Fiduciary Risk Assessment for Vietnam Bank for Social Policy Completed

[11 March 2011] Australia, Denmark, the Netherlands and more recently the United Kingdom (Targeted Programme Budget Support donors – TPBS donors) have supported the Rural Water Supply and Sanitation National Target Program Phase 2 (RWSS-NTP2) through Targeted Program Budget Support (TPBS). This represents a commitment to the Government of Vietnam’s (GoV’s) own implementation strategies, as consistent with the Hanoi Core Statement on Aid Effectiveness. Following a joint sector review in 2010, it was recommended that in principle Australia and Denmark would follow the United Kingdom and join their funds to those be made available to VBSP.

However, such a decision will be made only after a Fiduciary Risk Assessment of the VBSP is carried out and the outputs of this study shows that there is no significant fiduciary risks associated with the WSS lending of the VBSP.

The objective of the study is to enable the TPBS donors to determine the fiduciary risks of supporting the VBSP water and sanitation programme and what mitigating action is required to minimize these risks. This objective will also allow the VBSP to make improvements in its operations if justified. In a general term, fiduciary risks are risks that i) funds are not used for the intended purposes; ii) funds are not properly accounted for; and/or iii) funds do not achieve value for money. The assessment is focused on assessing the level of this risk of VBSP.

Under the commission of DANIDA, Economica Vietnam completed the Fiduciary Risk Assessment for VBSP with focus on its lending and operational capacity under the water and sanitation programme. The study is expected to provide additional arguments and analysis for TPBS donors, including DANIDA, to make a well-informed decision on the addtional funding to VBSP to expand its water and sanitation lending programme.

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