The Local Government Division, Ministryof Local Government, Rural Development and Cooperatives(LGD) agreed, as part of the identification of a follow-upproject to the on-going Rural Transport Improvement Program(RTIP), to launch an Operational Risk Assessment (ORA) ofthe Local Government Engineering Department (LGED). The ORAdraws on and adapts previous work to develop methodologiesto assess and suggest mitigation measures for fiduciaryrisks, as well as inherent risks linked with road andinfrastructure construction and maintenance, administrativecontrol risks, and risks associated with politicalinfluence. The Fiduciary and Operational Risk ManagementImprovement Plan (FORMIP) built on the first report to: (i)assess fiduciary and operational risks in LGED'smanagement of projects, assets and other resources, and inLGD's oversight function, that are likely to be majorfactors in possible funds leakages, delays and undueinterferences and overall inefficient use of publicresources; (ii) prioritize options which are realistic andavailable to effectively minimize (and where possible,eliminate) the major operational risks identified; and (iii)identify options for mechanisms which (drawing on this ORAas a 'baseline') will facilitate efficient futuremonitoring of operational risks in LGED and the LGD. Animportant conclusion of the ORA is that most of therecommended actions are within LGED's authority totake, with support from development partners and routinebudgetary spending and staffing authorizations from otheragencies. However, the action plan proposed in the reportwill be greatly enhanced if supported by further developmentof the Government's, Bank's and developmentpartners' programs to improve governance and reduceoverall operational risk in Bangladesh. Individualsub-sector reports such as these ORA can only have a limitedimpact in the absence of wider and widely supported programs.
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