key administrative & General management and administrative capacities- § Clear and formal definition of the main “corporate accounted for, reported and administered financial capacities governance” actors of the entity and of their transparently in accordance with pertinent respective roles and responsibilities regulations and laws, and with due Financial management and accounting (GAAP-IFRS or § accountability IPSAS or equivalent standards) Information relating to the entity’s overall Internal and external audit § administration and management is available, Control frameworks – a process to provide § consistent, reliable, complete and conforms reasonable assurance regarding the achievement of objectives in the following stated categories: to the required fiduciary standards effectiveness and efficiency of operations; reliability of financial reporting; compliance with applicable The entity’s operations show a track record laws and regulations; risk assessment processes; in effectiveness and efficiency defines roles and responsibilities pertaining to the accountability of fiscal agents and fiduciary trustees; and defines internal control activities, amongst others Procurement – covering both general operations of § the entity and the implementation/execution of the activities funded by the Fund Protection and commitment against Transparency & § Disclosure of conflicts of interest - a disclosure mismanagement and fraudulent, corrupt and policy, or equivalent administrative provisions to this accountability effect, that establishes the necessary mandatory wasteful practices. financial disclosures § Code of ethics - a documented code of ethics that Disclosure of any form of conflict of interest defines ethical standards to be upheld (actual, potential or perceived). § Capacity to prevent or deal with financial mismanagement and other forms of malpractice § Investigation - independent and objective Code of ethics, policies and culture that investigation of allegations of fraudulent and corrupt practices drive and promote full transparency and § Anti-money laundering and antiterrorist financing accountability.
Specific Fiduciary Standards Required Competency Specific Requirement Scope Underlying Principles Ability to identify, formulate and appraise projects or Project Management § Project preparation and appraisal programmes (from concept to full funding Competency to manage or oversee the proposal) execution of approved funding proposals, including the ability to § Project implementation, oversight manage EEs or project sponsors and to support project delivery and control and § Monitoring and evaluation implementation § Project-at-risk systems and related Capacity to consistently and transparently report on the project risk management progress, delivery and implementation of the approved funding capabilities proposal Required Competency Specific Requirements Grant award mechanisms § Transparent eligibility criteria and evaluation § Grant award decision and procedures and/or funding allocation § Public access to information on beneficiaries and results mechanisms § Transparent allocation and implementation of financial resources § Good standing with regard to multilateral funding (e.g. through recognised public expenditure reviews) On-lending and § Appropriate registration and/or license from a financial oversight body or regulator in the country and/or internationally, as applicable blending § Track record, institutional experience and existing arrangements and capacities for on-lending and blending with resources from other multilateral sources § Creditworthiness of the institution making on-lending or blending arrangements § Due diligence policies, processes and procedures in place § Financial resource management, including analysis of the intermediary’s lending portfolio § Public access to information on beneficiaries and results § Investment management, policies and systems, including portfolio management § Capacity to channel funds transparently and effectively, and to transfer GCF’s funding advantages to final beneficiaries § Financial risk management, including asset liability management § Governance and organisational arrangements, including relationships between the entity’s treasury function and the operational side § For intermediaries or IEs that blend grant awards: • clear procedures about the grant award rules that the implementing partner is required to apply, or • if the intermediary or IE uses its own rules, satisfactory minimum requirements.
Fiduciary Functions: Accreditation Required Against Basic Specialized Specialized Specialized Examples of fiduciary functions Fiduciary Fiduciary Fiduciary Criteria Fiduciary Criteria Criteria for for Grant Award Criteria for On- Project and/or Funding lending and/or Management* Allocation Blending Entities will be required to be credited against certain duciary standards in rder to Mechanisms ac undertake the relevant function fi o ü Strengthening institutional and fiduciary s regulatory systems ü ü Implementing projects usingGCF’s resources, where the entity itself executes the project ü ü Implementing projects usingGCF’s resources, where the project is executed by another entity ü ü ü Awarding grants ü ü Managing lines of credit using the GCF’s resources ü ü ü On-lending ü ü ü BlendingGCF’s resources with other sources of funding ü ü UsingGCF’s resources for guarantees * Assessment of the entity against this standard will take into account whether the entity is overseeing or ü ü UsingGCF’s resources for equity investments projects/programme implementing s.
Fast-track Accreditation Process: q Certain entities may be eligible to apply under the fast-track accreditation process, as approved by the Board: q Global Environment Facility (GEF) q Adaptation Fund (AF) q Directorate-General for Development and Cooperation – EuropeAid of the European Commission (DG DEVCO) q Recognizing that certain entities have completed the accreditation process of other funds/institutions against fiduciary and environmental and social standards that may be comparable to theGCF’s fiduciary standards and ESS, the fast-track process allows for eligible entities to focus their application on theGCF’s accreditation requirements (gaps) that have not been assessed in other accreditation processes . q The fast-track process also allows for the accreditation review to focus on how the entity addresses the gaps .
Fast-track Accreditation Process: Global Environment Facility entities Global Environment Facility (GEF)-accredited entities B.08/03, B.10/06, B.12/30, B.14/09 or B.15/09 Eligible if: 1. InGCF Board decisions, Up to 14 December 2016 2.Accreditation date, and GEF’s Minimum FiduciaryStandards and Minimum Standards on 3. In full compliance with ESS 1. Anti-money laundering and anti-terrorist financing (basic Gaps to be Fiduciary gap(s) fiduciary criteria for the purpose of transparency and addressed accountability) by entity: 1. Have the capacity to assess and manage relevant elements of ESS gap(s) Performance Standards 1-4 and 6 environmental and social risks and impacts in line with theGCF's ESS through an ESMS Fast-track Yes (except for the gaps above to be addressed) Basic fiduciary criteria and ESS accreditation Yes against: Specialized fiduciary criteria for project management No Specialized fiduciary criteria for grant award and/or funding allocation mechanisms No Specialized fiduciary criteria for on-lending and/or blending
Recommend
More recommend
