98001 Execute Resources and Coordinate Efforts Across the Post-Disaster Process Towards effective post-disaster public financial management Background Highlights Rapid action by the government can help to mitigate the  A dedicated coordination unit streamlines inter- disaster impact on the affected population and quickly institutional efforts across the post-disaster recovery restore damaged assets. However, immediately after a and reconstruction process. natural disaster there is often inadequate information  The coordination unit may be mandated to manage about its impact on public infrastructure and services. This the Disaster Risk Management fund and the lack of information can prevent government agencies from administrative dimensions associated with resource adequately performing their functions and may also allocation, disbursement, and execution in the impact the private sector. aftermath of a natural disaster. This note discusses the role of a coordination unit in  The Operating Rules of the coordination unit should managing the efforts between the central and different clearly articulate its mandate and responsibilities. levels of local governments, and the private sector across several phases of the disaster. This is the sixth of a series Considerations for Implementation of six notes that, together, reviews the process of an The role of the coordination unit may be defined institutional mechanism to finance post-disaster recovery depending on the scope of its mandate. For example the and reconstruction. coordination unit can manage the DRM fund through a General Principles public trust with a technical committee and fiduciary agent. The technical committee could consolidate requests A coordination unit should manage the DRM fund and for funds, verify the damage assessment results submitted the administrative dimensions associated with each step by the Damage Assessment Committee1, authorize the of the fund allocation, disbursement, and execution disbursement of funds that have been approved by the process. Delays in recovery and reconstruction operations Ministry of Finance, and monitor physical and financial are usually due to difficulties in allocating and executing progress of post-disaster activities. resources that have been secured through the Disaster Risk Financing and Insurance (DRFI) strategy, of which the The fiduciary agent of the public trust may disburse the DRM fund is an essential component. Streamlining the approved resources directly to the contractors and service efforts of the different entities involved in post-disaster suppliers. This mechanism is an effective option to recovery and reconstruction could help to ensure speedy maintain control over resources and transparency of operations, prevent leakage of scarce public finance, and funding channels to avoid the misuse of funds. Resources maintain accountability of fund uses. can be allocated cross multiple years and any unused or leftover resources from completed activities can be In the aftermath of a natural disaster, the coordination released back into the general pool of funds managed by unit consolidates the requests for funds submitted by the public trust. government agencies and local governments. This avoids multiple channels being used to access the federal budget The coordination unit should have Operating Rules that and also provides an overview of the total monetary clearly prescribe its mandate and responsibilities. This can amount of the damages. Having a single coordination unit help to resolve inefficiency in communication or clarify to manage all requests solves a ‘multiple-window procedural discretion amongst different government problem’ where none of the government agencies or local entities. The coordination unit may be anchored within the governments except the Ministry of Finance knows the Ministry of Interior, the Ministry of Finance, the Executive budgetary cost of an additional dollar requested. It helps to prevent one agency’s request for funds exhausting the 1 The Damage Assessment Committee determines the actual resources available for another, given the budgetary damages sustained by public assets and quantifies associated constraints that a government may face. reconstruction needs. See Note titled “Allocate Resources Based on Damage and Loss Assessment Methodology”. Office of the President, or in any government body related When the FONDEN Trust Technical Committee approves to post-disaster recovery and reconstruction. and authorizes the disbursement of resources, a subaccount is created within the FONDEN Trust for each International Experience disaster and for each sectoral agency. The fiduciary agent of the FONDEN Trust, Mexico’s national development bank In Mexico, the General Directorate of FONDEN manages BANOBRAS, makes payments directly to agencies or FONDEN, Mexico’s Natural Disaster Fund, and coordinates service suppliers carrying out the post-disaster activities all intergovernmental and inter-institutional entities (Figure 2). before, during, and after a disaster. Anchored within the Ministry of Interior, the General Directorate of FONDEN is Figure 2. Budget accounts Managed by the General mandated to provide resources to the 32 Mexican states Directorate of FONDEN and federal agencies following a natural disaster, if the needs exceed the financial capacity of these entities. When the Ministry of Interior issues a declaration of a disaster, the General Directorate of FONDEN installs a Damage Assessment Committee and oversees the damage assessment procedure, verifying the assessment results and crosschecking reconstruction activities. The General Directorate of FONDEN reviews applications requesting FONDEN resources and submits the consolidated request for funding to the Ministry of Finance for final review. Upon receiving the documents, the Ministry of Finance convenes a meeting of the FONDEN Trust Technical Committee to approve and authorize the disbursement of Source: FONDEN (2012) resources (Figure 1). The Operating Rules of FONDEN articulate the The FONDEN Trust Technical Committee also supports the responsibilities of the General Directorate of FONDEN and General Directorate of FONDEN in monitoring the physical the rules and limitations of each of the budgetary and financial progress in every activity that has received instruments under its management. The Operating Rules FONDEN resources at both the federal and local level by are periodically revised to ensure that each of the requiring submission of financial statements and quarterly budgetary instruments are cutting-edge and the General reports on physical and financial progress. Directorate of FONDEN can efficiently manage the Figure 1. Members of the FONDEN Trust Technical expectations of different stakeholders. Committee and their voting authority* Technical Committee Member Voting Authority Contacts Two Representatives of the Ministry of Finance and Public Credit Voting Power Olivier Mahul, Program Manager, Disaster Risk Financing Representative of the Ministry of Interior (SEGOB) Voting Power & Insurance Program, FCMNB and GFDRR, The World Observer Status Bank, omahul@worldbank.org Representative of the Ministry of Civil Service (No Voting Authority) Representative of BANOBRAS as the Fiduciary Agent Rubem Hofliger, Senior Policy Advisor, Disaster Risk of the FONDEN Trust (Permanent invitation with Observer Status (No Financing & Insurance Program, FCMNB and GFDRR, The mandatory attendance required at all Technical Voting Authority) World Bank Committee meetings) Source: FONDEN (2012) Hannah Yi, Policy Analyst, Disaster Risk Financing & *All representatives designate an alternate to ensure participation. Insurance Program, FCMNB and GFDRR, The World Bank, hyi@worldbank.org The General Directorate of FONDEN manages a number of budget accounts: the reconstruction fund (FONDEN Program for Reconstruction, the original and primary financial instrument), Emergency Fund for urgent aid relief, and a disaster prevention fund (FOPREDEN). The resources of the FONDEN Program for Reconstruction are managed through a trust fund, the FONDEN Trust. Updated November 2013