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DRAFT FOR DISCUSSION DATED DECEMBER

VIEWS: 26 PAGES: 124

									   GOVERNMENT OF THE PEOPLE’S REPUBLIC OF BANGLADESH

         MINISTRY OF HEALTH AND FAMILY WELFARE




HEALTH, NUTRITION AND POPULATION SECTOR PROGRAMME (HNPSP)


           IMPLEMENTATION MANUAL
                      Created: Feb 9, 2005




                               1
                                   FISCAL YEAR

                                   July 1 – June 30

The Fiscal year (FY) of the Government ends on June 30. FY before a calendar year
denotes the year in which the fiscal year ends, e.g. FY2005 ends on June 30 2005.


                       ABBREVIATIONS AND ACRONYMS

    ADB           Asian Development Bank
    CIDA          Canada International Development Agency
    CMSD          Central Medical Stores Depot
    CSO           Civil Society Organization
    DANIDA        Danish International Development Assistance
    DfID          Department for International Development (United Kingdom)
    DGFP          Directorate General of Family Planning
    DGHS          Directorate General of Health Services
    DP            Development Partner
    EC            European Commission
    FMR           Financial Monitoring Report
    GTZ           German Technical cooperation (Deutsche Gesellschaft für
                  Technische Zusammenarbeit)
    HAPP          HIV/AIDS Prevention Project
    HCWMP         Healthcare Waste Management Plan
    HNPSP         Health, Nutrition and Population Sector Programme
    IDA           International Development Association
    JICA          Japan International Cooperation Agency
    KfW           German Agency for Reconstruction (Kreditanstalt für
                  Wiederaufbau)
    LCG           Local Consultative Group
    MOF           Ministry of Finance
    MOHFW         Ministry of Health and Family Welfare
    MTEF          Medium Term Expenditure Framework
    NGO           Non-Governmental Organization
    NGP           Non-Government Provider
    OP            Operation Plan
    PBF           Performance Based Financing
    PLMC          Procurement and Logistics Monitoring Cell
    PMA           Performance Monitoring Agency
    PMR           Programme Monitoring Report
    PSO           Programme Support Office
    Sida          Swedish International Development Cooperation Agency


                                          2
SIP      HNP Strategic Investment Plan
SWAp     Sector-Wide Approach
TA       Technical Assistance
THP      Tribal Healthcare Plan
UNFPA    United Nations Population Fund
UNICEF   United Nations Children‘s Fund
USAID    United States Agency for International Development




                                3
                              TABLE OF CONTENTS

Abbreviations and Acronyms

Definitions

Introduction

Chapter I. Background

Chapter II. Institutional Arrangements

Chapter III. Contributions and Obligations of the Government of Bangladesh (GOB) and
of the Development Partners (DPs)

Chapter IV. Programme Implementation - Annual Planning and Budgeting Cycle

Chapter V. Disbursements and Financial Management – Audit

Chapter VI. Procurement

Chapter VII. Reviews and Reports – Performance Monitoring


Annex I        The Programme (HNPSP) – Support to the HNP Strategic Investment
               Plan (July 2003-June 2010)
Annex II       Terms of Reference for the Programme Support Office (PSO)
Annex III      Partnership Arrangements
Annex IV       Indicative Contributions of the Development Partners (DPs) – 2005-
               2010 – By Development Partner (DP); by pooled DPs and non-pooled
               DPs; by year; by sub-Programme; by share; by low case and high case.
Annex V        Annual Planning Cycle, and MOHFW/DPs Meeting Schedule
Annex VI       Results Framework and Monitoring
Annex VII      Indicative Dates for the APR and expected Outputs
Annex VIII     APR Policy Dialogue
Annex IX       Financial Management Improvement Plan
Annex X        Procurement Improvement Plan




                                           4
                                DEFINITIONS

a) ―Operational Plan (OP) and Budget‖ means each plan and budget detailing the
   Programme activities to be carried out in each fiscal year, as agreed upon between
   the GOB and the Development Partners (DPs).

b) ―Consultant Guidelines‖ means the Guidelines for the Selection and Employment
   of Consultants by World Bank Borrowers dated May 2004.

c) ―Development Partners‖ means Bilateral and Multilateral Institutions which
   support GOB‘s HNP sector.

d) ―Environmental Management Plan‖ means the set of mitigation, enhancement,
   monitoring, and institutional measures dated       to be taken during
   implementation of the Programme to eliminate any adverse environmental and
   social impacts, offset them, or reduce them to acceptable levels, or to enhance
   positive impacts.

e) "Fiscal Year" or "FY" means the twelve-month period beginning July 1 of each
   year and ending June 30 of the following year.

f) ―FMR‖ means the financial monitoring reports prepared periodically by GOB
   under the HNPSP, in form and substance satisfactory to IDA, which: (i) set forth
   sources and uses of funds for the Programme, both cumulatively and for the
   period covered by said reports, showing funds provided under the FOREX
   account and explaining variances between the actual and planned uses of such
   funds; (ii) describe physical progress in Programme implementation, both
   cumulatively and for the period covered by said reports, and explaining variances
   between the actual and planned Programme implementation; and (iii) set forth the
   status of procurement under the Programme and expenditures under contracts
   financed out of the FOREX account, as at the end of the period covered by said
   reports.

g) ―FOREX Account‖ means the account held by GOB at the Central Bank to
   receive the contributions of the Pooled Development Partners to the Programme.

h) ―GOB‖ means the Government of the People‘s Republic of Bangladesh.

i) ―Guidelines‖ means the Guidelines for Procurement under IBRD Loans and IDA
   Credits dated May 2004.

j) ―Healthcare Waste Management Plan (HCWMP)‖ means the plan developed for
   the management of health care waste at the facility level, including segregation,
   storage and final disposal.




                                        5
k) ―HNP Consortium‖ means, the development partners who are members of the
   Local Consultative Group (LCG) cooperating with GOB for the development of
   the HNP sector (the LCG Sub-Group for HNP). The HNP Consortium aims to
   coordinate and streamline actions and procedures amongst the DPs.

l) ―HNP Forum‖ means the GOB-led mechanism established to facilitate the
   exchange of information and the policy dialogue between the DPs and GOB on all
   matters related to the HNP Sector. The HNP Forum is chaired by the Secretary of
   MOHFW, or his/her representative.

m) ―Implementing Agencies‖ means any public, private or civil society entities,
   operating under the laws of the People‘s Republic of Bangladesh, which receive
   grant funds to implement Programme activities.

n) ―Non-Pooled Development Partners‖ means, collectively, UNICEF, WHO,
   USAID, GTZ, KfW, JICA, and any other national or international agencies or
   organizations which may adhere to the Partnership Arrangements, and which will
   provide non-pooled contributions to the Programme.

o) ―Non-Pooled Funds‖ means the funds, or their in-kind equivalent, or the technical
   assistance provided by Development Partners to finance specific projects or
   budget lines of the Programme.

p) ―Partnership Arrangements‖ means the document signed by the GOB, the Pooled
   Development Partners and any other interested Development Partners providing
   for coordination and exchange of information for the implementation of the
   Programme and for common procedures on procurement, disbursement, M&E,
   etc.

q) ―Pooled Development Partners‖ means , collectively, the Department for
   International Cooperation of the United Kingdom (―DfID‖), the Government of
   the Netherlands (―Dutch Government‖), the European Commission (―EC‖), the
   International Development Association (―IDA‖), the Swedish Government
   (―Sida‖), the United Nations Population Fund (UNFPA), and any other donors
   pooling at least a part of their funds into a FOREX Account held by GOB (MOF)
   and having signed the Partnership Arrangements and a Bilateral Financing
   Agreement with GOB, or a Co-Financing Agreement with IDA (as the case may
   be), and any other national or international agencies or organizations which may
   adhere to the Partnership Arrangements and which will pool their funds for the
   financing of the Programme.

r) ―Pooled Funds‖ means, collectively, the funds provided by the Pooled
   Development Partners to the FOREX Account held by GOB at the Central Bank.

s) ―Procurement Plan‖ means the document which, for all contracts to be financed
   by the pooled funds under the Programme, describes the different procurement



                                       6
   methods or consultant selection methods, the need for pre-qualification, estimated
   costs, prior review requirements and time frame. The procurement plan covers a
   period of 18 months. The procurement plan is updated at least every 12 months,
   or more frequently if required to reflect the actual project implementation needs
   and improvement in institutional capacity.

t) ―Programme‖ means the Health, Nutrition and Population Sector Programme
   (HNPSP), as outlined in GOB‘s HNP Strategic Investment Plan – SIP (July 2003-
   June 2010) and detailed in the respective Programme Implementation Plans
   (PIPs).

u) ―Programme Support Office (PSO)‖ means the consulting firm recruited by the
   MOHFW and working within the existing structure of the MOHFW to assist
   MOHFW in the implementation of the HNPSP.

v) ―Report Based Disbursements‖ means withdrawal of funds from the financing
   accounts on the basis of Financial Monitoring Reports (FMR) and other
   information as may be specified by IDA to the MOHFW.


w) ―Tribal Healthcare Plan (THP)‖ means the plan developed after detailed
   consultations with tribal population, health service providers, NGOs and other
   stakeholders to meet the specific health needs of tribal population.




                                        7
                              INTRODUCTION

1. The Implementation Manual describes the responsibilities of the Government of
   Bangladesh (GOB) and the Development Partners (DPs) in relation to the Health,
   Nutrition and Population Sector Programme (HNPSP), as outlined in GOB‘s HNP
   Strategic Investment Plan – SIP (July 2003-June 2010) and detailed in the
   respective Programme Implementation Plans (PIPs).

2. This Implementation Manual sets out the application of GOB‘s and Development
   Partners (DPs)‘ respective financial management, procurement and disbursement
   arrangements for the implementation of the Programme.

3. The fiduciary arrangement under the Programme will: (a) account for the use of
   all funds (whether pooled-funding or not) under the Programme; (b) stipulate
   applicable procurement regulations and procedures; (c) put in place an acceptable
   internal control system; and (d) have effective external auditing arrangements.
   This Manual also defines a single reporting, monitoring and evaluation system
   under the Programme.

4. The procedures set out in these arrangements are complemented by: (1) GOB‘s
   ―Public Procurement Regulations 2003‖, the ―Procedures for Implementation of
   the Public Procurement Regulations 2003‖, and the ―Public Procurement
   Processing and Approval procedures (PPPAP)‖; (2) GOB‘s ―Financial
   Management Manual‖; (3) GOB‘s ―Treasury and Sub-Treasury Rules‖, ―General
   Financial Rules‖ and ―Accounts Code‖; (4) the ―World Bank Guidelines for
   Procurement under IBRD Loans and IDA Credits‖; (5) the ―World Bank
   Guidelines for the Selection and Employment of Consultants by World Bank
   Borrowers‖; (6) the World Bank‘s ―Disbursement Handbook‖ and the
   ―Guidelines: Annual Financial Reporting and Auditing for World Bank-Financed
   Activities‖.

5. GOB and the Development Partners (DPs) have reached certain understandings
   on co-operation and procedures for financial management, procurement,
   disbursement, monitoring and evaluation and the exchange of information to carry
   out the Programme. Some of the arrangements described in this Implementation
   Manual have been incorporated into Partnership Arrangements, Grant or Credit
   Agreements, Co-Financing Agreements, and/or Bilateral Agreements.




                                       8
                                      CHAPTER I

                                    BACKGROUND

I.1 The HNPSP (the Programme) aims to assist GOB in the implementation of its
Strategic Investment Plan 2003-2010 (SIP) for the Health, Nutrition and Population
Sector (HNP). Support is provided by a large group of Development Partners (DPs)
through a SWAp1 arrangement.

I.2 The Programme Development Objective is to improve health outcomes and to reduce
health inequalities through improved public sector capacity and accountability, targeting
of public resources and increased utilization of quality essential health services by the
population, especially poor households. The Programme addresses some of the key
issues faced by the health sector today, including health inequalities, the dynamics and
comparative advantages of public and non-public health service provision, and the quality
of health care.

I.3 To achieve its objectives, the Programme will focus on three major component: (i)
Strengthening Public Health Sector Management and Stewardship Capacity, including
development of pro-poor targeting measures as well as strengthening sector-wide
governance mechanisms; (ii) Health Sector Diversification, including the development of
new delivery channels for publicly and non-publicly financed services; (iii) Stimulating
Demand of essential services by poor households, including health advocacy and
demand-side financing options. A summary description of the Programme is given in
Annex I.

I.4 The Government strategy to meet the poverty reduction challenge is spelled out in its
Interim Poverty Reduction Strategy Paper (I-PRSPP). The HNPSP has a particular focus
on services geared to the achievement of the social development goals and targets that are
within the mandate of the MOHFW and are likely to contribute most to its Millennium
Development Goals and emerging HNP challenges:

      a) Reduce infant and under-five mortality rates by 65%, and eliminate gender
         disparity in child mortality.
      b) Reduce the proportion of malnourished children under five by 50% and eliminate
         the gender disparity in child malnutrition.
      c) Reduce maternal mortality rate by 75%.
      d) Ensure access to reproductive health services to all (PRSP March 2003).
      e) Reduce Total Fertility with a view towards achievement of replacement level
         fertility by 2010.
      f) Reduce the burden of TB, HIV/AIDS, malaria and other priority diseases (MDG
         2000).



1
    SWAp: Sector-Wide Approach.


                                            9
I.5 The HNPSP builds on the implementation of the first health sector SWAp (HPSP).
In order to reduce the burden and cost of multiple procedures, to reinforce Government
ownership, and to strengthen institutional development, the Development Partners (DPs)
have adopted a sector-wide approach (SWAp), while maintaining appropriate standards,
and still using, as need be, their own specific procedures. For the resources for the health
sector that will be pooled in an account held by GOB at the Central Bank (referred to as
the ―FOREX account‖), the Pooled Development Partners will use common
implementation arrangements.

I.6 The Government intends to continue to improve the performance of its institutions in
managing health sector resources in order to enhance the development impact of the
Programme. The Development Partners intend to collaborate by building stronger donor
partnerships in support of the HNPSP and HNP SIP. The Government and the
Development Partners are committed to openness, consultation and sharing of
information. As the Development Partners gain increasing confidence in Government
institutions and procedures, channeling of donor resources through Government systems
could be scaled up. In this context, Development Partners will continue working towards
strengthening and utilizing Government systems including planning and budgeting
arrangements, mechanisms, rules and procedures for procurement, disbursement,
accounting, auditing, reporting, monitoring and evaluation.




                                             10
                                     CHAPTER II

                        INSTITUTIONAL ARRANGEMENTS


II.1 Basic Characteristics of the SWAp

II.1.1 A sector-wide approach (SWAp) is an approach to support a country-led
Programme for a coherent sector in a comprehensive and coordinated manner. The
HNPSP SWAp includes the key elements that are usually found in a SWAp, albeit to a
varying degree and sometimes as a result of a gradual and phased process. Those key
elements can be summarized as follows:

   1. Government ownership and leadership
   2. Partnership with Development Partners
   3. Agreed sector policy framework and strategies based on shared vision and
      priorities
   4. Common sector Programme / expenditure framework
   5. Coordination / alignment of resources
   6. Harmonized implementation mechanisms and use of local systems and procedures

II.2 Government Ownership and Leadership

II.2.1 The Ministry of Health and Family Welfare (MOHFW) is responsible for overall
co-ordination of the implementation of the Programme and of the contributions of
Development Partners (DPs) to the Programme. To the extent possible, MOHFW will
integrate the Programme activities within its regular administrative structure. It will be
accountable for making Programme implementation adhere to GOB and DPs‘ procedures
and guidelines, as well as for overall transparency and accountability in using HNPSP
funds.

II.2.2 According to the sector framework, the Line Directors are the main implementing
agencies or spending units who implement the Programme with policy and administrative
guidance from the MOHFW. Under the HNPSP, the sector activities have been grouped
into 37 Programmes with 37 operational plans to be implemented by 37 Line Directors.
MOHFW‘s capacity is strengthened by a Programme Support Office (PSO), consisting of
the recruitment of a technical assistance consulting firm. The Terms of Reference
(TORs) of the PSO are given in the Annex II.


II.2.4 All institutions in the health sector will operate on the same planning and budget
cycle. On or before the 15th of April in each year, the Government and the Development
Partners will estimate the amount of financing to be provided by the Government and
each of the Development Partners for the following fiscal year. An agreement will be
reached on a consolidated sector plan and budget (the ―Operational Plan‖, or OP) derived



                                            11
from the HNP Strategic Investment Plan (SIP), the Programme Implementation Plan
(PIP) and the health sector‘s performance for the previous year.

II.2.4 All activities in the health sector and the support of Development Partners will be
within the framework of the HNP SIP and focused on the achievements of the agreed
health sector objectives and plans set out in the Programme. Funds provided by the
Government and the Development Partners will be used exclusively to finance
expenditures under the OP. Development Partners should make all efforts to operate
within the Government planning and budget cycle. The Government will reflect in its
budget all support that it receives in the sector.

II.3 The Partnership between GOB and DPs

II.3.1 In order to be successfully implemented, the HNPSP will require the establishment
and efficient working of a strong partnership between the Government of Bangladesh
(GOB) and the Development Partners (DPs).

II.3.2 With reference to the basic characteristics of a SWAp, the partnership between
GOB and the DPs is built on the following general guiding principles:

   a) MOHFW leads the implementation of the HNPSP and the design and
      management of DP support, including technical assistance.

   b) The Development Partners (DPs) provide sector-wide support to the priorities
      defined by the MOHFW in the HNP Strategic Investment Plan - SIP (July 2003-
      June 2010) and detailed in the respective Programme Implementation Plans
      (PIPs).

   c) Development Partners (DPs) that are pooling resources (referred to in this manual
      as ―Pooled Development Partners‖) provide sector-wide support by making
      contributions to a FOREX Account held by GOB at the Central Bank. Together
      with GOB‘s contributions, those funds are made available to the implementing
      agencies or spending units through GOB‘s budgetary channels.

   d) Development Partners (DPs) that are not pooling resources (referred to in this
      manual as ―Non-Pooled Development Partners‖) provide support or parallel
      financing for specific projects or budget lines in the OP and budget. The
      contributions of Non-Pooled DPs may be financial, but may also include the
      provision of technical assistance and in-kind contributions.

   e) Mechanisms already exist or have been recently established to facilitate the
      exchange of information and the policy dialogue between GOB and the DPs (―the
      HNP Forum‖), and to coordinate and streamline actions and procedures amongst
      the DPs (―the HNP Consortium‖).




                                            12
II.4 The HNP Forum

II.4.1 The HNP Forum‖ is a GOB-led mechanism established to facilitate the exchange
of information and the policy dialogue between the DPs and GOB on all matters related
to the HNP Sector.

II.4.2 The HNP Forum is chaired by the Secretary of MOHFW (or his/her representative)
and is attended by senior-level GOB and DP officials which support GOB‘s HNP sector
(i.e. all the bilateral and multilateral institutions which are members of the LCG Sub-
Group for the HNP sector). Representatives from other Ministries/units, civil society
representatives, and other stakeholders from the non-public sector may be co-opted.

II.4.3 The HNP Forum provides a platform for sharing ideas, vision and experiences as
well as discussing all issues related to the implementation of the Programme, particularly
but not limited to the HNP sector reforms.

II.4.4 The HNP Forum shall provide a platform to: (i) review the annual progress report, the
operation plans, as well as the supporting budgets; (ii) provide overall policy and operational
guidance for the implementation of the HNPSP and recommend corrective actions, if needed;
and (iii) resolve any other issues and conflicts that may emerge during HNPSP implementation.

II.4.5 The following arrangements apply for the HNP Forum:

   a) The HNP Forum will meet at least once every quarter.
   b) As may be necessary to take care of any business matter of interest to members of
      the HNP Forum, additional meetings may be called at any time by the Secretary
      of MOHFW (Chair of the HNP Forum) in consultation with the Chair of the HNP
      Consortium.
   c) Meetings will take place during common office hours of GOB and the DPs.
   d) Notices of meetings and agenda will be issued by the Secretary of MOHFW
      (Chair of the HNP Forum) at least one week before the scheduled meetings. All
      DP may suggest items of the agenda through the Chairperson of the HNP
      Consortium to the Chair of the HNP Forum, at least 48 hours previous to the issue
      of notice.
   e) Draft minutes will be circulated for comments within one week of a meeting, and
      finalized minutes will be issued not later than three weeks after the meeting.

II.5 The HNP Consortium

II.5.1 The HNP Consortium has been a reality in Bangladesh for some time already. The
consortium consists of all Development Partners (DPs) supporting the HNPSP; those DPs
are members of the Local Consultative Group (LCG) cooperating with GOB for the
development of the HNP sector (the LCG Sub-Group for HNP). The HNP Consortium
represents both the Pooled DPs and the Non-Pooled DPs. It aims to coordinate and
streamline actions and procedures amongst the DPs. A Secretariat office assists the
Chairperson of the consortium to perform his/her tasks and to follow up the activities
required for DP coordination.


                                              13
II.5.2 Members of the HNP Consortium are committed to a systemic development of
health service provision in Bangladesh, with the ensuing commitment to support the
policies of the Government of Bangladesh (GOB) and work with GOB systems. As
regards financial flows, Development Partners (DPs) are committed to the principle that,
to the extent possible, resources will be channeled through government systems in line
with GOB procedures and requirements.

II.5.3 HNP Consortium members will endeavor to communicate to GOB and other
stakeholders with a common voice.

II.5.4 To the extent possible planning and organization of activities by HNP Consortium
members will be done jointly; HNP consortium members will participate in annual joint
reviews, the midterm review and the final evaluation of the HNPSP, under agreed Terms
of Reference.

II.5.5 The HNP Consortium will operate under Partnership Arrangements included in
Annex III.

II.6 The Role of IDA

II.6.1 IDA is a Pooled Development Partner (DP) among other DPs and it does also play
to some extent the role of lead financial agency for the Programme. Development
Partners have chosen to follow IDA procedures for project preparation and supervision
during implementation. IDA will continue to take the lead, on behalf of Development
Partners, on financial, procurement and performance audits, and on arrangements for
Programme supervision including the mid-term review and the end of Programme
evaluation.

II.6.2 In addition, with respect to contracts financed with pooled funds provided by
Pooled DPs, IDA will review and provide clearance on procurement on behalf of all the
Pooled DPs.

II.6.3 It should be noted that most of the Development Partners that have so far agreed to
pool their funds will do so through IDA under trust fund arrangements. As administrator
of the funds, IDA stands responsible for all actions related to fiduciary aspects of the trust
fund. Legal agreements between IDA and the Pooled Development Partners will define
the trust fund objectives and mechanisms, as well as the rights and liabilities of each
party. Such arrangements are outside the scope of this manual for the implementation of
the HNPSP.

II.7 Special Coordination Mechanism for the Pooled DPs


II.7.1 Without questioning the trust that the Pooled DPs place in IDA, there is a need for
a coordination mechanism that will allow them to maintain their specific role in the



                                             14
policy dialogue, to be involved on an equal basis in strategic decisions, and to exercise
their mandate of monitoring their pooled financial contributions. To meet these
requirements, the pooled DPs will need to have separate, quarterly meetings for
exchanging information among them and for harmonising their views on strategy and
implementation issues. Ideally, these meetings should be scheduled around the quarterly
meetings of the HNP Forum.

II.7.2 The pooled DPs will aim to discuss and develop a common position for the policy
dialogue with GOB, and on activities financed by the pooled funds and on matters which
are of particular interest and concern to them, including:

   a) the Annual Programme Review – APR: TORs, choice of consultants, and
      acceptance of report;
   b) the choice of indicators for the payment of the performance-based Category (1)
      and decisions on such payments;
   c) the status and progress of the Programme; and
   d) the adaptation of the Programme strategy.

II.7.3 The Pooled DPs are committed to the principle of partnership and will exercise
their best efforts to reach decisions by consensus. Where this is not possible, decisions
will be reached by voting: a qualified majority of the Pooled DPs (meaning a simple
majority of the DPs, contributing at least 40% of the pooled funds) will be required.




                                            15
                                     CHAPTER III

    CONTRIBUTIONS AND OBLIGATIONS OF THE GOVERNMENT OF
   BANGLADESH (GOB) AND OF THE DEVELOPMENT PARTNERS (DPs)

III.1 Contributions and Obligations of the Government of Bangladesh (GOB)

III.1.1 The Government of Bangladesh (GOB) is committed to the objectives of the
Programme and will act with due diligence and efficiency to facilitate its successful
implementation. In particular, GOB will:

   a) Not unilaterally change the scope of the Programme;

   b) Provide its financial contributions as detailed in the agreed Operational Plan and
      Budget and ensure timely release of funds;

   c) Ensure that the resources channeled through the Programme are reflected in the
      plans, budgets and accounts of GOB;

   d) Ensure that accounts and records for the Programme are maintained in accordance
      with the Accounts Code, the Treasury Rules and General Financial Rules of
      GOB;

   e) Grant all necessary permits, including work permits for consultants, import
      licenses and foreign exchange permissions that may be required in connection
      with the implementation of the Programme;

   f) Promptly inform the DPs of any condition (including theft or misuse of funds)
      which interferes or threatens to interfere with the successful implementation of
      the Programme; and

   g) Ensure that any person misusing funds provided to or through the MOHFW under
      the Programme is subject to the full rigors of the laws of Bangladesh.

III.1.2 The Government of Bangladesh has designated the MOHFW as the institution
responsible for coordinating the Programme and facilitating interventions carried out by
Implementing Partners, with the assistance of a Programme Support Office (PSO).

III.2 Contributions and Obligations of the Development Partners (DPs)

III.2.1 The DPs will make available their agreed contributions to the Programme in a
timely manner.

III.2.2 The allocation, disbursement and use of funds in support of the Programme will
be directed through two different modalities:



                                            16
      Pooled funds provided by Pooled DPs in proportion to their financing share of the
       agreed OP and Budget will be made available to implementing agencies or
       spending units through GOB‘ normal budgetary channels.
      Non-pooled funds, technical assistance and in-kind contributions provided by DPs
       will be directed towards specific projects or budget lines in the OP and Budget in
       accordance with the bilateral agreements between GOB and the respective DPs.

III.2.3 Any DP which intends to invoke remedial measures and to suspend or terminate,
in whole or in part, its contribution to the financing of the Programme will give MOHFW
as much advance notice as possible, in line with the provisions of its bilateral agreement
with GOB.

III.2.4 The DPs will work towards harmonization of their contributions, to avoid
duplication of efforts and to increase transparency, especially with respect to the
coordination of technical assistance.

III.2.5 Based on arrangements in bilateral agreements between IDA and some Pooled
DPs, the said Pooled DPs will deposit their contributions to a Trust Fund managed by
IDA, which will disburse those funds to the FOREX Account held by GOB at the Central
Bank for the Programme, in accordance with agreed procedures.

III.2.6 Some DPs may specify that their contributions should not be used to pay the cost
of any import duties, customs duties or domestic taxes imposed directly or indirectly by
GOB nor any salaries of civil servants of GOB.

III.3 Estimated Amounts of Contributions

III.3.1 The Programme is estimated to cost about US$3.6 billion. The Government of
Bangladesh would contribute about US$2.4 billion to the cost of the Programme and the
Development Partners about $1.2 billion, out of which about $0.66 billion are to be
pooled.

III.3.2 The anticipated timing of GOB and DPs (DPs) support for the Programme and the
indicative contributions of the DPs are set out in Annex IV. The contributions indicated
in Annex IV are indicative of resources available and do not constitute pledges of the
DPs.




                                            17
                                     CHAPTER IV

                     PROGRAMME IMPLEMENTATION
                 ANNUAL PLANNING AND BUDGETING CYCLE

IV.1 General

IV.1.1 For Programme implementation, all DPs will aim at operating under a common
framework, particularly with respect to:

      the preparation of OP and budget and the indicative contributions to the
       Programme, within the context of MOHFW‘s annual planning and budgeting
       cycle, and
      the reporting requirements, the annual Programme reviews and the audits.

VI.12 The details of Programme implementation will not be the same, however, for
pooled funds provided by Pooled DPs, and for projects and activities supported by non-
pooled funds or contributions. MOHFW and Pooled DPs will have to adhere to common
rules and procedures, whereas MOHFW and DPs that are not pooling their funds and
contributions will have more flexibility to agree between them on implementation
modalities to be incorporated into their bilateral agreements.

IV.2 The Implementing Agencies

IV.2.1 The Programme will be implemented by public sector and private sector entities.

IV.2.2 The public sector includes MOHFW and its attached departments, such as DGHS,
DGFP, National institute of Population Research and Training, Directorate of Nursing
and Education, Directorate of Drug Administration, Central Medical Stores Depot
(CMSD), Construction Management and Maintenance Unit (CMMU) and the Project
Management Unit of NNP. There are 31 Line Directors. Each Line Director will be
responsible for certain actions included in the HNPSP components. The Line Directors
will get line support of the Department/Ministry. Each Wing headed by the Joint
Secretary / Joint Chief will monitor implementation. The Public Works Department will
also implement the Programme.

IV.2.3 In addition to the contractors, suppliers and consultants that will participate in
Programme implementation as sub-contractors of implementing agencies or spending
units, the private sector includes the Management Support Agency (MSA) and the NGOs
and other private sector entities that will be contracted by MSA to deliver health services
to the population.

IV.3 The Annual Planning and Budgeting Cycle

IV.3.1 The process will include the following steps:


                                            18
    a) Following the quarterly review meeting of the HNP Forum, chaired by the
       Secretary of MOHFW or his/her representative and attended by the DPs, in
       February of each year the DPs will, to the extent possible, indicate to MOHFW
       the estimated amounts of their contributions to the financing of the Programme
       for the following fiscal year (July 1 to June 30).

    b) An Annual Programme Review (APR), which will also assess the sector
       performance for the purpose of the payment under Category 1 of the Credit, will
       be carried out.

    c) Consultations between MOHFW and the DPs will take place in order to reach
       agreement on an OP, Budget and Procurement Plan2 by the end of May. The OP
       and Budget, including outputs, constitute the accepted programme of actions for
       the following July 1 to June 30 period. Changes to the OP and Budget may be
       agreed during the quarterly review meetings or by written agreement between
       GOB and the DPs at any other times.

    d) A detailed financing plan will be agreed identifying which activities will be
       funded by Pooled DPs and which activities will be funded by the Non-Pooled
       DPs. Funds provided by the Development Partners and the Government of
       Bangladesh are to be used exclusively to finance eligible expenditures3 under the
       OP and Budget (and the procurement plan in the case of pooled funds provided by
       Pooled DPs).

    e) Contributions by the DPs and GOB will be confirmed at that time, and the
       proposed DPs‘ contributions will be entered into the national budget and,
       eventually, the Medium Term Expenditure Framework planning cycle.

    f) Line Directors / Program Managers and other implementing agencies will
       implement the OP and Budget. They will be accountable for achievement of
       agreed outputs – accountability to be matched by delegated authority, including
       for procurement.

    g) Line Directors and other implementing agencies will report monthly on the
       implementation of their own programme, and the Secretary, MOHFW will hold
       monthly meetings to review progress. Quarterly Programme Monitoring Reports
       (PMRs) will be submitted to the DPs.




2
  The procurement plan covers only the contracts to be financed by pooled funds provided by Pooled DPs.
3
  Eligible expenditures may include grants, goods, works and services provided in support of the
Programme, in the form of pharmaceutical drugs, nutritional supplements, supplies, equipment, civil works,
operating costs, consulting and audit services, vehicle and equipment operation, travel, per diem and
supervision costs, training and workshops, and other expenditures under the Programme but, at least with
respect to pooled funds provided by Pooled DPs, excluding taxes and salaries of GOB civil servants.


                                                   19
   h) After the end of the fiscal year, an Annual Programme Implementation Report
      (APIR) is submitted to the DPs, and a new annual planning cycle starts.

IV.3.2 A summary description of the annual planning cycle and meeting schedule is
provided in Annex V.

IV.4 Operational Plan (OP), Budget and Procurement Plan

IV.4.1 Each implementing agency (whether a Line Director, or a private sector entity)
will prepare its own annual operation plan and budget. The consolidation of all those
plans and budgets will constitute the OP and Budget for the Programme for the fiscal
year. Since there many implementing agencies, the OP is likely to be a voluminous
document. The following guiding principles are recommended for its preparation to
facilitate the review and approval by the DPs, and the subsequent monitoring during the
fiscal year as well as the evaluation of results at the time of the Annual Programme
Review (APR).

IV.4 2 All projects and activities included in the Programme (HNPSP) will, to the extent
possible, be reflected in the OP and Budget, whether they are financed by pooled funds or
by non-pooled funds. The OP and Budget will specify the activities to be carried out
under each sector strategy and reflect clear links between the sector policy and strategic
framework on the one hand, and expenditure plans for the sector on the other hand; the
objective is to ensure that the allocation of resources reflect the sector strategies. In the
case of projects and activities financed by pooled funds provided by Pooled DPs, the link
will be more clearly established by the contracts included in the procurement plan.

IV.4.3 The Operational Plan (OP) and Budget does not need to give the same importance
to all the implementing agencies. In line with the development objectives of the
Programme (HNPSP), it will provide more details on the agencies that are more involved
in the delivery of health services to the population, as opposed to those that are more
oriented towards management, logistics or similar types of support (without minimizing
the importance of such support). In addition to focusing on what may be viewed as the
most important part of the Programme, the recommended approach has the advantage of
concentrating the planning by MOHFW and the review by the DPs on a more limited
number of Line Directors and agencies, such as the Management Support Agency
(MSA), which are more service delivery oriented.

IV.4.4 Finally, the OP and Budget will focus on expected results. For each sub-
component or activity, the OP will identify a few outcome indicators that could be
measured every year, either by the Annual Programme Review (APR) or through special
surveys. Those indicators will preferably be those related to the delivery of health
services to the population; they will be selected from among those included in the
―Results Framework and Monitoring‖ (See Annex VI). The indicators selected each year
will definitely include, as a minimum, the performance-based financing indicators agreed
with GOB for the purpose of the payment of Category 1.




                                             20
IV.5 Annual Programme Reviews (APR)

IV.5.1 Rather than having each DP having its own review process and mission, the
objective is to have only one Annual Programme Review (APR), for the whole
Programme and of interest to all DPs, carried out every year. The purposes of the APR
are:

       First, to take stock of the achievements of the Programme during the previous
        year, as a necessary input for the preparation of the OP, budget and financing plan
        (including the payment under Category 1 for performance) for the next year;

       Second, to review Programme implementation during the current year, to revise
        eventually the current year‘s OP and budget; and

       Third, to review the proposed OP, budget and procurement plan for the next fiscal
        year and to recommend whether an annual disbursement will be made in the next
        fiscal year, and if so, for what amount.

IV.5.2 The Annual Programme Review (APR) is a management instrument, designed for
both GOB and the DPs, to monitor progress in the implementation of the Programme and
to verify that management and policy responsibilities are met. It will focus on service
delivery and reforms, particularly the diversification of service provision, and any other
priority area that may be selected jointly by GOB and the DPs.

IV.5.3 The APR will be carried out under the guidance of a joint GOB / DPs APR
Steering Committee (SC), headed by the Joint Chief Planning, MOHFW, and comprising
of the following members: (i) DGHS (Planning, MOHFW); (ii) DGFP (Planning, MOHFW);
(iii) PSO Coordinator; (iv) WB Task Team Leader; (v) Two representatives of the HNP
Consortium; (vi) Head of the National Health Service Users Forum; (vii) One representative of
ERD; and (viii) One representative of IMED (Planning). The APR SC will meet in November
to start the process of planning and implementing the APR for the following year. The
APR SC will be primarily responsible for the following: (i) To oversee/ facilitate the APR
planning and implementation process; (ii) To ensure the timely submission of key reports
requested for the APR; (iii) To agree on Terms of Reference for the APR Consultancy Team; (iv)
To facilitate the Field Visits and agree on criteria for selection of locations; and (iv) To organize
the Policy Dialogue and agree on selection of Moderator.

IV.5.4 The APR process will include several steps (technical work, field visits and
policy dialogue), as detailed below.

a. The Technical work will be carried out by a competitively selected independent team
   of international and national consultants that will collect, review and analyze data
   generated routinely within the health delivery system as well as additional qualitative
   data, conduct fact-finding activities and review components and sub-components.
   Since the review will cover the previous year, the current year and the proposed OP
   and Budget for the following year, it will have to be carried out in two parts: first, in
   January /February a review of the past year and of the current year; and second, in


                                                 21
       April and May an evaluation of the proposed OP, budget and procurement plan for
       the next fiscal year (See Annex VII for indicative dates for the APR and Expected
       Outputs).

               With respect to the previous fiscal year, the consultant report will compare
                achievements with what was planned in the approved OP, budget and
                procurement plan, and discuss the reasons for variances and the lessons that
                can be drawn from them. The APR team will under the guidance of the Lead
                Consultant rate the performance of each of the HNPSP components. The Team may
                choose to adopt the following six –point scale: HS= Highly Satisfactory; S=
                Satisfactory; MS= Moderately Satisfactory; MU= Moderately Unsatisfactory; U =
                Unsatisfactory; HU= Highly Unsatisfactory. The team will come up with an overall
                program performance rating.

                In addition, it will give particular attention to the short-list of performance indicators
                under Category 1 and assess which performance criteria, if any have been met. It will
                update the Results and Monitoring Framework and advise on the choice of indicators
                for the following fiscal year as well as adaptation of the program strategy, if
                necessary.

                Based on the key findings and ratings of the APR Independent Technical Report as
                well as additional qualitative and quantitative data, the WB TTL has the
                responsibility of deciding on the percentage of funds to be disbursed for Category 1.
                The WB TL will send an official letter to inform the Joint Chief Planning, MOHFW
                after concurrence with the co-financiers4 on the percentage of funds to be disbursed
                for category 1 and the reasons for that decision.

          With respect to the current fiscal year, the consultant report will make
           recommendations on any adjustments that need to be made to the current year‘s
           OP, budget and procurement plan.

          With respect to the next fiscal year, the consultant report will comment on the
           proposed OP, budget and procurement plan; particularly, whether they are
           consistent with the Programme and the sector policy and strategic framework.

b. Status of Performance Indicators Report is to be prepared by an independent
       consultant/agency hired by and submitted to WB TTL. WB TTL will share the document
       with co-financiers.

c. Field visits to hospitals and other health facilities, encompassing both rural service
       delivery and urban service delivery, will be carried out by joint teams comprising
       MOHFW staff, representatives of DPs and NGOs. Each year‘s visits may focus on a
       particular theme, such as service delivery by NGOs and private sector entities, or the
       extent to which service delivery is reaching the target groups (women, children and
       the poor), etc. The process is to be managed by an independent consultant/ agency


4
    Refer to Section II.7.3, p. 15


                                                     22
     competitively selected and contracted by the WB TTL. The WB TTL will share the
     Consolidated Field Visit Report with co-financiers.

d. A Stakeholder Participation Workshop Report will be prepared. The workshop for
   beneficiaries of HNP services will be handled/ organized by the same consultant/agency as in
   (c) above. The WB TTL will share the documents with co-financiers.

e. Independent Risk Assessment and Management Report is to be prepared by an
   independent consultant. The WB TTL will share the document with co-financiers.

f.   The Lead APR Consultant will prepare the Independent Technical Report in coordination
     with the WB TTL. The WB TTL will share the document with co-financiers.

g. The issues identified in the technical work and field visits will form the agenda of a
     high level policy dialogue to take place in March between senior representatives of
     MOHFW and the DPs. Key Objectives of the one-day Policy Dialogue will be as follows:
     (i) To Discuss key findings and recommendations proposed by the Independent Technical
     Report; (ii) To Discuss MOHFW‘s Official Comments on Independent Technical Report; (iii)
     To Prioritize HNPSP Issues; and (iv) To Agree on Proposed Actions required to move the
     HNPSP program forward. Following the policy dialogue, the OP, budget and
     procurement plan for the following year are approved (Refer to Annex VIII for details
     on Policy Dialogue format).




                                              23
                                            CHAPTER V

          DISBURSEMENTS AND FINANCIAL MANAGEMENT - AUDIT


V.1 Financial Management Assessment

V.1.1 Although some improvements have been made in recent years in connection with
the HPSP, weak controls and poor management within MOHFW are still outstanding
issues. A financial management assessment has been carried out, focusing on how a
reliable financial management system in MOHFW can accurately account for all receipts
and uses of funds while depending on the mainstream existing government system. A
time-bound Financial Management Improvement Plan (described in Annex IX) has been
prepared to address weaknesses identified in the assessment.

V.2 Disbursements and Flow of Funds

V.2.1 The disbursement and flow of funds will vary, depending on whether the funds are
pooled or not by the DPs. With respect to Pooled Funds provided by Pooled DPs,
disbursement arrangements will be in accordance with the provisions of the Development
Credit Agreement (DCA) between GOB and IDA and of the relevant bilateral agreements
(between IDA and the respective DPs, or between GOB and the respective DPs, as the
case may be). For Non-Pooled Funds, disbursements will be in accordance with the
provisions of the bilateral agreements between GOB and the respective DPs.

Disbursement and Flow of Pooled Funds provided by Pooled DPs

V.2.2 The process will be as follows:

    a) MOHFW and Pooled DPs will agree on the estimated cost of the first OP, or
       budget, to be financed by the pooled funds and on the contribution of each Pooled
       DP (in absolute amount and as a percentage of the total pooled funds).

    b) The first disbursement of pooled funds will correspond to the estimated
       expenditures to be financed by the Pooled DPs for the first six months of the OP.

    c) Each Pooled DP5 will deposit into the HNPSP FOREX Account held by GOB at
       the Central Bank an amount corresponding to its share of six months estimated
       expenditure of the OP to be financed by the pooled funds.




5
 Some Pooled Development Partners may choose to pool their funds through IDA under trust fund
arrangements detailed in a Framework Agreement - in those cases, the deposit of funds will be made by
IDA.


                                                   24
    d) GOB‘s normal budgetary channels will then be used to make funds (both the
       pooled funds contributed by the Pooled DPs and GOB share) available to the
       implementing agencies or spending units6.

    e) Thereafter, MOHFW will request disbursements from the Pooled DPs on a
       quarterly basis, following the completion of each quarterly review meeting.

    f) Disbursement requests will be based on the agreed OP, Budget and Procurement
       Plan, and will use the quarterly Financial Monitoring Report (FMR) format7
       agreed between GOB and IDA, which will include a statement on funds required
       for the next six months. Quarterly FMRs will be submitted within 45 days of the
       end of each quarter.

    g) For the second and subsequent years of the Programme, GOB and Pooled DPs
       will review the performance of the Programme (particularly with respect to the
       indicators selected for performance-based financing) and, on or before May 30,
       will agree on the estimated cost of the next OP to be financed by the pooled funds
       and on the contribution of each Pooled DP (in absolute amount and as a
       percentage of the total pooled funds).

    h) Each Pooled DP will deposit into the HNPSP FOREX Account held by GOB at
       the Central Bank an amount corresponding to its estimated share.

    i) And so on …

V.2.3 In the Development Credit Agreement (DCA) between GOB and IDA, certain
percentages8 of the pooled funds will be allocated, or earmarked, to two specific
disbursement categories:

       25% of the pooled funds will be allocated to a Category 1 for performance (see
        the paragraph below on performance-based financing); and
       15% of the pooled funds will be allocated to a ―diversification of service
        provision‖ category (Category 2) - mentioned in Chapter IV, and for which
        implementation arrangements (primarily through a Management Support Agency
        - MSA) have yet to be defined.

V.2.4. MOHFW can also request that a payment be made through a special commitment
or directly from IDA to a supplier.


6
  According to the sector framework, the Line Directors are the line managers who implement the Program
with policy and administrative guidance from the MOHFW. Under HNPSP, the sector activities have been
grouped into 37 programs with 37 Operational Plans (OPs) to be implemented by 37 Line directors.
7
  A set of the FMR format is annexed to the Minutes of Negotiations of the IDA Credit.
8
  The percentages of 25% and 15% mentioned in this section are those envisaged at the beginning of the
Programme for the whole Programme; however, those percentages may be adjusted yearly during
Programme implementation.


                                                  25
Flow of Non-Pooled Funds

V.2.5 Arrangements for the disbursement and the flow of non-pooled funds (to be
provided by DPs who want to finance specific projects or activities of the Programme)
will be negotiated between GOB and each Non-Pooled DP and incorporated into
bilateral, financing agreements between the two parties. There are many options
available, including but not limited to disbursements of funds directly to Line
Directorates for specific projects and activities, direct provision of technical assistance,
and direct payments to contractors, suppliers and consultants for works, goods and
services to be provided in kind.

V.2.6 Under the SWAp, MOHFW will have to report to all DPs the entire expenditure
on the Programme, showing separately those financed with pooled funds and those
financed with non-pooled funds. Therefore, whatever the agreed arrangements for the
flow of funds, Non-Pooled DPs should provide MOHFW with accurate and timely
information on the projects and activities carried out and on the amounts spent.

Release of funds to cost centers

V.2.7 MOHFW will release funds for three quarters at a time by issuing a single order at
the beginning of the year treating HNPSP as a single programme for the purposes of
funds release. This procedure will help avoid the bureaucratic delays of the fund release
system within MOHFW. For the fourth quarter fund release, MOHFW has to submit to
the MOF a number of utilization reports reflecting usage of DPs and Government funds
by Line Directors. The MOF does not release funds for the fourth quarter unless
information regarding the previously released funds for the first three quarters is
provided. The main problem causing delay in fund release is the late collection of SoEs
showing DPs‘ expenditure from multiple cost centers i.e. Drawing and Disbursement
Officers (DDOs). Late release of the fourth quarter fund poses a serious risk in terms of
potential funds leakage and accounting. Part of this problem will be addressed as pooled
funds flow through the Government systems. However, the issue with non-pooled funds
will remain. MOHFW needs to streamline the reporting on the entire sector expenditure
to avoid this delay.

Funding from Line Directors to Drawing and Disbursement Officers (DDOs) at Regional
Level, Districts and Upazilas

V.2.8 According to existing GOB system of release of funds, Line Directors disburse
funds to various cost centers, i.e. Drawing & Disbursement Officer at Regional level,
Districts and Upazilas. Disbursements are made quarterly on the basis of approved
Administrative Order (AO) for each Operational Plan. The Chief Accounts Officer
(CAO) of MOHFW transmits copies of the AO to the Divisional Comptroller of
Accounts (DCA), District Accounts Officer (DAO) and Upazila Accounts Officer for
ensuring that expenditures are consistent with approved spending.




                                              26
V.2.9 As the fund release and disbursement records are still done on a paper-based
system, they are subject to time lags and inadequate monitoring of actual expenditure
against disbursed budget. A computerized Fund Disbursement system was developed by
the FMAU in order to automate the disbursement and record keeping procedures.
However, it has not been implemented in most of the Line Directors. The Financial
Management Improvement Plan includes technical assistance for this.

Funding to the Management Support Agency (MSA) and to the NGOs and Other Private
Sector Entities

V.2.10 The diversification of service provision will be financed by both Pooled DPs and
Non-Pooled DPs. Although details of the implementation modalities have yet to be
defined9, the mechanism will include grants to be made to a Management Support
Agency (MSA) which will, in turn, contract, finance and monitor NGOs and private
sector providers of health services. An independent agency (i.e. the Performance
Monitoring Agency- PMA) will be set up to supervise, monitor and evaluate the
performance of each contractor and give feedback to MSA. Special disbursement and
financial management arrangements will be established for the Management Support
Agency (MSA) and for the NGOs and other private sector entities.

V.3 Performance-Based Financing (PBF)

V.3.1 In order to promote achievements of key outputs or reforms of HNPSP, a
percentage of the pooled funds will be allocated to a specific category (Category 1),
disbursement of which would be based on certain performance indicators each year.
Disbursement of funds from this category will be made only if the performance is
satisfactory. The disbursement percentage would be determined from year to year
depending on the performance.

V.3.2 The disbursement for performance will be made each year based on the
completion of two ―necessary conditions for success‖ (NCS) and on the achievement of
certain targets for a number of selected performance indicators.

V.3.3 The two ―necessary conditions for success‖ (NCS) will be that: (1) a programme
Support Office (PSO) has been established in MOHFW and is functioning; and (2)
MOHFW has entered into a contract with the Management Support Agency - MSA (that
will manage the funds allocated to the diversification of service provision) and MSA is
operational. These NCS may be abandoned only in mutual agreement between GOB and
pooled DP.

V.3.4 The six performance indicators associated to Category 1are selected from a short
list of measurable health outcomes, equity and fiduciary indicators, such as:

9
  The pattern of service provisions will be adjusted over time by the increasing use of contracts and
commissions for NGOs to provide primary and secondary care in areas where they have a comparative
advantage, and for private providers to offer secondary and tertiary quality services for poor people where
they can do so cost-effectively.


                                                     27
      Share of total govt. expenditure allocated to MOHFW expenditure (%)
      Proportion of total MOHFW expenditure allocated to the 25% poorest districts
       (%)
      Utilization rate of ESD of the two lowest income quintile (%)
      Proportion of contracts awarded within initial bid validity period (%)
      Proportion of births attended by skilled personnel (%)
      TB case detection rate (%)

V.4 Accounting flow and Reconciliation

At the Ministry level

V.4.1 The existing mainstream accounting system of the GOB will be followed. For
GOB and pooled funds channeled through the Government treasury system, accounting
will follow the system of Comptroller General of Accounts (CGA). Under the system,
the FMAU of the MOHFW will continue receiving and recording financial information
both for GOB and pooled funds following the CGA system, and will be responsible for
maintaining the sector accounts. FMAU will also be responsible for receiving
expenditure statement from the Line Directors and reconciling the SOEs with CGA
information. The Accounts Code, the Treasury Rules and General Financial Rules of the
Government will form the basis for accounting, which is adequate for preparing sector
accounts.

V.4.2 For expenditure financed by non-pooled funds and for any discrete programme
activities supported by the DPs which will not be channeled through the treasury system,
FMAU will account for such expenditure following existing accounts code of the GOB
and consolidate the information with the main sector accounts.

V.4 3 The sector accounts will be maintained using existing Management Account
Consolidation System (MACS) software. The MACS will undergo further changes
during Programme implementation. The Financial Management Improvement Plan
includes upgrades of MACS in the MOHFW and selected Line Directors.

At the levels of the Line Directors (LDs) and of the Drawing and Disbursement Officers
(DDOs)

V.4.4 The existing CGA payment and accounting system and time-line for SOE
submission by the DDOs to LDs and by LDs to the FMAU of the MOHFW will be
followed. To avoid reconciliation problem, Compilation Register maintained at the
Division, District and Upazila Accounts Office will be duly reconciled by the DDOs and
signed. Failing this, subsequent fund release to LDs and DDOs will be withheld. MOF‘s
executive order to this effect will be strictly monitored and enforced.

V.5 Financial Reporting and Monitoring



                                           28
V.5.1 Timely preparation of accurate financial reports for the sector will be one of the
key Financial Management performance indicators to be monitored.

V.5.2 GOB and the DPs have agreed to accept a single set of Financial Monitoring
Reports (FMRs) – largely based on the financial statements currently prepared by
MOHFW. MOHFW will prepare quarterly financial statements accounting for all
receipts and expenditures in the preceding quarter, reconciling the accounts for the
quarter, and estimating cash requirements for the next six months. Annual consolidated
financial statements will also be prepared, reflecting the planned activities and budget
allocation for the OP.

V.6 Internal Controls

V.6.1 Government‘s existing financial power, authority and payment responsibility
outlined in the Financial Management Handbook of the health sector and General
Financial Rules will be followed. There are clear guidelines for authorization and
approval of financial transactions at the Secretary (MOPME) and LDs and DDOs levels.
By December 2005, the Bangla version of the FM Handbook, which was circulated in
2003, will be updated to cover proposed changes in the HNPSP.

V.6.2 There are some inherent weaknesses in the internal control system of the LDs. In
most cases, the LDs or their deputies are not well conversant with financial rules,
regulations or reporting requirements. The organization structure and set-up in which
internal control is placed in the key LDs offices and in the MOHFW illustrates this lack
of understanding of the nature of internal control. In LDs offices, Deputy Director
(Audit) reports to the Director Finance. With the streamlining of overall internal audit
function, the reporting relationship in the LDs will be restructured and training module
would include internal control functions which will be imparted covering all LDs.

V.6.3 The current system of asset and inventory recording, maintenance and verification
in MOHFW and LDs is as weak as in other public sector institutions. Neither the LDs
nor the DDOs at district and Upazila offices maintain an up-to-date asset register. There
is no system to ensure that fixed assets are properly recorded at the time of procurement
or immediately thereafter. This is partly because the GOB‘s current procedure does not
treat the procurement and utilization of fixed assets as a process requiring controls. A
computerized inventory system with both central and distributed databases (both of
which need to be updated on a regular basis and be consistent with each other) needs to
be procured and placed under the MIS departments of the MOHFW. Initially, it would
be done in one of the key LD‘s, which will then be rolled out to all LDs, DDOs at District
and Upazila Level. The installation and completion of the system would be completed by
June 2006.

V.7 Internal Audit

V.7.1 To strengthen internal audit in MOHFW and to ensure effective periodic
monitoring of financial and operational activities in the sector, semi-annual internal



                                             29
audits of the Programme will be carried out by a recognized auditing firm under TORs
acceptable to the DPs. The private auditing firm will be appointed by MOHFW
following a competitive selection process in accordance with the ―Guidelines: Selection
and Employment of Consultants by World Bank Borrowers‖; IDA will oversee the
selection process on behalf of the DPs. GOB officials will be involved and will facilitate
the conduct of the internal audits, ensuring in particular that the auditing firm hired from
the private sector has proper access to GOB records. The semi-annual internal audit
reports (for July-December) will be submitted to the DPs by the end of February and the
semi-annual internal audit reports (for January-June) by the end of August. The internal
audit report will be an important input for financial management supervision and for the
Annual Programme Review (APR), and for taking timely corrective action.

V.7.2 The firm of auditors is expected to be in place by June 30, 2005 and will be
appointed for the first two years of the Programme. Depending upon the performance of
the auditors, the same or new auditors will be appointed for subsequent years.

V.8 External Audit

V.8.1 Without prejudice to the rights of DPs to carry out their own audits, MOHFW and
the DPs have agreed to common external audit arrangements, covering all funds available
for the implementation of the Programme, irrespective of the source of funding. Audits
will be carried out by the Comptroller and Auditor General (C&AG) of Bangladesh in
accordance with the ―Statement of Audit needs‖ agreed between C&AG and the DPs and
in accordance with international auditing standards, consistently applied. The audit
report will contain a separate opinion as to whether the financial statements submitted
during the fiscal year, together with the procedures and internal controls involved in their
preparation, can be relied upon to support the transactions and balances of the FOREX
and other Accounts, and the contributions of GOB and the DPs.

V.8.2 In the past, the DPs have not always complied with the reporting requirements of
the MOHFW on the Programme expenditure directly incurred by the DPs or by their
appointed consultants. As a result, the audit could not verify the authenticity of the
Direct Project Aid (DPA) expenditure in the financial Statements. This has resulted in a
huge number of pending audit objections now awaiting settlement. In the future, the
C&AG will qualify the audit report to exclude expenditure for which the documentation
is with the DPs.

V.8.3 The audit report will be submitted to the Chair of the HNP Consortium within six
months of the end of each fiscal year. The Chair will distribute the audit report to the
DPs and collect their comments. The Chair of the HNP Consortium will provide joint
comments to the MOHFW within two months of the receipt of the audit report.

V.8.4 Any audit findings related to corrupt practices will be dealt with by the Bank‘s
Anti-corruption Unit in accordance with its procedures.




                                             30
                                              CHAPTER VI

                                            PROCUREMENT

                                              CHAPTER VI

                                            PROCUREMENT

VI.1 General

VI.1.1 Procurement of goods, works and services10 financed with the pooled funds
provided by the Pooled Development Partners will be carried out in accordance with the
World Bank‘s "Guidelines: Procurement Under IBRD Loans and IDA Credits" dated
May 2004; and "Guidelines: Selection and Employment of Consultants by World Bank
Borrowers" dated May 2004, and with ―The Public Procurement Regulations, 2003‖
(PPR-2003) promulgated by the Government of Bangladesh (GOB). For each contract to
be financed by the pooled funds, the different procurement methods or consultant
selection methods, the need for pre-qualification, estimated costs, prior review
requirements, and time frame are detailed in a Procurement Plan to be agreed between
GOB and IDA.

VI.1.2 Procurement arrangements for contracts financed by non-pooled funds provided
by Non-Pooled DPs will be those agreed between GOB and the respective Non-Pooled
DPs and specified in the bilateral agreements between GOB and the respective Non-
Pooled DPs.

VI. 2 Procurement Reform and Governance

VI.2.1 Following the country procurement assessment, the Government established a
Central Procurement Technical Unit (CPTU) under the Implementation, Monitoring and
Evaluation Division (IMED) of the Ministry of Planning. The CPTU‘s mandate is to:

       a) manage the public sector procurement reform Programme;
       b) prepare and issue public procurement regulations;
       c) introduce in all public procurement standard bidding documents for goods, works
          and professional services;
       d) revise the delegation of powers and the procurement approval process;
       e) publish contract awards;
       f) introduce appeal procedures and a code of ethics for procurement staff; and
       g) establish regular training Programmes to develop the required human resources.

VI.2.2 The introduction by GOB of the “Public Procurement Regulations 2003” (PPR-
2003) constitutes a major reform in the field of public procurement and is expected to add
speed and efficiency in procurement. The regulations are accompanied by ―The
10
     Pooled funds provided by Pooled DPs will not be used to finance civil works.


                                                      31
Procedures for Implementation of The Public Procurement Regulation 2003‖ and ―The
Public Procurement Processing and Approval Procedures‖ (PPPAP), which stipulate the
processing time for the approval of all procurement decisions.

VI.2.3 Although the regulations are non-statutory, these are mandatory for all procuring
entities using public funds. Accordingly, under the HNPSP Sector Wide Approach, the
regulations will be used for all pool procurement of goods, works and services, except
those subject to International Competitive Bidding,Direct contracting , Shopping and
procurement from UN Agencies and consulting contracts at or above US$ 200,000.

VI.2.4 Enforcement of the regulations is key to a better procurement performance under
HNPSP and any modification to such regulations should be approved by the Bank. In
case of any amendment to the PPR-2003 inconsistent with IDA Procurement Guidelines,
the latter shall be applicable to the extent of the effects of the amendment.

V.3 MOHFW’s Capacity to Implement Procurement

VI.3.1 Procurement of goods will be carried out by the procuring entities (CMSD,
DGFP, etc.), working closely with the functional Directorates and decentralized units of
the MOHFW, under the guidance and supervision of the Joint Secretary – Coordination
of MOHFW. There is a limited decentralization of procurement authority to the District
and Upazilla levels based on the number of hospital beds. Since GOB does not have a
procurement cadre, the respective entities are staffed, from desk officers to directors, by
officials on secondment / deputation from other administrative departments.

VI.3.2 Procurement is a major challenge concerning project implementation in
Bangladesh, and the health sector is no exception. A number of recent assessments of the
capacity of MOHFW to carry-out and to manage the procurement and distribution of
health sector goods uncovered a number of significant weaknesses and recommended
actions to address these weaknesses.

VI.3.3 Increased capacity would contribute to a more transparent and efficient
framework under which procurement decisions and actions will enable the attainment of
the Programme goals in a timely fashion. Given the current status of procurement and
logistics within MOHFW, innovative and effective measures should be implemented to
overcome major deficiencies in managing the Procurement Cycle. A procurement
improvement plan has been prepared listing a number of actions to be included in the
annual operation plans (AOP) to be financed. As an example, one recommended action
is that MOHFW should establish a Procurement and Logistics Monitoring Cell (PLMC)
under the direct supervision of the Joint Secretary – Coordination; such cell would
provide quality assurance and control to bidding documents preparation and bid
evaluation, and ensure that all contracts are awarded within the initial bid validity period
and that letters of credit (L/C) are opened within 14 days of the signing of the contract.
The Procurement Improvement Plan is included in Annex X.




                                             32
VI.4 Procurement Plan

VI.4.1 During appraisal, MOHFW developed a procurement plan for Programme
implementation for the following 18 months which provides the basis for procurement
methods. This plan has been agreed between MOHFW and IDA on December 8, 2004.
The procurement plan is consistent with IDA‘s simplification agenda and, as such, an
effort was made to streamline and reduce the number of contracts subject to prior review
by prioritizing, rearranging the categories, and forming packages that can be fully
financed by IDA (net of taxes).

VI.4.2 By April 15th of each fiscal year, or as needed to reflect the actual implementation
needs and improvements in institutional capacity throughout the duration of the
Programme, the MOHFW provides the Pooled DPs, for their review and concurrence, a
draft procurement plan (―Procurement Plan‖), which would include on-going contracts
rolling into the following year, and detailed procurement plans for the following 18
months, based in part on the draft Annual Operation Plan (AOP). All procurement to be
carried out under the Programme for the following 18 months and financed with pooled
funds will be included in the Procurement Plan. The methods of procurement and
consultant selection will be indicated as well as the need for pre-qualification, estimated
costs, prior review requirements and time frame. The Procurement Plan will be approved
by IDA on behalf of the Pooled DPs by June 30 at the latest.

VI.4.3 MOHFW will implement the procurement plan in the manner in which it has been
approved by IDA. During the period of the Programme, MOHFW will include in its
quarterly Programme Monitoring Reports (PMR) submitted to the DPs information on
the implementation of the Procurement Plan.

VI.5 Procurement of Goods

VI.5.1 Goods procured under the Programme would include: medical equipment,
pharmaceuticals, contraceptives and other health sector goods and supplies.

VI.5.2 Procurement of goods financed by the pooled funds provided by the Pooled DPs
and estimated to cost US$300,000 equivalent or more per contract will be conducted
using international competitive bidding (―ICB‖), in accordance with the Guidelines for
Procurement under IBRD Loans and IDA Credits dated May 2004 (―the Guidelines‖).
Procurement of goods under shopping,direct contracting and from United Nations
Agencies will also be in accordance with the Guidelines. IDA‘s Standard Bidding
Documents (SBD) will be used for all ICB.

VI.5.3 Regarding procurement from United Nations Agencies, the World Bank
Guidelines acknowledge that there may be situations in which procurement directly from
specialized agencies of the United Nations (UN), acting as suppliers, pursuant to their
own procedures, may be the most appropriate way of procuring. Such situations include:
(a) small quantities of off-the-shelf goods, primarily in the field of education and health;
and (b) specialized products where the number of suppliers is limited such as for vaccines



                                            33
and drugs. As an example, procurement of vaccines by UNICEF may be the most
efficient procurement method.

VI.5.4 Procurement of other goods financed by the pooled funds will be in accordance
with ―The Public Procurement Regulations 2003 (PPR-2003)‖ and, for NCB, will use
Standard Tender Documents (STD) acceptable to IDA. Regarding ―Qualifications of the
Bidder‖, NCB procurement of pharmaceuticals, contraceptives and condoms, will be in
accordance with the qualification criteria of IDA‘s SBDs for Health Sector Goods (2004).

VI.6 Selection of Consultants

VI.6.1 The implementation of the Programme will require extensive procurement of
services by GOB, ranging from individual consultants to consulting firms, and to NGOs
particularly for service delivery components of the Programme. GOB may like to engage
also universities, government research institutions, public training institutions, etc. if
required to undertake assignments of special nature.

VI.6.2 Consultants financed by pooled funds provided by Pooled DPs and estimated to
cost US$200,000 equivalent or more per contract will be conducted in accordance with
the ―Guidelines for the Selection and Employment of Consultants by World Bank
Borrowers‖. The Guidelines will also apply to the procurement of services above the
same threshold.

VI.6.3 Consultants financed by pooled funds and costing less than US$200,000 per
contract will be recruited in accordance with ―The Public Procurement Regulations 2003
(PPR-2003)‖.

VI.7 Emergency Procurement

VI.7.1 In emergency resulting from natural disasters, the immediate procurement of
pharmaceuticals, vaccines, medical supplies or nutritional supplements is necessary to
effect deliveries in the shortest possible time. In such emergencies, procurement directly
from UN Agencies, and through shopping and direct contracting methods with
appropriate justification, will be acceptable.

VI.8 Prior Review by IDA

VI.8.1 The following contracts financed by pooled funds will be subject to prior review
by the Pooled DPs: (a) all goods contracts estimated to cost US$300,000 equivalent or
more which will be procured through ICB; (b) all direct contracts for goods; (c) the first
NCB contract of each agency in every calendar year; (d) consultancy services estimated
to cost US$100,000 equivalent or more per contract for firms and/or NGOs, and
consultancy services estimated to cost US50,000 equivalent or more per contract for
individuals; and (e) all single source selection of consultants for firms and/or NGOs. All
procurement plans, including any revisions, will also be subject to prior review. The
Pooled DPs have agreed that IDA will review and provide clearances on procurement on



                                            34
behalf of the Pooled DPs. MOHFW and Implementing Partners will not split packages
into smaller packages merely to allow the use of less competitive procurement methods
or to avoid prior review by the Pooled DPs. All contracts which are not subject to prior
review will be subject to post-review by the Pooled DPs and/or by the independent
procurement audit firm appointed by MOHFW.

VI.9 Procurement by the Management Support Agency (MSA) and by NGOs and
other private sector entities.

VI.9.1 Each implementing agency that receives funding from MOHFW, either directly
or indirectly, will be responsible for its own procurement. In particular, procurement by
the Management Support Agency (MSA) and by the NGOs and other private sector
entities contracted by MSA, will be in accordance with good procurement practice,
including transparency and the most competitive method appropriate to the
circumstances. Good procurement practice and simple procurement procedures and
reporting will be detailed in the HNPSP Implementation Manual (to be included as an
Annex when implementation modalities for the MSA have been defined) and referred to in
the service contracts between MOHFW and the entities.

VI.10 Procurement Audits

VI.10.1 MOHFW will facilitate the conduct of an annual external procurement audit
covering contracts financed by pooled funds provided by Pooled DPs. The procurement
audit will be carried out by a recognized firm with expertise in this field under TORs
acceptable to the Pooled DPs. The procurement audit firm will be appointed by
MOHFW following a competitive selection process in accordance with the ―Guidelines:
Selection and Employment of Consultants by World Bank Borrowers‖; IDA will oversee
the selection process on behalf of the Pooled DPs. The procurement audit report will be
made available to MOHFW and the pooled DPs by October 31 of each year. MOHFW
and the Pooled DPs will comment on the report by December 15. By January 31,
MOHFW and the Pooled DPs will agree on a plan of action to correct any anomalies and
errors identified in the audit report; MOHFW will implement such plan of action in
accordance with a schedule satisfactory to the Pooled DPs.

VI.10.2 While procurement audits would normally be provided annually, when particular
risks have been identified, any Pooled DP may request that a special procurement audit
be conducted, or may send additional procurement missions to the field for further post
reviews or investigations. In addition, any Non-Pooled DP may carry out its own
procurement review of the contracts which it has financed.

VI.11 Misprocurement

VI.11.1 If cases of misprocurement occur, each DP may take the actions established in
its own guidelines. For contracts financed with pooled funds, any Pooled DP may
decide, after consultation with the other Pooled DPs, whether to cancel from its
respective financing an amount equivalent to the contract amount multiplied by its



                                           35
percentage participation in the FOREX Account. The other Pooled DPs will make the
same determination with regard to their respective financing of that same contract.




                                          36
                                    CHAPTER VII

     REVIEWS AND REPORTS – MONITORING & EVALUATION (M&E)


VII.1 Reports

VII.1.1 By September 30 of each year, MOHFW will provide to the Chair of the HNP
Consortium, for distribution to all the DPs, its Annual Programme Implementation
Report (APIR) covering the previous fiscal year. The APIR is based on the annual
reports prepared by the Line Directors and other implementing agencies or spending
units.

VII.1.2 Within 45 days of the end of each quarter, MOHFW will provide to the Chair of
the HNP Consortium, for distribution to all the DPs, quarterly Programme Monitoring
Reports (PMR). The quarterly Programme Monitoring Reports will contain information
on the implementation of the Programme during the previous quarter, including problems
encountered and actions taken, outputs / achievements, procurement actions and financial
activity.

VII.2 Review Meetings

VII.2.1 MOHFW will convene quarterly meetings of the members of the HNP Forum to
review the quarterly Programme Monitoring Reports (PMR). The meetings will be
convened one week after the distribution of the PMRs, but not later than 2 months after
the end of the quarter. Quarterly meetings coinciding with the submission of the Annual
Programme Implementation Report (APIR) and the financial and procurement audit
reports, and with the Annual Programme Review (APR) will also discuss, as the case
may be, the APIR, the audit findings, the APR, the preparation of the OP and budget, and
the performance assessment.

VII.3 Assessments

VII.3.1 MOHFW will commission external evaluations to assess implementation of the
Programme under terms of reference agreed with the DPs at the mid-term (December
2007) and end point (June 2010) of the Programme.




                                           37
                                           ANNEX I

   THE HEALTH, NUTRITION AND POPULATION SECTOR PROGRAMME
                           (HNPSP)

     Support to the HNP Strategic Investment Plan SIP (July 2003 – June 2010)


The project aims to assist GOB in the implementation of its Strategic Investment Plan 2003-2010
(SIP) for the HNPSP. It will do so in cooperation with a large group of DP through a SWAp of
support, but with a clear focus on some components of the program. To achieve these objectives,
the program will focus on three major areas: (i) Strengthening Public Health Sector Management
and Stewardship Capacity, including development of pro-poor targeting measures as well as
strengthening sector-wide governance mechanisms; (ii) Health Sector Diversification, including
the development of new delivery channels for publicly and non-publicly financed services; (iii)
Stimulating Demand of essential services by poor households, including health advocacy and
demand-side financing options.

HNPSP has a particular focus on services geared to the achievement of the four PRSP social
development goals and targets that are within the mandate of the MOHFW and are likely to
contribute most to its Millennium Development Goals and emerging HNP challenges:
 Reduce infant and under-five mortality rates by 65%, and eliminate gender disparity in child
    mortality;
 Reduce the proportion of malnourished children under five by 50% and eliminate the gender
    disparity in child malnutrition.
 Reduce maternal mortality rate by 75%; and
 Ensure access to reproductive health services to all (PRSP March 2003).
 Reduce Total Fertility with a view towards achievement of replacement level fertility by
    2010;
 Reduce the burden of TB, HIV/AIDS, malaria and other priority diseases (MDG 2000) and
    begin to tackle newer health threats and improve health risk protection by
 Improving emergency services; and
 Improving the prevention and control of non-communicable diseases.

IDA will measure the success of its support by the same indicators as used in the SIP. The results
framework (see Annex 3) contains some key indicators for inputs, outputs, process and health
outcomes. Some of the outputs will be mayor benchmarks selected to measure progress in the
health sector reforms supported under HNPSP. It also includes targets for key indicators and
major program outputs for the various components, on the basis of which disbursements will be
made to support the annual work program.

The project has 3 components, which are closely interlinked. While the first component focuses
on objectives for service delivery in the classical PHC domain and achieving the HNP MDG, the
second responds by developing policies and strategies to the changing disease burden due to
urbanization and aging of the population. The third component addresses major policy reforms
and strategies in order to achieve better equity and efficiency in the HNP sector.

Component 1: Accelerating achievement of HNP-related MDG and PRSP goals. The
component supports the delivery of essential services (ESD). Such a package would focus on:



                                                38
(a) Reducing maternal, neonatal and childhood mortality and improving maternal and childhood
nutrition
Despite recent progress, maternal, neo-natal and childhood mortality rates remain high in
Bangladesh. This is due to a combination of factors requiring multiple interventions, including
poor maternal nutrition resulting in low-birthweight babies, undetected problems during
pregnancy and delivery and the postnatal period and poor access to skilled attendance at delivery
and emergency obstetric services for complications.

Key strategies for reducing maternal mortality will be:
 Social mobilization and counseling to raise awareness of problems during pregnancy, labour
   and the postnatal/neonatal period and obstetric complications and the need for adequate rest
   during pregnancy and nursing time. Most common causes of maternal deaths in Bangladesh
   are bleeding, sepsis, eclampsia, unsafe abortion, obstructed labor and indirect causes, which
   are aggravated by the ‗three delays‘. BCC should also address the need for better maternal
   and early childhood nutrition.
 Skilled birth attendance. Competency-based six-month training on basic midwifery for
   community health workers (FWAs and female HAs) has already begun. The
   expansion/scaling up from the piloting of the Skilled Birth Attendant (SBA) Training to a
   National SBA Training and Service Program up to the year 2010 has been agreed by the
   MOHFW and will require funding. This national plan would increase the supply of certified
   and registered service providers from the government, private, and NGO sectors. They will
   be able to provide domiciliary maternal and neonatal services, safe home deliveries and
   newborn care. The qualified SBA are certified and registered.
 Strengthening emergency obstetric services (mainly public and NGO). As foreseen in the
   2001 National Strategy for Maternal Health, properly equipped and staffed EmOC services
   are required to handle obstetric complications. There is a need to strengthen Comprehensive
   EmOC at UHC and MCWC already serving as such centers and to increase the numbers of
   basic and comprehensive centers to ensure that properly equipped and staffed units are easily
   accessible in all parts of the country.
 Health voucher programs to increase demand for maternal and neonatal health services and to
   insure against the costs normal delivery by a skilled provider and emergency obstetric care.
   The idea is that pregnant women would be given vouchers to purchase antenatal, normal
   delivery and postnatal services from a designated provider of their choice for the first and
   second pregnancy. The providers would be reimbursed for their services from a special fund
   when they present the vouchers. The voucher scheme will help avoid the three delays and
   will ensure timely referral of the complicated cases to an appropriate service provider. The
   Government, with technical support from WHO, has started a pilot program and DP have
   expressed interest in expanding the scope of health voucher pilot programs. Increased
   financial allocations to EmOC through normal budget processes will be required until and
   unless health vouchers become the main way in which public funds are directed towards safer
   delivery for mothers and their babies.

Strategies for reduction of neonatal mortality. Improvement of MMR through public information,
maternal reduction, skilled attendance and EmOC will also help in reducing NMR, because NMR
reducing interventions are integrated components of the SBA Curriculum and EmOC
interventions. Additional resources should be allocated to scale up the essential newborn care
package and improved home care.

Major strategies to reduce the childhood mortality will be:




                                                39
   Strengthen the existing routine EPI in addition to supplementary immunization activities as
    per need.
   Social mobilization and counseling sessions will emphasize / on exclusive breastfeeding for
    first 6 months with early initiation and colostrum feeding and adequate and timely
    introduction of complementary feeding .
   Scaling up the implementation of IMCI.—Key interventions for this are to provide the
    clinical management training for health care providers from first level to referral care level,
    ensure continuous supply of drugs through improved health management system and
    community based interventions to strengthen home care practices.
   Continue the existing ARI and CDD programme in non-IMCI areas of the country which will
    be phased out with the expansion of IMCI.

Key strategies to improve maternal and child nutrition:
 Social mobilization and counseling sessions to support the important role of the adequate
   nutrition at national and community level to achieve sustainable improvements in birth
   weights and in the nutritional status of vulnerable groups through the adoption of new
   behaviors and the appropriate use of health services.
 Social mobilization and counseling sessions for families on nutritional needs and proper
   household food preparation, particularly the girl child, girl adolescent and pregnant women
   and home-based food production through home gardening and animal husbandry and
   nutrition counseling for the adolescents, pregnant and lactating women that would cover the
   importance of adequate nutrition for themselves during pregnancy and lactation as well as
   preparation for exclusive breastfeeding.
 Strengthen existing breastfeeding and complementary feeding activities and linking up with
   the global Infant and Young Child Feeding (IYCF) interventions, which promote exclusive
   breast feeding for 6 months and continue breastfeeding until 2 years with appropriate
   complementary feeding. The intervention will provide IYCF counseling particularly to
   pregnant and nursing mothers and address infant and young child feeding in normal and
   special circumstances (severe malnutrition, emergencies,).
 Strengthen the IMCI package, so every sick child among those coming/referred to a health
   facility or seeking care from a service provider in the community is checked for malnutrition
   and provided with appropriate counseling /management..
 Further improve the coverage of vitamin-A supplementation every six month for all children
   1-5 year of age, through NIDs or Vitamin A Weeks, and provide post-partum vitamin-A
   supplementation to newly delivered mothers.
 Improve Iron folate supplementation to adolescent girls through the school health program
   and for pregnant women through the maternal health and SBA Services programs.
 Promote increased consumption of micronutrient and anti-oxidant-rich food by all.
 Increase coverage of deworming.
 Prevention of chronic diet-related NCD.
 Improved control of food quality and safety.
 IDD control through salt iodization.

(b) Reducing total fertility to replacement level

Replacement level fertility was a GOB target for 2005, but the fertility plateau of the last decade
has meant delay to 2010 at the earliest. Family planning use has been rising steadily during the
1990s, but, until 2004, without reduction in fertility. Further efforts are needed to shift family
planning use patterns towards more effective, longer lasting, and lower cost clinical and
permanent methods. Three key strategies for reducing TFR to replacement level will be:


                                                    40
   Public information campaigns, and service quality improvements, to shift family planning use
    from short-term hormonal methods (oral pill) to longer-term, lower cost clinical methods
    (IUD), and permanent methods like sterilisation. Also increased provision of a variety of
    hormonal methods with proper counseling and treatment for side-effects and method
    switching.
   Selective outreach services to urban slums, hard-to-reach and low-performing areas by well
    informed field staff who can effectively counsel couples to maximise continuation of
    temporary family planning methods, and minimise unnecessary method switching. With
    targeted household visits, there is particular scope to bring more high parity couples into the
    family planning program, as unmet need is high among them.
   Special programs will be developed to address adolescent reproductive health.
   Cross-sectoral efforts to provide alternative roles to young women outside of early marriage
    and childbearing, in particular greater access to education and employment:

The implementation of these strategies as reflected in future PIP will take full account of the
major objectives set out in the National Population Policy recently approved by the Cabinet
Subcommittee.

(c) Reducing the burden of TB and malaria and preventing and controlling HIV/AIDS.

While there has been substantial progress in disease prevention and control and a decline in
childhood communicable diseases, new and old infectious diseases, such as malaria, tuberculosis
and acquired immunodeficiency syndrome (AIDS) are important threats to health for the years
ahead.

With regards to Tuberculosis, Bangladesh ranks fourth on the list of the 22 highest TB burden
countries in the world. About 70,000 patients are estimated to die of TB each year. Bangladesh is
committed to achieve the international targets of detection of 70% of smear-positive patients and
curing 85% of them by 2005. The countrywide prevalence survey that is planned for 2004/05 will
serve as baseline for monitoring progress towards achievement of the 2015 target. Three major
strategies for progress with TB control in Bangladesh:
 Increase case detection while maintaining a high cure rate This requires strengthening of NTP
     management at central, divisional and district levels, intensifying effective NTP partnership
     and collaboration, expansion of diagnostic and treatment services, implementation of quality
     assurance of smear microscopy, implementation of BCC strategies and strengthening of
     monitoring and evaluation.
 Improve the compliance of the private sector and academic institutions with the DOTS
     strategy through orientation of private and informal practitioners and conclusion of MOU.
 Ensure uninterrupted supplies of drugs and laboratory supplies through improved
     procurement, storage and distribution.

Malaria is one of the major public health problems in Bangladesh. A total population of 14.7
million are at highest risk. Drug resistance to chloroquine and sulphadoxine-pyramethamine is
posing a serious problem. An estimated 1.0 million clinical cases are treated every year. The
program envisages to achieve a 50% reduction of incidence and of deaths due to malaria by the
year 2015. The main strategy for reducing the malaria disease burden will be intensified
implementation of the Revised Malaria Control Strategy, i.e.,
 Early Diagnosis and Prompt Treatment (EDPT);
 selective vector control;
 promotion of Insecticide Treated Mosquito Nets (ITMN);


                                                 41
   surveillance, information management and outbreak preparedness and control; and
   community involvement and partnerships with NGOs and private sector under the Roll Back
    Malaria whose goal is to halve the burden of malaria by 2010..

HIV/AIDS first emerged in Bangladesh only in the mid-1990s. While Bangladesh remains a low-
prevalence country, infection rates among commercial sex workers and intravenous drug users
have been rising and had by 2002 reached the level of a concentrated epidemic. The four major
components and strategies of the HIV/AIDS Prevention Program are:
 Targeted interventions for high-risk group interventions,
 Communication and advocacy, also in cooperation with other ministries,
 Blood safety, and
 Institutional strengthening.

These remain valid and can be implemented, through FY 2005/06 within the existing resource
framework for the HIV/AIDS Prevention Project (HAPP, Supported by IDA and DfID), as
reflected in the current PIP. At the same time, the HIV/AIDS Prevention Project has been
constrained in its absorptive capacity, particularly with regard to the procurement of NGO
services on which the project design rests. DP support will address this constraint through
increased attention to the Institutional Strengthening component of the HIV/AIDS Prevention
Project. Bangladesh also receives resources for HIV/AIDS through the GFATM and USAID. The
programs will be reviewed together and the various service delivery models used under these
programs need to be compared and evaluated before a decision can be made about the best
transition from HAPP to HNPSP.
                       I.       Component 2: Meeting emerging HNP sector challenges.
                   II.     (a) Reducing injuries and implementing improvements in emergency
                                                          services.
HNP service have not yet fully adjusted to the rising incidence of industrial, road, and domestic
accidents, nor to the high incidence of injuries due to violence. At the same time, the risks of
environmental emergencies remain high and may be increasing. Improved emergency services
were one of the two most common requirements expressed by consumers during consultation in
preparation for the Conceptual Framework Paper. Government providers are likely to have a
comparative advantage in the provision of emergency services, while the comparative advantage
of NGO providers lies with campaigns for greater road, industrial, domestic and water safety and
in advocacy and assistance related to violence against women. Four key strategies for reducing
injuries and improving emergency services:
 Public information campaigns and inter-sectoral health promotion to improve road, water and
     industrial safety and to raise community awareness of domestic injuries, including injuries
     due to violence. Qualified NGOs will be commissioned to devise and implement these
     campaigns along with GOB.
 Provision of medical, counseling and legal assistance to women victims of violence, as is
     already practiced by one-stop crisis centers at Dhaka and Rajshahi Medical College Hospitals
     and by partner NGOs the Urban Primary Health Care Project complemented by advocacy for
     violence prevention, as undertaken by BRAC.
 Investments in emergency care facilities in locations where risks of a medical emergency are
     highest. In many rural areas this would involve development of casualty units at existing
     upazila and district-level facilities. There may also be a need to construct new specialized
     units in urban areas and along main highways. These investments would need to be planned
     carefully, also with reference to data on numbers and locations of traffic accidents available
     from the Bangladesh Road Transport Authority. As the demand for emergency services is
     unpredictable on a day-to-day basis, there would also be a need to create a co-ordination



                                                42
    mechanism to ensure even and high utilization rates. The running costs of these investments
    would need to be estimated to ensure that they were affordable. The private sector will also
    be encouraged to provide emergency care.
   Publicly financed insurance against catastrophic treatment costs. The costs of care for serious
    medical emergencies are likely to impose an insufferable financial burden on poor families
    and their relatives, plunging them into permanent penury. This is a new but important call on
    the HNP sector budget to finance increased allocations for emergency care. MOHFW will
    develop a policy.

(b) The prevention and control of major non-communicable diseases (NCD).

The rising proportional burden of NCD in Bangladesh, because of the epidemiologic transition,
requires an adjustment in the priorities for the HNP sector. Among the NCD, cardio-vascular
diseases (ischemic heart disease, hypertension and stroke), diabetes mellitus, cancer and chronic
respiratory diseases deserve priority attention. They are amenable to cost-effective prevention and
improved management. Five key strategies for improving the prevention and control of NCD:
 An assessment of the disease burden of major NCD and their common risk factors should be
    carried out. Data should also be generated for mental illness. The cost implications for the
    poor should also be estimated to support rational and socially equitable resource allocations.
 Public information campaigns to increase awareness of the risks of smoking, unhealthy diet
    (particularly inadequacy of fruit and vegetables and excess of salt) and physical inactivity.
    Private or NGO providers are likely to have a comparative advantage in devising and
    implementing such campaigns and might be commissioned to do so. Health promotion and
    inter-sectoral cooperation is needed to address the determinants of the NCD.
 Improved screening for the early detection of obesity (particularly abdominal obesity),
    hypertension and diabetes.
 Improved diagnosis and management for these major NCD should be promoted. The
    Bangladesh Medical Association has important roles to play in ensuring that their members
    are familiar with the appropriate regimes.
 Publicly financed insurance against emergency treatment costs of NCD may be justified as
    they impose large costs on poor families. Ways need to be found, possibly by using health
    vouchers of ensuring that poor families are protected from these costs.

(c) Urban health service development.

While urban health receives funds through ADB support, further policy and strategy development
is needed. HNPSP will provide the framework for this.

Despite the rapid growth of urban preventive and primary health services in recent years, unmet
health needs remain. There is a particularly important gap in the provision of secondary
(inpatient) care for routine interventions, although the private sector is making an increasing
important contribution. In addition, there are increasing requirements for improved prison health
care services that the Ministry of Home Affairs has difficulty in providing. In the medium to long
term, an Urban Health Development Plan is required that would rationalise and improve
infrastructure and service delivery strategies, incorporating government, private and NGO
contributions and defining the appropriate roles for MOLGRDC and MOHFW. As part of such a
Plan, the financing of urban health services deserves re-examination. Overall, public funding for
urban health services is inadequate and new financing options need to be developed. Over the
next five years, MOHFW will move forward on the following fronts:
 Improve liaison between DGHS and DFP and municipal authorities



                                                43
   Provide clinical staff to the Ministry of Home Affairs for prison services
   Open discussions with MOLGRDC with a view to developing an integrated urban health
    development plan
   Consider the case and carry out a feasibility study for a Centre of Excellence to be established
    at the National Academy of Health Management of Dhaka or other tertiary care level
    facilities.

(d) Improve the HNP response to disasters.

Bangladesh is one of the most highly natural disaster-prone countries in the world. Natural
disasters like tropical cyclones, floods and tidal surges have not only claimed hundreds and
thousands of lives, but have also resulted in a huge economic loss of property and have adversely
affected the health, environment and welfare of the population. The Emergency Preparedness and
Response (EPR) programme under the Director, Disease Control, DGHS, with active co-
operation of related department agencies and institutions, is responsible for preparatory capacity
building and logistics arrangements and for adequate response during emergencies. A broad, co-
ordinated inter-sectoral response is required. However, within the HNP sector, a number of
measures can be initiated quickly and sustained over the next five years:
 Improvements in intersectoral liaison and co-ordination: Advocacy of improved intersectoral
    mechanisms to co-ordinate responses to emergencies
 Improvements in co-ordination within the HNP sector: Strengthened communication and co-
    ordination mechanisms within DHS and between DHS and municipal authorities, the armed
    forces, NGOs and civil society
 Improvements in the management of emergency stocks: Improved location, maintenance and
    turnover of emergency stocks, including for water purification and the control of water-borne
    and parasitic diseases.
 Advocacy for and participation in the development of a co-ordinated risk management plan.

Component 3: Advancing HNP sector modernization.

In the coming years MOHFW will focus more on its public health functions of policy
formulation, information gathering, surveillance, quality control and enforcing regulations, health
promotion and multi-sectoral action for health. The Ministry will also start making a distinction
between provision and purchasing of HNP services. The following three subcomponent are all
linked to this vision.

(a) public health sector management and stewardship capacity.

MOHFW wishes to intensify and extend investments in improved professional management
skills. It has identified five functions that need to be developed further:
 planning and monitoring functions, in close liaison with the Financial Management and Audit
     Unit, to ensure that PIPs and Operational Plans are prepared in line with this Strategic
     Investment Plan and implemented according to agreed performance indicators;
   information management, most importantly the management information required to monitor
    the performance of the sector (public and private) and to identify priority interventions to
    improve its efficiency, equity and effectiveness;
   reform management, including developing reform proposals and design, initiating them and
    assessing the results in terms of efficiency improvements;




                                                44
   aid management responsible for the co-ordination of aid proposals, the proper use of pooled
    and non-pooled aid funds and the provision of respective activity and expenditure reports, the
    latter from the FMAU, to Development Partners; and
   the management of contracts and commissions with private and NGO providers.
The organizational arrangements required to embed these functions most effectively require
further discussion and, in due course, will be incorporated in the appropriate Operational Plans.
The set-up of an enhanced and coordinated management/HNP information system will be carried
out as one of the first such arrangements. However, each will require significant investments in
human resources and skills within MOHFW and an effective change management process.

Improving budget management through developing a formal resource planning, or MTEF,
process in achieving the HNP sector‘s strategic objectives. Developing this medium term
budgeting perspective through an MTEF-type process will provide a mechanism for the sector to
begin to build linkages between capital and recurrent budgets, development and revenue budgets
and between government and other (internal and external) sources of funding. It is proposed to
remedy allocative inefficiencies in a step-wise manner over the next five years towards an
allocative formula, initially based on per capita district budgets, later weighted by poverty-related
health indicators.

Decentralisation and local level planning. Major targets have been established, agreed and
accepted for the 2003/04-05/06 period covering maternal and infant/child mortality, fertility rates,
malnutrition and communicable disease control. The next step is to ensure that each of the various
departments, directorates and administrative bodies that comprise the health sector in Bangladesh
understand clearly and agree on their contribution to achieving these stated goals, on the basis of
step-wise delegation of responsibility against agreed work plans and budgets beginning with the
management of the recurrent non-staff budget, followed by the small-item capital budget,
followed by the recurrent staff budget and with it delegated authority for staff recruitment and
management. Progress to each next step will be preceded by training and accreditation and
demonstrated competence at each level.
Improvements in organisational and individual performance will require capacity building at all
levels, which will take time. The implications also for those in the centre who will be taking on
new roles in policy formulation, regulation, resource allocation and performance management
will need to be considered. Decentralisation of authority to the managers of large facilities will
build on valuable, though mixed, lessons learned from work in Sylhet and Chittagong Medical
College Hospitals. An umbrella bill for Hospital Autonomy is in the final stages of drafting. In
terms of decentralisation to districts, a pilot programme in six districts represents the first steps in
this process. Budgets are being prepared on the basis of Local-level Planning with stakeholder
participation. Local-level planning needs to be strengthened and supported at the district and
upazila levels by giving district-level HNP Service Development Committees more responsibility
for raising and allocating funds and for the delivery of services at their respective levels.

(b) Health sector diversification.

MOHFW and municipalities need to develop capabilities to become active service purchasers in
partnership with NGOs and private providers. These purchases need to be well informed about
cost and quality and to be accompanied by the capability to assess outputs and outcomes.
MOHFW need to ensure quality and does need to develop a capability for pro-active service
contract management so that it can enter the market itself to compensate for gaps in service
provision, to promote comparative advantage in service provision and to provide incentives for



                                                  45
innovations that will help to improve co-ordination. The latter is particularly true for ensuring
better referral mechanisms to secondary or tertiary services.

MOHFW will begin to tackle this important and complex issue, in collaboration with professional
associations and large NGO HNP service providers, with the aim of improving the evaluation of
service quality and cost and by supporting clinical training, quality circles and other means to
motivate providers to supply the highest quality services.

The pattern of service provision will be adjusted over time by the increasing use of contracts and
commissions for NGOs to provide primary care in more remote and under-served areas, where
they have a comparative advantage, and for private providers to offer secondary and tertiary
services for poor people where they can do so cost-effectively and at high quality.
If current experiments in ‗demand-side financing‘ are successful (see below) and can be
extended, the incentives facing HNP service providers will shift significantly over the next
decade as more services are purchased by the Government on behalf of poorer consumers. There
will be greater competition between providers and there will be an increasing tendency for
providers to offer services within the scope of their comparative advantage. The Government will
be able to target its limited resources more sharply towards its key clients and towards the most
important services where consumption is sub-optimal. As the supply of services from private and
NGO providers grows, the Government will be able to concentrate more on providing the
services in which it has a comparative advantage.

However, such changes will also bring challenges in terms of service quality management and in
terms of the knowledge consumers need to choose the providers best able to help them.

(c) Stimulating demand for HNP services.

This will be achieved by a greater concentration of public funds and attention on effective
communication, education and information strategies. They will be focused on improving the
image of the HNP sector, and the prevention, early detection and management of key health
problems (safe delivery and appropriate new-born care, HIV/AIDS, tuberculosis, malaria,
respiratory and cardio-vascular disease) and on promoting healthy life-styles and behaviors
(better maternal and childhood nutrition, effective family planning, reduced smoking, improved
domestic, road, water and industrial safety). Public information campaigns will utilise both
modern and traditional communication methods. The campaigns will be complemented by active
multisectoral health promotion to deal with determinants of poor health. The foundation for these
activities is provided by Bangladesh‘s internationally reputed competencies for health promotion
and health communication strategies. The work begun on introducing the teaching of healthy
behaviors into schools will be intensified. A new emphasis will be placed on the early recognition
of health threatening conditions and behaviors. The comparative advantage of NGOs and the for-
profit private sector in providing communication services will be exploited to the full.

Expanding demand-side financing initiatives. Increasing attention is being given to ways of
subsidising the consumption of important health services. A number of local and community
financing schemes already include an element of ‗demand-side‘ financing. In addition, an
important trial has been started by the MOHFW with support from Development Partners,
including WHO, in the use of vouchers, which allow eligible poor pregnant women to purchase
maternal health services. If effective in terms of targeting and impact, this and other schemes will
be expanded in geographical scope and extended to other priority services for poor people. This is
to be a major priority for the next five years. Issues still to be resolved include the selection of



                                                 46
voucher recipients, accreditation of providers and administration of the funds used to reimburse
service providers.




                                               47
                            ANNEX II
    TERMS OF REFERENCE OF THE PROGRAMME SUPPORT OFFICE (PSO)

Background

1.1     In cooperation with its development partners (DP) the Bangladesh, Ministry of
Health and Family Welfare (MOHFW) is preparing for DP support to its Health,
Nutrition and Population Sector Programme (HNPSP) 2003-2010. The support will be
provided through a sector-wide approach.

1.2    A study on governance and institutional capacity of the MOHFW confirms the
need for strengthening the MOHFW management capacity in order to improve the
implementation of the HNPSP. The MOHFW wants to recruit a team of qualified staff in
a Programme Support Office (PSO) within the MOHFW to facilitate internal
coordination and better implementation of HNPSP activities.

2          Objectives

2.1     The MOHFW will establish the PSO as a core group of Technical Assistance
(TA) for support and guidance to the implementation and performance monitoring of the
HNPSP, TA management, and coordination of DP assistance. It will work within the
existing organizational structure in the MOHFW which is responsible for implementation
of the HNPSP at all levels. It is foreseen, that besides PSO other TA will be provided to
various other departments/units of MOHFW. The PSO will have general oversight of all
TA provided to the MOHFW in view of improving TA coordination functions of the
MOHFW.

3          The Main Tasks of the PSO

3.1   The team of long-term consultants will assist the MOHFW in the smooth
implementation of HNPSP, with a focus on the following areas:

       i        support the Planning Wing of MOHFW in the preparation, management and
                coordination of the HNP sectoral reform processes and programmes;
      ii        assist in definition of TA needs in the various departments and units of the
                MOHFW and the drafting of TOR and recruitment of the local and
                international TA. Wherever possible this will be in the form of pre-defined
                TA packages for core areas, such as health economics, financial
                management, procurement, monitoring and evaluation, strengthening
                institutional arrangements including organizational development;
      iii       assist in the coordination and monitoring of performance of all TA provided
                to the MOHFW;
      iv        assist in the preparation of the Annual Programme Reviews (APR);
       v        advise the Secretary, MOHFW on longer term development issues for the
                sector as well as on shorter term issues of great importance;



                                              48
         vi        advise the Secretary, MOHFW on the proper coordination with the DP and
                   assist in the organization and implementation of those arrangements;
         vii       assist the MOHFW for strong monitoring systems at all levels;
        viii       assist in identification of training needs and Human Resource (HR)
                   development;
         ix        support coordination work between Director General (DG) Family Welfare
                   and the Director General Health in MOHFW regarding the set-up of
                   comprehensive Monitoring & Evaluation (M&E) systems and developing
                   integrated data to support the performance, monitoring and evaluation of
                   both wings of the Ministry;
          x        support in overseeing the performance of the procurement and financial
                   management of the MOHFW;
         xi        assist in promotion of stakeholder consultation during the implementation of
                   HNPSP, particularly, at the local level to ensure a coherent and timely
                   project implementation
        xii        assist the Planning Wing, MOHFW, in the elaboration (identification,
                   preparation, evaluation, approval by the MOHFW and supervision) of any
                   pilot activity designed under the HNPSP, in compliance with the MOHFW
                   procedures
        xiii       assist and advise the MOHFW in the commissioning of impact analysis
                   studies;
        xiv        assist in the preparation of periodic reports for supervision/implementation
                   support missions of the DPs;
        xv         assist the Planning Wing, MOHFW in evaluation of the Annual Operation
                   Plans and to ensure their alignment with the Strategic Investment Plan;
        xvi        assist and work closely with the management support agency or TA team
                   responsible for administering the initiatives in NGO contracting & demand
                   side financing; and
    xvii           make sure that sustainable capacity building and technology transfer is an
                   integral part of all long-term TA provided to MOHFW during HNPSP.

4             Work Arrangements

4.1     The main tasks of PSO will be to assist the MOHFW in bridging the gap between
policy formulation and implementation through capacity enhancement and change
management. In particular the PSO:

    i         will be headed by a Director who will report directly to the Secretary, MOHFW.
              The Director of PSO is responsible for ensuring the timely and proper fulfillment
              of the above-mentioned tasks. The Director will work alongside the Secretary,
              MOHFW to act primarily as senior adviser, supporter and facilitator for the
              implementation of key reforms including strengthening the monitoring and
              evaluation arm of the MOHFW during the lifetime of HNPSP;




                                                  49
    ii         will actively aim to strengthen the Planning Wing of the MOHFW (Joint Chief
               Planning, MOHFW) and work in close collaboration with the Additional
               Secretary in undertaking a number of tasks pertaining to:

               a      policy activities and facilitation of DP-GOB policy dialogue;

               b      programme preparation, supervision and coordination; and

               c      Technical Assistance support.

               In undertaking its assignment, the PSO will regularly consult with relevant
               counterparts/heads of unit on matters related to daily managerial and technical
               issues. Consultants hired by the PSO will work alongside the appropriate Line-
               Directors for timely achievement of key objectives.

    iii        should preferably be located within MOHFW premises. The operation of the
               PSO will be financed by the pooled DP support. The PSO will be appropriately
               staffed with senior professionals comprising of long-term national and
               international consultants who will be selected through an international bidding
               process following standard GOB/WB procedures. The establishment of a
               Selection Committee and the selection process itself will be done in agreement
               with the pool financiers.

4.2    An Advisory Committee, chaired by the Secretary, MOHFW and having as its
members the JC Planning, DG Health and DG Family Planning, the chair of the HNPSP
LCG Sub-Group and the World Bank Task Manager, will meet quarterly to review the
needs for and use of TA by MOHFW and the performance of PSO.

4.3     It is foreseen that additional TA will need to be hired before DP support becomes
effective for quality assurance in the areas of procurement, financial management,
communication and monitoring and evaluation.

5              Skills required

5.1            The skills required for members of the PSO team will include:

           i       at least 10 years relevant experience in the following areas: public health,
                   public administration, health institutional strengthening, organizational
                   development, health economics, poverty analysis and pro-poor targeting;
           ii      working experience in a developing country is a requirement;
          iii      proficiency in English; and
          iv       a proven record of good communication and writing skills.

5.2   TA Firms are invited to present their proposals in accordance with the attached
Request for Proposals (RFP). Firms need to demonstrate their experience in designing
and sourcing Technical Assistance. The core PSO team will constitute of a mix of



                                                    50
international and local consultants with appropriate skill mix and it should not exceed 6
persons in total.

5.3    The TA will be hired for an initial period of 2 years. Upon a satisfactory
evaluation of performance, the TA contract will become renewable for periods of up to 4
years. In the case of necessary individual replacements under the contract, an overlap
period of at least 12 weeks is required.




                                           51
                                        ANNEX III

                         PARTNERSHIP ARRANGEMENTS

                                       BETWEEN

                      THE GOVERNMENT OF BANGLADESH

                                           AND

                             DEVELOPMENT PARTNERS

                                     CONCERNING

   SUPPORT FOR THE IMPLEMENTATION OF THE HEALTH, NUTRITION
          AND POPULATION SECTOR PROGRAMME (HNPSP)


The Government of Bangladesh, represented by its Minister of Health and Family
Welfare and referred to as ―GOB‖, and the undersigned Development Partners,
collectively referred to as ―the DPs‖, desiring to collaborate on the implementation the
Health, Nutrition and Population Sector Program have reached the following
understandings:

1. DEFINITIONS

For purposes of these arrangements, the following terms have the following meanings:

   i.   ―Programme‖ means the Health, Nutrition and Population Sector Programme
        (HNPSP), as outlined in GOB‘s HNP Strategic Investment Plan – SIP (July 2003-
        June 2010) and detailed in the respective Programme Implementation Plans
        (PIPs).

  ii.   ―Three Years Rolling Plan (TYRP)‖ means a plan and budget outlining the
        Program activities to be carried out in the respective subsequent three year period.
        For the initial year of each TYRP the plan gives the level of detail required in an
        annual work plan. The rolling plan is updated every year and responds to and
        reflects the findings of the respective previous Annual Performance Review
        (APR).

 iii.   ―Development Partners‖ means bilateral and multilateral Institutions which
        support GOB‘s HNP sector.

 iv.    ―Pooled Development Partners‖ means , collectively, the Department for
        International Development of the United Kingdom (―DFID‖), the Netherlands
        Government (―Dutch Government‖), Delegation of the European Commission


                                             52
        (―EC‖), the International Development Association (―IDA‖), the Swedish
        Government (―Sida‖), the United Nations Population Fund (UNFPA), the World
        Bank (WB) and any other development partners pooling at least a part of their
        funds into a FOREX Account held by GOB (MOF) and having signed the
        Partnership Arrangements and a Bilateral Financing Agreement with GOB, or a
        Co-Financing Agreement with IDA (as the case may be), and any other national
        or international agencies or organizations which may adhere to the Partnership
        Arrangements in accordance with Section 10.1 and which will pool their funds for
        the financing of the Programme.

  v.    ―Non-Pooled Development Partners‖ means, collectively, the Canadian
        International Development Agency (CIDA), Japan, the Ministry for Economic
        Cooperation of the Federal Republic of Germany, UNICEF, the World Health
        Organisation, and any other national or international agencies or organizations
        which may adhere to the Partnership Arrangements in accordance with Section
        10.1, and which will provide non-pooled contributions to the Programme.

 vi.    ―Procurement Plan‖ means the document which, for all contracts to be financed
        by the pooled funds under the Programme, describes the different procurement
        methods or consultant selection methods, the need for pre-qualification, estimated
        costs, prior review requirements and time frame. The procurement plan covers a
        period of 18 months. The procurement plan is updated at least every 12 months,
        or more frequently if required to reflect the actual project implementation needs
        and improvement in institutional capacity.

vii.    ―HNP Forum‖ means the GOB-led mechanism established to facilitate the
        exchange of information and the policy dialogue between the DPs and GOB on all
        matters related to the HNP Sector. The HNP Forum is chaired by the Secretary of
        MOHFW or his/her representative.

viii.   ―HNP Consortium‖ means the members of the Local Consultative Group (LCG)
        which cooperate with GOB for the development of the HNP Sector.

 ix.    ―Programme Support Office (PSO)‖ means the consulting firm recruited by the
        MOHFW and working within the existing structure of the MOHFW to assist
        MOHFW in the implementation of the HNPSP.

  x.     ―MSA‖ means the management services agency for diversification of service
        delivery to be employed by the Borrower to manage the contracting, monitoring
        and financing of non-government and private providers;

 xi.    ―Implementing Agencies‖ means any public, private or civil society entities,
        operating under the laws of the People‘s Republic of Bangladesh, which receive
        funds to implement Programme activities.




                                            53
2. BACKGROUND

Section 2.1

The Development Partners Contributions (DPCs) to the HNPSP aim to assist GOB in the
implementation of its Program Implementation Plan (PIP) 2003-2010, which is based on
its Program Strategic Investment Plan 2003-2010 (SIP) for the Health, Nutrition and
Population Sector (HNP-Sector). The Programme Development Objective is to improve
health outcomes and to reduce health inequalities through improved public sector
capacity and accountability, the targeting of public resources and increased utilization of
quality essential health services by the population, especially poor households. To
achieve its objectives the Programme will focus on three major components:

       i       Strengthening Public Health Sector Management and Stewardship
               Capacity including development of pro-poor targeting measures as well as
               strengthening sector-wide governance mechanisms;

       ii      Health Sector Diversification including the development of new delivery
               channels for publicly and non-publicly financed services; and

       iii     Stimulating Demand of essential services by poor households including
               health advocacy and demand-side financing options.

Section 2.2

Support to the HNPSP will be provided by a large group of Development Partners (DPs)
through a Sector Wide Approach (SWAp) arrangement, building on the implementation
of the first Health Sector SWAp (HPSP). GOB intends to continue to improve the
performance of its institutions in managing health sector resources in order to enhance
the development impact of the Programme. The DPs intend to collaborate by building
stronger donor partnerships in support of the HNPSP and HNP SIP. GOB and the DPs
are committed to openness, consultation and sharing of information. The DPs will
continue working towards strengthening and utilizing Government systems including
planning and budgeting arrangements and mechanisms, rules and procedures for
procurement, disbursement, accounting, auditing, reporting, monitoring and evaluation.

3. GENERAL PROVISIONS

Section 3.1

The Partnership Arrangements set out the responsibilities of GOB and the DPs in relation
to the Health, Nutrition and Population Sector Programme (HNPSP) to implement
Bangladesh‘s HNP Strategic Investment Plan – SIP (July 2003 – June 2010), as detailed
in the respective Programme Implementation Plans (PIPs).




                                            54
Section 3.2

The Partnership Arrangements are common understandings between the Government of
Bangladesh and members of the Development Partners and they are not international
treaties nor legally binding instruments. They are adopted pursuant to and subject to
bilateral agreements between GOB and the DPs for the purpose of financing the
Programme. Any matter not expressly provided for in these arrangements will be
governed by the bilateral agreements between GOB and the respective DPs. In the event
of any conflict between the provisions of these arrangements and the bilateral
agreements, the latter will apply.

Section 3.3

The Partnership Arrangements govern only the arrangements and procedures under which
support from GOB and the DPs will be provided for implementation of the programme of
activities of the Health, Nutrition and Population Sector. The provisions of these
arrangements will guide both the pooled and non-pooled funding contributions of the
undersigned DPs whether those contributions are financial or in the form of technical
assistance or in-kind.

4. CONTRIBUTIONS AND RESPONSIBILITIES OF THE DPs

Section 4.1

The DPs will make available their contributions to the Programme in a timely manner.

Section 4.2

The allocation, disbursement and use of funds in support of the Programme will be
directed through two different modalities:

  i.   pooled funds provided by Pooled DPs in proportion to their financing share of the
       agreed Three Years Rolling Plan (TYRP) and Budget will be made available to
       spending units through GOB‘ normal budgetary channels;

 ii.   non-pooled funds provided by DPs will be directed towards specific projects or
       budget lines in the TYRP and Budget in accordance with the bilateral agreements
       between GOB and the respective DPs.

Section 4.3

Any DP which intends to invoke remedial measures and to suspend or terminate, in
whole or in part, its contribution to the financing of the Programme should give MOHFW
as much advance notice as possible in line with the provisions of its bilateral agreement
with GOB.




                                           55
Section 4.4

The DPs will work towards harmonization of their contributions, to avoid duplication of
efforts and to increase transparency with respect to the coordination of assistance.

5. CONTRIBUTIONS AND RESPONSIBILITIES OF GOB

Section 5.1

GOB declares its commitment to the objectives of the Programme and will act with due
diligence and efficiency to facilitate its successful implementation. In particular, GOB
will:

   i.   not unilaterally change the Programme;

 ii.    provide its financial contributions as detailed in the agreed TYRP and Budget and
        ensure timely release of funds;

 iii.   ensure that the resources channelled through the Programme are reflected in the
        plans, budgets and accounts of GOB.

 iv.    ensure that accounts and records for the Programme are maintained in accordance
        with the Accounts Code, the Treasury Rules and General Financial Rules of
        GOB;

  v.    grant all necessary permits, including work permits for consultants, import
        licenses and foreign exchange permissions that may be required in connection
        with the implementation of the Programme; and – without prejudice to any
        bilateral agreement - exempt from taxes and levies the DPs‘ staff members.

 vi.    promptly inform the DPs of any condition (including theft or misuse of funds)
        which interferes or threatens to interfere with the successful implementation of
        the Programme; and

vii.    ensure that any person misusing funds provided to or through the MOHFW under
        the Programme is subject to the full rigors of the laws of Bangladesh.

Section 5.2

GOB designates the Ministry of Health and Family Welfare (MOHFW) as the institution
responsible for coordinating the Programme and facilitating interventions carried out by
implementing agencies with the assistance of a Programme Support Office (PSO). The
terms of reference of the PSO are attached in Annex II.




                                            56
6. CONSULTATION, INFORMATION, COORDINATION AND DECISION
MAKING

Section 6.1

Within the framework of the HNP Forum, MOHFW will invite the DPs to quarterly
meetings to review the progress of the Programme and the uses and requirements for
funds, and discuss policy, mid-course corrections and any other matters related to the
HNP Sector. Invitation containing a draft agenda and any other documents to be tabled
should be sent out to the DPs a minimum of one month/two weeks before the meeting
date.

As may be necessary to take care of any business matters of interest to members of
the HNP Forum additional meetings may be called at any time by the Secretary
of MOHFW (Chair of the HNP Forum) in consultation with the Chair of the HNP
Consortium.

The chair of the HNP Forum will prepare draft minutes to record the proceedings of the
HNP-Forum. Within one week after the meeting the chair will make the draft of the
minutes available to all participating institutions for consideration and adoption by
consensus. The finalized minutes will be issued not later than three weeks after the
meeting.

Section 6.2

GOB and the DPs will co-operate fully with each other on all matters relating to the
execution of the Programme and on other matters of common interest to them. In
particular the DPs will send to the Chair of the HNP Consortium, for distribution to the
other DPs, copies of letters or notices to the Minister or Secretary of MOHFW as
appropriate. To the extent possible the DPs will coordinate their missions for technical
assistance, implementation support and Programme supervision.

Section 6.3

GOB will promptly consult with the DPs through the HNP Forum whenever it proposes
to amend materially its proposals for the Programme and its‘ financing. Each DP will
promptly consult with the other DPs through the HNP Consortium whenever it intends to
suspend or terminate, in whole or in part, its contribution to the financing of the
Programme.

Section 6.4

Any dispute or controversy that arises in relation to the Programme should be settled by
means of dialogue and consultation between the Parties, and unilateral actions should be
avoided. Any dispute or controversy between the DPs should be settled through dialogue
and consultation within the HNP Consortium. If the dispute or resolution cannot be



                                            57
settled at the level of the HNP Consortium the issue will be brought to the Local
Consultative Group (LCG) for resolution.

Section 6.5

The pooled DPs will meet quarterly to discuss and develop a common position for the
policy dialogue with GOB and on activities financed by the pooled funds and matters
which are of particular interest and concern to them, including the APR (TORs, choice of
consultants, and acceptance of report), the choice of indicators for the payment of the
performance-based percentage and decisions on such payments, the status and progress of
the Programme and the adaptation of the Programme strategy. The Pooled DPs commit
themselves to the principle of partnership and will exercise their best efforts to reach
decisions by consensus. Where this is not possible decisions will be reached by voting: a
qualified majority of the Pooled DPs (meaning a simple majority of the DPs, contributing
at least 40% of the pooled funds) will be required.

Beyond the need of the pool funding agencies to agree among themselves on common
positions, all signatories of this agreement commit themselves to collaborate in the HNP
consortium on developing, to the extent possible, a consensus on all relevant sector
issues. They will make a particular effort to achieve common positions for the quarterly
meetings of the HNP-Forum and for the yearly policy dialogue (e.g. Annual Programme
Review, status and progress of the HNPSP, adaptation of the programme strategy, etc.).


Section 6.6

If a DP invokes remedial measures or if financing from a DP is no longer available for
the Programme, GOB will promptly review and make necessary revisions to the
Programme, in consultation with all other DPs, to ensure that the expenditure framework
corresponds to the resources available.

Section 6.7

Without prejudice to the direct contacts that all DPs may have with GOB the DPs will
aim to use the HNP Forum as the appropriate venue and mechanism for the exchange of
information and policy dialogue between GOB and the DPs on the HNP Sector.

7. ANNUAL PLANNING – REPORTS AND REVIEWS

Section 7.1

Following the quarterly review meeting of the HNP Forum, chaired by the Secretary of
MOHFW or his/her representative and attended by the DPs, in February of each year the
DPs will, to the extent possible, indicate to MOHFW the estimated amounts of their
contributions to the financing of the Programme for the following fiscal year (July 1 to
June 30). An APR, which will also assess the sector performance for the purpose of



                                            58
disbursing performance payments, will be carried out. Consultations between MOHFW
and the DPs will take place in order to reach consensus on the yearly update of the
TYRP, Budget and Procurement Plan by the end of May. A detailed financing plan will
be agreed identifying which activities will be funded by Pooled DPs and which activities
will be funded by the Non-Pooled DPs. Contributions by the DPs and GOB will be
confirmed at that time and the proposed DPs‘ contributions will be entered into the
national budget and, eventually, the Medium Term Expenditure Framework planning
cycle. A summary description of the annual planning cycle and meeting schedule is
provided in Annex B.

Section 7.2

The first year of the TYRP, Budget and Procurement Plan will constitute the accepted
programme of action for the following fiscal year period (July 1 to June 30). Changes to
the Operation Plan for the respective ongoing year and Budget may be agreed during the
quarterly review meetings chaired by MOHFW or by written agreement of MOHFW and
the DPs at any other times. The GoB will share their relevant latest update of the TYRP
with the Chair Person of the Consortium for dissemination to all DPs, at whichever is the
earlier date, but not later than one month in advance of the relevant meeting, and at least
two months before the approval meeting of the ECNEC.

Section 7.3

By September 30 of each year, MOHFW will provide to the Chair of the HNP
Consortium, for distribution to all the DPs, its Annual Programme Implementation
Report (APIR) covering the previous fiscal year. The APIR is based on the annual
reports prepared by the Line Directors and other implementing agencies or spending
units.

Section 7.4

Within 45 days of the end of each quarter MOHFW will provide to the Chair of the HNP
Consortium, for distribution to all the DPs, quarterly Programme Monitoring Reports
(PMR). The quarterly Programme Monitoring Reports will contain information on the
implementation of the Programme during the previous quarter, including problems
encountered and actions taken, outputs / achievements, procurement actions and financial
activity.

Section 7.5

MOHFW will convene quarterly meetings of the members of the HNP Forum to review
the quarterly Programme Monitoring Reports (PMR). The meetings will be convened
one week after the distribution of the PMRs, but not later than 2 months after the end of
the quarter. Quarterly meetings coinciding with the submission of the Annual
Programme Implementation Report (APIR) and the financial and procurement audit
reports, and with the Annual Programme Review (APR) will also discuss, as the case



                                            59
may be, the APIR, the audit findings, the APR, the preparation of the Annual update of
the TYRP and budget and the performance assessment.

Section 7.6

MOHFW will commission external evaluations to assess implementation of the
Programme under terms of reference agreed with the DPs at the mid-term (December
2007) and end point (June 2010) of the Programme.

8. DISBURSEMENTS AND FINANCIAL MANAGEMENT

Section 8.1

Non-Pooled funds provided by Non-Pooled DPs will be disbursed and channelled to the
implementing agencies, or used to provide in-kind contributions to the implementing
agencies, in accordance with the provisions of the bilateral agreements between GOB and
the respective Non-Pooled DPs.

Section 8.2

With respect to Pooled Funds, disbursement arrangements will be in accordance with the
provisions of the Development Credit Agreement between GOB and IDA and of the
relevant bilateral agreements. The first disbursement of pooled funds will correspond to
the estimated expenditures to be financed by the Pooled DPs for the first six months of
the Programme. Thereafter MOHFW will request disbursements from the Pooled DPs on
a quarterly basis, following the completion of each quarterly review meeting.
Disbursement requests will be based on the agreed TYRP, Budget and Procurement Plan
and will use the quarterly Financial Monitoring Report (FMR) format agreed between
GOB and IDA (the FMR format is annexed to the Minutes of Negotiations of the IDA
Credit). Quarterly FMRs will be submitted within 45 days of the end of each quarter.
Either directly or through the IDA, the Pooled DPs will deposit their funds into the
HNPSP FOREX Account held by GOB at the Central Bank. GOB‘s budgetary channels
will then be used to make funds (both the pooled DPs‘ share and GOB‘ share) available
to the implementing agencies or spending units.

Section 8.3

MOHFW will maintain a financial management system that will clearly reflect the
transactions, resources, expenditures, assets and stores under the Programme. The
system should ensure that MOHFW is able to produce timely, understandable, relevant
and reliable financial information for planning and implementation of the Programme and
monitoring of progress. A financial management assessment has been carried out,
focusing on how a reliable financial management system in MOHFW can accurately
account for all receipts and uses of funds while depending on the mainstream existing
government system. Based on the assessment, GOB and the DPs have agreed on a time-




                                          60
bound financial management improvement plan to address weaknesses identified in the
assessment and to further strengthen financial management capacity in MOHFW.

Section 8.4

GOB‘s mainstream accounting system, including the Treasury Rules, General Financial
Rules and Account Code, will continue to form the basis for accounting and financial
control within MOHFW and its agencies. MOHFW will prepare quarterly financial
statements accounting for all receipts and expenditures in the preceding quarter,
reconciling the accounts for the quarter, and estimating cash requirements for the next six
months. Annual consolidated financial statements will be prepared, reflecting the
planned activities and budget allocation for the respective year in the TYRP.

Section 8.5

To strengthen internal audit in MOHFW and to ensure effective periodic monitoring of
financial and operational activities in the sector, semi-annual internal audits of the
Programme will be carried out by a recognized auditing firm under TORs acceptable to
the DPs. The private auditing firm will be appointed by MOHFW following a
competitive selection process in accordance with the ―Guidelines: Selection and
Employment of Consultants by World Bank Borrowers‖; IDA will monitor the selection
process on behalf of the DPs. GOB officials will be involved and will facilitate the
conduct of the internal audits, ensuring in particular that the auditing firm hired from the
private sector has proper access to GOB records. The semi-annual internal audit reports
will be submitted to the DPs by the end of February and by the end of August.

Section 8.6

Without prejudice to the rights of DPs to carry out their own audits, MOHFW and the
DPs have agreed to common external audit arrangements covering all funds available for
the implementation of the Programme, irrespective of the source of funding. Audits will
be carried out by the Comptroller and Auditor General (C&AG) in accordance with the
―Statement of Audit needs‖ agreed between C&AG and the DPs and in accordance with
international auditing standards, consistently applied. The audit report will contain a
separate opinion as to whether the financial statements submitted during the fiscal year,
together with the procedures and internal controls involved in their preparation, can be
relied upon to support the transactions and balances of the FOREX and other Accounts,
and the contributions of the GOB and the DPs. The audit report will be submitted to the
Chair of the HNP Consortium within six months of the end of each fiscal year. The Chair
will distribute the audit report to the DPs and collect their comments. The Chair of the
HNP Consortium will provide joint comments to the MOHFW within two months of the
receipt of the audit report.




                                             61
Section 8.7

Special disbursement and financial management arrangements will be established for the
MSA which could be financed with contributions from both Pooled DPs and Non-Pooled
DPs for the contracting, financing and monitoring of NGOs and private sector providers.

9. PROCUREMENT

Section 9.1

Procurement arrangements for contracts financed by non-pooled funds provided by Non-
Pooled DPs will be those agreed between GOB and the respective Non-Pooled DPs and
specified in the bilateral agreements between GOB and the respective Non-Pooled DPs.

Section 9.2

Procurement arrangements for contracts financed by pooled funds provided by Pooled
DPs will be in accordance with the provisions of the Development Credit Agreement
(DCA) between GOB and IDA.

Section 9.3

By April 15th of each fiscal year, or as needed to reflect the actual implementation needs
and improvements in institutional capacity throughout the duration of the Programme, the
MOHFW provides the Pooled DPs, for their review and concurrence, a draft procurement
plan (―Procurement Plan‖), which would include on-going contracts rolling into the
following year, and detailed procurement plans for the following 18 months, based in part
on the draft TYRP. All procurement to be carried out under the Programme for the
following 18 months and financed with pooled funds will be included in the Procurement
Plan. The methods of procurement and consultant selection will be indicated as well as
the need for pre-qualification, estimated costs, prior review requirements and time frame.
The Procurement Plan will be approved by the IDA on behalf of the Pooled DPs by June
30 of each fiscal year at the latest.

Section 9.4

MOHFW will implement the procurement plan in the manner in which it has been
approved by IDA. During the period of the Programme, MOHFW will include in its
quarterly Programme Monitoring Reports (PMR) submitted to the DPs information on
the implementation of the Procurement Plan.

Section 9.5

Each implementing agency that receives funding from MOHFW, either directly or
indirectly will be responsible for its own procurement. In particular, procurement by the
MSA and by the NGOs and other private sector entities contracted by the MSA, will be



                                           62
in accordance with good procurement practice, including transparency and the most
competitive method appropriate to the circumstances. In relation to the use of pooled
funds, good procurement practice and simple procurement procedures and reporting are
detailed in the HNPSP Implementation Manual and referred to in the service contracts
between MOHFW and the respective contractual partner(s). Procurement arrangements
for contracts financed by non-pooled funds provided by Non-Pooled DPs will be those
agreed between GOB and the respective Non-Pooled DPs and specified in the bilateral
agreements between GOB and the respective Non-Pooled DPs..


Section 9.6

If cases of misprocurement occur each DP may take the actions established in its own
guidelines. For contracts financed with pooled funds any Pooled DP may decide, after
consultation with the other Pooled DPs, whether to cancel from its respective financing
an amount equivalent to the contract amount multiplied by its percentage participation in
the FOREX Account. The other Pooled DPs will make the same determination with
regard to their respective financing of that same contract.

Section 9.7

MOHFW will facilitate the conduct of an annual external procurement audit covering
contracts financed by pooled funds provided by Pooled DPs. The procurement audit will
be carried out by a recognized firm with expertise in this field under TORs acceptable to
the Pooled DPs. The procurement audit firm will be appointed by MOHFW following a
competitive selection process in accordance with the ―Guidelines: Selection and
Employment of Consultants by World Bank Borrowers‖; IDA will oversee the selection
process on behalf of the Pooled DPs. The procurement audit report will be made
available to MOHFW and the DPs by October 31 of each year. MOHFW and the Pooled
DPs will comment on the report by December 15. By January 31 MOHFW and the
Pooled DPs will agree on a plan of action to correct any anomalies and errors identified
in the audit report. MOHFW will implement such plan of action in accordance with a
schedule satisfactory to the Pooled DPs.

Section 9.8

While procurement audits would normally be provided annually, when particular risks
have been identified any Pooled DP may, if it so chooses, request that a special
procurement audit be conducted or send additional procurement missions to the field for
further post reviews or investigations. In addition any Non-Pooled DP may carry out its
own procurement review of the contracts which it has financed.




                                           63
10. MEANS TO ADMIT NEW DPs

Section 10.1

New DPs may join these Partnership Arrangements on the basis of:

  i.   agreement of the MOHFW and the undersigned DPs;
 ii.   the new DP having the authority to enter into legal agreements.

11. MEANS TO AMEND THIS PARTNERSHIP ARRANGEMENTS

Section 11.1

These Partnership Arrangements may be amended at any time upon the written
agreement of GOB and all the undersigned DPs.

12. ENTRY INTO EFFECT AND DURATION

Section 12.1

These Partnership Arrangements together with the Annexes will come into effect on the
date of their signature by GOB and, at a minimum, the Pooled DPs. The Partnership
Arrangements will remain in effect for the duration of the HNPSP unless extended by
agreement in writing of GOB and the undersigned DPs.

13. WITHDRAWAL FROM THE PARTNERSHIP ARRANGEMENTS

Section 13.1

Any signatories following consultation with GOB and the other signatories may
terminate its participation in these Partnership Arrangements at any time by written
notice to GOB and the other DPs.

14. ADDRESSES

The following addresses are specified for purposes of information and notices:


15. SIGNATORIES TO THE PARTNERSHIP ARRANGEMENTS

Section 15.1

In witness hereof the undersigned GOB and DPs, acting through their duly authorized
representatives, have signed these Partnership Arrangements in their names:




                                            64
On behalf of
Signature of the Authorized Representatives:


                                    CANADIAN INTERNATIONAL DEVELOPMENT AGENCY


                                    By         ________________________
                                               Authorized Representative

                                    DEPARTMENT FOR INTERNATIONAL DEVELOPMENT
                                    OF THE UNITED KINGDOM



                                    By         ________________________
                                               Authorized Representative


                                    COMMISSION OF THE EUROPEAN COMMISSION


                                    By         ________________________
                                               Authorized Representative


                                    EMBASSY OF THE FEDERAL REPUBLIC OF GERMANY


                                    By         ________________________
                                               Authorized Representative

                                    INTERNATIONAL DEVELOPMENT ASSOCIATION


                                    By         ________________________
                                               Authorized Representative


                                    EMBASSY OF JAPAN


                                    By         ________________________
                                               Authorized Representative




                                          65
THE NETHERLANDS GOVERNMENT


By    ________________________
      Authorized Representative



SWEDISH INTERNATIONAL DEVELOPMENT
COOPERATION AGENCY (Sida)


By    ________________________
      Authorized Representative



THE UNITED NATIONS POPULATION FUND


By    ________________________
      Authorized Representative



UNITED NATION‘S CHILDREN FUND


By    ________________________
      Authorized Representative



WORLD HEALTH ORGANISATION

By    ________________________
      Authorized Representative




     66
                          ANNEX IV
    INDICATIVE CONTRIBUTIONS OF THE DEVELOPMENT PARTNERS
                           2005-2010

                           NON-POOL FINANCING
DEVELOPMENT               CONTRIBUTION               KEY SUPPORTED ACTIVITIES
PARTNER       National        USD       Period
              currency        (million)
              (million)
CIDA          CA 60           50.8         2005/10   Earmarked contribution: Life cycle approach
                                                     (CD 20 m), Line of commodity (CD 40 m.),
German        EUR 12          15.9         2005/10   KfW: The German Government has
Government    (EURO 10 FC                            committed € 10.0 Million of financial
              and EURO 2                             cooperation for the support of HNPSP.
              by TC                                  These funds will be non-pooled and
                                                     earmarked to contribute to the financing of
                                                     the following HNPSP
                                                     interventions/activities: Contraceptive
                                                     security (€ 7.0 M.); Quality control of
                                                     contraceptives (€ 0.4 M.); Diversification of
                                                     service providers / PPP/HIV-AIDS/
                                                     reproductive health (€ 1.5 M.); Consulting
                                                     services (€ 0.6 M); Contribution to the
                                                     financing of Health Consortium Secretariat
                                                     and / or PSO (€ 0.5 M)

                                                     GTZ: The German Government has
                                                     committed € 2.0 Million for technical
                                                     cooperation to support HNPSP. In
                                                     consultation with the national counterpart
                                                     and DP a flexible resource pool will be
                                                     created (SWAp Backup) and housed under
                                                     the coordination of the national counterpart
                                                     and GTZ, which will be used to provide a
                                                     mix of long and short term technical
                                                     assistance to support the implementation of
                                                     the HNPSP in piloting innovative
                                                     approaches in M&E, demand-side financing
                                                     (social health insurance schemes), concept
                                                     development for public private partnerships
                                                     in family planning/HIV/AIDS/reproductive
                                                     health including QM within the context of
                                                     HR and other issues.
Japanese                      100          2005/10   Japan, through the Japanese Debt
Government                                           Cancellation program, will make an
                                                     estimated $20 m per year available to GOB
                                                     budget for HNPSP. The actual amount will
                                                     depend on APR outcomes.
Japanese                      60           2005/10   Technical cooperation in kind for maternal
Government                                           and child care, reproductive health,
                                                     supplementary immunization activities for
                                                     maternal and neonatal tetanus elimination
                                                     and measles control for 2005 through
                                                     UNICEF (approximately US$ 2 million) and


                                      67
DEVELOPMENT                       CONTRIBUTION                KEY SUPPORTED ACTIVITIES
PARTNER               National        USD       Period
                      currency        (million)
                      (million)
                                                              to Filariasis Elimination Program for 2005
                                                              (approximately US$200,000).

UNICEF                USD 48.5        48.5         2006/10    Child health: EPI, CDD, ARI, IMCI (29 m.),
                                                              women health: emergency obstetric care,
                                                              women friendly hospital initiative and social
                                                              mobilization for women (7.5 m.), nutrition:
                                                              control of Iodine deficiency disorders,
                                                              control of vitamin A deficiency, Control of
                                                              Iron deficiency anemia, breastfeeding
                                                              protection and promotion, comprehensive
                                                              nutrition system developments (8 m.),
                                                              Emerging public health issues: Arsenic and
                                                              HIV (4 m.)
UNFPA                 USD 35           35          2006/11    Reproductive health (65%), Gender (20%)
                                                   Calendar   and population development strategies
                                                   years      (15%)
WHO                   USD 46          46           2004-08    Communicable disease surveillance,
                                                              prevention, eradication control, TB, non
                                                              communicable diseases surveillance and
                                                              prevention, tobacco, health promotion,
                                                              disability, child and adolescent health,
                                                              making pregnancy safer, HID/AIDS,
                                                              nutrition, health and environment, food
                                                              safety, emergency response, essential
                                                              medicines, immunization and vaccine
                                                              development, blood safety, research policy
                                                              and promotion, organization of health
                                                              services.
Sida-Sweden           26 MSEK         3.8          2004/07    Support MVA Program through three
                                                              NGOs: RH-STEP, BWHC, and BAPSA to
                                                              support MVA program. Monitoring of the
                                                              activities of these three NGOs will be the
                                                              responsibility of the Director (MCH-
                                                              Services) and Line Director (ESP-RH) of the
                                                              Directorate General of Family Planning
                                                              (DGFP).

SUB TOTAL                             260          2005/11                     III.     Under HNPSP,
HNPSP NON-                                                                                MOHFW
POOL
FINANCING
(USD million)

ADB + co-financiers   USD 50          50           2005/11    Urban Health Project
                                                              ADB and co-financiers' contribution to the
                                                              Second Urban PHC project amounts to $70
                                                              million (grant co-financing from Sida of $5
                                                              million and DfID of about 15 million GBP)
                                                              plus another $2 million in parallel financing



                                              68
DEVELOPMENT                      CONTRIBUTION                        KEY SUPPORTED ACTIVITIES
PARTNER              National        USD       Period
                     currency        (million)
                     (million)
                                                                     from UNFPA, to be implemented over 6.5
                                                                     years.
Sida- Sweden         MSKE 35          5                   2005/11    Grant co-financing to Urban Health Project
DfID                 GBP 15           28.3                2005/11    Grant co-financing to Urban Health Project
USAID                USD 210          210                 2005/10    While USAID will be developing a new
                                                          Calendar   strategy next year, Support to NGO sector
                                                          years      and Private sector (through
                                                                     Social Marketing), in family planning,
                                                                     maternal and child health and prevention,
                                                                     especially focused on the poor with
                                                                     emphasis on urban health. Operations
                                                                     research and TA in specific areas (family
                                                                     planning and logistics).

EU                   EURO 10          13.2                2005/11    Support of Urban Health project
SUB TOTAL                             306.5               2005/11    Under MOLG (Urban health project) and
PARALLEL HNP                                                         MOF (USAID)
PROJECTS


POOL FUND
DEVELOPMENT                           CONTRIBUTION                          KEY SUPPORTED
PARTNER                   National      USD      Period                     ACTIVITIES
                          currency      (million (Fiscal year)
                          (million)     )
WB (IDA)                  USD 200       200      2005/10                    HNPSP support with performance-
DfID                      GBP 100       188.7    2005/10                    based-financing criteria
EU                        EURO 98       130.1    2005/10
The Netherlands           EURO 40       53.1     2005/10
Sida-Sweden               MSEK 500      74.6     2005/11
CIDA                      CA 15         12.7     2005/10                    Contribution to Swap (CIET, TA,
                                                                            and other unmarked projects, (CD.
                                                                            15 m.).
UNFPA                     USD 1.0            1.0           2007/08          Contribution to the pool on a pilot
                                                                            basis
SUB TOTAL                                    660.2
HNPSP POOL
FINANCING

PERIOD 2005/10
Total GOB contribution to HNPSP = USD 2.36 Billion
Total DP contribution in the HNP Sector = USD 1.17 Billion
Exchange rate at 11/26/04: 1 USD = 0.53 GBP, 1 USD = 0.753 EURO, 1 USD = 6.7 MSEK, 1 USD = 1.18



Note: The amounts and timing of the contributions mentioned in this Annex are
indicative of resources that may be available and do not constitute pledges of the
Development Partners (DPs).



                                                     69
                                       ANNEX V

    ANNUAL PLANNING CYCLE AND MOHFW/DP MEETING SCHEDULE
 Month      Activities
 July
 August     -Submission of the quarterly Programme Monitoring Report (PMR)
            - Submission of quarterly Financial Monitoring Report (FMR)
            - Submission of semi-annual internal audit report for January to June
            - Quarterly Meeting (to review 4th quarter of previous Fiscal Year)
 September  - Submission of Annual Programme Implementation Report (APIR)
 October    - Procurement audit report submitted to MOHFW and the Pooled DPs
 November   - Submission of the quarterly Programme Monitoring Report (PMR)
            - Submission of quarterly Financial Monitoring Report (FMR)
            - Quarterly Meeting (to review 1st quarter of current Fiscal Year)
 December   - Submission of the external audit report
            - MOHFW and the Pooled DPs to comment on procurement audit report
 January    - MOHFW and the Pooled DPs to agree on an action plan to address
            anomalies and errors identified in the procurement audit report
            - Start of Annual Programme Review (APR)
 February   - Submission of the quarterly Programme Monitoring Report (PMR)
            - Submission of quarterly Financial Monitoring Report (FMR)
            - Submission of semi-annual internal audit report for July to December
            - DPs to provide joint comments on external audit report
            - Quarterly Meeting (to review 2nd quarter of current Fiscal Year)
            - DPs to indicate estimated contributions for next FY
            - Annual Programme Review (APR)
 March      - Annual Programme Review (APR)
            - Preparation of OP, Budget and Procurement Plan
 April      - Annual Programme Review (APR)
            - Preparation of OP, Budget and Procurement Plan
            - Review of OP, Budget and Procurement Plan
 May        - Submission of the quarterly Programme Monitoring Report (PMR)
            - Submission of quarterly Financial Monitoring Report (FMR)
            - Quarterly Meeting (to review 3rd quarter of current Fiscal Year)
            - Final Operational Plan (OP), Budget and Procurement Plan
 June       - DP to confirm their financial contributions to the Programme

Note: GOB Fiscal Year is from July 1 to June 30. In the table above, 1st quarter refers to
the period 1st July - 30th September; 2nd quarter refers to the period 1st October - 31st
December; 3rd quarter refers to the period 1st January - 31st March; and 4th quarter
refers to the period 1st April - June 30th




                                           70
                                          ANNEX VI
                             RESULTS FRAMEWORK AND MONITORING

                                               Results Framework
                 PDO                             Outcome Indicators                           Use of Outcome
                                                                                               Information
Increase availability and utilization of   - Proportion of total MOHFW                   Lessons for strengthening HNP
user-centered, effective, efficient,       expenditure allocated to the 25% poorest      services and for scaling-up new
equitable, affordable and accessible       districts (increasing to 40%)                 strategies; Documenting
quality HNP services.                      - Utilization rate of ESD of the two lowest   progress in the health sector.
                                           income quintiles (from 55% to 65% by
                                           2010)

       Intermediate Results                                                                    Use of Results
       One per Component                                                                        Monitoring
Component One:                             - Proportion of births attended by skilled    Component One:
Accelerating achievement of                personnel (from 25% to 40 % by 2010)
MDG/PRSP outcomes and population           - TB case detection rate (from 41% to         For program monitoring and
policy                                     70% by 2010)                                  redirection through APR
                                           - % of children 1-5 receiving Vit. A          process
                                           supplements during the last 6 months.
Component Two:                             - Share of total govt. expenditure            Component Two:
Meeting emerging HNP sector                allocated to MOHFW expenditure (from          For program monitoring and
challenges                                 5% to 10%)                                    redirection through APR
                                                                                         process
                                           - NCD strategy developed and
                                           implemented as per details in results
                                           framework
Component Three:                           - Proportion of contracts awarded within      Component Three:
Advancing HNP sector modernization         initial bid validity period (95% from 2006
                                           onwards)                                      For program monitoring and
                                           - HS,FP and P-MIS delivering                  redirection through APR
                                           management information according to           process
                                           specifications
                                           - DSF pilots on schedule as per details in
                                           results framework
      The results framework presented on the following pages will be used by GOB and DP for
      Monitoring and Evaluation of the overall HNP sector program.




                                                           71
                                                                 ARRANGEMENT FOR RESULTS MONITORING11
                                                                                       Target values                                                          Data Collection and Reporting
Indicators                                     2003    2004    2005          2006           2007          2008        2009      2010        Frequency and     Data collection       Responsibility for data
                                               Base                                                                             Target         Reports         instruments               collection
Component 1: MDG and i-PRSP output and efficiency indicators
% births attended by skilled personnel         11.5     16         20.5          25           29.5           34        38.5        43            Annual            RHIS                   MOHFW
% DPT3 coverage                                 72      85          90           90            90            90         95         95            Annual            RHIS
                                                                                                                                                 Annual        EPI Coverage               MOHFW
% measles immunization                         75.7                                           80                                   >80
                                                                                                                                                                  Survey
% children 1-5 receiving Vit.-A                                                                                                                  Annual            RHIS                   MOHFW
                                                89      89         90            90           90             90         90         >90
supplements in last 6 months
% women on long lasting birth control                                                       Increas                   Increas                    Annual         RHIS/BDHS                 MOHFW
                                               13.3              Increase     Increase                    Increase
methods                                                                                        e                         e
                                                                                            Increas                   Increas                    Annual        RHIS/ BDHS                 MOHFW
Contraceptive prevalence rate                          47.3      Increase     Increase                    Increase                 70
                                                                                               e                         e
Age at first birth                             Base                                                                                              3 years          BDHS                    MOHFW
                                                                                                                                                 Annual        National TB                MOHFW
TB case detection rate                         41%                               70                                               70%
                                                                                                                                                              Control Program
                                                                                                                                                 Annual        National TB                MONFW
TB cure rate                                   84%                               85                                               85%
                                                                                                                                                              Control Program
                                               <15                                                                                               Annual       BDHS/ malaria               MOHFW
% U5 using bed-nets (in endemic areas)                 Base        20            25           30                                 Target?
                                                %                                                                                                                 control
% of 15-24 year olds who used a condom                                                      Increas                   Increas                    Annual        NASP survey                MOHFW
                                               35.3              Increase     Increase                     Increase              Target?
with non regular partners                                                                   e                             e
                                                                                            Decrea                    Decrea                     3 years       BDHS survey                MOHFW
% adults (age 15-55) who use tobacco           Base             Decrease      Decrease                    Decrease              Decrease
                                                                                               se                        se
                                                                                            Increas                   Increas                    Annual            RHIS                   MOHFW
% women receive counseling after injury        Base              Increase     Increase                    Increase               Increase
                                                                                                e                         e
Number of public awareness messages on                                                      Increas                   Increas                    Annual         NGO reports               MOHFW
                                               Base              Increase     Increase                    Increase               Increase
injury/accident per capita                                                                      e                         e
                                                                             10%            10%           10%         10%       10%             Annually           APR                   SBTP/NASP
                                                                   10%
% Blood screened before transfusion                    Base                  Increase       Increas       Increase    Increas   Increase
                                                                 Increase
                                                                                            e                         e

Outcome/impact indicators:
IMR (per 1,000)                                 56     53.3        50.6         47.9          45.1           42.4      39.7         37                        HNPSP
U5MR (per 1,000)                                80      76          72           68            64             60        56          52                        Evaluation;
                                                                                                                                            Annual from       BDHS data;          MOHFW; ICDDRB/IMED;
MMR (per 100,000)                              295     287         279          271           264            256       248         240                        Performance
                                                                                                                                            APRs; Periodic                            TA for MIS;
U5% underweight                                 48      46          44           42            40             38        36          34      from evaluation   audits; Annual
% severe stunting (24-60 M)                     27      26          25           24            23             22        21          20      surveys           performance
                                                                                                                                                              reviews and
Total fertility rate
                                               3.2/3    3.1        2.9            2.8         2.6            2.5        2.4        2.2                        qualitative
11
   All indicators disaggregated by gender and wealth-quintiles whenever feasible and relevant                                                                 studies, MMR
                   1
Met need for EOC (%)                            13      17         21             25          29             33         37         41                         survey
% increase in utilization of HNP services by
                                                55      55         60             65          70             75         78         80
the two lowest quintiles


                                                                                                     72
Component II: Meeting Emerging HNP Sector Challenges
1. Improving disaster response             2005        2006         2007         2008         2009        2010
Emergency Health Response                              Strategy     Implemen     In           In          In             Annually          Program audit        MOHFW/External
Strategy implemented and                               agreed       ted          operation    operatio    operation                                               consultants
working to agreed standards                                                                   n
3 Urban health service
development
Urban HNP strategy developed                           Strategy     Implemen     Implemen     Implem      Implemen       Annually          Administrative          MOHFW
and implemented                                        developed    ted          ted          ented       ted                              Records/APR
                                                       and
                                                       agreed
                                                       based on
                                                       MOU
Other
NCD prevention strategy                    Strategy    Consultati   Implemen     Implemen     Implem      In             Annually              APR                 MOHFW
developed and implemented                  developed   on. work     tation       tation       entation    operation
                                                       plans
                                                       Develpmt.
4. Health care waste
management
Environment action plan           Develo   Guideline   5%           10%          30%          70%         100%           Annually              APR                 MOHFW
                                  ped      s           Facilities   Facilities   Facilities   Facilitie   Facilities
(safeguard indicator)                      approved    implemen                               s
                                           by          ting
                                           MOHFW
                                           …
Component III: Health sector modernization
2. Improve disease
surveillance
% of districts with disease                2%          10%          30%          50%          70%         80%          Program audit       Program audit         MOHFW/TA
surveillance reports                                                                                                     Annually                                  PSO
5.Local level planning
Expansion of hospital                                  Legal/inst   Pilot and    Scaling-     20          30             Annually             Survey?           MOHFW with TA
autonomy                                               itutional    evaluation   up (10
                                                       arrangeme    (5           hosp)                                                                               PSO
                                                       nts in       hospitals)
                                                       place
Strategy for local-level                               Strategy     Implemen     Implemen     Implem      Implemen       Annually          Administrative        Planning Wing
planning developed and                                 developed    ted          ted          ented       ted                              Records/APR            Directorated
implemented                                                                                                                                                           PSO
Feasibility study for financial            Conducte    Piloted &    Scaled-up    Scaled-up    Scaled-     Scaled-up      Annually      Evaluation reports/APR        FMU




                                                                                       73
decentralisaton to district level               d in 4       eval. in x                             up                                                                       PSO
                                                districts    districts
6. Diversifying service
provision
Regulatory framework                                                                   Work                   Enforced       Annually                 APR                  MOHFW
(including quality assurance)                                                          started on   Framew                                                                  PSO
for non public providers                                                               developm     ork in
                                                                                       ent          place
                                                                                                    by end
                                                                                                    2005
Accreditation system for public                              Develope     piloted      20%          30%       40%        Annually from 2008           APR?                 MOHFW
and private service providers                                d                         coverage     coverag   coverage
                                                                                                    e
Commissioning ESD from non-                                  MSA in       15M$         20M$         30M$      35M$           Annually         Category specified in     MOHFW/PSO
public providers through the                                 place        being                                                                      DCA
MSA                                                                       contracted
Establishment of Performance                                              Fully                                              Annually                                      MOHFW
Monitoring Agency (PMA) for                                               functional
commissioning of non-public
providers
7. Demand-side financing
Demand side financing models                    Piloted      Piloted      .            Scale up     Scale                    Annually         Administrative records    MOHFW/PSO
(including voucher schemes,                                               Evaluated    Evaluated    up                                        and evaluation reports      with TA
user fees, social and private                                                                       Evaluat
insurance etc) piloted and                                                                          ed
evaluated
8. Budget management
Share of total govt. budget         5%     6%   8%           10%          10%          10%          10%       10%            Annually                PETS?                GOB/MOF
allocated to MOHFW budget
MOHFW HNP ADP budget                                                      Sequential                                         Annually
compared to HNP actual                                                    increase
expenditure GOB and DP)
Proportion of total MOHFW           Base                                  Sequential                          40%            Annually                 PETS                 MOHFW
expenditure allocated to the                                              increase
25% poorest districts
100% of audit objections fully                                            Implemen     Implemen     Implem    Implemen       Annually                  PA               MOHFW with
settled within 12 months after                                            ted          ted          ented     ted                                                        external TA
completion of fiscal year
Proportion of users in the two                  Base                      Sequential                                         Annually         PER, PETS, Survey?       MOHFW with TA
lowest quintiles who receive                    establishe                increase                                                                                     and DP assistance
consultation and drug treatment                 d
free of charge in public health
facilities




                                                                                             74
Medium term expenditure                                           In place     In place     In place   In place      Annually              APR              MOHFW/MOF?
framework
9. Sector management
Institutional arrangements for          Arrangem                  In place     In place     In place   In place      Annually              APR              MOHFW with
integration of nutrition in to          ents                                                                                                                MOE and MOF
SWAp at national and district           finalized;
levels designed and agreed
Institutional arrangements for          Arrangem                  In place     In place     In place   In place      Annually              APR              MOHFW with
integration of HIV/AIDS in to           ents                                                                                                                MOE and MOF
SWAp at national and district           finalized;
levels designed and agreed
Regulatory framework                    Designed     Agreed       Enforced                                           Annually              APR                 MOHFW
(including quality assurance)                        Drug
for pharmaceuticals in place                         ordinance
                                                     revised
Proportion of health care               Base         Sequential   Sequential   Sequentia    Sequent    Sequential    Annually              APR              MOHFW/PSO
utilisation at                          establishe   increase     increase     l increase   ial        increase
CCs and/or Satellite Clinics            d                                                   increase
     and/or EPI spots
UHFWCs
UHCs
District Hospitals and
Medical College Hospitals
by two poorest SES quintiles
among attendees
Steps taken to improve           Base   % of staff                % of staf                 % of                    Bi-Annually   Sample survey alternate      MOHFW
presence of staff present at            present                   present                   staff                                         years
Upazila level                                                                               present
Implementation of improved              Operation                                                                    Annually              APR               MOHFW with
planning and budgeting                  al plan                                                                                                                Planning
procedures to agreed                    guideline                                                                                                           Commission and
specifications                          and                                                                                                                      MOF
                                        proforma
                                        revision
                                        reflect
                                        move
                                        towards 3
                                        year
                                        rolling
                                        plan,
                                        inter—LD
                                        collaborat
                                        ion,
                                        financing




                                                                                   75
                                         sources
Jt GOB/DP monitoring and                 Manual        Monitorin                                                     Annually/Periodic   APR, Evaluation reports    MOHFW/HEU
evaluation System for APR                for APR       g system
reviewed and agreed revisions            process       for                                                                                                             IMED &
implemented                              and           poverty                                                                                                       Independent
                                         performan     and health                                                                                                     evaluation
                                         ce audit      piloted                                                                                                     Agency, PSO and
                                         developed     APR                                                                                                               DPs
                                         and           conducted
                                         agreed        as per
                                                       agreed
                                                       scope and
                                                       time
                                                       schedule
                                         Evaluatio                               Follow-
                                         n design                                on                     Follow-on
                                         finalized;                              evaluatio              evaluation
                                         Baseline                                n                      measurem
                                         measurem                                measurem               ents and
                                         ents                                    ents and               report
                                         completed                               report
HS, FP and P-MIS delivering              Baseline      Capacity     Capacity     Capacity    Capacit    Capacity       Annually and      APR and HMIS reports         DGHS,
management information to                info;         strengthen   strengthen   strengthe   y          strengthen      quarterly                                    DGFP/HEU
agreed specifications                    Capacity      ing; Data    ing; Data    ned; Data   strength   ed; Data                                                       PSO
                                         assessmen     flowing      flowing      flowing     ened;      flowing
                                         t/strengthe                                         Data
                                         ning                                                flowing
Performance audits linking               TORs and      Implemen     Implemen     Implemen    Implem     Implemen         Annually              PA report           MOHFW with TA
finance and performance                  Tools         ted          ted          ted         ented      ted
                                         designed
                                         and
                                         agreed
Institutional arrangements for   Arra    HSUF          5% HCF       10%HCF       20%HCF      30%HC      50%HCF           Annually                 APR                 MOHFW
community and stakeholder        nge     secretariat
participation                    ment    in place
                                 s for
(HSUF= Health Service Users      HSU
Forum)                           F
                                 agre
                                 ed
Tribal HNP Plan (safeguard       Acti    THNPP         HNP          10%          20%         30%        50%              Annually                 APR                   ¿???
indicator)                       on      Steering      baseline     tribal       tribal      tribal     tribal
                                 plan    Committe      data on      HCF          HCF         HCF        HCF
                                 &ins    e formed.     tribal




                                                                                      76
                                         tituti                 populatio
                                         onal                   n
                                         arra                   establishe
                                         nge                    d and
                                         ment                   incorporat
                                         final                  ed into
                                         ized                   MIS
10. Aid management
Memorandum of                                     June 2005                                                       Use of        Half yearly meetings   Administrative records    GOB and DPs
Understanding agreed, signed                      signed                                                          GOB             as part of yearly
and implemented                                                                                                   procedure        planning and
                                                                                                                  s, and in      monitoring cycle
                                                                                                                  so far not,
                                                                                                                  PDs fully
                                                                                                                  harmonize
                                                                                                                  d and
                                                                                                                  simplified
                                                                                                                  procedure
                                                                                                                  s
% of performance based                            Sequential    Sequential   Sequential   Sequentia    Sequent    Sequential         Annually                  APR               MOHFW/HEU
finances disbursed                                increase      increase     increase     l increase   ial        increase                                                      with TA and DPs
                                                                                                       increase
PSO established and functional                    Establishe    Fully        Fully        Fully        Fully      Fully              Annually                  APR                 MOHFW
                                                  d             functional   functional   functional   functio    functional
                                                                                                       nal
11. Human resources
                                                  HR task                                                                            Annually          APR, Performance audit   MOHFW, PSO,
                                                                                                       Strateg
                                                  Force est;     Strategy     Strategy     Strategy                Strategy
HR Task Force established                                                                                 y
                                                  Strategy      implemen     implemen     implemen                implemen
with TORsand operational                                                                               implem
                                                  implemen          ted          ted          ted                    ted l
                                                                                                        ented
                                                  ted
                                                  Incentives     Action                                                         Annually after 2006            APR                 MOHFW
                                                   study and     plan for     Action
Performance-linked staff                                                                  Introduce    Introdu    Introduce
                                                   consultati     agreed       plan
incentive systems in-place                                                                    d          ced          d
                                                  on process     options      piloted
                                                      done      developed
12. Procurement and logistics
Contracts awarded within         Base                                                                                           Annually/quarterly       APR, Procurement       MOHFW/PSO/P
                                                     80%          >95%         >95%         >95%        >95%        >95%
initial bid validity period      level                                                                                                                        reports              MCL
Proportion of commodities                                                                                                       Annually/quarterly       APR, procurement       MOHFW/PSO/P
distributed by DGHS and          Base                                                                                                                         reports              MCL
                                                     80%          >95%         >95%         >95%        >95%        >95%
DGFP versus received by          level
service delivery provider




                                                                                              77
Reducing Misprocurement12         Base            Not >1        Not >1       0             0            0       0          Annually/quarterly   APR, procurement   MOHFW/PSO/P
                                                                                                                                                     reports          MCL
Letter of credit be opened                                                                                                 Annually/quarterly   APR, procurement   MOHFW/PSO/P
                                  Base
(when applicable) within 14                         100%          100%           100%          100%      100%       100%                             reports          MCL
                                  level
days of signing the contract



This results framework will need to be agreed upon and updated on an annual basis through the APR process.




12
  Misprocurement is defined as ― The action of canceling that portion of the loan/credit for which goods, works and services have not been procured in
accordance with the agreed provisions in the credit/agreement‖.




                                                                                                78
                                                                   ANNEX VI (continued)

                                                             Logical Framework for HNPSP
This framework will be used by a majority of the DP in the HNP Sector for monitoring and evaluating their support to HNPSP. IDA will use the
Results Framework, as outlined on the previous pages. This LogFrame has been added to make the PAD a document which can be used by all DP.
                                                                                      DESCRIPTION OF                 MEANS OF
  OBJECTIVE           DESCRIPTION                       INDICATOR                                                                         ASSUMPTIONS/RISKS
                                                                                        INDICATOR                   VERIFICATON

                                            Decrease in PROPORTION OF THE % rural and urban poverty by
                     Poverty eradication                                                                                              PRSP is used as policy instrument
   Overall Goal                             POPULATION living on less then 1 gender and socio-economic
                        (PRSP goal)                                                                                                    Positive economic development
                                                          $ a day                     grouping

                  The goal of HNPSP is
                  sustainable improvement
                  of health, nutrition and
                  family welfare status of
                                                                                Share of total Government                           PRSP finalized with agreed MTEF
      Goal        the population of           Budget share                                                          BDHS
                                                                                budget allocated to MOHFW                           Inter ministerial response to i-PRSP
                  Bangladesh, especially
                  vulnerable , e.g. the poor,
                  women, the children and
                  the elderly
                                                                             Proportion of total MOHFW
                                            Pro poor MOHFW budget allocative
                                                                             expenditures allocated to 25%          PETS, BDHS      Resource allocation is needs based
                                            efficiency
                                                                             poorest districts

                  1. Health interventions
                  that address key                                                                                                 Urban Primary Health Project delivers
                                                                                Utilization of ESP(ESD?)
                  biological, social and                                                                            BDHS, special primary care for the urban population,
                                            1a) Utilization of ESP(ESD?)        services at all service levels in
     Results      environmental                                                                                     study          i.e. the poor. Improved collaboration
                                            services by the poor                public and NGO facilities, by
                  determinants for MDG                                                                              (UPHCPII), SDS between Private ad Public Health
                                                                                the two lowest quintiles
                  receive priority resource                                                                                        Sector
                  allocation in PIP
                                                                                                                    BDHS, special Functional coordination at provider
                                            1b) IMR (per 100,000)
                                                                                                                    study (UPHCPII) level is effective
                                                                                                                    BDHS, special Equity, Gender and Stakeholder
                                            1c) U5MR (per 1,000)
                                                                                                                    study (UPHCPII) Participation is mainstreamed




                                                                           79
                                                                            DESCRIPTION OF                MEANS OF
OBJECTIVE      DESCRIPTION                      INDICATOR                                                                      ASSUMPTIONS/RISKS
                                                                              INDICATOR                VERIFICATON
                                                                                                       BDHS, special
                                    1d) MMR (per 100,000)
                                                                                                       study (UPHCPII)
                                                                                                       BDHS, special
                                    1e) U5% underweight and stunted
                                                                                                       study (UPHCPII)
                                                                                                       BDHS, special
                                    1f) Total Fertility Rate
                                                                                                       study (UPHCPII)
                                                                       % of 15-24 years old who used
                                                                       a condom at last intercourse
                                    1g) Condom use                                                   NACP
                                                                       with regular and non-regular
                                                                       partner
            2. The ten policy
                                                                        70% of milestones as set forth
            responses (SIP) are                                                                                          Inter-ministerial and High level
                                                                       in the PPP are completed within PPP, revised PIP,
            implemented in line with 2a) Dynamics of implementation                                                      committees support reform activities
                                                                       6 months of deadline during     APR
            action plan and three year                                                                                   that are outside the HNPSP condition
                                                                       first 2 years, 90% thereafter
            rolling PIP
                                                                     70% of agreed Category 1
                                                                                                                         New institutional structures (PSO,
                                                                     (performance based financing)
                                    2b) MOHFW utilizes budget for TA                                   SEO               MSA) are effective relative to their
                                                                     payment disbursed to GOB
                                                                                                                         TOR
                                                                     annually against performance




                                                                  80
                                                                   DESCRIPTION OF                 MEANS OF
OBJECTIVE   DESCRIPTION             INDICATOR                                                                      ASSUMPTIONS/RISKS
                                                                     INDICATOR                   VERIFICATON
                          2c) Specific and agreed Performance Share of total govt. expenditure Minutes of    No negative impact of DSF/provider
                          Indicator                           allocated to MOHFW                 meetings    diversification on public provider is
                                                              expenditure (%)                                observed
                                                              Proportion of total MOHFW
                                                              expenditure allocated to the
                                                              25% poorest districts (%)
                                                              M & E function established
                                                              (baseline measurement
                                                              established and HIS capacity
                                                              strengthened)
                                                              100% of audit objections fully
                                                              settled within 12 months after
                                                              completion of fiscal year
                                                              Utilization rate of ESD of the
                                                              two lowest income quintile (%)
                                                              Proportion of contracts awarded
                                                              within initial bid validity period
                                                              (%)
                                                              Proportion of births attended by
                                                              skilled personnel (%)
                                                              Vitamin A coverage (%)
                                                              TB case detection rate (%)
                                                              % blood sample screen before
                                                              transfusion

                                                                                                               Accreditation improves quality of care

                                                                                                               Sector Diversification measures
                                                                                                               support shift from "illness treatment"
                                                                                                               to "health promotion" paradigm




                                                         81
                                                                               DESCRIPTION OF               MEANS OF
OBJECTIVE       DESCRIPTION                     INDICATOR                                                                        ASSUMPTIONS/RISKS
                                                                                 INDICATOR                 VERIFICATON
            3. "Core" health services
            provision are improved at                                     >=70%% of total MOHFW                            All relevant and significant Public
                                                                                                           PIP revision,
            the margin to cost-       3a) Budget allocation to ESP        budget reserves applied to                       Health Functions are sufficiently
                                                                                                           APR, SDS
            effective, equitable and                                      ESP(ESD?) delivery annually                      addressed under " core services"
            accessible levels
                                                                          Absence rate of service provider
                                                                                                                           Agencies to manage the non-routine
                                                                          against established posts at     Sentinel
                                     3b) Staff absenteeism                                                                 data collection are contracted and
                                                                          public facilities (Upazila and   surveillance
                                                                                                                           deliver
                                                                          below) less then 20% by 2006
                                                                          Service provider positions at
                                                                          Upazila and below are filled by
                                                                                                                           GOB contracts sufficient TA to
                                     3c) Staff posting                    2007 according to needs based APR
                                                                                                                           advance implementation process
                                                                          assessment and provider skill
                                                                          mix analysis
                                                                          less than 20% stock out of 5
                                                                          essential drugs (TB, vaccines,                   Decentralization reform initiatives are
                                     3d) Essential Drugs                  contraceptives, Vit. A, ORS) at SDS              not locked by outside (MOHFW)
                                                                          district, thana, union and                       interference
                                                                          community clinic levels by 2010
                                                                          Non-availability of three key
                                                                          equipments at district and below
                                     3e) Equipment                                                         SDS
                                                                          facility levels less then 20% by
                                                                          2010 for cesarean section
                                                                          Operating theatre, ambulance
                                     3f) Facility Maintenance             and generator in working      SDS
                                                                          condition 80% of time by 2010
                                                                          Any increase in Infrastructure
                                     3g) Civil Works                                                      Survey, PETS
                                                                          capacity is needs based by 2005
                                                                          Upazila HC are fully operational
                                     3h) Upazila Service accessibility                                     SDS
                                                                          according to needs by 2008




                                                                     82
                                                                                      DESCRIPTION OF                 MEANS OF
OBJECTIVE            DESCRIPTION                      INDICATOR                                                                        ASSUMPTIONS/RISKS
                                                                                          INDICATOR                VERIFICATON
                                                                                % clients satisfied with service
                                                                                provision at public, NGO and
                                         3i) Client satisfaction index                                             SDS
                                                                                Private facilities (aggregate
                                                                                measure)
                                                                                All Public Health facilities offer
                                         3j) Gender                             Gender sensitive services by       SDS
                                                                                2010

                   1.1 Reduce maternal,
                   neonatal, childhood                                           percentage increase in
                                                                                                                                 Gender issues are mainstreamed in
Sets of activities mortality and improving 1.1.1 Met EOC need                   utilization of EOC facilities by APR
                                                                                                                                 other Line Ministries
                   maternal and childhood                                       the pregnant women by 2010
                   nutrition
                                                                                 percentage of deliveries of
                                                                                target population conducted by
                                         1.1.2 Deliveries attended by skilled   skilled personnel (excluding
                                                                                                                DHS              No increase in foeticide
                                         personnel (facility or home)           TBAs) during the last one year.
                                                                                Disaggregated by socio-
                                                                                economic status.
                                                                                % of women who attend to
                                         1.1.3 Unsafe abortion                                                  Survey
                                                                                unskilled providers for MR
                                                                                 percentage of pregnant women
                                         1.1.4 ANC coverage                     that sought ANC. Disaggregated DHS
                                                                                by socio-economic status.

                                         1.1.5 IMCI strategy scaled up and       percentage of Upazila/Thana
                                         implemented                            (UHC/THCs) that have adopted UNICEF
                                                                                and introduced IMCI strategy
                                                                                Proportion of children 9 to 59
                                                                                months, pregnant and lactating
                                         1.1.6 Vitamin A coverage               mothers receiving Vitamin A      DHS
                                                                                capsules twice a year / last six
                                                                                months




                                                                          83
                                                                                  DESCRIPTION OF              MEANS OF
OBJECTIVE       DESCRIPTION                     INDICATOR                                                                        ASSUMPTIONS/RISKS
                                                                                     INDICATOR               VERIFICATON
            1.2 Reducing TFR to      1.2.1 CPR with proportions for          percentage of currently married
            replacement levels       method mix                             couples aged 15-49 years who
                                                                            are currently using              APR
                                                                            contraception (specified by
                                                                            method)
                                                                             percentage of eligible couples
                                     1.2.2 Discontinuation rate of          aged 15-49 years who
                                                                                                             DHS
                                     contraception                          discontinued use of (modern)
                                                                            contraceptive methods.
            1.3 Reducing the burden 1.3.1 TB Case detection rate            Annual TB case detection rate
            of TB, Malaria, and                                             of smear positive incidence                    Demand side barriers to access can be
                                                                                                           NTBP
            preventing and                                                  cases. Disaggregated by gender                 overcome
            controlling HIV/AIDS                                            and socio-economic status
                                                                             percentage of syphilis cases
                                                                            among targeted groups: sex
                                     1.3.2 STD prevalence                                                   NACP
                                                                            workers, MSM, truck drivers,
                                                                            and ANC seekers
                                                                            % households with treated bed
                                     1.3.3 Malaria prevention                                               Survey
                                                                            nets in malaria endemic areas
                                                                            % Blood samples in Public /
                                     1.3.4 Safe Blood Transfusion                                           NACP
                                                                            Private facilities screened
            1.4 The prevention and   1.4.1 Cervical cancer screening
            control of major non-                                           % women accurately diagnosed
                                                                                                         Survey, MIS
            communicable diseases                                           with cervical cancer
            (NCDs)
                                                                            Number of BCC activities that
                                     1.4.2 Diabetes Mellitus                address biological and
                                                                            behavioral determinants of DM
                                                                            Number of BCC activities that
                                                                            address biological and
                                     1.4.3 Cardio-vascular diseases
                                                                            behavioral determinants of
                                                                            CVDs




                                                                       84
                                                                                DESCRIPTION OF              MEANS OF
OBJECTIVE       DESCRIPTION                    INDICATOR                                                                 ASSUMPTIONS/RISKS
                                                                                    INDICATOR              VERIFICATON
            1.5 Reducing injuries and 1.5.1 VAW                            % of women who receive
            implementing                                                   counseling after injury
            improvements in                                                disaggregated by age and socio-
            emergency services                                             economic status
                                                                           Number of Public awareness
                                    1.5.2 Road Safety                      messages on injury/accident per
                                                                           capita
                                                                           Number of deaths due to
                                    1.5.3 Prevention of drowning           drowning disaggregated by
                                                                           gender and age

            2.1 Improving the health 2.1.1 Emergency Health Response Strategy developed by 2006,
            response to disasters    Strategy implemented and working implemented by 2007.
                                     to agreed standards
            2.2 Improve Disease      2.2.1 Monthly reports on notifiable 10% by 2005, 100% by 2010
            surveillance             CDCs available on a monthly basis
                                     2.3.1 High-level MOLGRDC/
                                     MOHFW Co-ordination Committee
            2.3 Urban Health Service                                     Bi-annual meetings held by
                                     for Urban HNP Services meeting and
            development                                                  2006
                                     addressing Primary Care and Public
                                     Health Issues
                                     2.3.2 Urban (primary, secondary,
                                     tertiary) health strategy including
                                                                         Strategy developed by 2006,
                                     institutional structure development
                                                                         implemented by 2007
                                     (MOHFW and MOLG) developed
                                     and adopted
                                                                           Plan developed by 2004,
            2.4 Health Care Waste                                          guidelines approved by 2005
                                    2.4.1 Environmental action plan
            Management                                                     and plan implemented at 5%
                                                                           facilities in 2006; 100% in 2010
                                                                           Legal/Institutional framework in
                                    2.5.1 Expansion in Hospital
            2.5 LLP                                                        place by 2006, piloted in 2007
                                    autonomy
                                                                           and scaled up in 2008




                                                                      85
                                                                                    DESCRIPTION OF                 MEANS OF
OBJECTIVE       DESCRIPTION                       INDICATOR                                                                           ASSUMPTIONS/RISKS
                                                                                       INDICATOR                  VERIFICATON
                                      2.5.2 Strategy for Local level          Strategy developed by 2006,
                                      planning developed                      implemented by 1007
                                      2.5.3 Feasibility study for financial   study conducted in 4 districts by
                                      decentralization to district level      2005, piloted in 2006 and scaled
                                                                              up by 2007
                                     2.6.1 Regulatory framework
            2.6 Diversifying Service                                          Framework developed by 2005,
                                     (including QA) for non public
            Provision                                                         implemented by 2006
                                     providers
                                     2.6.2 Strategy and plans for capacity    Capacity plan developed by
                                     for contracting services                 2005, piloted by 2006 and
                                                                              scaled up by 2007
                                      2.6.3 Accreditation system for public
                                                                              Piloted by 2007, 40% coverage
                                      and private secondary hospitals in
                                                                              by 2010
                                      place
                                      2.6.4 Number of Upazilas where non
                                      public providers deliver ESD of         Study completed annually by
                                      acceptable quality                      2006,

                                      2.6.5 Commissioning ESD from non- Total contract value to non-
                                      public providers                  public provider 10 M$ by 2006,
                                                                        35 M$ by 2010
                                      2.6.6 Establishment of management
                                      support agency for delivery of non- Fully functional by 2005
                                      public service provision
                                      2.6.7 Establishment of Performance
                                      Monitoring Agency (PMA) for
                                                                          Fully functional by 2007
                                      commissioning of non-public
                                      providers
                                      2.7.1 Demand side financing models Piloted by 2006, evaluated in                          No negative impact of DSF/provider
            2.7 Expanding DSF
                                      (including voucher scheme) piloted 2007 and scaled up in 2008                             diversification on public provider is
            initiatives
                                      and evaluated                                                                             observed




                                                                        86
                                                                                DESCRIPTION OF          MEANS OF
OBJECTIVE       DESCRIPTION                  INDICATOR                                                               ASSUMPTIONS/RISKS
                                                                                   INDICATOR           VERIFICATON
            2.8 Improved Budget   2.8.1 Share of total govt. budget        6% by 2004, 8% by 2005, 10%
            management            allocated to MOHFW budget                by 2006
                                  2.8.2 MOHFW HNP estimated
                                  budget compared to HNP actual
                                  expenditure GOB and DP)
                                  2.8.3 Proportion of total MOHFW
                                  expenditure allocated to the 25%
                                  poorest districts
                                  2.8.4 100% of audit objections fully
                                  settled within 12 months after
                                  completion of fiscal year
                                  2.8.5 Proportion of users in the two
                                  lowest quintiles who pay for drugs       In place by 2007
                                  and services in public facilities
                                  2.8.6 METF
                                  2.9.1 Institutional arrangements for
            2.9 Improved Sector   integration of nutrition in to SWAp      Arrangements finalized by
            Management            at national and district levels          2005, in place by 2007
                                  designed and agreed
                                  2.9.2 Institutional arrangements for
                                  integration of HIV/AIDS in to        Arrangements finalized by
                                  SWAp at national and district levels 2005, in place by 2007
                                  designed and agreed
                                  2.9.3 Regulatory framework
                                  (including quality assurance) for        Designed by 2005, agreed by
                                  pharmaceuticals in place                 2006, enforced by 2007

                                  2.9.4 Alternative models of health       piloted by 2006, evaluated in
                                  financing piloted and evaluated          2007 , scaled up in 2008 if
                                                                           evaluation is positive




                                                                      87
                                                                            DESCRIPTION OF                 MEANS OF
OBJECTIVE      DESCRIPTION                 INDICATOR                                                                    ASSUMPTIONS/RISKS
                                                                              INDICATOR                   VERIFICATON
                                2.9.5 Staff absenteeism rate at
                                Upazila level
                                                                       OP guideline and proforma
                                2.9.6 Implementation of improved       revision reflect move towards 3
                                planning and budgeting procedures      year rolling plan, inter—LD
                                to agreed specifications               collaboration, financing sources
                                                                       by 2005
                                2.9.7 Monitoring System reviewed       Manual for APR process and
                                and agreed revisions implemented       performance audit developed
                                                                       and agreed by 2005, APR
                                                                       conducted as per agreed scope
                                                                       and time schedule by 2007;
                                                                       Evaluation design finalized%
                                                                       Baseline measurements
                                                                       completed by 2005; Monitoring
                                                                       system for poverty and health
                                                                       piloted by 2006,
                                2.9.8 HS, FP and P-MIS delivering      Base line info available by
                                management information to agreed       2005, capacity -building
                                specifications                         thereafter
                                2.9.9 Institutional arrangements for   Institutional arrangements for
                                community and stakeholder              Health Service users Forum
                                participation safeguard indicator      agreed BY 2004, HSUF
                                                                       secretariat in place, 50%
                                                                       coverage by 2010
                                2.10.1 Memorandum of                   Signed by 2005
            2.10 Improved AID
                                Understanding agreed, signed and
            Management
                                implemented
                                2.10.2 Performance audits              Performance audit plan
                                                                       developed by 2005,
                                                                       implemented by 2006
                                2.10.3% of performance based
                                finances disbursed




                                                                  88
                                                                                 DESCRIPTION OF            MEANS OF
OBJECTIVE       DESCRIPTION                    INDICATOR                                                                ASSUMPTIONS/RISKS
                                                                                    INDICATOR             VERIFICATON
                                    2.10.4 PSO established and             PSO established by 2005, fully
                                    functional                             functional by 2006
            2.11 Improved HR
                                    2.11.1 HR Task Force established       Established by 2005, operational
            Management and
                                    and operational                        by 2006
            Development
                                                                           Piloted in 2006, evaluated in
                                    2.11.2 Performance-linked staff
                                                                           2007, scaled up in 2008 if
                                    incentive systems in-place
                                                                           positive
            2.12 Improved           2.12.1 Contracts awarded within        80% BY 2005, >95% BY 2006
            Procurement services    initial bid validity period
                                    2.12.2 Proportion of commodities
                                    distributed by DGHS and DGFP
                                    versus received by service delivery
                                    institute
                                    2.12.3 Reducing Mis-procurement
                                                                           District, Upazila, Thana and CC
                                                                           levels have a functional
            3.1 ESD                 3.1.1 Systems Development
                                                                           supervisory, logistics and
                                                                           referral system in place by 2010
                                                                           Selective interventions that
                                                                           address key communicable
                                                                           diseases such as Kala Azar,
            3.2 Control                                                    Filariasis, Dengue, Malaria and
                                  3.2.1 Selective interventions
            Communicable Diseases                                          HIV are designed and supported
                                                                           within the institutional
                                                                           framework of HNPSP and its
                                                                           partners
                                                                           The emergence of NCDs is
                                                                           annually addressed through
            3.3 Control NCD         3.3.1 Health Promotion
                                                                           effective and country-wide BCC
                                                                           campaigns




                                                                      89
                                                                                  DESCRIPTION OF               MEANS OF
OBJECTIVE       DESCRIPTION                       INDICATOR                                                                 ASSUMPTIONS/RISKS
                                                                                     INDICATOR                VERIFICATON
                                                                           Public health functions for the
                                                                           different service provision
            3.4 Public Health          3.41 Functions
                                                                           levels are defined and
                                                                           operational by 2008
                                                                           The concept of adolescent as a
                                                                           separate and distinct group (to
                                                                           children and adults) is integrated
            3.5 Adolescent health      3.5.1 Mainstreaming
                                                                           in all service delivery, RH
                                                                           promotion and reporting
                                                                           instruments by 2008
                                                                           Awareness campaign for the
                                                                           prevention of accidents and
            3.6 Violence and Injury    3.6.1 Awareness Campaigns           injuries are annually
                                                                           implemented; scaling up of
                                                                           One-Stop-Crisis centers
            3.7 Health Promotion and
            BCC
                                                                           All primary students receive an
            3.8 School health          3.8.1 Screening
                                                                           annual health check
                                                                           Environmental pollution
                                                                           especially in the high density
            3.9 Environmental health 3.9.1 Action
                                                                           areas is addressed through an
                                                                           local level action plan by 2010
                                                                           MIS system is delivering
                                                                           monthly data for HNPSP
            3.10 MIS                   3.10.1 Information dissemination
                                                                           performance measurement by
                                                                           2006
                                                                           Nurse to population ratio
            3.11 Nursing               3.11.1 Training
                                                                           significantly increased by 2010
                                                                           National drug policy is revised
            3.12 Pharmaceuticals       3.12.1 Policy revision
                                                                           and implemented by 2006




                                                                      90
                                                                       DESCRIPTION OF                MEANS OF
OBJECTIVE      DESCRIPTION                       INDICATOR                                                        ASSUMPTIONS/RISKS
                                                                            INDICATOR               VERIFICATON
                                                                  National reference and quality
            3.13 Laboratory services 3.13.1 QA
                                                                  control laboratory is established




                                                             91
                           ANNEX VII
      INDICATIVE DATES FOR THE APR AND EXPECTED OUTPUTS


1. On November 9th of every year, Joint Chief Planning, MOHFW convenes the first APR
   Steering Committee meeting to discuss the following:

a) Preparation of MOHFW Progress Report,
b) Draft APR TOR
c) Draft consultants‘ individual TORs
d) Draft Field Visit TOR including criteria for selection of sites to visit
e) Draft Stakeholder Workshop TOR.

Joint Chief (Planning) with support from PSO will be responsible for points (a) to (e) and will
submit drafts to APR Steering Committee for discussion ten days prior to convening the
meeting. JC will agree together with WB TTL on the selection of the Team Leader of the
Technical Report. Other consultants will be hired by WB TTL in accordance with TOR
approved by the APR Steering Committee.

2. On January 21st of every year, MOHFW Progress Report is prepared by the MOHFW
   and submitted to WB TTL by Joint Chief Planning. WB TTL shares this document with
   co-financiers. The content of the MOHFW progress report will have been previously
   agreed during November HNP Quarterly meeting.

3. On February 10th of every year, The WB TTL receives the Draft Status of Performance
   Indicators Report . The report is prepared by an independent consultant/agency hired by
   and submitted to WB TTL. WB TTL shares document with co-financiers.

4. On February 10th of every year, the WB TTL receives the Draft Consolidated Field
   Visit Report. Consolidated Field Visit Report: field visits include both rural and urban
   localities and have representation from DPs, relevant GOB officials and NGOs. The
   process is managed by an independent consultant/ agency competitively selected and
   contracted by the WB TTL.WB TTL shares documents with co-financiers.

5. On February 10th of every year, the WB TTL receives the Draft Stakeholder
   Participation Workshop Report. The workshop for beneficiaries of HNP services is
   handled/ organized by the same consultant/agency as in (4) above. WB TTL shares
   documents with co-financiers.

6. On February 10th of every year the WB TTL receives the Draft Independent Risk
   Assessment and Management Report prepared by an independent consultant. The WB
   TTL shares the document with co-financiers.

7. On February 12th of every year, the members of the independent consultancy team
   officially start work until March 1st. The Lead Consultant will be expected to be present
   during the Policy Dialogue. The team members may conduct their own field visits
   independently of the group visits mentioned in point (4) above.

8. On February 28th of every year, the Lead Consultant shares the Draft Independent
   Technical Report with WB TTL. The WB TTL shares draft document with co-financiers
   and meets for discussion.


                                              92
9. On March 3rd of every year, the WB TTL shares Draft Independent Report with
   Secretary MOHFW and APR Steering Committee. WB TTL sends letter requesting for
   Official Comments from MOHFW. MOHFW starts its own internal discussions.

10. On March 17th of every year, WB TTL receives Official Comments from Secretary,
    MOHFW. WBTTL circulates official letter to co-financiers.

11. On March 21st of every year, holding of Policy Dialogue.

12. On March 24th of every year, Lead Consultant submits Final Independent Technical
    Report to WB TTL. WB TTL circulates to HNP Consortium and MOHFW.

13. On March 27th of every year, the WBTTL and Joint Chief, Planning (MOHFW)
    officially agree on Necessary Conditions for Success and the short list of Performance
    Criteria of Category 1 for the next fiscal year.

14. On March 30th of every year WB TTL sends letter to Joint Chief Planning to inform on
    percentage of pooled funds allocated to Category 1, NCS and selection of performance
    criteria for next fiscal year.

15. On April 3rd every year, WB TTL sends Draft Aide-Memoire to Secretary, MOHFW

16. On April 10th of every year, Secretary, MOHFW sends Official Comments on Draft
    Aide-Memoire sent to WB TTL with draft Action Plan.

17. On April 12th of every year, APR wrap-up meeting to finalize the Aide-Memoire and
    Action Plan

18. On April 19th of every year, Country Director sends Management Letter to Secretary,
    MOHFW together with the final Aide-Memoire, the final Action Plan and Independent
    Technical Report.

19. Revised OP, Budget and Procurement Plan for next fiscal year submitted to WB TTL by
    May 8th of every year.

20. Report on Review of Revised OP, Budget and Procurement Plan prepared by independent
    evaluator and submitted to WB TTL by May 22nd of every year.

21. Final revised OP, Budget and Procurement Plan for the next fiscal year submitted to WB
    TTL by May 31st of every year.

22. Follow-up during HNP Forum during quarterly meetings -- from August onwards -- as
    per HNPSP Implementation Manual and the Annual Planning Cycle and MOHFW-DP
    Meeting Schedule.




                                           93
                                        ANNEX VIII

                              POLICY DIALOGUE FORMAT


Key Objectives of one-day Policy Dialogue:

    To Discuss key findings and recommendations proposed by the Independent Technical
    Report
    To Discuss MOHFW‘s Official Comments (of March 17th) on Independent Technical Report
    To Prioritize HNPSP Issues
    To Agree on Proposed Actions required to move the HNPSP program forward

Format for Policy Dialogue:

       The Policy Dialogue will be held in a forum chosen by the APR Steering Committee.
       It should be encouraged that GOB, DP and civil society have their own internal policy
        dialogue before this event
       Guests will limited to the following:

From DP side:

    -   Co-financiers
    -   Chairperson of LCG HNPSP subgroup and only one representative of each DP agency

From GOB side:

            o   Secretary, MOHFW
            o   Joint Chief Planning, MOHFW
            o   Director General Health, MOHFW
            o   Director General Family Planning, MOHFW
            o   Director Planning, DGHS
            o   Director Planning, DGFP
            o   All Line Directors
            o   Secretary from Finance, Planning and Establishment respectively
            o   PSO Coordinator

From Civil Society:

            o   Head of National Health Service Users Forum
            o   Three community members selected by the Health Service Users Forum

The Format for Policy Dialogue is as follows:

Session 1: Presentation of Independent Technical Report by Lead Consultant
Session 2: Request for Questions, Statements and Clarifications. Session led by Moderator.
Questions will be answered during Session 3.
Session 3: First Panel Discussion on the key report findings and recommendations including
prioritization of key issues. Session led by Moderator. Discussion summarized by the JC
(Planning)



                                                94
Session 4: Second Panel Discussion on MOHFW‘s and DP respective Official Comments.
Session led by Moderator who welcomes questions, comments and clarifications from audience.
Discussion summarized by PSO Coordinator.
Session 5: Summary of Agreements reached and Action Points – which is jointly prepared by a
core group of 3 officials from GOB and 3 representatives from DP and presented by Secretary,
MOHFW

The First Panel will have six participants: two representatives from the MOHFW, Head of
National Health Service Users Forum, two representatives from co-financiers and the Lead
Consultant.

The Second Panel will have six participants: three MOHFW representatives and three co-
financiers including the WB TTL.

Both Panel Discussions (session 3 and 4) will be led by a Moderator chosen by the APR Steering
Committee

Sessions 1, 2 and 3 will be morning sessions.
Sessions 4 and 5 will be afternoon sessions




                                                95
96
                                          ANNEX IX

               FINANCIAL MANAGEMENT IMPROVEMENT PLAN

1.      Financial Management Assessment

(i)     Introduction:

To support the Health and Population Sector Program (HPSP) of the Ministry of Health and
Family Welfare (MOHFW) introduced in 1998, efficient and effective sector specific changes in
financial management were recommended. MOHFW has implemented some of the changes like
establishment of a Management Accounting Unit (MAU), introduction of HPSP Handbook on
Financial Management, revision of delegation of financial powers, staff training, formation of
Budget Committee and New Classification Structure and Cost Center Codes for HPSP and Line
Directorates (LD). However, because a number of other recommendations remained
unimplemented for years, there are weak controls and poor management in the entire program.
The issues related to weak controls and poor management need to be identified and addressed
through a time-bound action plan and require strong commitment for implementation from
Government of Bangladesh (GOB).

The financial management assessment was carried out to examine existing flow of funds,
accounting, reporting in all the tiers of the operation, their consolidation and reconciliation
system, accountability and sanctions mechanism and identifies systemic and sector specific risks
and recommends appropriate intervention to mitigate the risk and improve the overall system.
With the measures taken listed in the FM improvement plan, MOHFW will have a financial
management system which can adequately account for all resources and expenditure. In brief, the
assessment has focused on how a reliable financial management system in MOHFW can
accurately account for all receipts and uses of funds by depending on the existing government
system and ensure a system of sound planning and budgeting timely accounting, reporting and
auditing and culminate in a process of taking corrective action.

(ii)    Public Sector Financial Management:

Accountable and efficient management of public funds is a key to good governance. The PFM
system in Bangladesh is not capable of managing public funds effectively, and accountability is
not well understood or practiced at all levels of the system. In recent years, GOB has made
considerable progress in public financial management. The Financial Management Reform
Program ( FMRP) and other reform initiatives supported by developments partners demonstrate
GOB‘s continuous thrust to improve public expenditure management and financial accountability
that requires more transparency, sound internal controls at all levels, accounting, information on
service provided and timely action where mismanagement is found. Despite commendable
progress, the overall financial management system of the GOB still remains highly regulations
driven, input and process oriented rather than results or outcomes focused. Access to information
is restricted, capacity to act timely is practically non-existent and credible sanctions when
transgressions occur is particularly weak. The oversight bodies and C&AG report have repeatedly
pointed out waste, fraud and misuse of public funds but to little effect. Despite GOB‘s attempts to
develop a sound financial management framework for the health sector, much remains to be done
for making sector financial management system effective and sustainable.

(iii)   Lessons Learnt:



                                                97
With introduction of Health And Population Sector program in 1998, the project driven approach
has been replaced by a sector wide management program, under which MOHFW business is
managed under defined program components covering operations throughout the country.
MOHFW was the first pilot ministry for the Reforms in Budgeting and Expenditure Control
Project ( RIBEC). A Management Accounting Unit, now known as Financial Management and
Audit Unit (FMAU) was first established in MOHFW. The purpose of establishing the FMAU
was to provide a complete and accurate financial picture of the MOHFW activities by capturing
expenditure information for development projects covering funds from donor and GOB sources
and meet MOHFW‘s financial management requirements in the context of sector wide program
approach. A modified version of the GOB accounting classification was created and a standard
reporting format was introduced.

The main problem of MOHFW financial management relates to the failure to establish the basic
institutional framework required for sustainable systems management and development.
To date, the institutional weakness of the FMAU has not been resolved due to issues of control
and management of Comptroller General of Accounts ( CGA) staff currently seconded to the
MOHFW. The control of the personnel rests with CGA making it difficult for MOHFW to ensure
staff accountability.

The merger of Program Finance Cell (PFC) and Accounts, Reports and Information Technology (
ARIT) Cell into FMAU has had little effect. With 37 temporary staff funded by development
budget, PFC is functioning more or less in the same way as before. PFC is a bill passing and
payment authority for the pooled fund and at the same time responsible for internal audit- thus
performing tasks with a conflict of interest. The internal audit by PFC covers only development
budget, while MOHFW‘s internal audit team conducts internal audit on revenue budget. Even
with such split of internal audit function covering development and revenue expenditure between
two units, the internal audit has not been effective.

Financial Management in Line Directorates is weak due to lack of enforcement of financial rules
and regulations in maintaining accounts and records. This has led to huge reconciliation problems
in accounting offices making accurate SOE preparation difficult for the sector. External or
constitutionally mandated audit is complicated because of the fact that in health sector three
directorates of the C&AG are involved to conduct audit. Donor funded projects are audited by
Foreign Aided project Audit Directorate ( FAPAD), GOB funded activities in the health sector
covering revenue is audited by Local and Revenue audit Directorate and GOB funds in the
sectoral program spent through the CGA system is audited by Civil Audit Directorate.

The number of unresolved audit objections continues to be a matter of concern. This is due in part
to lack of understanding by the FAPAD of the nature of accounting process for the SWAp.
Responding to audit objections by spending offices at district and Upazila level proved to be
extremely time consuming. Non availability of supporting documents for expenditure incurred
directly by DP remained another major concern throughout HPSP implementation which has
resulted in a number of unresolved audit objections.

Based on the lessons learnt and FM assessment in the health sector, an action plan has been
agreed for further strengthening of the sector FM system. It is outlined at the end of this
assessment.

2.      Summary of Risk Analysis:



                                               98
Risk                                       Risk Rating   Mitigation Measures
Inherent Risk:
The impact of the audit is lost because                  -Agreement reached on scope, coverage
of large number of audit observations,     H             and reporting on audit with the Auditor
poor system of resolution and an                         General. Draft TOR have already been
emphasis on the settlement of audit                      shared with AG.
observations instead of the content of                   -DP to focus on the critical audit
the audit observations.                                  observations and follow through on them to
                                                         their logical conclusion.
                                                         -To expedite resolution of audit
                                                         observations, MOHFW to circulate audit
                                                         reports to all concerned within 15 days of
                                                         receipt.
                                                         -MOHFW to draw up a response and an
                                                         action plan on audit report within three
                                                         months of the receipt of the audit report.

Inadequate accounting and reporting        M             FMAU staff to be under the overall
capacity at FMAU due to absence of                       supervision of the Principal Accounting
unified command.                                         Officer, i.e. Secretary MOHFW.
Control Risk: Control Risk
FMAU do not have appropriate staff,        S             Agreement between DfID and MOHFW
especially to work on computer-based                     for plan that covers staff recruitment,
financial systems and is still dependent                 training and actions for FMAU
on consultants leading to risk of                        sustainability and effectiveness.
sustainability and effectiveness.
                                                         Agreement to contract out Internal audit
A unit that is responsible for approving   H             functions covering both development and
the bills also conducts the internal                     revenue and discontinue the existing
audit, thereby creating a conflict of                    internal audit function by two groups –
interest.                                                PFC and internal audit team of MOHFW.
System Risk:
The Management Accounting                                 Agreement between DfID and MOHFW to
Consolidation System (MACS) system         L             further upgrade the MACS through FMRP.
lacks administrative modules which
keeps it from becoming fully
operational without involvement of
donor funded Consultants who may not
always be available.
Overall Risk rating                        H

3.      Strengths and Weaknesses:

(i)     Strengths:
HNPSP will have the following strengths in the area of financial management:
 Already outlined, disseminated and practiced sector specific financial rules and regulations
 MOHFW‘s experience in implementing sector program and its financial management
    requirements including the FM requirements of the donors
 An already established and operational Financial Management Unit in the MOHFW. A FM
    Manual stating sector specific FM rules and regulations.



                                               99
    A computerized financial management system.

(ii)     Weaknesses:
HNPSP appears to have the following weaknesses:
 Inadequate financial management capability at the Directorate levels.
 Inadequately trained human resources.
 Delayed preparation of SOE by the DDO and LD often based on inaccurate information.
 Inadequate monitoring of financial reports at the ministry and LD levels leading to absence of
     realistic cash forecast, need based yearly budget estimates and improper review of
     performance indicators.
 Weak assets and inventory management
 Inappropriate internal control and auditing mechanism, weak external audit resolution
     mechanism

Based on the FM assessment and lessons learnt, the overall FM arrangement for the sector
including specific interventions to address the above weaknesses are outlined below.

4.      Implementing Entities :

(i)      MOHFW:
MOHFW will have overall responsibility for HNPSP implementation and management of DP
support, including technical assistance. MOHFW will establish a Program Support Office (PSO),
staffed by TA for coordinating program activities. The HPSO will closely liaise with the DP and
the FMAU on financial management issues.

(ii)     Line Directors:
According to the sector framework, the Line Directors are the line managers who implement the
program with policy and administrative guidance from the MOHFW. Under HNPSP, the sector
activities have been grouped into 37 programs with 37 Operational Plans (OPs) to be
implemented by 37 Line directors.

5.      Fund Flow Arrangements:

The chart below captures the funds flow arrangements for the program from pooled
funds.




                                              100
                                                     Pooled Funds



                                                 Pooled Donors




                                                 IDA and Trust
                                                 Funds held at
                                                 WB
                                                            On the basis
                                                            of FMRs
                    Quarterly FMRs MOHFW to DP




                                                 Forex Account
                                                 held by GOB
                                                 (MOF)
                                                                                       GOB’s Budget
                                                                                       System
                                                                                       (Including
                                                                                       GOB
                                                                                       Resources)




                                                                                         MOHFW
                                                                                         Expenditure

Pooled Funds:
(i)    IDA will administer the pooled funds on behalf of all the pool donors.
(ii)   Based on annual performance review of HNPSP, MOHFW and DP, by April 15th of each
       year, will estimate financing share for both GOB and pooled donors for the following
       fiscal year for all disbursement categories.
(iii)  GOB will open a FOREX account with the Central Bank for HNPSP.
(iv)   For the first disbursement, an amount of donors‘ share of six months estimated
       expenditure of the program will be deposited into the FOREX account.
(v)    GOB‘s budgetary channels will then be used to make funds – both the pooled donors‘
       share and GOB share available to the spending units.
(vi)   On the basis of monthly expenditure, GOB will draw funds from the FOREX account to
       its consolidated fund.
(vii)  At the end of the quarter, DP would replenish the FOREX account on the basis of FMRs
       – including a statement on funds required for the next six months.
(viii) GOB can also request a payment to be made through a special commitment or directly
       from IDA to a supplier.

Non-pooled Funds:



                                                          101
The non-pool donors may use different mechanisms for making funds available to the program.
Some of the possible option could be (a) funds made available to the program by making direct
payment to the contractors, suppliers and consultants under bi-lateral agreements with the
Government; (b) Non-pool donors disburse funds to Line Directors for specific program
expenditure; (c) separate FOREX or special accounts could be created for each non-pool donor
and (d) reimburse GOB for the expenditure incurred. MOF prefers option (c).

However, while submitting FMRs to the DP on a quarterly basis, MOHFW will have to report the
entire expenditure on the sector - separately identifying the expenditure of non-pool donors and
the combined expenditure of GOB and pool donors.

Release of funds to cost centers
With the change of planning process, a new fund release and disbursement procedure has been
followed in the implementation of HPSP under the Sector Wide Approach. According to the new
procedure of fund release and disbursement, MOHFW releases funds for three quarters at a time
by issuing a single order at the beginning of the year treating HPSP as a single program for the
purposes of funds release. This procedure helped avoid the bureaucratic delays of the fund release
system within MOHFW. The same fund flow procedures would be continued in HNPSP.

For the fourth quarter fund release, MOHFW has to submit to the MOF a number of utilization
reports reflecting usage of donors and Govt. funds by LD. The MOF does not release fund for
fourth quarter unless information regarding the previously released fund for the first three
quarters is provided. The main problem causing delay in fund release is the late collection of SOE
showing donors expenditure from multiple cost centers i.e. DDO as mainstream accounting
system does not account for donors expenditure. As a result, LD cannot submit their SOE
consolidating DDO expenditure to the MOHFW timely. Late release of the fourth quarter fund
poses a serious risk in terms of potential funds leakage and accounting. Part of this problem will
be addressed as pooled funds flow through the Govt. systems. However, the issue with non-pool
donors will remain. MOHFW needs to streamline the reporting on the entire sector expenditure to
avoid this delay.

Funding from LD to DDO at Regional Level , Districts and Upazilas:
According to existing GOB system of release of funds, LD disburse funds to various cost centers,
i.e. Drawing & Disbursement Officer at Regional levels , District and Upazila quarterly on the
basis of approved Administrative Order (AO) for each Operational Plan. The Chief Accounts
Officer ( CAO)of MOHFW transmits copies of the AO to the Divisional Comptroller of Accounts
( DCA), District Accounts Officer ( DAO) and Upazila Accounts Officer for ensuring that
expenditures are consistent with approved spending.

As the fund release and disbursement records are still done on a paper-based system, they are
subject to time lags and inadequate monitoring of actual expenditure against disbursed budget. A
computerized Fund Disbursement system was developed by the FMAU in order to automate the
disbursement and record keeping procedure. However, it has not been implemented in most of the
LD. It is recommended that Financial Management Improvement Component of the program will
provide TA for this.

6.      Co-Financing and Financing Arrangements:

(i)     Annual Program Review will determine donors‘ yearly contribution to HNPSP. Legal
        agreements between IDA and Pooled donors will lay down the terms and conditions of
        co-financing arrangements for donor funds managed by IDA. Pooled donors will not be


                                               102
        able to participate in a particular year if funds are not received by IDA at the time of
        determining the financing percentage.

(ii)    There will be a MOU between DP and GOB outlining common implementation
        arrangements for HNPSP and IDA‘s fiduciary role in managing pooled funds There will
        also be a Code of Conduct (COC) among HNPSP Consortium members which will
        outline guiding principles to be followed by all DP during program implementation.

7.      Performance-based Financing (PBF):

        In order to promote achievements of key outcomes of HNPSP, it was agreed that a
        percentage of the pooled funds will be allocated to a specific category, disbursement of
        which would be based on certain performance indicators each year. Disbursement of
        funds from this category will be made only if the performance is satisfactory. This
        disbursement percentage would be determined from year to year depending on the
        performance.

8.      Planning and Budgeting:

(i)     There have been appreciable improvements in the planning and budgeting system of
        MOHFW recently as it has been preparing its own detailed budget estimates without
        intervention from MOF and the Planning Commission for both the revenue and
        development budgets. A three year budget cycle reflecting GOB‘s 3 year rolling plan,
        strategic priorities and its linkages to Medium Term Expenditure Framework (MTEF) has
        been prepared. Performance indicators for every budget holder are being considered.

(ii)    The formation of the Financial Management and Budget Committee as a high -level
        decision making body was a first step in management of the Ministry's financial
        resources. There had been some developments in the MOHFW regarding unification of
        the two budgets- revenue and development. If the unification takes place as per GOB
        plan by FY 05, MOHFW would be the first ministry having unified budgetary system
        which would greatly contribute in improving overall fund management and expedite
        program implementation.

(iii)   The guideline for preparation, implementation and monitoring of Operational Plan and
        annual planning cycle developed by MOHFW was a useful guide during HPSP
        implementation. This would be further updated once unification takes place.

9.      Accounting flow and Reconciliation:

At the Ministry level:
(i)     The existing mainstream accounting system of the GOB will be followed. For GOB and
        pool funds will be channeled through the Government treasury system, accounting will
        follow the system of Comptroller General of Accounts. Under the system, the FMAU of
        the MOHFW will continue receiving and recording financial information both for GOB
        and pooled donors funds following CGA system and will be responsible for maintaining
        the sector accounts. FMAU will also be responsible for receiving expenditure statement
        from the LD and reconcile the SOE with CGA information. The Accounts Code, the
        Treasury Rules and General Financial Rules of the Government will form the basis for
        accounting which is adequate for preparing sector accounts.



                                                103
(ii)    For expenditure outside the pooled funds and for any discrete program activities
        supported by the donors which will not be channeled through the treasury system, FMAU
        will account for such expenditure following existing accounts code of the GOB and
        consolidate the information with the main sector accounts.

(iii)   The sector accounts will be maintained using existing Management Account
        Consolidation System (MACS) software. It will undergo further changes during program
        implementation. It has been agreed that updating or changes in MACS in the MOHFW
        and selected LD will be done through FM component of the program.

At the LD and DDO level:
The existing CGA payment and accounting system and time-line for SOE submission by the
DDO to LD and by LD to the FMAU of the MOHFW will be followed. To avoid reconciliation
problem, Compilation Register maintained at the Division, District and Upazila Accounts Office
would be duly reconciled by the DDO and signed. Failing this, subsequent fund release to LD and
DDO will be withheld. MOF‘s executive order to this effect would be strictly monitored and
enforced.

10.     Internal Controls:

(i)     GOB existing financial power, authority and payment responsibility outlined in the FM
        Handbook of the health sector and General Financial rules will be followed. There are
        clear guidelines for authorization and approval of financial transactions at the Secretary
        (MOPME) and LD and DDO levels. It has been agreed that FM Handbook, the Bangla
        version which was circulated in 2003 will be quickly updated to cover proposed changes
        in the HNPSP. This would be completed by December 2005.

(ii)    There are some inherent weaknesses in the internal control system of the LD. In most
        cases, the LD or their deputies are not well conversant with financial rules, regulations or
        reporting requirements. The organization structure and set-up in which internal control is
        placed in the key LD offices and in the MOHFW illustrates this lack of understanding of
        the nature of internal control. In LD offices, Deputy Director (Audit) reports to the
        Director Finance. It is agreed that with the streamlining of overall internal audit function,
        the reporting relationship in the LD will be restructured and training module would
        include internal control functions which will be imparted covering all LD within one year
        of program effectiveness.

(iii)   The current system of asset and inventory recording, maintenance and verification in
        MOHFW and LD is as weak as in other public sector institutions. Neither the LD nor the
        DDO at district and Upazila offices maintain an up-to-date asset register. There is no
        system to ensure that fixed assets are properly recorded at the time of procurement or
        immediately thereafter. This is partly because the GOB‘s current procedure does not treat
        the procurement and utilization of fixed assets as a process requiring controls. It has been
        agreed that a computerized inventory system with both central and distributed databases
        (both of which need to be updated on a regular basis and be consistent with each other)
        needs to be procured and placed under the MIS departments of the MOHFW. Initially, it
        would be done in one of the key LD‘s, which will then be rolled out to all LD, DDO at
        District and Upazila Level. The installation and completion of the system would be
        completed by June 2006.

11.     Staffing and Capacity Building


                                                104
MOHFW: FMAU and PFC:
(i) The FMAU of the MOHFW which is responsible for MOHFW financial management
    activities has never been fully functional and effective due to inadequate number of
    permanent staff and also being largely dependent on consultants The FMAU is headed by
    GOB official from admin cadre. The placement of CAO‘s function from CGA to
    MOHFW as per GOB FM improvement plan is yet to be implemented. Deputy Chief
    Accounts Officer (DCAO) seconded from CGA office has been working in the MOHFW
    without reporting directly to the principal accounting officer ( Secretary) of the MOHFW.

(ii)    The current staff in the FMAU are well versed with HPSP and are considered adequate
        for the initial six months. Until GOB‘s plan for placement of CAO‘s function under the
        direct supervision of the MOHFW, it has been agreed that DCAO will be deputed in the
        MOHFW by June 2005. This would help avoiding current dual reporting by the CGA
        staff in the MOHFW. It has also been agreed that the FMAU will be headed by a senior
        official from accounts and audit cadre. At least 4 to 5 System Analyst positions will be
        created to ensure continuity of the computer based financial system in the FMAU. It will
        be agreed with the MOFHW that instead of creating new positions, the option of transfer
        of existing staff will be considered.

(iii)   The Financial Management Improvement component of HNPSP will contain a TA
        component to bring the FMAU at the final stages of level 3 as defined by DfID supported
        FMRP and GOB FMAU guidelines. By March 2005, agreement will be reached between
        MOHFW, MOF and DP to this effect.

(iv)    As under the HNPSP, the fund flow and accounting will follow CGA accounting system
        and there is a need to separate the accounting function from the internal audit, the current
        staff size of the erstwhile PFC may be redundant. It is recommended that staff doing
        internal audit function in the PFC be discontinued or placed under other units in the
        MOHFW.

(v)     Given FMAU‘s (erstwhile PFC part) manual accounting records and books and little
        exposure to computerized accounting and reporting system and internal audit without any
        tangible impact on the overall development program of the sector, and Government‘s
        recent move for a unified budget system, it is recommended that PFC‘s function be
        scaled down to dealing with determining donors expenditure eligibility and payment
        request to the donors. For this, current staff size would be reduced from 37 to 10.

LD and DDO:
(i)    LD do not have uniform staffing pattern, some have more than required and some are
       without any FM staff. At the field level of DDO, the same person is responsible for job
       with a conflict of interest like handling cash as well as accounting for it. Most of the
       DDO are doctors and have little knowledge of financial management rules and techniques
       resulting in many irregularities.

(ii)    It has been agreed that FMAU will make an assessment of current staff pattern in all the
        LD and DDO by June 2005 and recommend internal adjustment among LD. It has also
        been agreed that LD and DDO being the key health sector cost centres will have
        designated staff for dealing with FM activities.




                                                105
(iii)   A comprehensive training module covering sector FM rules, regulations, policy and
        procedures including audit will be prepared which will be form the basis for periodic
        training. As the previous training under HPSP proved to be in effective, a consulting firm
        will be hired to design training modules as well as for training. The updated FM
        Handbook will also be used as training material. All budget holders, FM staff and auditor
        will undergo such training within six months of credit effectiveness.

12.     Internal Audit:

(i)     There is no single unit in the MOHFW for internal audit. Currently internal audit is
        carried out by PFC for development expenditure while internal audit unit under the Joint
        Secretary (Administration and Personnel Management) carries out revenue audit. In some
        LD, internal audit units conduct internal audit for revenue expenditure, reporting to
        immediate line manager. Though a large number of staff are designated for this task,
        none of the internal audits are effective and add any value to the sector program.
        Leakages, misuse and mismanagement of resources remain a major deterrent to overall
        improvement of financial management in the health sector.

(ii)    To strengthen internal audit in the Ministry and to ensure effective periodic monitoring of
        financial and operational activities in the sector, it has been agreed that the internal audit
        function would be outsourced to audit firms with TOR acceptable to DP to carry out half
        yearly audit for the program. There is need for GOB officials to be involved otherwise
        internal auditors hired from the private sector will not get proper access to GOB records.
        FMAU will liaise with and facilitate the performance of the internal audit.

(iii)   The firm of auditors is expected to be in place by June 30, 2005 and will be appointed for
        first two years. Depending upon performance of the auditors, the same or new auditors
        will be appointed for subsequent years. MOHFW will share internal audit report with DP
        within one month of the completion of the audit. The internal audit report will be an
        important input for FM supervision, Annual Program Review of HNPSP and timely
        corrective action. The FM training module for HNPSP FM would include internal audit,
        roles and responsibilities of management, its impact and effectiveness.

13.     External Audit:

(i)     MOHFW and the DP agreed to a single audit arrangement for the health sector. The
        fragmentation of external audit responsibility between three directorates will be replaced
        by a composite team drawn from three directorates to audit the health sector program.
        This has been discussed with the C&AG. It has been agreed that such composite team or
        ―audit directorate Consortium team‖ would be given adequate training on the financial
        and accounting set up of HNPSP.

(ii)    An Agreement on scope, coverage and reporting on audit needs has been reached with
        the Auditor General.

(iii)   The audit report will be submitted to the secretariat of the donor Consortium within six
        months of the end of each fiscal year. The secretariat will review the audit report, share it
        with the DP and provide joint comments to MOHFW within one month of the receipts of
        audit report. Any audit findings related to corrupt practices will be dealt with by Bank‘s
        Anti-corruption Unit in accordance with its procedures.



                                                106
(iv)    To facilitate audit settlement process, agreement will be reached that objections should be
        split up by functional areas. The report should further sub-divided into direct project aid
        by DP and concerned LD. The existing centrally arranged tripartite meetings at the
        ministry level will be spread over the concerned LD and DDO office and at the district
        levels. Audit team and FMAU officials would draw up work plan within one month of
        final audit report on the process of audit follow up. Audit Committee together FMAU
        will provide quarterly update to the PSU of the Bank on settlement progress. Any major
        findings remaining unresolved beyond specified time frame will be subject to
        disallowable expenditure by the pooled donors.

(v)     Auditors training on the program specifics will be critical for effective audit under sector
        approach. It has agreed that the program will support auditors‘ training cost and will be
        part of overall FM Improvement Plan. The training module would specifically focus how
        to move away from current transaction specific audit to focusing more on systems and
        procedures and bring down trivial audit objections.

(vi)    Unless urgently required, additional audit by individual donors will be discontinued in
        HNPSP.

(vii)   All previous audit reports under HPSP have been received in time. GOB has agreed to
        submit an action plan on all the critical outstanding observations. The submission of
        evidence on the resolution of 50% (in terms of value) of outstanding critical audit
        observations was a condition for negotiations. The other pending observations which
        mainly relate to non-compliance with GOB rules and policy such as non deduction of
        tax/Vat, violation of PP provision, single source selection method not acceptable - will
        also be followed through by GOB. ARCS of the WB will keep track of the following
        audit for HNPSP:

        Implementing Agency           Audit                              Auditors
        MOHFW                         Program Financial Statements       Government auditor (C&AG)

14.     Financial Reporting and Monitoring:

(i)     GOB and the DP have agreed to accept a single set of Financial Monitoring Reports
        (FMRs) – largely based on the financial statements currently prepared by MOHFW.
        Under HPSP, additional reports provided information on sources of funds and
        expenditure for the sector and were submitted to the Bank along with withdrawal
        Application. The same set of reports which are generated by the mainstream accounting
        system of the GOB will be continued in HNPSP with minor modifications. FMAU will
        be responsible for consolidating financial information from all cost centers, preparing
        variance analysis for actual expenditure against budget, forecasting of quarterly estimated
        expenditure and reconciling information with LD and CGA arising out of monitoring of
        financial reports.

(ii)    Timely preparation of accurate financial reports for the sector will be one of the key FM
        performance indictors, which FMU will monitor along with other FM indicators outlined
        above(?).

(iii)   The DP have not complied with the reporting requirements of the MOHFW on the
        program expenditure directly incurred by the DP or by their appointed consultants. As a
        result, audit could not verify the authenticity of the Direct Project Aid (DPA) expenditure


                                                107
          in the financial Statement. This has resulted in huge number of pending audit objections
          now awaiting settlement. It has been agreed that in future, the AG would qualify the audit
          report to the exclude expenditure for which the documentation is with the DP.

       (iv) Quarterly Financial Statements (FMRs) would include the following reports: (i)
            Consolidated Sources and Uses of Funds Statement (ii) Sources and Uses of Funds Pool
            Donors (iii) Sources and Uses of funds Non-pool donors (iv) Uses of Funds by project
            components/ Activities ( as per Operational Plan) and (v) USD Forex Account (Health
            Account) Activity Statement.

15.       Information System:

(i)       The MOHFW and LD have exposure to Management Accounting Consolidation System
          (MACS) and mini MACS to keep track of expenditure. The FMAU prepares SOE with
          this automated system with the help of IT consultant. In a limited number of LD, MACS
          is used with the help of consultant. With recruitment of system analysts, it is expected
          that dependency on consultant will be reduced. FMAU will initially use the existing
          system to maintain accounts and generate financial reports. With the help of TA under
          the program, further streamlining of MACS including preparation of user manual and
          training will be done on computerization by June 2005.

16.       Fiduciary Role, Coordination and Supervision:

(i)       Under the oversight of IDA, a HNPSP Program Support Office (PSO) will guide,
          supervise and monitor all major issues affecting financial management of HNPSP. A full
          time Financial Management Specialist will be appointed in PSO to be primarily
          responsible for guiding and monitoring HNPSP FM work including monitoring of FM
          improvement plan. DP will periodically review PSO functioning to ensure its quality.
          Indicative TOR for PSO and its experts have been prepared.

(ii)      The key FM fiduciary work for which HPSO (in close liaison with the secretariat of the
          DP) will be responsible are (a) review FMRs and determine eligible expenditure (b) share
          copies of audit report with DP and provide it‘s the secretariat‘s reactions to GOB after
          discussing the audit in a Consortium meeting. Any serious issues raised by annual,
          special or procurement audit will be immediately taken up and will be notified to the
          GOB for action within a time-frame (d) any allegation of corruption will be dealt with by
          Bank‘s Anti-Corruption Unit in accordance with its procedures (e) facilitate joint
          supervision missions of DP and facilitate summarizing mission findings and (f) monitor
          specific FM actions that may require intensive follow up including review of FM
          performance indicators.

17.       Financial Management Improvement Plan:

The Government and the DP have agreed on a time-bound FM improvement plan to address
weaknesses identified in the FM assessment and to further strengthen FM capacity in the
MOHFW and LD. Below is the FM Improvement Plan:




                                                108
Actions/ Activities                                      Responsibilities    Completion
FM Framework for Health Sector Level:
- Update FM handbook to cover proposed changes           MOHFW               Dec. 2005
   under HNPSP
- Develop sector FM training strategy and module         MOHFW               Dec. 2005
- Prepare Sector Accounts and reports on a quarterly     MOHFW               Starting Oct.
   basis by consolidating expenditure from all sources                       2005
   - RPA (Govt), RPA (others), DPA to LD, DPA to
   PIUs
- Agree on HNPSP audit needs with C&AG and               C&AG                Mar. 2005
   combine three directorate‘s audit function into one
   consolidated audit report for the sector
- Audit training module for SWAp and HNPSP               MOHFW, C&AG, FIMA   Dec. 2005
   operation and auditors training
- MOHFW response on critical audit observations          MOHFW               Within 60 days of
                                                                             receipt of audit
                                                                             report
FM Capacity at the Ministry level:
- Placement of CAO function under the direct             MOHFW               June 2005
    supervision of MOHFW
- Depute DCAO in the MOHFW                               MOHFW               June 2005
- FMAU operation and computerization:                    MOHFW, MOF, DfID    June 2006
       (i) Bring FMAU at the final stages of level
       3 with permanent staff
       (ii) Upgrade MACS
       (iii) Operationalize Computerized Fund
       Disbursement system in selected LD
         (iv) Staff training
- Discontinue existing fragmented responsibility for     MOHFW               Jan. 2006
internal audit function in the MOHFW and contract out
the service to private audit firm with audit committee
being responsible for reviewing report and
recommending actions. Agree TOR for internal audit
- Introduce computerized inventory and assts             MOHFW               June 2005
management database both at the central and
selected LD and place the monitoring function
with MIS of the MOHFW
FM capacity at the Institution Level- LD:
-   Strict enforcement of MOF‘s executive order to       MOHFW               March 2005
    withhold fund release to LD unless SOE is
    submitted timely and Compilation Register is
    signed by all concerned
-   Assessment of FM staff doing job of conflict of      MOHFW               Dec. 2005
    interest and existing staff pattern for internal
    adjustment
-   Staff training                                       MOHFW               Dec. 2005




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18.    Disbursement arrangements:

The report based system of disbursement will be used for the program. Disbursement by the pool
donors will be made to the HNPSP FOREX account of GOB on the basis of quarterly FMRs. The
FMRs will include statement on funds requirement for the next two quarters. The details have
been captured in the section on funds flow.




                                             110
       Disbursement under the proposed credit will be made as indicated in the table below.

CATEGORY    TOTAL      IDA DFID EU                                     NETH. SIDA CIDA UNFPA
OF          ALLOCATION                                                 EMB.                  PERCENTAGE
            (UD$
EXPENDITURE                                                                                  OF
            MILLION)
                                                                                             FINANCING
Category 1 for             160               50     47      33         13    18.6 -    -     % of the
Performance. To                                                                              allocated amount
be spent on                                                                                  determined by
specific items                                                                               the Association
agreed upon                                                                                  on the basis of
during APR.                                                                                  annual
                                                                                             performance
                                                                                             according to
                                                                                             selected
                                                                                             indicators
Category 2:               100                30     29      20         8     11.3 -    -     100% of foreign
Contracted                                                                                   expenditures,
services of NGO,                                                                             100% of local
private sector,                                                                              expenditures. 13
and non-public
providers.

Category 3:               305                94     89      61         25     35.2   -      -     100% of foreign
Goods and works                                                                                   expenditures,
for the HNP                                                                                       100% of local
sector                                                                                            expenditures
                                                                                                  (ex-factory cost)
                                                                                                  and 65% of local
                                                                                                  expenditures for
                                                                                                  other items
                                                                                                  procured locally.
Category 4:               95.2               25.2   23.7    16.1       7.1    9.5    12.7   1.0   100% of foreign
Services, training                                                                                expenditures,
and studies.                                                                                      100% of local
                                                                                                  expenditures
Unallocated
Total:                    660.2              200    188.7   130.1      53.1   74.6   12.7   1.0


       Use of Statement of Expenditures (SOE):

       The program will use Report Based system of Disbursements. Disbursements will be made to the
       GOB FOREX account on the basis of FMRs received on a quarterly basis (See the section on
       Funds flow for more information).




       13
            There are no tax implications.


                                                                 111
                                             ANNEX X

                        PROCUREMENT IMPROVEMENT PLAN

A. General

Procurement for the proposed project would be carried out in accordance with the World Bank‘s
"Guidelines: Procurement Under IBRD Loans and IDA Credits" dated May 2004; the
"Guidelines: Selection and Employment of Consultants by World Bank Borrowers" dated May
2004, and ―The Public Procurement Regulations, 2003‖ promulgated by the Government of
Bangladesh (GOB) following the provisions stipulated in the Legal Agreement. The various items
under different expenditure categories are described in general below. For each contract to be
financed by the Credit, the different procurement methods or consultant selection methods, the
need for pre-qualification, estimated costs, prior review requirements, and time frame are agreed
between the Borrower and the Bank in the Procurement Plan. The Procurement Plan will be
updated at least every six months or as required, but not exceeding a twelve month period
between any two revisions, to reflect the actual project implementation needs and improvements
in institutional capacity.

Procurement of Goods: Goods procured under this project would include: pharmaceuticals,
contraceptives, medical equipment and other health sector supplies and goods. The procurement
will be done using the Bank‘s Procurement Guidelines and SBDs for all ICB, Shopping, and
Direct Contracting and PPR-2003 and SBDs, acceptable to the Bank, for NCB and other methods.

As of December 2004, among others, three major changes to the PPR-2003, regarding the time
allowed for preparation and submission of bids (21 days in place of 28 days), bid opening (in
cases of multipoint submission of bids time allowed up to 24 hours in place of 3 hours), and
direct contracting of public enterprises are not acceptable to the Bank and cannot be applied to
any procurement under HNPSP. Accordingly, 28 days shall be allowed for preparation and
submission of bids. The bid opening must take place within one hour of the deadline for bid
submission at one place and all contracts under NCB and Shopping thresholds should be subject
to competition. In case of any further amendment to the PPR-2003 inconsistent with IDA
Procurement Guidelines, the latter should be applicable to the extent of the effects of the
amendment.

Regarding ―Qualifications of the Bidder‖ NCB procurements of pharmaceuticals, contraceptives
and condoms, shall be in accordance with the qualification criteria of the Bank‘s SBDs for Health
Sector Goods (May 2004).

Selection of Consultants : It is envisaged that extensive procurement of services will be required
by GOB from individual consultants, consulting firms and NGOs particularly for service delivery
components of the program. Short lists of consultants for services estimated to cost less than $
200,000 equivalent per contract may be composed entirely of national consultants in accordance
with the provisions of paragraph 2.7 of the Consultant Guidelines. GOB may like to engage
universities, government research institutions, public training institutions, etc., also if required to
undertake assignments of special nature.

The procurement procedures and SBDs and RFPs to be used for each procurement method, as
well as model contracts for goods and services procured, are presented in the Project
Implementation Manual of HNPSP.



                                                 112
1. B. Assessment of the agencies’ capacity to implement procurement

Procurement activities will be carried out by the procuring entities (CMSD, DGFP, etc.)
functioning under the administrative control of the Ministry of Health and Family Welfare
(MOHFW). Since GOB does not have procurement cadre, the respective entities are staffed by
officials on secondment/deputation from other administrative departments in the positions from
Desk Officers to Directors.

Assessments of the capacity of the Implementing Agency to implement procurement actions for
the project were carried out by the Procurement Staff of the World Bank in August and
November, 2004. The assessment reviewed the organizational and institutional structure for
implementing the project and the interaction between the project‘s staff responsible for
procurement and the Ministry‘s relevant central unit for administration and finance.

The outcome of the assessment indicates that CMSD‘s and DGFP‘s capacity to undertake
procurement must be strengthened. At present, these two arms of the MOHFW, primarily
responsible for the procurement of goods under HNPSP have a total of 23 (15 in CMSD & 8 in
DGFP) staff fully dedicated to the procurement function. Of them, 8 (5 in CMSD & 3 in DGFP)
are trained to handle IDA and PPR 2003 procurement with some supervision. Balance 15 (10 in
CMSD & 5 in DGFP) staff who assist these 8 Desk Officers have yet to be trained in
procurement. They are merely assisting the Desk Officers. Thus there is limitation of the trained
staff in these two entities.

Current capacity of these two arms of MOHFW will be further revamped with formal and on the
job training offered by the Bank and the consultants hired to provide technical assistance. The
formal training includes presentations on the PPR-2003 and the Bank‘s procurement guidelines
and SBDs. In particular, the technical assistance that is anticipated for both CMSD and DGFP
will consist of: (i) direct TA by a group of international/national consultants for medical
technology and equipment that will be working on-site providing technical and procurement
support and on-the-job advice and coaching to CMSD staff; (ii) direct TA to DGFP from John
Snow Inc./DELIVER and from the consultants working with the Procurement Cell (new cell to be
created at the level of the Joint Secretary); (iii) New staff of the Procurement Cell will provide
technical support and oversight to the carrying-out of the procurement function in both procuring
arms, CMSD and DGFP. The Procurement Improvement Plan included in Annex 8 lays out the
measures that MOHFW needs to adopt so that they are better able to manage a higher threshold.
Such higher threshold will allow more reliance on public procurement regulations and country
systems.

2. Summary of Risk Analysis

 Risk                               Risk mitigating factors                                   Risk
                                                                                              rating
 Non implementation of Public       Implementation of the PPR-2003 and training of the        H
 Procurement Regulations-2003       concerned personnel of MOHFW on PPR-2003.
 Changes in the PPR-2003            In case of any amendment to the PPR-2003                  H
                                    inconsistent with IDA Procurement Guidelines, the
                                    latter shall be applicable to the extent of the effects
                                    of the amendment.



                                                113
Weak regulatory capacity to        Commission a study to look into how DDA capacity         H
guarantee quality                  to discharge its regulatory functions can be
pharmaceuticals.                   strengthened. Introduction of fast track registration
                                   (without unreasonable conditions attached) to
                                   address current restrictions on imports.

Inappropriate procurement          Initial procurement plan should be for at least 18       H
planning                           months. Subsequent plans should be updated at least
                                   every 6 months during execution of the project
                                   always covering next 18 months and each such
                                   updating shall be submitted to IDA for review and
                                   approval.
Lack of needs assessment for       Need based assessment for equipment should be            M
medical equipment.                 conducted and completed by June 2005.
                                   Adjustments of procurement plan to be done
                                   accordingly
Lack of quality control in         Technical assistance should be obtained to (i) assist    H
preparation of bidding             with document preparation (including technical
documents                          specifications) and (ii) enhancement of capacity of
                                   the technical staff by transfer of knowledge through
                                   on the job and formal training. The new
                                   Procurement and Logistic Monitoring Cell at
                                   ministry level under Jt. Secretary (Coordination)
                                   should monitor the above and ensure the
                                   compliance.
Invoking of extraneous             A technical expert, not a member of the Technical        H
conditions at the time of bid      Evaluation Committee, from the pool of Technical
evaluation that are not            Assistance should be present to advise on bid
stipulated in the bid documents.   evaluation.
Absence of both pre and post       Introduction of pre and post shipment inspection.        H
shipment inspection.
Delay in opening of Letters of     In the contracts under which payment is to be made       H
Credit.                            through Letters of Credit (L/C),a clause in the
                                   Special Conditions of Contract should be added to
                                   read as: "LC has to be opened within 14 days of
                                   signing of the contract. Interest shall be paid at the
                                   rate [insert rate] for delayed opening of LC for the
                                   number of days beyond fourteen days.”

Long delays in installation and    Technical Assistance should look into alternative        M
operation of equipment and         contracting modalities that will guarantee supply,
idling of equipment for lack of    installation, operation and service of the equipment.
repair and maintenance.
Absence of procurement audits.     Appropriate mechanism of procurement audits              M
                                   should be introduced.
Absence of procurement cadre       There should be a cadre of professionals in              M
and frequent transfers of the      procurement and logistics which may be combined



                                              114
 staff deployed for procurement      for all departments/ministries. In the meantime
 functions.                          whoever is drawn for this job should stay in the
                                     position at least for five years.
 Lack of accountability in the       Enforcement of accountability through appropriate   H
 procurement entities                instruments e.g. Service rules, Conduct rules,
                                     Disciplinary rules etc..
The overall project risk for procurement is “high”.


              Procurement Improvement Plan (January 2005 – June 2006)

Actions                                                          Responsibilities        Completion Date
Create a Procurement and Logistics Monitoring Cell under               MOHFW             July 1, 2005
the Joint Secretary (Coordination) to promote the                                        (establishment of
stewardship role of the MOHFW                                                            PLMC)
        To provide quality assurance and control to bidding
        documents preparation and bid evaluation and
        overseeing that all contracts are awarded within the
        initial bid validity period and opening of the L/C
        within 14 days of signing of the contract, where
        applicable.

        To ensure compliance with PPR-2003 and its
        companion, Instructions on Processing and
        Approval Timetable

   Hire Technical Assistance to support Medical                  PLMC, PSO, CMSD         July – December
           Equipment Procurement                                                         2005
        Needs assessment
        Development of updated Table of Equipment
        Drafting/updating of Technical Specifications
        Participation of technical expert from the TA
        pool in Bid Evaluation
        Analyze alternative contracting modalities for
        medical equipment to ensure timely supply,
        installation, operation and service.
Hire Technical Assistance to establish MIS of all                PLMC, PSO, DGFP,        January 2006
procurement entities such as, DGFP and CMSD                      CMSD
Introduction of Prequalification (for drug suppliers), regular   PLMC, PSO, DGFP and     Pre and Post -
pre and post-shipment                                            CMSD                    shipment Inspectors
                                                                                         in place by December
                                                                                         2005
                                                                                         Pre -Q – June 2006
Training Courses, Quarterly Workshops and Procurement            MOHFW, PLMC, PSO        First Course: January
Audit                                                                                    2005 (held)
                                                                                         Second Course:
                                                                                         March 2005Quarterly
                                                                                         workshops: July 2005
                                                                                         – June 2006


                                                115
                                                                                           First procurement
                                                                                           audit – June 2006
Quality Assurance and Quality |Control
Commission Study to analyze and make recommendations           PLMC, PSO, DDA              December 2005
on the capacity of the regulatory authority (DDA) to ensure
drug quality
Commission a feasibility study for the establishment of a
State-of-the Art National Laboratory for testing of            PLMC, PSO, DDA              December 2005
medicines (manufactured locally and imported)


C. Procurement Plan

The Borrower, at appraisal, developed a procurement plan for project implementation which
provides the basis for the procurement methods. This plan has been agreed between the Borrower
and the Project Team on December 8, 2004 and is available at the World Bank office in Dhaka. It
will also be available in the project‘s database and in the Bank‘s external website. The
Procurement Plan will be updated always for the next 18 months period in agreement with the
Project Team every six months or as required, but not exceeding a twelve-month period between
any two revisions, to reflect the actual project implementation needs and improvements in
institutional capacity. The procurement plan is consistent with the Bank‘s simplification agenda
and as such, an effort was made to streamline and reduce the number of contracts subject to prior
review by prioritizing, re-arranging the categories, and forming packages that can be fully
financed by IDA (net of taxes).
There are quite a number of contract packages which are valued equivalent to above Taka
50 million (up to which is the current delegation to respective DGs of Health and Family
Planning) that require approval of Ministry (Minister). There are 4 contract packages
above Taka 250 million each that require approval of CCGP (Cabinet Committee on
Government Purchase). The procuring entities must adhere to the time table prescribed
by the PPPAP(Public Procurement Processing and Approval Procedures) promulgated in
accordance with Regulation-57.1 of PPR-2003.

D. Frequency of Procurement Supervision

To enhance capacity and quality of output quarterly supervision workshops, led by MOHFW with
the participation of the World Bank and other DPs, will be conducted. These will aim at
reviewing the over-all progress achieved and problems identified during the previous quarter.

To determine whether the procedures, processes and documentation for procurement and
contracting were in accordance with the DCA and that the procurement carried out achieved the
expected economy and efficiency gains, an annual procurement audit of HNPSP will be
performed. In addition, routine post review of procurement actions will be undertaken by the
World Bank for at least 20% of the contract packages under post-review category; however, the
MOHFW shall disseminate all complaints received against all contract packages irrespective of
post- and prior-review thresholds, including the disposal of the complaint. Post-review contracts
subjected to complaints will come under mandatory post review by the Bank and if it is found
that the complaint was not addressed satisfactorily, such contracts will be declared
misprocurement.



                                               116
         E. Details of the Procurement Arrangements Involving International Competition

         1. Goods, Works, and Non Consulting Services



         (a) List of contract packages to be procured following ICB, NCB, Shopping and direct
         contracting:

         3. (A) Procurement Plan of CMSD

  1            2             3            4          5              6                 7       8             9

 Ref.     Contract        Estimated   Procurem     P-Q          Domestic       Review     Expected     Comments
 No.    (Description)        Cost        ent                   Preference      by Bank      Bid-
                           Million     Method                   (yes/no)       (Prior /   Opening
                            Takas                                               Post)       Date
                             US$
                           millions

G-513   Radiological         185.60 ICB            No          Available if   Prior       03/13/05
        Eqpt, inst and        3.146                            purchaser
        accessories                                            choose
G-514   X-ray                29.849 ICB            No          Available if   Prior       03/28/05
        accessories           0.506                            purchaser
                                                               choose
G-515   Imaging eqpt.,        80.25 ICB            No          Available if   Prior       04/12/05
        instr and            1.3559                            purchaser
        accessories                                            choose
G-516   Cardiology           47.729 ICB            No          Available if   Prior       04/27/05   Put on hold until
        eqpt, inst and        0.809                            purchaser                             study on needs
        accessories                                            choose                                assessment
                                                                                                     completed
G-517   Anaesthetic         141.922 ICB            No          Available if   Prior       05/12/05
        eqpt, inst and        2.405                            purchaser
        accssories                                             choose
G-518   Endoscopic          164.812 ICB            No          Available if   Prior       03/29/05   Put on hold until
        Eqpt                 2.7934                            purchaser                             study on needs
                                                               choose                                assessment
                                                                                                     completed
G-519   Diathermy             74.97 ICB            No          Available if   Prior       04/13/05
        machines             1.2707                            purchaser
                                                               choose
G-520   Autoclaves,          63.628 ICB            No          Available if   Prior       04/28/05
        sterilizers and      1.0784                            purchaser
        suction                                                choose
        apparatus
G-521   OT Eqpt, inst.       95.054 ICB            No          Available if   Prior       05/13/05
        and                   1.611                            purchaser
        accessories                                            choose


                                                         117
G-522   OT lights and     65.365 ICB    No         Available if   Prior   05/28/05
        accessories        1.108                   purchaser
                                                   choose
G-523   Ophthalmologi     15.185 ICB    No         Available if   Post    04/12/05
        cal eqpt, inst.    0.257                   purchaser
        and                                        choose
        accessories
G-524   ENT eqpt.,        31.486 ICB    No         Available if   Prior   04/27/05
        inst. and          0.534                   purchaser
        accessories                                choose
G-525   Orthopaedic       90.638 ICB    No         Available if   Prior   05/12/05
        eqpt, inst and     1.536                   purchaser
        accessories                                choose
G-526   Urology eqpt,     41.706 ICB    No         Available if   Prior   05/27/05   Put on hold until
        inst and          0.7069                   purchaser                         study on needs
        accessories                                choose                            assessment
                                                                                     completed
G-527   Gynae-Obs         10.542 ICB    No         Available if   Post    06/11/05
        eqpt, inst and     0.179                   purchaser
        accessories                                choose
G-528   Dental Equpt      67.486 ICB    No         Available if   Prior   05/29/05
        & Acce.            1.144                   purchaser
                                                   choose
G-529   Paediatric        97.928 ICB    No         Available if   Prior   05/10/05
        Equipment &        1.660                   purchaser
        insrt.                                     choose
G-530   Linear             40.00 ICB    No         Available if   Prior   04/25/05   Put on hold until
        Accelerator       0.6779                   purchaser                         study on needs
                                                   choose                            assessment
                                                                                     completed
G-531   Cobalt therapy     10.00 ICB    No         Available if   Post    05/10/05   Put on hold until
        machine           0.1695                   purchaser                         study on needs
                                                   choose                            assessment
                                                                                     completed
G-532   Irradum 192          0.90 ICB   No         Available if   Post    05/25/05
        Gradytherapy      0.0153                   purchaser
        machine                                    choose

G-533   Surgical          42.139 ICB    No         Available if   Prior   06/09/05
        instruments,       0.714                   purchaser
        accessories                                choose
        and consum
G-534   Medical Eqpt,     30.743 ICB    No         Available if   Prior   06/24/05
        instr and          0.521                   purchaser
        accessories                                choose
G-535   Lab eqpts,        222.595 ICB   No         Available if   Prior   05/10/05
        instr and           3.773                  purchaser
        accessories                                choose
G-536   Gas cylinders     23.874 ICB    No         Available if   Prior   05/25/05
        (Oxy and Nitr     0.4046                   purchaser


                                             118
        Oxide)                                      choose
G-537   First aid box       8.278 ICB    No         Available if   Post    06/09/05
                           0.1403                   purchaser
                                                    choose
G-538   Hospital and       10.362 NCB    No         N/A            Post    06/10/05
        other linen        0.1756
G-539   Pharmaceutica      24.416 ICB    May        Available if   Prior   03/02/05
        ls(Tab.            0.4138        be         purchaser
        Preparations                                choose
        FY 04-05)
G-540   Pharmaceutica      20.250 ICB    May        Available if   Prior   02/27/05
        ls-                0.3432        be         purchaser
        Anthelmintic                                choose
        preparations-
        FY 04-05
G-541   Tab. DEC            75.00 ICB    May        Available if   Prior   02/26/05
        (Diethylcarba      1.2712        be         purchaser
        mazine-                                     choose
        100mg)
G-542   Pharmaceutica       12.86 NCB    May        N/A            Post    03/01/05
        ls Cap.            0.2180        be
        Preparations –
        FY 04-05
G-543   Pharmaceutica      16.700 NCB    May        N/A.           Post    03/01/05
        ls-Inj., syrups    0.2831        be
        & others-FY
        04-05
G-544   I.V.Fluid and      11.675 ICB    May        No             Prior   02/28/05
        ORS                0.3824        be
G-545   High protein        9.340 NCB    No         N/A            Post    07/09/05
        biscuits and       0.1979
        other essentials
        for schools
G-548   Computers,         119.320 ICB   No         Available if   Prior   03/19/05
        peripherals and     2.0223                  purchaser
        accessories                                 choose
G-549   Audiovisual         8.595 ICB    No         Available if   Post    03/21/05
        telecom eqpt       0.1456                   purchaser
        and                                         choose
        accessories
G-551   Refrigerator,      29.154 ICB    No         N/A            Prior   06/24/05
        Air coolers        0.4941
        and
        dehumidifiers
G-552   Crockery and        6.646 NCB    No         N/A            Post    06/25/05
        kitchen            0.1126
        ancillaries
G-553   Hospital           50.446 ICB    No         Available if   Prior   07/24/05
        furniture          0.8550                   purchaser
                                                    choose


                                              119
G-556   Vehicles          127.440 ICB   No         Available if   Prior   07/10/05
        (Ambul,            2.1600                  purchaser
        CRVs,                                      choose
        microbús,
        pick-up vans
        etc)
G-558   Insecticides         7.08 NCB   No         N/A            Post    07/26/05
                          0.1200
G-559   Post mortem       14.305 ICB    No         Available if   Post    08/24/05
        instruments       0.2424                   purchaser
        and                                        choose
        accessories
G-560   Pharmaceutica     21.693 ICB    May        N/A            Prior   08/25/05
        ls(Tab.           0.3677        be
        Preparations
        FY 05-06)
G-561   Pharmaceutica     20.250 ICB    May        N/A            Prior   05/10/05
        ls-               0.3432        be
        Anthelmintic
        preparations-
        FY 05-06
G-562   Pharmaceutica     14.859 NCB    May        N/A            Post    09/09/05
        ls Cap.           0.2518        be
        Preparations –
        FY 05-06
G-563   Pharmaceutica     13.627 NCB    May        No.            Post    05/25/05
        ls-Inj., syrups   0.2309        be
        & others-FY
        05-06
G-564   Pharmaceutica     11.329 NCB    May        No.            Post    06/09/05
        ls-               0.1920        be
        ointment,crea
        ms, drops &
        others-FY-05-
        06
G-565   I.V.Fluid and     10.618 NCB    May        No             Post    06/24/05
        ORS               0.1800        be
G-566   Anti TB           16.229 ICB    May        Available if   Post    03/26/05
        Drugs-FY 04-      0.2751        be         purchaser
        05                                         choose
G-567   Anti TB           76.384 ICB    May        Available if   Prior   04/24/05
        Drugs-FY 05-      1.2946        be         purchaser
        06                                         choose
G-568   Lab.               1.610 NCB    No         No             Post    03/03/05
        Chemicals-        0.0273
        reagents FY
        04-05
G-569   Lab.               6.971 NCB    No         No             Post    03/27/05
        Chemicals-        0.1181
        reagents FY



                                             120
        05-06
G-570   Lab MSR, ace        11.604 NCB       No         No   Post   03/05/05
        &                   0.1967
        consumables
        FY 04-05
G-571   Lab MSR, ace        13.599 NCB       No         No   Post   04/11/05
        &                   0.2305
        consumables
        FY 05-06
G-572   Vaccines, Sera     138.791 UNICEF
        & other for         2.3524
        EPI
G-573   Eqpt, Inst,         89.687 UNICEF
        Acce                1.5201

        TOTAL            2673.519 (Taka m)




                                                  121
               4. (B) Procurement Plan of DFP

   1                    2                3             4            5           6                 7             8           9
Ref. No.             Contract       Estimated      Procureme       P-Q      Domestic           Review        Expected    Com-
                   (Description)       Cost            nt                   Preferenc         by Bank          Bid-      ments
                                    (Taka, m)       Method                      e           (Prior / Post)   Opening
                                      US($)                                  (yes/no)                          Date
                                     millions
GFP-          Condom-GOB              503.1            ICB          No        Yes               Prior        24 Jul 05
01/05         Condom-SMC              8.5271
GFP-          Low Dose Oral            2000            ICB          No        Yes               Prior        24 Jul 05
02/05         Pill                   33.8983
GFP-          Injectables              1200            LIB          No         No               Prior        24 Jul 05
03/05                                20.3390
GFP-          DDS Kits for             665             ICB          No        Yes               Prior        24 Jul 05
04/05         FPandMCH               11.2712
              Services
GFP-          Norplant, Trocar        225.6            ICB          No        Yes               Prior        19 Jul 05
05/05         and Canula              3.8237
GFP-          IUD                       23             ICB          No        Yes               Prior        29 Jul 05
06/05                                 0.3898
GFP-          MVA Kits                   6             ICB          No        Yes               Post         14 Aug 05
07/05                                 0.1017
GFP-          Elastomeric             72.75            ICB          No        Yes               Prior        29 Jul 05
08/05         Matrix Dressing         1.2330
GFP-          Standard Dose             12             ICB          No        Yes               Post         29 Aug 05
09/05         Oral Pill               0.2034
GFP-          Sharee, Lungi and        300             ICB          No        Yes               Prior        31 Jul 05
10/05         Blanket                 5.0847
GFP-          N.S.V. Kit                60             ICB          No        Yes               Prior        09 Jul 05
11/05                                 1.0169
GFP-          FWC Kits                 29.7            ICB          No        Yes               Prior        13 Aug 05
12/05                                 0.5034
GFP-          Motor Cycle              125             ICB          No        Yes               Prior        31 Aug 05
13/05                                 2.1186
  Total       5222.15 (Taka m)

               (b) All contracts estimated at or above US$300,000 will be procured through ICB and subject to
               prior review by the Bank. All direct contracts will also be subject to prior review. All
               procurement plans, including any revisions will be prior-reviewed by the Bank.

               (c) The first NCB contract of each agency of every calendar year will be subject to prior review

               2. Consulting Services

               (a) List of consulting assignments with short-list of international firms.

           1                    2                  3                4            5                6                 7
        Ref. No.          Description of       Estimated        Selection     Review          Exp. Pro-          Comments
                           Assignment            Cost           Method        by Bank         posal Sub-


                                                                122
                                                                                      mission
CS-01         Proc and Logistics       US$ 1.75        Individuals     Prior        03/31/05       Two individual
              Monitoring Cell          million                                                     consultants for full
                                                                                                   life of the project @
                                                                                                   US$ 25,000 per
                                                                                                   month
CS-02         Medical Eqpt. Tech.      US$ 3.00        QBS             Prior        03/31/05       Needed throughout
              Assistance.              million                                                     the project life.
CS-03         QA/QC-National           US$ 0.50        QBS             Prior        06/30/05
              Drug Policy              million
CS-04         Selection of STC to      US$ 0.50        Individual      Prior        05/31/05
              support MOHFW
CS-05         Organizational           US$ 0.50        Fixed           Prior        07/31/05
              Assessment of            million         Budget
              B‘Desh Nutrition
              Program
CS-06         B‘desh HNPSP             US$ 0.50        Fixed           Prior        02/28/05
              Evaluation Plan          million         Budget
CS-07         Establishing Project     US$ 4.00        QCBS            Prior        06/30/05       Needed throughout
              Support Office           million                                                     the project life.
CS-08         Health Information       US$ 1.00        QCBS            Prior        07/31/05
              Improvement Plan         million
CS-09         MSA                      US$ 4.00        QCBS            Prior        03/31/05       Needed throughout
                                       million                                                     the project life
CS-10         Procurement Audit        US$0.50         QCBS            Prior        07/01/06       Annual
                                       million
Total                                  US$
                                       16.25M

        (b) Consultancy services estimated to cost above US$ 100,000 equivalent for firms and/or NGOs,
        and US$ 50,000 for individuals per contract and all single source selection of consultants for
        firms and/or NGOs will be subject to prior review by the Bank.

        (c) Short lists composed entirely of national consultants: Short lists of consultants for services
        estimated to cost less than US$ 200,000 equivalent per contract may be composed entirely of
        national consultants in accordance with the provisions of paragraph 2.7 of the Consultant
        Guidelines.

        Emergency Procurement
        In emergency resulting from natural disasters it is critical to effect deliveries of the most
        immediate pharmaceuticals, vaccines, nutritional supplements and necessary medical supplies in
        the shortest possible time. In such emergencies, procurement directly from UN Agencies and
        through shopping and direct contracting methods with appropriate justification will be
        acceptable.




                                                         123

								
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