Checks and balances
The IMF conducts audits of all its operations. The audit mechanisms are set up to improve governance, transparency, and accountability and include an external audit firm, an independent External Audit Committee, and the Office of Internal Audit (OIA).
The External Audit Committee is independent of the IMF and its Executive Board. The committee reports to the Board of Governors and is responsible for overseeing the IMF’s external audit, internal audit, financial accounting and reporting, risk management, and internal control functions.
The OIA is an independent assurance and advisory function designed to protect and strengthen the IMF. Its mandate is twofold: (1) assessing the effectiveness of the IMF’s governance, risk management, and internal controls and (2) acting as a consultant for improvement of the IMF’s business processes by advising on best practice. To provide for its independence, the OIA maintains a functional reporting relationship with the External Audit Committee. The OIA’s 2022 coverage encompassed several key areas, including support for the IMF’s modernization programs, investment activities of the Staff Retirement Plan, and the Capital Investment Framework for information technology investments.
Managing enterprise risk
The IMF’s internal Office of Risk Management provides the leadership and innovation necessary to identify, assess, measure, monitor, and report IMF-wide enterprise risks. It supports an enterprise risk management framework that leverages standard practices adapted to the context of the IMF’s unique mandate and operating model. It works across all IMF departments to ensure a consistent approach to risk tolerance, governance, culture, and risk processes, supported by risk issue and action management and strong IMF-wide communication and reporting.
Learning from experience
The Independent Evaluation Office (IEO) celebrated its 20th anniversary in 2021. It conducts independent and objective evaluations of IMF policies and activities and is fully independent of IMF management and the IMF staff, operating at arm’s length from the Executive Board. Its mission is to promote learning within the IMF, strengthen the institution’s external credibility, and support institutional governance and oversight. Recent IEO evaluations have focused on growth and adjustment in IMF-supported programs and on the IMF’s engagement with small developing states. More information about the IEO, including its terms of reference and evaluation reports, is available at https://ieo.imf.org.
Ethics and staff conduct
The IMF’s Ethics Office, its Ombudsperson, and its Office of Internal Investigations help ensure good governance within the organization.
The Ethics Office assists the organization in maintaining high ethical standards of conduct and the reputation of the IMF and its employees for probity, integrity, and impartiality. The Ethics Advisor promotes awareness of ethics issues, provides training and education on ethics to the IMF staff, and oversees annual Ethical Conduct and Core Values Certification to support compliance with the Staff Code of Conduct, as well as an annual Financial Disclosure Program for senior staff members and staff members in specific roles. A separate Code of Conduct is in place for members of the Executive Board.
The Ombudsperson is available to provide impartial and independent assistance in resolving employment-related problems. The Office of Internal Investigations conducts inquiries and investigations into allegations of misconduct, including breaches of the Code of Conduct. The IMF Integrity Hotline, administered by an independent third party, is available for anonymous and confidential allegations of misconduct or other concerns from staff or members of the public.
The IMF Executive Board is also committed to maintaining the highest standards of governance and integrity in the organization’s data, research, and operations. In concluding its investigation into the World Bank’s 2018 Doing Business report, the Executive Board noted that it had “confidence in the impartiality and analytical excellence of IMF staff and in the IMF’s robust and effective channels for complaint, dissent, and accountability,” but it would consider “possible additional steps to ensure the strength of institutional safeguards in these areas.”
In this context, in December 2021 the Executive Board announced the establishment of a steering group to lead a follow-up institutional safeguards review with the objective of helping ensure that the staff, management, and Executive Board maintain the highest possible standards around internal governance and staff voice and the integrity of data and analysis. As such, through an integrated approach involving the staff, management, Board, and an external panel of independent experts, an assessment of the robustness and effectiveness of channels for complaint, dissent, and accountability inside the IMF is being conducted. An evaluation of the overall strength of the safeguards at key nodes in the IMF’s internal review processes is also underway to ensure integrity in the organization’s data and analysis. Work on the review was completed in June 2022.
Engagement with the public
The IMF meets regularly with political leaders and country authorities and routinely engages with a wide range of private sector representatives, the media, and nongovernment stakeholders such as the academic community, civil society organizations, parliamentarians, labor unions, and youth leaders. Opportunities for such two-way dialogue allow the IMF both to explain its approaches and to learn from others to improve its policy advice.
When the IMF provides financing to a member country, it carries out a safeguards assessment to provide reasonable assurance that the country’s central bank can manage the IMF resources and provide reliable monetary data on the IMF-supported program. The assessments involve an evaluation of central bank operations in five areas: (1) the external audit mechanism, (2) the legal structure and autonomy, (3) the financial reporting framework, (4) the internal audit mechanism, and (5) the system of internal controls. From 2000 to the end of April 2022, 366 assessments were conducted, covering 104 central banks; 20 of these assessments were completed in FY 2022.
The assessments involve an evaluation of central bank operations in five areas:
The IMF also monitors progress as central banks work to improve their safeguards frameworks and address IMF recommendations in safeguards assessments. The monitoring continues for as long as IMF credit remains outstanding, and about 82 central banks are currently subject to monitoring. The monitoring activity has increased by about 20 central banks compared with the pre-pandemic levels owing to the financing extended to member countries to address the impact of the COVID-19 pandemic.
The IMF also conducts fiscal safeguards reviews of state treasuries when a member requests exceptional access to IMF resources in cases in which a substantial portion of the funds—at least 25 percent—is directed toward financing the state budget. During FY 2022, one fiscal safeguards review was conducted, and a second is in progress.
FY 2022 Assessments Completed
As of April 30, 2022
|Bank of Central African States (BEAC)|
|Eastern Caribbean Central Bank (ECCB)|
|Papua New Guinea|
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