Banking Supervision (September 16-20, January 21-24)
METAC trained a team of Da-Afghanistan Bank (DAB) on corporate governance issues. The training covered international bank corporate governance topics, such as the corporate governance principles, internal control and internal audit functions’ frameworks issued by Basel Committee on Banking Supervision, as well as the guidance on strengthening governance framework issued by the Financial Stability Board and included walk-throughs of related key policy guidance, reports, and assessment tools. The training was an opportunity to discuss with the DAB team the difficulties that DAB supervisors encounter while inspecting banks, and the possible measures that could be implemented for a sound bank corporate governance framework. The mission was held in Amman, Jordan.
METAC assisted the DAB in enhancing the capacity of their supervisors in assessing weak banks, including their contingency and recovery plans. A hands-on training was organized, focusing on sharing lessons learned from the experience of other countries and best practices. This capacity development activity is expected to increase the knowledge, skills and expertise of banking supervisors, and hence reduce the risks that weak banks pose to the financial system.
Public Financial Management (November 12-16 and December 3-7, 2018)
METAC organized a five-day workshop aiming at augmenting the capacity of the Afghan MoF to identify and analyze key fiscal costs and risks, using the new version of the PPP Fiscal Risk Assessment Model (PFRAM). The workshop included (i) presentations of good practices in assessing fiscal costs of PPPs, (ii) discussions of specific fiscal risks related to PPPs, and (iii) hands-on training on the PFRAM. The mission helped the Afghan delegation selecting key data from two PPP contracts and assess their fiscal implications with the PFRAM.
METAC designed and delivered a one-week training workshop aiming at strengthening cash management capacities. It focused on cash planning and forecasting techniques and how the forecasts can be used in support of financial decisions. In addition, linkages between the budget execution control framework and cash management were discussed. The Afghan delegation presented the main reports prepared by their Cash Management Unit, leading to discussions on the ways to improve their relevance for decision-making and their convergence with international good practices. Building on the findings of this workshop, METAC will consider further support, including a hands-on and in-depth review of tools and data used for the preparation of daily and monthly cash plans.
Revenue Administration (September 2-6, January 20-24)
METAC continued its assistance to Afghanistan Revenue Department (ARD) on developing and implementing a national, single large taxpayer office (SLTO). In this context, it developed an action plan for the implementation of a fully functioning SLTO, which includes analyses and adoption of criteria for the selection of large taxpayers, changes to the organizational structure, and enhancements to the implementation project and governance methodologies. In addition, a comprehensive risk management and compliance improvement strategy was presented to authorities, who agreed on its implementation.
METAC assisted the Single Large Taxpayer Office of the ARD in establishing a VAT refund system. The objective is to refund legitimate claims and implement safeguards to prevent payment of fraudulent claims. This activity is part of an ongoing project to strengthen core tax administration functions, in particular VAT refund claim payments, and audit and verification. Specifically, METAC advised the ARD on: (i) identifying risks associated with implementing a VAT refund system and project governance, (ii) broader issues associated with better refund management practices, such as internal controls to prevent fraud and the importance of connected IT systems to use third-party data. A detailed project plan to implement effectively the VAT refund system was developed and discussed with ARD officials.