Fiscal Agent for Education Common Funding Mechanism

Item Description:

The Government of the Republic of Malawi (Government of Malawi) through the Ministry of Education, Science and Technology (MOEST) together with education development partners is preparing the establishment of an Education Reforms Joint Fund (ESJF) for channelling coordinated and joint support to the implementation of the Education Sector Implementation Plan (ESIP II) 2014-2017/18 and approved subsequent plans. The Common Fiduciary Oversight Arrangement (CFOA) Joint Declaration of Intent (JDI) is being developed alongside the ESJF (JDI). The CFOA JDI sets out specific understandings and mutual endeavours of the Government and DPs to sustainably strengthen the operation of the Governments’ education sector fiduciary systems.

Both the ESJF and the CFOA are established on the basis of common agreements and understanding where both Development Partners and Government of Malawi:

• Accept that sound public management within Government fiduciary systems is a critical pre-condition for the effective delivery of education services;
• Acknowledge that, despite considerable mutual effort and some improvements, Government fiduciary systems continue to suffer from significant weaknesses;
• Recognise that uncoordinated development partners’ support for government fiduciary systems can impose considerable transaction costs on Government; and
• Understand that Government fiduciary systems require considerable strengthening to be able to efficiently and effectively meet Government and international expectations and provide sufficient confidence to allow development partners to resume some forms of direct budgetary support and/or other form of harmonized /aligned support.

The Government of Malawi through the MOEST will be implementing the Malawi Education Sector Improvement Project (MESIP) worth USD 44.9 million, funded through the Global Partnership for Education (GPE) and supervised by the World Bank. The project is expected to commence in September 2016 and will channel its funds via the anticipated Common Financing Mechanism more directly through the Education Reform Joint Fund (ESJF). Together with the GPE funds, the Education Reform Joint Fund is expected to channel funds worth approximately 20M US$ on an annual basis from other education development partners in Malawi. The partners that envisage to contributing to the Common Financing Mechanism are the following: DFID, KFW, Norway, WB (GPE funds) and UNICEF. Over time, it is expected that other development partners will be joining the mechanism.

The ESJF and CFOA JDI partners envisage contracting the services of a specialized consulting firm as “Fiscal Agent (FA)” to implement fiduciary controls in the operation of the ESJF. The Fiscal Agent shall provide a range of financial management services to the GoM in connection with the JDI for the ESJF and the CFOA. The resources in the Education Reforms Joint Fund are referred to as “funds”, and are provided by development partners’ signatories to the Education Reform Joint funds (ESJF).

The FA shall perform all services necessary to ensure that all financial management and procurement services are conducted in accordance with the ESJF and CFOA of the Malawi Education Sector and in line with all international financial and procurement regulations.