2022-12-15-IMF-Safeguards_Assessments_Policy—External_Expert_Panel_39_s_Advisory_Report_37页_533kb

IMF Safeguards Assessments - 2022 External Expert Panel's Advisory Report Summary

Core Content

The 2022 External Expert Panel's Advisory Report evaluates the effectiveness of the IMF's safeguards assessments policy and offers recommendations to enhance its implementation. The report was prepared in November 2022 and presented to the Executive Board in December 2022. It is based on stakeholder consultations, a review of 91 safeguards assessments conducted between September 2015 and April 2022, and analysis of relevant IMF publications.

Main Areas of Focus

A. Safeguards Assessments Framework

• The ELRIC framework (External audit, Legal structure and autonomy, Financial reporting, Internal audit, Internal controls) was found to be appropriately applied.
• The focus on governance has been strengthened, with assessments now emphasizing it as an overarching principle.
• Risk management has become a more integral part of assessments, especially in response to emerging risks like cyber threats, digital currencies, and the impacts of the pandemic.

B. Adequacy and Coverage of Safeguards Reports

• The Panel observed a general agreement among stakeholders on the appropriateness of the safeguards assessments framework.
• There was limited awareness among central banks of the overall objectives and procedures of the safeguards policy.
• Integrated risk management and fiscal monitoring have been expanded, but some central banks felt the coverage was insufficient.

C. Impact of the Pandemic

• The pandemic led to a significant increase in safeguards assessments, with 42 of the 91 assessments (about 45%) conducted remotely during 2020–2022.
• The shift to remote assessments increased the average time per assessment from 9 to 14 days, due to coordination across time zones.
• The pandemic also increased the number of central banks under safeguards monitoring, from 67 to 82.
• Staff overtime increased significantly, averaging 16% per month during the pandemic period.

Key Recommendations

• Establish a separate governance pillar focusing on board effectiveness and central bank governance culture.
• Explicitly recognize risk management in assessments, including a high-level review of existing arrangements and their maturity.
• Develop comprehensive guidelines that reflect best practices in the areas covered by the safeguards assessment framework.
• Broaden the identification of risks from legal and regulatory changes affecting central banks.
• Improve central bank capacity building to better implement safeguards recommendations.
• Clarify interdepartmental roles and responsibilities in fiscal safeguards reviews to streamline operations.
• Ensure that the implementation of recommendations does not further strain staff resources.

Observations from Stakeholder Engagements

• Central banks generally agreed that the safeguards assessments framework was appropriate, especially in terms of governance, risk management, and audit.
• There was a lack of awareness about the safeguards policy among central banks, particularly regarding its applicability and objectives.
• Central banks suggested that advance guidance on best practices would help them better prepare for assessments and improve their performance.
• The implementation of legal reforms recommended by safeguards assessments is often delayed and politically sensitive, but central banks found value in the process.
• Capacity constraints within central banks were identified as a key challenge to effective implementation of safeguards recommendations.
• There was a need for increased outreach and knowledge-sharing activities, such as training and peer-to-peer learning, to support central banks in their operations.

Conclusion

The safeguards policy remains an effective instrument for preventing the misuse of IMF resources and misreporting of program monetary data. The introduction of the fiscal safeguards review (FSR) mechanism has further strengthened the policy. The Panel believes that the implementation of its recommendations will help minimize risks and enhance the effectiveness of the safeguards assessment framework. The continued focus on governance and risk management is essential for maintaining the integrity of the IMF's resources and supporting central banks in their operational improvements.

Key Information

• Total assessments conducted (2015–2022): 91
• Remote assessments (2020–2022): 42 (45%)
• Average time per assessment increased: from 9 to 14 days
• Central banks under monitoring increased: from 67 to 82
• Staff overtime during the pandemic: averaged 16% per month
• FSR threshold: 25% of funds directed to state budget financing
• ELRIC and LETIFA frameworks are central to the safeguards assessments policy.
• Legal and governance reforms are often delayed but seen as valuable.
• Capacity building and outreach activities are recommended to support central banks.

Annexes and Supporting Documents

• Annex I: External Expert Panel's Terms of Reference
• Annex II: Panel Composition
• Annex III: Safeguards Assessments Conducted Since Last Review
• Annex IV: Questions Provided to Central Banks in Advance of Discussions

The report emphasizes the importance of continuous improvement, stakeholder engagement, and adaptation to new challenges, such as the rise of digital currencies and the evolving nature of global risks.