PHASE 4

Response

B

STEP 4 Establishing Financial Auditing and Monitoring Systems

Financial auditing and monitoring systems build upon the public financial management systems for post-disaster situations and are linked to the M&E system:

  • Aid-tracking mechanisms: During the ‘response’ phase, the government needs to quickly establish aid-tracking mechanisms that help to coordinate and allocate resources under a central framework − if combined with a cost-benefit analysis, it would contribute to assessing the efficiency of spending (see also Phase 1.C Performance Analysis of Existing Disaster Risk Management Mechanisms). Tracking of multiple streams of funding includes public sources, donor funds, private sector contributions and NGO sources.


  • Independent third-party auditing will enhance accountability of the government. Auditing and monitoring oversight is designed at three levels: 1) overall recovery programme monitoring, 2) sector-level project monitoring, which consolidates the reporting of each sector, and 3) at the lowest level, individual project monitoring takes place.

Tools and Guiding Questions

Guiding Questions

Has the government established an aid-tracking system?

Is an independent third-party auditing (external auditor) in place?

Guidelines

Expected Outputs When Using the Tools

Financial auditing and monitoring systems build upon the public financial management systems for post-disaster situations and are linked to the M&E system:

  • If post-disaster financing is combined with pre-disaster financing, insurance and other DRM mechanisms, it reduces ad hoc fund allocation efforts with their adverse consequences and secures funds before extreme weather events occur.
  • Combining post-disaster financing with insurance will reduce the amount of funding to be mobilized for resilient recovery.
  • Systematic financial need assessment enables the government to set recovery priorities and is a basis for mobilizing required funding.
  • Establishing effective and transparent financial management and auditing systems enhances the reputation of public authorities and may attract external funding.
  • Insurance-related outputs (see ‘Synergies: Insurance and Response’).