International Affairs:

Effectiveness of the World Bank's Independent Review and Evaluation System

ID-78-14: Published: Jun 5, 1978. Publicly Released: Jun 5, 1978.

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The International Bank for Reconstruction and Development (World Bank) was created in 1945 primarily to help finance reconstruction economies devastated by World War II and for development of productive facilities where private capital was not available on reasonable terms. The Foreign Assistance Act of 1961 required the President, acting through the U.S. representative to the World Bank, to propose and actively seek establishment of an independent review and evaluation system for the World Bank.

Since the establishment of an operations evaluation unit in September 1970, the Bank has made considerable progress in developing an independent review and evaluation system. The establishment of a Director-General position in 1975 was a major step toward making Bank operations more responsive to the needs and concerns of member governments. A review of auditing standards and procedures followed by the Operations Evaluation Department (OED) disclosed opportunities for the Bank and OED to strengthen their independent review system by further refining and building upon standards and procedures initiated over the past several years. The Bank's review system has evolved so that now is an opportune time to bring OED standards, procedures, and practices more in line with those recommended by the Comptroller General in 1974. The effectiveness of OED reports would be enhanced if recommendations were required when appropriate.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of the Treasury, through the U.S. Executive Director of the World Bank, should urge development of a time-phased plan for systematically reviewing all Bank activities and functions and encourage the World Bank's Board of Directors to establish a standard requiring that reports contain recommendations when appropriate. The U.S. Executive Director should encourage the Bank's OED to require work programs for all its reviews, provide its staff with formal guidance on basic audit techniques, strengthen its internal review process to ensure adherence to its own reporting standards, and revise its followup procedures.

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