Addressing Risks in Trust Funds: Lessons Learned and Possible Responses

Multi-partner Trust Funds have increasingly become the preferred channel for funding of complex operations. While they are risk-sharing instruments, that does not mean they are risk-free.

This Note summarises lessons learned and presents possible steps for better risk management to desk officers and decision-makers who have Trust Fund responsibilities in Norway’s aid administration.

The Note focuses on financial risk, such as fraud, corruption and financial mismanagement, effectiveness risk, the danger that agreed-upon objectives will not be achieved, and the relationship between the two.

This Note addresses both general and specific issues when addressing Trust Funds, issues that may also be relevant for bilateral assistance.