THE African Capacity Building Foundation (ACBF) is tightening its financial support system and is now operating a special account to be used solely for its projects.
In a document given out to executive directors and finance managers attending their workshop, the ACBF said the beneficiary project’s counterpart funds must not be co-mingled with funds in the special account.
ACBF-funded projects are required to be audited annually by a firm of reputable professional auditors in each country.
In Zimbabwe, the ACBF extends financial support to the Zimbabwe Economic Policy Analysis and Research Unit within the Ministry of Finance and Economic Development, the National Economic Consultative Forum and the Macroeconomic and Financial Management Institute of Eastern and Southern Africa.
The ACBF said an audit report together with a management letter should be submitted to the foundation within six months after the project’s financial year-end.
The special account comes in as several donor organisations have decided pulling out of Zimbabwe, citing the country’s poor economic and political climates. In some cases, however, donor countries have pulled out because of abuse of funds.
Donors are up in arms over Zimbabwe’s land reform programme, human rights record, alleged abuse of judiciary, as well as its tense political climate.
“Temporary borrowing from the special account in anticipation that counterpart funds to cover the beneficiary’s share of co-financing will shortly be available is strictly forbidden,” the document said.
“The beneficiary project may however pre-finance eligible items of expenditure under the grant agreement and then reimburse itself from the special account. Special accounts must be held in commercial banks or central banks.”
It said the accounts must be held in a convertible currency and funds advanced to the special account should only be withdrawn from the account as eligible expenditures became due and payable.
“Siphoning of funds from the special account to other accounts established by the beneficiary is not permitted and constitutes grounds for grant cancellation,” the document said. “Protection of funds in the special account is provided by the comfort letter.”
The ACBF said there were now several non-eligible expenditures for the foundation.
“Items not within the project and category description defined in the grant agreement are not eligible,” it said.
“Items not procured in accordance with the procurement guidelines of the foundation, payment made or due for goods, works and services provided after closing date, land acquisitions, late payment penalties imposed by suppliers, unless the penalties were incurred in connection with a disputed payment which was under arbitration, as well as civil works except minor renovations and interest on overdrafts or late payment of accounts.”
The main objective of the workshop was to enhance the performance of ACBF – supported projects and programmes through sharing of information on lessons, practices and procedures on project implementation and management.