Catalog

	Table of Contents
p. 34 of 95 BACK | NEXT Message from the Chairman of the Board of Directors Members, Capital Stock and Voting Power The Record Abbreviations 2004 in Review: Board of Directors' Report Special Theme: The Changing Face of the Microfinance Industry: Building Financial Systems for the Poor Part 1: Institutional Effectiveness Managing for Development Results Accountability Knowledge Management Achieving Development Impact Human Resources and Budget Administration Part 2: Poverty Reduction Part 3: Financial Statements: Management's Discussion and Analysis

Annual Report 2004 : Part 1: Institutional Effectiveness

---

Administration

Special Capital Budget Projects

ADB's headquarters and its facilities were designed in the late 1980s. Normal wear and tear compounded by harsh weather have gradually increased maintenance and repair costs, and its security features were not designed to address current threats and risks like terrorist attacks or bombings. The Board of Directors therefore approved two major special capital budget projects (SCBPs): (i) improved daylight access for ADB atria and adjacent staff offices with an allocation of nearly $1.6 million in November 2003, and (ii) rehabilitation of ADB's headquarters building and enhancement of security with an allocation of $14.8 million in April 2004. In total there are 12 projects, but the priorities are security and safety. The security projects started in mid-2004 and are expected to be completed by 2006. An SCBP steering committee was formed comprising heads of departments and chaired by the vice-president for finance and administration.

Field Offices Projects

In 2004 ADB approved two new funding sources to enhance security and safety in the field. One was an annual capital budget for the procurement of security and safety related equipment in the field. The other was an administrative budget to assist the field offices to comply with the United Nations (UN) minimum security standards in accordance with our memorandum of understanding with the UN on security arrangements.

ADB also provided technical assistance and assessments to several field offices such as the Bangladesh Resident Mission regarding the need for new or expanded office space.

Managing Business Continuity

In 2004, the Business Continuity Management (BCM) Steering Committee was established. The BCM Working Group led by OAS and assisted by external consultants completed the first part of a strategy to mitigate the probability of a risk to business functions and to reduce its impact by timely responses to disruptions in critical business functions. The first phase improved existing recovery site facilities and established an in-country business continuity facility. The next phase covers other business functions and the possible establishment of an offshore recovery facility.

Continuity plans covering all critical aspects of ADB's business functions will be developed and tested by departments concerned in coordination with OAS in 2005. The plans will cover arrangements and procedures for ADB to respond to any disruption to ensure safety and security of personnel and that critical business functions will continue in a timely and effective manner. This will include the organizational structures and delegation of authority needed to deal with all emergencies. The plans will guide ADB from the initial declaration of a disaster or crisis through crisis management to recovery and restoration of processes and systems. OAS will ensure the plans and procedures are evaluated and adjusted on a regular basis.

Streamlining Business Processes

During 2004, business processes were refined and consolidated throughout ADB including actions and initiatives to enhance development effectiveness especially in the areas of client orientation and responsiveness, efficiency, and product quality.

Client Orientation and Responsiveness

ADB worked with governments and its development partners to identify development objectives, to formulate plans for achieving them, and to specify time-bound indicators to monitor implementation. ADB is committed to aligning its CSPs to DMCs' own national poverty reduction strategies to efficiently channel resources to match priorities identified in CSPs and to deliver high-quality assistance while minimizing transaction costs and response time for DMCs.

Acknowledging the key role of RMs, ADB continued to delegate responsibilities for project administration and management, for preparing CSPs and CSP updates, and for conducting country portfolio reviews. This further strengthened the capacity of RMs to use their close contacts with DMC governments and development partners to improve project implementation, coordination, and collaboration.

Efficiency

The review of new business processes completed in the first half of 2004 identified additional areas for their enhancement and reinforcement by rationalizing CSP preparation and processing technical assistance and reducing and streamlining document circulation. The actions to streamline business processes for private sector operations were initiated to better support the various facets of due diligence and to be more responsive to clients. The review concluded that better ways and bolder changes at the project, sector, and country levels need to be explored to further streamline procedures, increase efficiency, and improve the quality of products. To eliminate redundancies, a review of instructions and guidelines on operational procedures was conducted.

Several initiatives were started. The ordinary capital resources (OCR) partnership aims to strategically reposition ADB for greater relevance, responsiveness, and quality of OCR-financed operations. An innovation and efficiency initiative aims to reduce the cost of doing business with ADB, to raise its productivity, and to boost innovations for OCR and ADF borrowers. ADB is also reviewing strategic orientation and management of its technical assistance program to improve its quality and relevance.

Product Quality

ADB is amending its business processes to ensure (i) a greater focus on the overall quality of country assessments and the introduction of a results framework in each CSP; (ii) improved thematic and sector assessments by involving experienced thematic and sector staff in CSP preparation; and (iii) the introduction of a biennial stocktaking of CSPs and their lending and nonlending operations to examine if they are results-based and demonstrate improved quality at entry. To improve the quality of project design, regional departments initiated quality enhancement measures. In particular, quality assessment and facilitation teams were created in the South Asia Department, and the Economics and Research Department reviewed the quality of economic analysis of ADB-financed policy-based operations approved in 2003.

ADB continued to focus attention on improving project quality through better implementation, monitoring, and portfolio management. In March 2004, the technical assistance performance report (TPR) system became operational. Both the TPR and PPR are being enhanced to allow web access and more information on design changes and action taken on project implementation issues. An action plan was approved in 2004 to improve the quality of project and technical assistance frameworks, to enhance monitoring through PPRs and TPRs, and to revise PPMS procedures and guidelines to achieve better effectiveness and efficiency.

Back Human Resources and Budget	Next Part 2: Poverty Reduction