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p. 41 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 Part 2: Poverty Reduction Strategic Priorities Thematic Priorities Promoting Capacity Development Addressing Environmental Sustainability Gender and Development Promoting the Role of the Private Sector in Development Supporting Regional Cooperation and Integration for Development Regional Perspectives East and Central Asia Mekong The Pacific South Asia Southeast Asia Part 3: Financial Statements: Management's Discussion and Analysis

Annual Report 2004 : Part 2: Poverty Reduction : Thematic Priorities

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Promoting Capacity Development

The review of the PRS recommended that capacity development be adopted as a new thematic priority. As a first response, the Capacity Development Working Group was established and given the task of formulating a medium-term strategic framework and action plan for improving the effectiveness, efficiency, and sustainability of ADB's capacity development. The group also proposed updates for related business processes in ADB and agreed on a definition of capacity development and a classification system to be applied to projects starting in 2005. A draft report from the working group will be provided to Management in the third quarter of 2005.

As part of its capacity-building activities, ADB participated in the Multilateral Development Bank Technical Working Group on Financial Management Harmonization and the OECD's Development Assistance Committee's Joint Venture on Public Financial Management and reviewed and contributed to the proposed International Public Sector Accounting Standard on Disclosure Requirements for Recipients of External Assistance. As harmonization proceeds, it may be possible to shift some financial due diligence to DMCs to reduce the cost of project management and implementation and to simplify disbursement and monitoring. Such a shift will require increased internal capacity in the areas of financial management and accounting.

In addition, ADB continued to provide support to the International Federation of Accountants, the Confederation of Asia and Pacific Accountants, the International Organization of Supreme Audit Institutions, the Asian Organisation of Supreme Audit Institutions, and the South Pacific Association of Supreme Audit Institutions. The purpose of this support was to strengthen accounting and auditing capacity in the public and private sectors at the regional and country levels.

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