Catalog

	Table of Contents
p. 21 of 25 BACK | NEXT Introduction Background The need for change Practices of other multilateral development banks Policy framework Organizational and resource issues Review of organizational implications Communication and information technology Staffing issues Assessment of budget implications Recommendation

Resident Mission Policy : Organizational and resource issues

---

Review of organizational implications

Organizational issues

On the principle that form follows function, the overall organizational response to the new challenges facing ADB will follow from the over-all strategic direction to be articulated in the long-term strategic framework. This subject is beyond the scope of this paper. However, the proposed revision and expansion of RM functions will have a number of organizational implications for ADB.

The formulation and approval of ADB policies will clearly remain a function of headquarters. RMs are an agency of ADB, and their policy functions are to provide inputs for policy formulation and to implement policies effectively. There is some concern regarding possible isolation of RMs from headquarters, and the consequent fragmentation of policy implementation. One of the major tasks of headquarters departments will be to ensure that the integrity and consistency of ADB policies is maintained across DMCs.

Other consequences of possible isolation could include inadequate feedback of project concerns into policy dialogue and country programming, loss of quality control, and loss of cross-country experience and global best practice. These are not insurmountable concerns. The World Bank has tried to address the cohesion and feedback issues by developing country teams whose members are geographically dispersed, but have a country- or task-specific orientation. A similar approach is suggested for ADB to provide the basis for maintaining integration: RM staff will be integral members of country and project teams. The team concept will require a strong commitment by the different organizational units concerned to act across their current boundaries.

With respect to the structure of ADB, there are two major issues. Transfer of a major responsibility for any function to an RM will entail a corresponding reduction of the responsibility at headquarters. For example, transfer of country programming will reduce the work of the programs departments. Similarly, transfer of portfolio management and project administration will impact on projects departments. The extent of this impact cannot be fully predicted at this stage, but will become clearer as the pilot tests proceed.

A second issue is the question of reporting and accountability relationships between RMs with specific functions and headquarters departments. For the present, the current reporting structure will be maintained: RMs will continue to report to directors of programs departments.

Delegation of authority is another important organizational issue. The advantages of local presence will be considerably diluted without the local capacity to respond quickly and decisively. However, it is important to define clearly what is meant by delegation. At one level, the increased responsibility for functions such as programming, project processing, and project administration (and, as applicable, complete transfer) is itself an increase in delegation. At the next level, delegation means providing RMs with the authority to exercise specific powers currently exercised by headquarters officers. An example is approving changes in the scope of ongoing projects. Resident representatives already have the authority to exercise the powers of the projects director for delegated projects. It may be necessary to provide such formal delegation in other areas as well. Possible approaches include (i) preparing a new set of delegations of authority that take into account lessons learned and the expected needs of RMs, and (ii) allocating to the resident representative the authority of headquarters officers at a level sufficient to permit effective functioning. These approaches will require a detailed review of current powers across a number of different functions and activities. Feedback from pilot testing will also be important. This review will be completed within one year. Until then, formal powers will remain as they are at present.

Private sector operations entail different approaches and risks than do public sector activities. RM management of private sector operations will require providing a different set of staff skills and the resolution of issues regarding operational control and reporting of private sector operations. These will be worked out in the context of the approach developed in ADB's private sector development strategy.

Control and oversight

In view of ADB’s strong commitment to good governance and anticorruption, the benefits of RM expansion must be matched by the need to maintain integrity and transparency in all ADB activities. Delegation will not mean dilution of transparency, control, and oversight procedures. To the contrary, they will be strengthened where necessary. Appropriate fiduciary controls will be maintained, and the application of ADB's current procedures for procurement of goods and services ensured. Delegation of disbursement functions to RMs will be subject to the detailed guidelines on this subject to be issued by the Controller. ADB will ensure that effective internal control mechanisms are properly in place to prevent any misuse or abuse of delegated authority. Similarly, audit functions will need to be strengthened to ensure proper oversight. It may be necessary to increase the extent and frequency of supervision missions from headquarters in these key areas, and to provide enhanced staff capacity to ensure this.

Back Organizational and resource issues	Next Communication and information technology