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4.2 Execution and Funding Arrangement

As mentioned in the above institutional arrangement, ISG is attached to MARD-ICD, therefore MARD takes the responsibility of the executing agency and ICD the implementing agency.

Since it is envisaged that the funding of ISG will be jointly contributed from several donors, the option of a trust fund administered and managed by MARD-ICD is proposed. That is the way to integrate the ISG process in MARD in a sustainable manner.

The Secretariat will prepare a year plan and liquidity planning which will be approved by the Steering Board, and then funds can be disbursed. Reporting will follow one format that the contributing donors will accept; the reporting includes - work plan, budget, quarterly and annual activity and financial reports. If the reporting should follow each of the contributing donors’ requirements it will make the reporting too cumbersome and inefficient.

The financial reports should be detailed enough to make it possible to see the cost for the various activities, thus, serving as a management tool and making it possible to assess the efficiency of the operations. Delegation of authority, responsibility and reporting should basically follow the present ISG format. Since considerable authority over funds is delegated, annual external auditing of the accounts and procedures is a prerequisite. 

4.3 Duration

It is envisaged that the first step of the new phase of the ISG will cover a two-year period. Nearly end of the second year, the new phase shall be planned involving all stakeholders concerned and the budget is then made, enabling a continuation of activities for the whole  new phase. This planning shall incorporate the experiences, developments and other co-ordinating initiatives that have occurred during the operation of the first step.           

4.4 Risks and assumptions

A successful implementation of the ISG depends on several key assumptions. The major risk of the ISG is related to the formulation, development and implementation of policies and strategies in rural development and that these are in turn translated into development programmes. Without a function policy framework and strategy for rural development the ISG has only a small, if any, role to play. The evaluation of the ISG indicates that the need for policy framework and strategy has been recognised by the Government.

Another risks regarding the ISG process is related to the process and dialogues itself. It is necessary the process be not turned into meetings where the various stakeholders only present their positions regarding policies, priorities and programmes. The ISG requires a real dialogue between the parties concerned regarding development and harmonisation of policies and strategies. In view of that, TAGs have significant role in the preparation for substantial dialogues.

From the above follows that the ISG project is dependent on the realisation of true coordination - inter and intra ministerial, between government and donor and between donors - in the formulation phase of a programme development. This is based on the policy and strategies that have been developed as part of the ISG.

The ISG project implementation makes a major assumption that the parties are willing to openly exchange information on ongoing and pipeline projects/ programmes, priorities, policies and strategies. In this respect the ISG could serve as a catalyst in achieving an open exchange of information and showing the benefits related to information sharing.

Finally, in view of ISG process sustainability, there must be a direct involvement not only of the ICD Director himself as ISG Secretariat Director, but also of his deputies and progamme officers. That involvement may contribute to raise initiatives for TAG studies, synthesise experiences from several projects/programmes and exchange of information on external support utilization.

5  Financing

Although the core of the work is envisaged to be voluntary participating in meetings, there is a need to finance the Secretariat, the cost of the meetings and TAG studies. It is suggested at this stage that financing should be provided for two years of operation, which besides the costs for meetings, TAG and Secretariat, also include funds for short-term consultants - local and international, and planning costs. During these to years the final structure of the ISG process should be developed including the establishment of trust fund within the MARD:

The short-term consultants will support the work of the TAGs’ work with technical and policy expertise when needed. It is also proposed that a yearly monitoring is conducted to ensure that the ISG-process is effective and are following the objectives and activities agreed upon at the onset.

The country contribution will compose of: office and office equipment, the service of the ICD director and his deputies, a financial clerk and the expenses of local tele-communication.

5.1 Financial management

At present the ISG funds and managed under MRDP financial system. It is suggested, in this proposal, that the ISG process will continue to be financed under MRDP while an ISG trust fund, capable of handling funds from several donors, is established under MARD.  The financial management arrangement, with MRDP, is temporary and should not continue longer than up to July 2001, bur may be terminated earlier if a trust fund structure is established. Thus the establishment of a functional trust fund structure should be completed before July 2001.

5.2 Current system: ISG financial linkage with MRDP

Presently ISG process is financed solely by Sida through the system for support to MRDP.  It is suggested in this proposal, that during a transition period, while the ISG trust fund is established, other donors could contribute funds to ISG through the same channels. Below follows a short description of the present Sida - ISG arrangement.

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