Docstoc

ALBANIA Financial Monitoring Unit

Document Sample
ALBANIA Financial Monitoring Unit Powered By Docstoc
					                       ALBANIA


                  CAPACITY BUILDING TO
     SUPPORT THE IMPLEMENTATION OF THE INTEGRATED
                    PLANNING SYSTEM


                         DRAFT




                     OPERATIONAL
                       MANUAL




                         MAY 2008


________________________________________________________1
OPERATIONAL MANUAL
TABLE OF CONTENTS

TABLE OF CONTENTS ..................................................................................................................................... 2
LIST OF ABBREVIATIONS .............................................................................................................................. 4
INTRODUCTION ................................................................................................................................................ 6
I. THE PROJECT ................................................................................................................................................ 7
  A. PROJECT OBJECTIVES ................................................................................................................................ 7
  B. PROJECT DESCRIPTION .............................................................................................................................. 7
  D. RESULTS FRAMEWORK AND KEY OUTPUT INDICATORS ............................................................... 15
II. PROJECT ORGANIZATION ..................................................................................................................... 18
  A. PROJECT MANAGEMENT ......................................................................................................................... 18
  B. GOVERNMENT STRUCTURES AND THEIR RESPONSIBILITIES .................................................... 18
  C. IMPLEMENTATION ARRANGEMENTS .................................................................................................. 21
IV. PROCUREMENT ARRANGEMENTS ..................................................................................................... 22
  A. PROCUREMENT PLANNING .................................................................................................................... 22
  B. PACKAGES BREAKDOWN ....................................................................................................................... 24
  C. SELECTION OF PROCUREMENT METHOD ........................................................................................... 24
  D. MAIN PROCUREMENT STEPS AND PROCEDURES .............................................................................. 24
  F. EVALUATION COMMITTEES ................................................................................................................... 26
  E. REVIEW BY THE WORLD BANK OF PROCUREMENT DECISIONS .................................................... 27
V. CONTRACT ADMINISTRATION ............................................................................................................. 28
  A. CONTRACT PREPARATION ..................................................................................................................... 28
  B. IDENTIFYING THE SUPPLIERS ................................................................................................................ 28
  C. PROPOSALS................................................................................................................................................. 29
  D. SELECTION OF SUPPLIERS ...................................................................................................................... 29
  E. CONTRACT SIGNING ................................................................................................................................. 29
  F. CONTRACT MONITORING ........................................................................................................................ 29
  G. SCHEDULE OF MONITORING .................................................................................................................. 30
  H. CORRECTIVE ACTIONS ............................................................................................................................ 30
VI. FINANCIAL MANAGEMENT .................................................................................................................. 30
  A. BUDGETING ..................................................................................................................................................... 30
  B. FLOW OF FUNDS AND DISBURSEMENT PROCEDURES ........................................................................................ 30
  C. DESIGNATED ACCOUNT (DA) .......................................................................................................................... 31
  D. EXECUTION OF DISBURSEMENTS ..................................................................................................................... 31
  E. PRESENTATION OF INVOICES ............................................................................................................................ 32
  F. CHECKING OF INVOICES ................................................................................................................................... 32
  G. AUTHORIZATION OF PAYMENTS....................................................................................................................... 33
  H. PAYMENT ORDERS ........................................................................................................................................... 33
  I. CLOSURE OF CONTRACT ................................................................................................................................... 33
  J. ACCOUNTING SOFTWARE.................................................................................................................................. 33
  K. MONTHLY / PERIODIC PROCESSING SCHEDULES ............................................................................. 33
  L. REPORTING ................................................................................................................................................. 34
  M. INTERNAL CONTROL ............................................................................................................................... 34
      Internal control systems .............................................................................................................................. 34
      accounting control system ........................................................................................................................... 35
      Financial Control System............................................................................................................................ 35
      Bank Control ............................................................................................................................................... 35


 ________________________________________________________2
OPERATIONAL MANUAL
     Fixed Assets Control ................................................................................................................................... 35
 N. REPORT ON IRREGULARITIES AND FRAUDS ...................................................................................... 35
 O. TOR OF THE AUDIT ................................................................................................................................... 36
 P. DOCUMENTATION ........................................................................................................................................... 38
VII. REPORTING PROCESS........................................................................................................................... 38
REPORTING TO THE DONORS ...................................................................................................................... 39




 ________________________________________________________3
OPERATIONAL MANUAL
LIST OF ABBREVIATIONS

AFMIS      Albania Financial Management Information System
AMoFTS     Albania Ministry of Finance Treasury System
AWP        Annual Work Plan
BMZ        German Federal Ministry for Economic Cooperation and Development
CM         Component Manager
COM        Council of Ministers
DFID       UK Department for International Development
DOPA        Department of Public Administration
DMD        Debt Management Department
DSDC       Department for Strategy and Donor Co-ordination
DTS        Donor Technical Secretariat
DP         Development Partner
EU         European Union
GMC        Government Modernization Committee
GoA        Government of Albania
GPN        General Procurement Notice
FMR        Financial Management Report
INSTAT     Albanian Statistical Institute
IPS        Integrated Planning System
IPSIS      Integrated Planning System Information System
IU         Implementing Unit at the MoF
MDTF       Multi-donor trust fund
MoI        Ministry of Integration
MIS        Management information system
MIP        Ministry Integrated Plan
MoF        Ministry of Finance
MTBP       Medium-Term Budget Program
MTLM       Management Team in Line Ministries
NOBL       New Organic Budget Law
NSDI       National Strategy for Development and Integration
OSCE       Organization for Security and Co-operation in Europe
OM         Operational Manual
PIC        Public Investment Committee
PID         Public Investment Department
PIM         Public Investment Management
PIT        Project Implementation Team
PMC        Project Management Committee
SAA         Stability and Association Agreement
SIDA       Swedish International Development Cooperation Agency
SPC        Strategic Planning Committee
SPEM       Strengthening Public Expenditure Management
SPN        Specific Procurement Notice
TA         Technical Assistance

_______________________________________________________ 4
OPERATIONAL MANUAL
TIPA       Training Institute for Public Administration
UNDP       United Nations Development Program
WGSBI      Working Group on Strategy and Budget Integration




_______________________________________________________ 5
OPERATIONAL MANUAL
INTRODUCTION
This Operational Manual (OM) compiles the guidelines to be followed during the day-to-day
implementation of the Multi Donor Trust Fund for Capacity Building Support to Implement the
Integrated Planning System in Albania (IPS MDTF). The OM refers to the IPS Project
document, Grant Agreement, and other Government documents developed during project
preparation and appraisal, decisions of the Council of Ministers of Albania, as well as the
Procurement Plan prepared upon effectiveness of the grant. The OM is of mandatory application
for the use of the proceeds of the IPS MDTF, and has been agreed between the beneficiary (the
Government of Albania) and the donors through the World Bank as administrator of the grant.
Furthermore, any modifications or adjustments to the OM require the explicit no objection of the
World Bank.

The Operational Manual:
      Describes the objectives, components and activities of the IPS MDTF;
      Describes the two-level project management structure determined by the GoA, which
       includes policy-making as well as operational structures to support IPS-related activities;
      Specifies the duties and responsibilities with respect to the implementation of
       components and activities, procurement, financing and disbursement, planning and
       reporting at different levels;
    Presents the project Financial Management System (FMS), project accounting procedures,
     and operations of Trust Fund (TF) and Special Account (SA);
    Describes the procurement guidelines to be followed, as well as the duties and
     responsibilities of Governmental Bodies and IU with respect to procurement of goods,
     consulting services, training and civil works;
    Presents the project planning procedures and the duties and responsibilities of political
     and administrative project implementation bodies as well as the duties of the IU with
     respect to the planning process;
    Details the project monitoring and reporting system;
    Outlines the mechanims of interaction between the beneficiary and the donors through the
     World Bank as IPS MDTF administrator.




_______________________________________________________ 6
OPERATIONAL MANUAL
I. THE PROJECT

A. PROJECT OBJECTIVES

The project‟s development objective is „To ensure that the Government of Albania‟s core policy
and financial processes function in a coherent, efficient and integrated manner.‟ This will be
accomplished by building sufficient and sustainable capacity in line ministries to participate fully
in IPS.

B. PROJECT DESCRIPTION

The Integrated Planning System (IPS) is a broad planning and monitoring framework which aims
to ensure that the core policy and financial processes developed by the GoA function in an
integrated manner. These core processes are:
      The National Strategy for Development and Integration (NSDI), which establishes the
       GoA‟s medium to longer term goals and strategies for all sectors.
      The Medium-Term Budget Program (MTBP), which requires each ministry to develop a
       3-year plan to deliver program outputs to achieve its policy objectives and goals within
       the ministry‟s expenditure ceiling, as set out in the government‟s fiscal plan.
The IPS aims to provide a set of operating principles and supporting structures to ensure that
government planning and monitoring activities take place in as efficient and harmonized a way
as possible. In sum, IPS is neither a new nor a separate planning system. Nor is it an attempt to
amalgamate existing processes within a single process. Given the overriding importance of the
European integration agenda, the IPS is seen as a significant contributor to enhancing the
government‟s ability to deliver this agenda.

The project will help to support effective implementation of the IPS principles across the whole
government, as set out in the IPS Implementation Plan produced by the Department for Strategy
and Donor Coordination (DSDC, Council of Ministers) in April 2006. The focus of activities will
be as follows:
      2008: consolidation of IPS, to ensure that processes are understood and institutionalized
       across government, with targeted technical assistance for specific ministry products,
      2009: full implementation in all ministries, with emphasis placed on securing technical
       assistance, organizational development and improving ministry planning and budgeting
       capacity,
      2010: quality of implementation, with emphasis placed on further strengthening
       accountability mechanisms and increasing ministry service delivery capacity.


The project will be implemented over three years and will have eight inter-related components:


_______________________________________________________ 7
OPERATIONAL MANUAL
Component 1: SAA Implementation and EU assistance programming and reporting capacities
             strengthened
Component 2: Implement Medium-Term Budget Program
Component 3: Public Investment Management
Component 4: Macro-economic Forecasting and Debt Management
Component 5: IPS coordination, oversight, awareness, communication
Component 6: NSDI and supporting sector/cross cutting strategies
Component 7: Aid Coordination
Component 8: Monitoring and Reporting



                              Project Management




                               Coordination of
                              national strategies




                                DSDC, MoF,
                                   MoI

                Technical                        Development of
                Assistance                       human resource
                                                 and technology




_______________________________________________________ 8
OPERATIONAL MANUAL
The project is a technical assistance grant with a focus on institution and capacity building in line
ministries. The use of a TA operation is most appropriate given the need to strengthen the
government agencies that will be directly responsible for implementation of the IPS. The current
available amount of financing as per the Grant Agreement between the World Bank and
Albanian Government is 3,6 million Euro. This amount is expected to increase, subject to
complete disbursement from other donors of the total committed amount, as well as to the
contribution of the Governments of Italy and Switzerland.



CONTRIBUTING DONORS                                   AMOUNT (EUR MILLION)
Austria                                               0.50
European Commission                                   1.00
Netherlands                                           1.00
Sweden – SIDA                                         0.43
United Kingdom – DFID                                 2.21

TOTAL Pledges to Date                                 5,141
Net of administration fee 5%                          4,884
Bank execution portion1                               0,267
Grant amount for recipient execution                  4,617
80% of the above amount2                              3,693




C. PROJECT COMPONENTS


1: SAA Implementation and EU assistance programming and reporting
capacities strengthened
This component seeks to assess and enhance administrative capacities of the central public
administration to implement the SAA. This objective will be achieved through: (i) the
development of a comprehensive training plan to strengthen capacity within GoA in the

1
 This amount corresponds to the costs incurred by the World Bank for the technical supervision of the IPS MTBF,
and is additional to the standard grant administration fee.
2
  The holding currency for this TF is EURO. In cases where the pledge currency is different from the holding
currency, the Grant Agreement can be signed only after the entire donor contribution has been received and
converted to holding currency. As this is a multi-donor fund where donor contributions are received in different
currencies and then converted to the holding currency, the standard practice is to sign the grant agreement for 80%
of the total donor contributions (net of admin fee) initially, and upon receipt of entire donor contribution from all
donors, sign a grant amendment for the balance amount.


_______________________________________________________ 9
OPERATIONAL MANUAL
implementation of the European Integration Agenda, in line with the capacity building of the IPS
Implementation; and (ii) the preparation of a needs assessment and action plan in those entities
most closely related to SAA implementation, coming up with recommendations on fields of
intervention where urgent steps should be taken to increase capacities or establish new structures.
The implementation of this component will start by mid 2008.

      1. Key output indicators:

               o Improvement of public sector capacity for the implementation of SAA based on a
                 needs assessment, and supported by a comprehensive training to be applied by the
                 Department of Public Administration3.
               o A functional review and institutional development action plan for the 3 key
                 institutions determined by the Ministry of European Integration as critical for
                 achieving SAA commitments.



2: Implement Medium-Term Budget Program

This component seeks to strengthen the role of the General Directorate of Budget as the key
actor in managing the MTBP process in all line ministries, with the goal of enabling the line
ministries to support producing an MTBP that connects to NSDI /SAA and all other sector and
cross-cutting strategies. This will be possible through additional support to the Working Group
on Strategy, Budgeting and Integration, and program teams in line ministries as well, to build
their capacity to implement effectively MoF‟s Budget Instructions when preparing MTBP
submission, as well as the enhancement of the IT platform for MTBP and its linkage with the
Treasury and other financial management systems.

Key output indicators:

      o Enhance skills of staff at the General Budget Department and line ministries that will be
        included in the MTBP process, on issues related to budget planning, analysis, costing,
        and performance measurement, supported by a comprehensive training program;
      o Internal rules and procedures developed for each line ministry in conjunction with the
        overall MTBP Manual;
      o Practical Guide adopted for each Sector (policy area/programs) that will facilitate the
        MTBP preparation in each Line Ministry which, inter alia, shall include practical
        explanation with regards to defining policy goals, policy objectives, policy standards,
        outputs and activities and clear examples of core performance indicators related to the
        policy area/program; ;
      o Update and migrate the existing MTBP software as part of Treasury System Module;
      o Training of IT staff and functional (replaced by budget staff) for the new MTBP
        platform.



3
    The training program itself is not to be funded with IPS MDTF resources.

_______________________________________________________ 10
OPERATIONAL MANUAL
3: Public Investment Management

This component seeks to establish and then to integrate the Public Investment Management
processes into MTBP cycle. To achieve this, it will be very important to focus on the following
activities: (1) support the MoF to further consolidate the PIM processes and procedures and
fully integrate them into the MTBP process; (2) Design, develop, test and implement an IT
application to capture public investment project data (foreign and domestic financed), and
computerize the PIM procedures as part of Treasury and MTBP module; (3) Support and training
of MoF, IT/Budget functional team on the new application; (4) Support the integration of
procedures for externally-financed projects into the PIM process; (5) Support and train MoF and
line ministry staff to operate the new PIM processes in the PIM manual, (6) Train MoF and line
ministries‟ staff in cost/benefit analysis for PI‟s, (7) Support to ensure that capacity is in place to
ensure on-going (post 2008) training in operation of the PIM-IT delivered through TIPA; (8)
Support to further develop monitoring procedures for public investment projects; and (9) Support
to develop some pilot processes at the DPIM for pilot cases of post evaluation of investments.
This component will run from mid 2008 to end 2010.

Key output indicators:

   o PIM processes and procedures further improved;
   o PIM procedures become integral part of MTBP‟s Operational Manual;
   o MoF and line ministries‟ staff to build sector specific capacity for cost-benefit analyses,
     through dedicated TA
   o The IT architecture and functionality to address PIM requirements defined and their
     integration with other planning and financial management applications achieved;
   o 80% of the value of domestic and foreign financed projects approved go through the PIM
     review mechanism;
   o X percent increasing of donor-financed projects captured in the new IT system.




4: Macro-economic Forecasting and Debt Management

4.1: Macro-economic Forecasting

This sub-component seeks to reinforce the capacity of government to use macro-economic and fiscal
forecasting in the MTBP process. It will focus on building capacity in the Macroeconomic
Department and determining the forecasting methodology/model most appropriate for Albania.
While work will continue with the Macroeconomic Department, more effort will be made to
work with ministries who provide key data used in the macroeconomic analyses and
macroeconomic forecast.

Key output indicators:
        o Upgraded capabilities for macroeconomic analyses and forecasting, including new
             or improved modeling tools;

_______________________________________________________ 11
OPERATIONAL MANUAL
         o A cooperation model (procedure) between all member of Macroeconomic
           Committee established;


4.2: Debt Management

This sub-component will support capacity building in debt portfolio assessment and formulation
of Debt Management Strategy, and enhancement of human resources of the Debt Department.
The revision of duties will be tailored to the capacity building support that will be given to DMD
in financial market development, debt instruments, risk and sustainability analysis, negotiating
foreign investments, and developing debt data according to international standards.

Key output indicators:

         o A new structure for the Debt Management Department, based on sound
           international practices and addressing the proposed business model, proposed;
         o Updated debt management strategy, adopted;
         o Technical tools in risk assessment, largely used;
         o Manual for overall operation risk management produced and adopted;
         o Manual for Loan Agreements produced and adopted
         o Regulations/legal acts drafted to facilitate implementation of Legal Framework.



5: IPS coordination, oversight, awareness, communication

This component comprises two projects: provision of policy advice to the Department of
Strategy and Donor Coordination (DSDC) and implementation of the IPS and IPS-related
communications materials to distribute across the public administration; and to work with DoPA
and TIPA to incorporate IPS into existing training courses wherever applicable. Improvement of
the coordination of all processes of the IPS and full implementation in the line ministries

Both projects would be initiated and managed by DSDC, and this will start by mid 2008.

Key output indicators;
        o Line ministries capacities for coordination of IPS implementation increased
             through a set of training programs delivered to the different public administration
             levels in line ministries (including Management Teams and Working Groups on
             Budgeting and Integration), in cooperation with TIPA;
        o Communication process on IPS issues to be further developed;
        o A practice on routine communication to be established;
        o Deadlines in integrated planning calendar met by SPC, GMC and SBI Working
             Groups (Deadline on report publication met).




_______________________________________________________ 12
OPERATIONAL MANUAL
6: NSDI and supporting sector and cross cutting strategies

This component seeks to implement NSDI by building policy analysis capacity to ensure that the
goals/objectives of NSDI are effectively translated into concrete policies and programs at the
ministry level. The component will take care that cross-government standards/procedures are
established to guide this work. This component will ensure that all IPS products (sector and
crosscutting strategies, MTBP submissions, Ministry Integrated Plans and Ministry Monitoring
Plans) reflect GoA‟s EU/NATO integration commitments.

Key output indicators:
        o Develop expertise and capacity across all line ministries on policy development and
             evaluation of implementation and reporting procedures according to EU
             requirements based on training on best practices and policy analysis;
        o Increase capacity of DSDC staff to review the sector strategies and to evaluate,
             evaluate policy/ and program effectiveness, initiate or participate in evaluations of
             policy/ and program effectiveness;
        o Ensure that the policy goals in all sector and cross-cutting strategies are fully
             consistent with those guiding MTBP preparation from 2008 onward;.
        o Ensured that SPC decisions on Policy Priority Notes by line ministries are reflected
             in MTBP;
        o Manual for Impact Assessment to GMC designed and delivered;
        o Core IPS products, including:
                      Policy Priorities Note reflected in MTBP
                      Ministry Integrated Plans
                      Periodical reporting against MMP to the SPC
                      NSDI Annual Progress Report
                      New standards for the policy and legal review processes, delivered;
        o Ensure that NSDI priorities and MTBP process provide the basis for the
             programming of IPA and other donor‟s assistance.



7: Aid Coordination

This component seeks to establish the external assistance regulations and procedures,,
preparation of the annual report on external assistance performance, and ministry
training/support. This project will implement the design work completed under the UNDP-
managed multi-donor trust fund which will be completed by mid to late 2008.

Key output indicators:
        o A regulation that gives the DSDC the mandate of coordinating external assistance
             will be prepared and adopted;
        o A methodology for including external assistance at each stage of MTPB/ budget
             process will be produced and adopted;
        o A permanent communication with Donor technical secretariat will improve the
             quality of coordination.

_______________________________________________________ 13
OPERATIONAL MANUAL
         o A report on External Assistance will be produced annually;
         o A continuous training for DSDC will be provided aiming at extending the
           knowledge of internal staff on external assistance procedures.


8: Monitoring and Reporting

This component seeks to design a monitoring and reporting system that meets GoA and external
needs. The system should eventually meet all EU integration requirements and help the
Ministries to deliver their periodical reports in due time.
It will also be used to strengthen the usage of monitoring tools, such as Ministry Monitoring
plans and Ministry Annual Reports, both in DSDC and line ministries. Part of the functional
design of the system will derive from the outputs of the IPSIS/EAMIS feasibility study financed
through UNDP.
The MoF has already prepared an action plan to strengthen the institutional capacity of key MoF
operational departments and Treasury District Offices (TDOs), and to move from existing core
Treasury System (AMoFTS) to an integrated Albania Financial Management Information
System (AFMIS) in three phases. This component will also support this plan through several key
actions (Phase 2 and 3) to ensure that the proper advisory support and training are provided while
preparing the strategic plans and developing necessary monitoring and reporting solutions, in
line with the IPS objectives, as follows:
Phase 1: Improvement of AMoFTS functionality and interfaces [2008] (through MoF funds).
Phase 2: Strengthening the MoF capacity for budget planning, execution and reporting [2008-09]
 2.1 Advisory support for the MoF in resolution of operational issues, development of
 strategic plans and strengthening capacity
   •   Developing a strategy to strengthen the Treasury within the MoF (legislative and
       institutional changes, role and responsibilities) in line with the Public Finance Sector
       Strategy (2007-2013).
   •   Developing a plan for the establishment of an operational support and training unit within
       the MoF for sustainability of the future AFMIS solutions and strengthening the MoF IT
       Dept.
   •   Developing the integrated AFMIS functional and technical requirements (including
       MTBP and PIM, as well as IPSIS and EAMIS needs), and support for security solutions,
       auditing, testing and acceptance.
 2.2 Advisory support to improve the AFMIS infrastructure (security, GovNet).
 2.3 Improvement of AFMIS infrastructure (enhance MoF IT Dept and GovNet security).
Phase 3: Implementation of AFMIS [2008-10]
   •   Developing new roles/reports and customization of TS to comply with LOB & IPSAS
   •   Development of an interface with the DoPA HRMIS and Payroll DB.
   •   Development of MTBP and PIM modules, integrated with the AMoFTS system.


_______________________________________________________ 14
OPERATIONAL MANUAL
     •   Development of additional modules to support IPSIS and EAMIS for DSDC.
The core treasury system (AMoFTS) will be used as the basis for future AFMIS implementation
and a modular approach will be followed to expand the existing system capabilities gradually, as
a cost effective solution.

Key output indicators:
    An IPSIS system in place
    An EAMIS system in place
    All the IT software, hardware, network and security solutions in place, functioning
      properly
    The report of the ministries published periodically
    The staff of line ministries has taken ownership over the product
    Support to the GoA in training staff for the implementation of the monitoring system, as
      well as in other systems such as MTBP and public investment.
    Upgrade and interconnectivity of existing systems to ensure integrated monitoring of
      financial and non-financial flows, including an upgraded debt management system linked
      to the other MoF systems and interfaces with the Human Resources database.
    IPSIS and EAMIS will be adequately linked with other relevant systems such as debt
      management, public investment, and treasury.



D. RESULTS FRAMEWORK AND KEY OUTPUT INDICATORS

Project Development Objective       Project objective Indicators                               Project core products
The project‟s development               1.   Increased and transparent linkage between         1. An Integrated Planning Calendar
objective is „To ensure that                 NSDI objectives and government policy and         issued to ministries at the beginning
                                             budget allocations and expenditures               of each year.
the Government of Albania‟s             2.   Ministry program policy goals and objectives      2.MTBP is part of each Ministry
core policy and financial                    clearly indicate major NSDI (including EI)        Integrated Plans
processes function in a                      commitments from 2008.                            3. A single External Assistance
coherent,     efficient    and          3.   Clear link between sector strategies and public   Orientation document          revised
integrated manner.‟       This               investment project selection from 2008            annually to identify priority areas
                                             onwards.                                          where external assistance is needed
will be accomplished by                 4.   MTBP ceilings respected in ministry budgets       4. An IPS/EA Information System
building     sufficient    and               (% gap) from 2008 onwards.                        (IPSIS) and EAMIS produced to
sustainable capacity in line        .                                                          integrate reports on progress
                                                                                               achieved.
ministries to participate fully                                                                5.    Ministry Annual Reports
in IPS.                                                                                        prepared to match the results
                                                                                               achieved vs. the targets set.

Component Development Objective     Key output indicators                                      Expected Outcomes
1. EU assistance programming and    1. A functional review and institutional development       1. EU assistance is programmed
reporting capacities strengthened   action plan within the line Ministries of the EU           and implemented effectively in
by assessing and enhancing          Integration practice                                       line with Government priorities
administrative capacities of the    2. A training program for improving the public sector      and MTBP
central public administration to    capacities to implement SAA.                               2. The capacities of the MoI and
implement the SAA.                  3. DOPA in charge for the implementation of the            Line ministries are improved for
                                    designed training program.                                 reporting on absorption of EU


_______________________________________________________ 15
OPERATIONAL MANUAL
                                                                                                 funds
                                                                                                 3. Periodical information
                                                                                                 prepared on EU assistance
                                     .                                                           contracting and disbursement
                                                                                                 figures.
2. All ministries produce MTBPs      1. A comprehensive training program designed for the        1.Practical Guide adopted for
from 2008 that connect to NSDI       staff of General budget dept and line ministries on         each Sector (policy
and sectoral & cross-cutting         budget planning, analysis, costing, and performance         area/programs) that will
strategies.                          measurement.                                                facilitate the MTBP preparation
                                     2.Internal rules and procedures developed for each line     in each Line Ministry which,
                                     ministry in conjunction with the overall MTBP Manual        inter alia, shall include practical
                                     3. A training module for all the Program Management         explanation with regards to
                                     Teams (PMT) staff on the requirements of each               defining policy goals, policy
                                     element of MTBP preparation                                 objectives, policy standards,
                                     4. Development of new MTBP software as part of              outputs and activities and clear
                                     Treasury System Module.                                     examples of core performance
                                     5. A Training of IT staff and Budget functional staff for   indicators related to the policy
                                     the new MTBP platform                                       area/program;
                                                                                                 2. Migration of MTBP as part of
                                                                                                 an Integrated Albania Financial
                                                                                                 Management              Information
                                                                                                 System (AFMIS)
3. Public Investment Management      1. PIM procedures become integral part of MTBP‟s            1.Public Investments implement
processes and procedures             Operational Manual                                          properly following the list o
established and integrated into      2.Adequate staff at MoF and line Ministries receive         priorities .
MTBP cycle                           dedicated TA to build sector specific capacity for cost-
                                     benefit analyses                                            2. PIM functionality successfully
                                     3. IT architecture able to address PIM requirements and     integrated with MTBP (as part
                                     integrate them with other planning and financial            of AFMIS)
                                     management applications.
                                     4. Continuous supervision of the external assistance.

4. Reinforcing the capacity of       1. Installing a new or improved models tool for             1.Timetable identifying macro-
government to use macro-             macroeconomic analyses and forecasting.                     economic outputs needed during
economic and fiscal forecasting in   2. A new model of cooperation between all members of        the annual planning and budget
the MTBP process.                    Macroeconomic Committee.                                    calendar, developed
                                     3. A restructuring for the Debt Management                  2. Macroeconomic and Fiscal
                                     Department, based on sound international practices          Department staff competent in
                                     4. Number of training courses/sessions on financial         the use of macroeconomic
                                     market     development,      instruments,     risk   and    modeling software.
                                     sustainability analysis, negotiating foreign investments,
                                     developing debt data according to international
                                     standards.

5. IPS Coordinating and              1.       Workshops to be designed and organized for         1.  IPS Reports Prepared to
communication mechanisms in              central and line ministries                                 inform SPC and GMC and
place and operating by mid 2008.     2.       A set of training delivered to the different           contributing donors of the
                                         public administration levels in Line Ministries             TF
                                         (incl Management Teams and Working Groups on            2. IPS calendar in place and
                                         Budgeting and Integration), in cooperation with         implemented annually
                                         TIPA.
                                     3.       communication process on IPS issues to be
                                         further developed
                                     4.       A practice on routine communication to be
                                         established
                                     5. Deadlines in integrated planning calendar met by

_______________________________________________________ 16
OPERATIONAL MANUAL
                                     SPC, GMC and SBI Working Groups ( Deadline on
                                     report publication met

6.     Policy analyses capacity      1.   Develop expertise and capacity across all               1.   Policy     Priorities   Note
improved to plan and implement            Ministries on policy development and evaluation              reflected in MTBP
NSDI strategies in each line              of implementation. Training on best practices and       2.   Ministry Integrated Plans
Ministry.                                 policy analysis.                                        3.   Periodical reporting against
                                     2.   Ministries on reporting procedures and format of             MMP to the SPC
                                          reports; project planning, development and              4.   NSDI Annual Progress
                                          management in order to face the EU requirements              Report
                                     3.   Increase capacity of DSDC staff to review the           5.   New standards for the
                                          sector strategies and to evaluate policy/ and                policy and legal review
                                          program effectiveness, initiate or participate in            processes
                                          evaluations of policy/ and program effectiveness
                                     4.   Ensure that the policy goals in all sector and cross-
                                          cutting strategies are fully consistent with those
                                          guiding MTBP preparation from 2008 onwards.
                                     5.   Ensured that SPC decisions on Policy Priority
                                          Notes by LM reflected in MTBP

7 Establishing the external          1.   A regulation will be designed to mandate the            1. Annual report on External
assistance regulations and                DSDC coordination role in coordinating external         Assistance
procedures,, preparation of the           assistance.                                             2. TF Mid-Term Review part
annual report on external            2.   A methodology for including external assistance at          of the Donor      dialog
assistance performance, and               each stage of MTPB/ budget process will be                  Newsletter
ministry training/support.                produced.
                                     3.   A permanent communication with Donor technical
                                          secretariat will improve the quality of
                                          coordination.
                                     4.   An annual report on External Assistance will be
                                          produced yearly.
                                     5.   A continuous training for DSDC will be provided
                                          aiming at extending the knowledge for internal
                                          staff.

8. Monitoring and reporting system   1. Implement the action plan to strengthen the               1.   An IPSIS system in place
that meets GoA and external needs    institutional capacity of key MoF operational                2.   An EAMIS system in place
in place by end 2010.                departments and Treasury District Offices (TDOs), and        3.   All the IT software and
                                     to move from existing core Treasury System                        hardware, network and
                                     (AMoFTS) to an integrated Albania Financial                       security solutions in place
                                     Management Information System (AFMIS) in three                    functioning properly
                                     phases.                                                      4.   The report of the ministries
                                     2.Develop, implement, and test the IPS monitoring                 published periodically
                                     system, ensuring that it covers monitoring requirements      5.   The staff of line ministries
                                     for NSDI, MTBP, Government Program, EU and                        has taken ownership over
                                     NATO Integration,                                                 the product
                                     3.Support to the GoA in training staff for the               6.   IPSIS and EAMIS will be
                                     implementation of the monitoring system, as well as in            adequately linked with other
                                     other systems such as MTBP and public investment.                 relevant systems such as
                                     4.Upgrade and interconnectivity of existing systems to            debt management, public
                                     ensure integrated monitoring of financial and non-                investment, and treasury
                                     financial flows, including an upgraded debt
                                     management system linked to the other




_______________________________________________________ 17
OPERATIONAL MANUAL
II. PROJECT ORGANIZATION
A. PROJECT MANAGEMENT

The project management is organized in two hierarchical levels. The first level which
represents the political bodies includes Strategic Planning Committee (SPC) and Government
Modernization Committee (GMC). At second level are the IPS TF Interministerial Working
Group (IPS TF IMWG), DSDC and MoF, and Working Group for Strategy, Budgeting and
Integration (GBSI)..

The responsibilities for day-to-day coordination, management and monitoring stay with
GBSI which have been established within line Ministries. DSDC and MoF will be
responsible for reporting to the WB and donors as well as for coordination with, MoI and line
Ministries. This coordination will aim to ensure that the components of the TA program are
implemented smoothly and on time and the agreed results are achieved.

Direct responsibility for implementation of TF activities will fall on Implementing Unit in the
Ministry of Finance. It will be responsible for managing the timely implementation of project
activities, including: managing the day-to-day aspects of project procurement and financial
management and monitoring and reporting of progress on contracts‟ execution. Management
responsibility for each component will be clearly assigned to the first level managers heading
the organizational units within IPS.


B. GOVERNMENT STRUCTURES AND THEIR RESPONSIBILITIES

Strategic Planning Committee was established by the Council of Ministers Decision number
14, on 30th of January 2006.
Responsibilities: (i) to approve the main objective of Integrated Planning System (IPS), (ii) to
approve the main directions of national development strategy, (iii) to determine and approve
the priorites of GoA, (iv) to approve the national framework of MTBP, (iv) to coordinate the
donors external assistance.
Membership: Chaired by the Prime Minister, the other members are Deputy Prime Minister,
Minister of Finance, Minister of Economy, Trade and Energy, Minister of Public Works,
Transport and Telecommunication, Minister of Integration
Meetings: SPC holds meetings once a month.

Government Modernization Committee was established by the Council of Ministers
Decision number 11 on 30th of January 2006.
Responsibilities: (i) Monitor IPS implementation. (ii) to ensure the technical process on
preparing the documentation of National Strategy and its coordination with the donor
community, (iii) to ensure capacity and structural building according to the recommendations
of the strategy ”the Consolidation of IPS”.




_______________________________________________________ 18
OPERATIONAL MANUAL
Membership: Chaired by the Deputy Prime Minister and includes the Minister of Finance,
Minister of Economy, Trade and Energy, Minister of Public Works, Transport and
Telecommunication, and Minister of Integration.
Meetings: GMC holds meetings once a month and notifies the Prime Minister every month
on work progress.

Working Groups on Budgeting, Planning and Integration was established by the Council
of Ministers Decision number 78 on 8th of May 2006.
Responsibilities: (i) To determine and ensure in each line Ministries that the objectives of
PIM objectives are well coordinated and PIM Report is produced. (ii) to ensure the technical
coordination on IPS (iii) to implement the IPS in line Ministries.
Membership: Chaired by the Minister (of the line Ministry), with the participation of key
Department Directors and the other members are to be decided at Ministerial level.
Meetings: GSBI holds meetings twice a month.

Management Teams on Sector Planning are created at Ministry or Agency level. These are
operative, on-the-field teams that are in charge of implementing IPS. These teams are called
in regularly to meetings by the Deputy Minister in each Ministry.

IPS TF Interministerial Working Group (IPS TF IMWG) was established by the Council of
Ministers Decision number 32 on 21st of March 2008.
Responsibilities: (i) Monitor the implementation of IPS and achievement of its goals, (ii) to
prepare and approve the time schedule of IPS activities (iii) Supervise the procurement and
financial plan of IPS TF, (iv) Ensure the proper running of the reporting system (v)
Coordinate activities with the benefitiaries on project implementation status, (vi) Monitor
results and inform the GMC and the donor community on the implementation status of IPS
TF projects.
Membership: Co-chairpersons are the Deputy Minister of Finance and the Director of DSDC,
and members are Deputy Minister of MoI, Deputy Minister of Economy, Deputy Minister of
Education, Deputy Minister of Health, General Director of the Budget Department in MoF,
General Director of DOPA, and one coordinator from DSDC.
Meetings: IPS Steering Committee holds meetings at least once in two months.


Implementing Unit is established within the MoF in compliance with the EC requirement to
have dedicated and sufficient structure responsible for implementation of the EU financed
programs under the Instrument for Pre-accession Assistance (IPA). In the meantime
Implementing Unit is implementing programs under other donors including the World Bank.
Implementing Unit will carry out procurement, financial management, monitoring and
evaluation with respect to the Project Components. Implementing Unit will be directly
involved in day-to-day operations for the implementation of the IPS Project. Procurement
and financial management will constitute one of the major functions.

Some of the implementing unit tasks include:
(a) Perform operations in accordance with the World Bank requirements;

_______________________________________________________ 19
OPERATIONAL MANUAL
(b) Ensure open and transparent information/ notification to interested suppliers and
    consultants on of the IPS procedures, requirements through GPS and SPN;
(c) Carry out all the procurement and contracting activities at the highest ethical and
    professional level;
(d) Design and implement proper financial management system efficient to manage the
    project resources.
(e) Oversee the adequate application of the Operational Manual
(f) Ensure that a procurement plan is prepared and kept updated;
(g) Informing on project progress on quarterly basis the IPS Steering Committee through a
    written report prepared according to the agreed FMR-Financial Management Report.




POLITICAL AND IMPLEMENTATION BODIES OF THE IPS PROJECT

                                Council of Ministers




                                Strategic Planning
     Inter-Ministerial           Committee/Gov.
       Committees             Modernization Committee
   respectively chaired
  by the Prime Minister
    and Deputy Prime                                             Operational Bodies
         Minister
                                      Minister

                                                                IPS TF Interministerial
                                                                Working Group (IPS TF
                                                                     IMWG ) on
                                                                 IPS implementation
                                  Working Group for
                                Strategy, Budgeting &
  Chaired by Minister.               Integration
  General Secretary acts                                              IU at MoF
   as IPS Coordinator.
  Membership includes
  DM, senior General &
      Departmental
        Directors             Sector/Program Working
                                Groups/ Management
                                                                 Management Teams
                                       Teams
                                                                  in line Ministries




_______________________________________________________ 20
OPERATIONAL MANUAL
C. IMPLEMENTATION ARRANGEMENTS

General supervision will be performed by the Steering Committee of the IPS,
Overall implementation of the TA program will be done under the oversight of the Deputy
Minister of Finance, and Director of DSDC. This model will apply generally to all
components of IPS.

RESPONSIBILITIES OF AGENCIES INVOLVED IN IPS IMPLEMENTATION

IPS          Procurement          Preparation Approval Procurement            Training       Monitoring
Components Planning               of ToR’s     of ToR’s Execution             Plan           and Evaluation
Component 1: IU                   DOPA      in Deputy   IU                    DoPA      in   DoPA, MoI, IPS
EU assistance                     collaboration    Minister of                collaboratio   Steering Committee,
programming                       with MoI         MoI,                       n      with    WB, IPS Support
capacities                                         DOPA                       MoEI           Group
strengthened                                       Director
Component 2        IU             General budget   Deputy        IU           General        MoF, Budget
Implement                         Director         Minister of                budget         Department, IPS
Medium-Term                                        MoF                        Director,      Steering Committee,
Budget                                                                        Deputy         WB, IPS Support
Program                                                                       MoF            Group
Component 3:       IU             PIM              Deputy        IU           PIM            MoF Budget
Public                            Department       Minister of                Department     Department, IPS
Investment                        Director         MoF                        Director       Steering Committee,
Management                                                                    Deputy         WB, IPS Support
                                                                              MoF            Group e
Component 4:       IU             Macro            Deputy        IU           Macro          Macro Department,
Macro-                            Department       Minister of                Department     IPS Steering
economic                          Director         MoF                        Director,      Committee, WB,
Forecasting                                                                   Deputy         IPS Support Group
                                                                              Minister
                                                                              MoF
Component 5:       IU             DSDC             Director of   IU           Director       Director DSDC IPS
IPS                                                DSDC                       DSDC           Steering Committee,
coordination,                                                                                WB, IPS Support
oversight,                                                                                   Group
awareness,
communication
Component 6:       IU             DSDC, Deputy     Director of   IU           Director       Director DSDC,
NSDI and                          Minister of      DSDC,                      DSDC,          Deputy MoF IPS
supporting                        MoF              Deputy                     Deputy         Steering Committee,
sector and cross                                   Minister                   Minister       WB, IPS Support
cutting                                            MoF                        MoF            Group
strategies
Component 7:       IU             DSDC, Deputy     Director of   IU           Director       Director DSDC,
Aid                               MoF              DSDC,                      DSDC,          Deputy MoF IPS
Coordination                                       Deputy                     Deputy         Steering Committee,
                                                   MoF                        Minister       WB, IPS Support

_______________________________________________________ 21
OPERATIONAL MANUAL
                                                                              MoF           Group
Component 8:     IU              MIS      joint   Deputy        IU            MIS joint     Deputy MoF,
Monitoring and                   committee (IT    Minister of                 committee     DSDC, IPS Steering
Reporting                        dept in MoF,     MoF and                     (IT dept in   Committee, WB,
                                 Gov Net dept     Director of                 MoF, Gov      IPS Support Group
                                 in      CoM,     DSDC                        Net dept in
                                 DSDC                                         CoM,
                                                                              DSDC,




IV. PROCUREMENT ARRANGEMENTS
Procurement for the proposed project 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 the
provisions stipulated in the Grant Agreement.


A. PROCUREMENT PLANNING


Pursuant to the terms and conditions set forth in TF name MDTF for Capacity Building and
Support to implement the IPS of the Grant Agreement (TF 090843), the IU shall, submit to
the World Bank for approval a revised Procurement Plan all the contracts to be financed
under this operation.. This Procurement Plan is prepared out of the MIP approved by the
Council of Minister. Any such plan should be agreed with the World Bank, and no bidding
procedure for the procurement of goods, works or consultants‟ services could start unless the
proposed contract has been included in the Procurement Plan. The 2008 Procurement Plan
shall be signed by Deputy Minister and Director of DCDS. The Procurement Plan should be
furnished to the World Bank for review and not objection

    1. According to the components of IPS the beneficiaries will prepared the ToR‟s and
       will send them to the IU.
    2. The ToR might represent needs for goods or services for a sole beneficiary or for a
       group of beneficiaries.
    3. On behalf of the recipient, the order initiating procurement, approval of ToRs and
       establishing of Evaluation Committee will be done in premises of Deputy Minister of
       Finance (formal approval); the DSDC‟s director will be informed accordingly and
       approve them in principal.


B THRESHOLDS AND PRIOR REVIEW BY THE BANK OF PROCUREMENT DECISIONS

The Procurement Plan shall set forth those contracts which shall be subject to the Bank‟s Prior
Review. All other contracts shall be subject to Post Review by the Bank.


_______________________________________________________ 22
OPERATIONAL MANUAL
Except as the Bank shall otherwise determine by notice to the Recipient, the following contracts shall
be subject to Prior Review by the Bank:

                   Procurement Method           Procurement method        Prior Review Threshold
                                                   threshold USD
      1.        ICB (Goods and Works)         > 500,000                 All contracts
      2.        NCB (Goods)                   < 500,000                 First two contracts and
                                                                        All contracts > 200,000
      3.        Shopping                      < 100,000                 First two contracts

      4.        Direct Contracts                                        All contracts
                     Selection Method                                     Prior Review Threshold
      1.        Competitive Methods                                     All contracts with estimated
                (Firms)                                                 cost equivalent or more than
                                                                        USD100,000
      2.        Single Source (Firms and                                All contracts
                individuals)
      3         Consultant Qualifications     QCBS =< 200,000           The first two contracts
      4.        Individual                                              All contracts with estimated
                                                                        cost equivalent or more than
                                                                        USD 50,000

The procedures to be followed for National Competitive Bidding processes shall be carried out using
standard bidding documents acceptable to the World Bank. The Bank and the Recipient should agree
in advance.


Short list comprising entirely of national consultants: Short list of consultants for services,
estimated to cost less than USD 100,000 equivalent per contract, may comprise entirely of
national consultants in accordance with the provisions of paragraph 2.7 of the Consultant
Guidelines.
.


Table 3
           Selection Method                     Thresholds (Euro)      Prior Review
 1.        Quality and Cost based selection     <65,000 (short list All
                                                could be all national
                                                firms);           More
                                                international firms
 2.        CQs                                  < =65,000              All
 2.        Individual Consultants (IC)                                 More than 30,000
                                                                       Euro




_______________________________________________________ 23
OPERATIONAL MANUAL
B. PACKAGES BREAKDOWN

Distribution of the goods and services to be procured into packages will be made at the stage
of Procurement Plan preparation, depending on Project requirements, description of goods
and services and the estimated amount allocated for the goods and services in the Financing
Agreement. The IPS Steering Committee will decide the procurements packages.

C. SELECTION OF PROCUREMENT METHOD

The particular method of procurement is selected at the stage of Project Procurement Plan
preparation. The selection is largely determined by the following factors:
(a)    Cost estimation of proposed bid;
(b)    Type and quantity of goods;
(c)    Complexity and scope of required works and services
(d)    Possibilities of procuring the required range of goods and services locally
(e)    Terms and conditions of the TF Agreement

The Financing Agreement has stipulated the following methods of procurement to be used in
the course of the Project:

Particular Methods of procurement of Goods
(a) Goods shall be procured under contract awarded on the basis of:
       - International Competitive Bidding (ICB)
       - National Competitive Bidding (NCB)
       - Shopping,
       - Direct contracting


Particular methods of Procurement of Consultants’ and services
a. Quality and Cost Based Selection (QCBS)
b. Selection under a fix budget
c. Least-Cost Selection (LCS)
d. Selection based on Consultant Qualification (CQ)
e. Single source selection
f. Selection of Individual Consultants (IC)
g. Sole Source Procedures for the selection of Individual Consultants


D. MAIN PROCUREMENT STEPS AND PROCEDURES

The IU will manage procurement operations under the Project in respect to procurement of
goods, works and services. This paragraph lists the key procurement operations to be carried
out by the IU. Operations related to specific procurement methods are described in greater
detail below under the Annexes to this Manual.


_______________________________________________________ 24
OPERATIONAL MANUAL
The IU, working in conjunction with MoF, DSDC and MoI, shall perform the following
procurement operations:

1. Preparation and updating the Procurement Plan. Furthermore, the IU is responsible to
    confirm that all the proposed activities are eligible and have been already listed in the
    Procurement Plan.
2. Preparation of technical specifications and terms of reference acceptable to the Bank (this
    is an institutional obligation of the direct beneficiary; the IU will review the ToRs and
    collaborate with Ministries staff to finalize ToRs).
3. Preparation of bidding documents and obtaining the Bank's “no objection”,
4. Notification and Advertising: Publication of the General Procurement Notice and
    Specific Procurement Notice, Invitation for Prequalification, and Invitation for
    Expression of Interest,
5. Issuing of RFP to SH-L companies/ or bidding documents to interested suppliers,
6. Receipt and registration of bids,
7. Submission bids to the Evaluation Committee for opening,
8. Registration and filing of Bid Security originals,
9. Preparation of summary technical evaluation report based on evaluations by the
    Evaluation Committee,
10. Submission of that report to the Bank and obtaining “no objection” for opening of the
    financial proposals (for services),
11. Upon permission from the Bid Evaluation Committee, arranging of public opening of
    financial proposals (for services),
12. Evaluation of financial proposals,
13. Preparation of summary report and submission of the report to the Bank for «no
    objection»,
14. Preparation of notification of award and issue to the successful bidder,
15. Preparation of draft contract and its finalization
16. Forwarding the draft contract to the successful bidder for signing,
17. Notifying the unsuccessful bidders and release of Bid Securities,
18. Forwarding the copy of contract to the Association for “no objection” and registration,
19. Receiving and filing the Performance Security original,
20. Contract administration,
21. Administration of payments to contractors pursuant to the section on Disbursement
    Procedures of this Manual,
Upon completion of the contract and after receipt of appropriate product the signature of the
acceptance will be as follows:

Signature of Acceptance4


No Product to be accepted             Signature of Acceptance
1  Sole Document                      Chair WGBSI
4
 The proposed procedure for formalizing the approval of new documents under different components , should
also give enough flexibility to the process and avoid unnecessary bureaucratic delays.

_______________________________________________________ 25
OPERATIONAL MANUAL
2     Methodology Document        IPS Steering Committee
3     Strategic Document          Chair of GMC
4     Software Application        Chair of GMC



F. EVALUATION COMMITTEES

The Evaluation Committee (EC) is a committee of experts appointed by the MOF Deputy
Minister to carry out the evaluation of the bids. The EC uses the evaluation criteria set out in
bidding documents (works, goods and non technical services) and the Data Sheet attached to
the RFP (consulting services). The EC is not authorized to change, amend, or modify the
technical specifications and TOR. Bider and consultants prepare their bids and proposals
based on the technical specifications and TOR included in the bidding documents and RFP.

The judgment of the EC members has to be technically sound and objective, strictly
complying with the procedures and evaluation criteria indicated in the biding documents and
RFP, and capable of providing an adequate explanation for each evaluation. The experience
of EC members in the disciplines related to the assignment and their familiarity with
evaluation techniques of bids and consultants‟ proposals are both important. The EC should
comprise individuals of comparable hierarchical levels and from the institution responsible
for the outcome of the project. When appointing the EC, the Recipient should seek the advice
of the team who drafted the TOR, who may indicate those qualification requirements of the
EC members that best fit the characteristics of the assignment.

Observing the above referenced requirements Evaluation Committees are set up to evaluate
bids for particular groups of contracts, and are composed at least by 3 members. The
Committees are set up in accordance with the annual Procurement Plans and particular needs
for each bid..

(a)    One/Two members from line Ministries
(b)    One/ two member from the MoF
(c)    One/two of DSDC
(d)    IU will serve as a secretariat to evaluate the procedures and assist the group meetings
       (usually two members). IU is in charge to take minutes of the meetings and prepare
       the Evaluation Reports.

Evaluators‟ impartiality is as important as their professional expertise and mastery of
evaluation techniques. Consultants and other stakeholders must be persuaded that the
evaluation process is objective, fair, and conducted strictly by the rules and procedures set
out by the bidding documents and the RFP. EC members must exhibit the highest standards
of integrity, which preclude any questionable affiliation with bidders or the short-listed
consultants, including as an employee, consultant, relative, or political or business affiliate.
Failure to comply should disqualify the EC candidate.


_______________________________________________________ 26
OPERATIONAL MANUAL
All candidates should disclose in advance any perceived, potential, or actual conflict of
interest that can affect their objectivity, even if doing so could lead to exclusion from the EC.
All EC members should sign a written agreement to abide by restrictions on transactions with
invited consultants to ensure that the credibility of the evaluation process is preserved and
confidence in the Borrower is maintained.

EC members should be appointed shortly before the deadline for submission of proposals to
reduce the risk of questionable contacts with potential bidders or shortlisted firms before the
submission of proposals.

Before starting the evaluation, the EC members should ensure that they
• have no conflicts of interest,
• understand the evaluation (bids) the rating and scoring system (consulting services),
• have been provided with evaluation worksheets, and
• agree on how to evaluate the proposals.

The Recipient decides whether to select EC members from its own staff or to employ
independent consultants. Whenever possible, the first option should be preferred because it
allows the Recipient to better assess (i) the integrity of the candidates, (ii) their professional
background and competence, and (iii) their familiarity with proposal evaluation techniques.

Assistance to the EC: If the Recipient cannot form a sufficiently competent and reliable EC,
it should appoint an independent consultant to assist the EC in the process of understanding
the selection procedures;; and carrying out the evaluation, including drafting of the technical
evaluation report. If requested with sufficient lead time, the World Bank can assist the
Borrower in identifying suitable independent experts.


Minutes of meeting shall be recorded by the assistant of the IU; at the end of evaluation
process concluded by the Evaluation Committee, the minutes of the meeting will be signed
duly by Evaluators and the two Representatives of the IU; The Evaluation Committee adopts
decisions in accordance with the relevant World Bank Procurement Guidelines. The decision
shall not be adopted until the Committee shall have confirmed the compliance with all
procedural formalities.

E. REVIEW BY THE WORLD BANK OF PROCUREMENT DECISIONS
The procurement Plan shall set forth those contracts which shall be subject to the World
Bank‟s Prior Review. All the other contracts shall be subject to Post Review by the World
Bank.

F. RIGHT TO INSPECT AND AUDIT
Each contract financed from the proceeds of this Grant shall provide that the suppliers,
contractors and subcontractors shall permit the World Bank, at its request, to inspect their
accounts and records relating to the procurement and performance of the contract and to have
said accounts and records audited by auditors appointed by the World Bank. The deliberate

_______________________________________________________ 27
OPERATIONAL MANUAL
and material violation by the supplier, contractor or subcontractor of such provision may
amount to obstructive practice.

The Bank shall declare a firm or individual ineligible, either indefinitely or for a stated
period, to be awarded a contract financed by the Bank, if it at any time determines that the
firm or individual has, directly or through an agent, engaged in corrupt, fraudulent, collusive,
coercive or obstructive practices in competing for, or in executing, a contract financed by the
World Bank Group.



V. CONTRACT ADMINISTRATION

The following guidelines and procedures outline the entire process of contract monitoring,
which shall be the responsibility of IU. To follow the Guidelines and Procedures, certain
actions regarding the contract performance and monitoring shall be mandatory, if uniformity,
efficiency and control are to be ensured. Award of contract is the IU main activity, and
mistakes or insufficient control will not only lead to delays in the progress of projects, but
also to additional, sometimes significant, costs.

A. CONTRACT PREPARATION
Contract preparation shall start with defining of Terms of Reference (ToR) according to the
Procurement Plan. The Tender Procedure and Procurement Service shall prepare the cost
estimate and finalize the ToR and, proceeding from the cost estimate and efficiency
considerations, it shall decide on the appropriate procurement method. The bidding
documents, budget estimate and procurement method shall be agreed with IU and the Bank.
Once the contract is defined, it shall be assigned a number, in accordance with the system
provided in accordance with the components (codes) in Procurement Plan. The Authorization
to start the procedures will be signed by Deputy Minister.

B. IDENTIFYING THE SUPPLIERS
IU will create a computer database of all the potential suppliers, to be subsequently used by
the Tender Procedure and Procurement Service for selection of suitable suppliers of goods
and services.5 At this stage, however, suppliers will have to rely on the available sources. IU
shall advertise in general and specialized publications by placing procurement notices with
invitation to interested suppliers/consultants to register at IU. The registration data shall be
used both for the database and for initial identification of potential suppliers. Until the
database is created, the Tender Procedure and Procurement Service shall use their own
system for registration of suppliers and exchange of information. However, the registration


5
 It is suggested that the IU organize a workshop or publish an announcement that will aim at creating a
database of all potential suppliers for different services under this specific project.


_______________________________________________________ 28
OPERATIONAL MANUAL
system should not preclude consultants and bidder/ suppliers to participate in project
activities.



C. PROPOSALS
All the proposals received shall be registered in the proposal registration database.6


D. SELECTION OF SUPPLIERS
Selection of suppliers shall be carried out in accordance with this Manual, Section
Procurement of Goods, Works and Services. All correspondence relating to a particular
contract shall be stored in the appropriate directory of the network unit.

E. CONTRACT SIGNING
Finalization of the contract and its preparation for signing shall be responsibility of the IU.
The contract will be signed by Deputy Minister of Ministry of Finance with the exception of
the packages related to the activities of DSDC in case the contract will be signed from the
Secretary General of the Council of Ministers and the activities related to component 1 where
the contracts will be signed from the DoPA director with the authorization of the Minister of
Interior. The Minister of Finance should recognize and formalize the Order authorizing the
deputy Minister of Finance for the following actions for all procurement packages: (i)
Establishing the Evaluation committee; (ii) Approving the ToRs; (iii) Contracts‟ signing to
be financed under the MDTF for IPS.
Each contract shall be stored in their respective directories, with the files‟ names shall be
identical to those of the contracts. If there should be several revisions of the contract, the
extensions shall show the revisions in the alphabetical order. The originals of the signed
contracts shall be kept in the IU central archive; one copy shall be kept in Technical
Department archive. A copy of the signed contract will be sent to the World Bank‟s office
within 10 consecutive days after the day of the contract signature.

F. CONTRACT MONITORING
IU shall monitor contract performance using official and unofficial methods. Unofficial
control shall consist of telephone enquiries and discussions with suppliers/consultants that
perform the task. Official control shall include definition of stages, results and main
components of contract execution process. The stages and dates shall be clearly stated in the
contract, and compliance with the set dates and achievement of specific results by suppliers


6
 It is suggested that the registration database have specific “fields” which information comes from the
proposals. 2 different databases can be designed; one with the info generated from the Letter of Expression of
Interest where info on different suppliers can be found, and another one as it is proposed here (from proposals).


_______________________________________________________ 29
OPERATIONAL MANUAL
shall constitute conditions for payment. Accordingly, the stages indicated in the contracts
shall be reference points for contract monitoring.7

G. SCHEDULE OF MONITORING
The IU shall plan their contract monitoring activities and include in their work plan the
supplier visits schedule, telephone calls, etc.


H. CORRECTIVE ACTIONS
Responsibilities of the IU shall also include corrective actions to be taken in case of non-
conformance or problems in contract execution. The IU in cooperation with the DCDS and
WGSBI carefully consider such situation and propose the solutions to the Deputy Minister
Finance. In some cases, an unofficial meeting will be sufficient, in other, however, an official
letter will be required. In case of serious problems, the IU must immediately advise the SPC
and IPS Support Group. The ensuing decisions, e.g. on amendments to contract, its
cancellation, etc, shall be made by the Deputy Minister of Finance with the Bank‟s approval.



VI. FINANCIAL MANAGEMENT
A. BUDGETING
The annual budget will be plan according to the procurement plan. All implementation
entities are responsible for the preparation of the budgets based on their respective
procurement plans – starting from 2008. When changes will be occurring in the procurement
plan and it will be revised, immediately the budget will be revised to. Changes in budget
planning for IPS components or activities will be approved by the co-chairs of IPS Steering
Committee, formally by Minister of Finance and will be sent to WB for having “NO
OBJECTION”.

B. FLOW OF FUNDS AND DISBURSEMENT PROCEDURES
The project funds are flowing from the World Bank Trust Fund to the designated accounts in
Bank of Albania (BOA) from which the funds are immediately transferred to a Project
Account (PA) in Euro opened formally in a commercial Bank They constitute 100% of the
total cost of all activities.
The finance specialist of IU, through accounting entries, keep track of the funding going to
this project enabling an appropriate reporting on the sources and uses of the project funds and
the remaining balance from World Bank Trust Fund for each component. The financial


7
  It is necessary to emphasize the following issues for the IU attention; (1) monitoring indicators for the contract
execution should be in place, (2) make sure to preserve the above information so that poor performing firms or
individuals are not contracted in the future, and (3) in all the contracts a clause should establish that firms or
individuals will not be fully paid if they do not deliver satisfactory or „as agreed” outputs.


_______________________________________________________ 30
OPERATIONAL MANUAL
specialist of the IU will consolidate all information provided by the Commercial Bank (ABA)
in order to have a consolidated situation of transfers and payments.
The table below sets forth the Category of item to be financed out of the proceeds of the TF, the
allocation of the amounts of the TF and the percentage of expenditures for items so to be:



 Category                                      Amount of the Grant                   Percentage of Expenditures
                                                    Allocated                              to be Financed
                                               (expressed in Euro)

  (1)   Goods,     consultants‟                       3,693,870                                  100%
 services,    Training     and
 Incremental Operating Costs8


 TOTAL AMOUNT                                         3,693,870



C. DESIGNATED ACCOUNT (DA)
The ceiling for the DA will be EUR 300,000. The IU manages the Designated Account
specifically opened for this project component, in the Bank of Albania to which the TF funds
will be transferred. The funds are then upon the request from IU transferred from the
Designated Account to the commercial bank from which eligible expenses related to the
project are paid. Withdrawal applications for the replenishments of the DA are sent to the
Bank at least every month, or when the balance of the DA is less than half of the initial
deposit. Supporting documents and records for replenishment will follow standard Bank
procedures and forms as described in Disbursement Handbook. (See Annex 2)


D. EXECUTION OF DISBURSEMENTS
All disbursements are performed against standard documentation as described in the Bank's
Disbursement Handbook (May 2006). Disbursements related to earmarked transactions are
administrated and prepared by the Finance specialist appointed in the sector of IU, on the
base of contract signed by the Vice Minister of Finance.
Bank funds are disbursed under the Bank‟s traditional procedures including Statements of
Expenditure (SoE) and direct payments. Supporting documentation should be provided with
each application for withdrawal:
For Request for Reimbursement

88
   “Operating Costs” means the reasonable and necessary incremental expenditures related to the operation of
the PMU, on account of Project implementation, management, coordination, and monitoring and evaluation, as
approved by the Bank on the basis of budgets acceptable to the Bank, and including, inter alia, the costs of: (i)
maintenance and operation of equipment and vehicles procured or used for the management of the Project; (ii)
salaries paid to staff hired for the purposes of the Project, other than civil servants‟ salaries; (iii) travel costs and
per diems; (iv) consumable office supplies; (v) communication, printing and publications; and (vi) costs of
translation and interpretation

_______________________________________________________ 31
OPERATIONAL MANUAL
(a) List of payments against contracts that are subject of World Bank‟s prior review
(b) Records, evidencing, eligible expenditure (copies of receipts, suppliers/consultants
    invoices) for payments for goods against contracts valued at Euro 80,000 equivalent or
    more for firms and at Euro 40,000 equivalent for individuals consultants.
(c) Statement of Expenditures for all other expenditures/contracts
For Reporting eligible expenditures paid from DA
 (a) List of payments against contracts that are subject to the World Bank‟s prior, review
 (b) Records, evidencing, eligible expenditure (copies of receipts, suppliers/consultants
     invoices) for payments for goods against contracts valued at Euro 80,000 equivalent or
     more for firms and at Euro 40,000 equivalent for individuals consultants
 (c) Statement of Expenditures for all other expenditures/contracts
 For request for Direct Payments
 (a) Records evidencing eligible expenditures (copies of receipts, supplier invoices)
Statements of Expenditure (SOE) and Withdraw Applications for disbursement of funds shall
be prepared under the responsibility of the IU‟s financial specialist and duly approved and
signed by deputy Minister of Finance (first signature) and the IU‟s director (second
signature).



E. PRESENTATION OF INVOICES
Invoices are submitted by the contractor or supplier as specified in the contract. Each invoice
shall clearly specify the corresponding work performed, or be supported by a statement of
works, as appropriate. The invoice shows the costs, separately, of the work done and the
taxes, the total to be paid, the contractor's/supplier's bank account to which payment should
be made, and the pertinent reference to the accompanying statement(s) of work. Invoices are
dated and signed by the contractor's/supplier's authorized representative. The invoice will
have the contract number, the product number as it foreseen in the payment schedule
included in the contract.

F. CHECKING OF INVOICES
For the invoices of Goods and Consulting Services is needed the confirmation from the final
Beneficiary9 or his delegated persons and then from the Financial Specialist in the IU. Except
in the event of duly proven force major, the total time that elapses between receipt of the invoice
by the Project and the issuance of the payment order to the bank (regarding payment to the
contractor/supplier) shall not exceed 28 working days. Compliance with this rule is a factor in
evaluation of the performance of Project staff concerned, as well as the performance of the
Project. The Acceptance Form (prepared by procurement specialist of the IU and duly signed
by beneficiary‟s authorized person and contractor‟s authorized person) on acceptance and
delivery of goods and services in accordance with technical specifications and ToRs under
the contract shall be attached to the invoice.



9
 Authorized persons heading the organizational units benefiting from the service or receiving the goods or
entitled to accept work.

_______________________________________________________ 32
OPERATIONAL MANUAL
G. AUTHORIZATION OF PAYMENTS
Authorization of a payment involves the following operations:
(1)     Preparation of a payment order for the net amount to be paid to the contractor's/
supplier's bank account as specified in the corresponding invoice;
(2)     Recording of the payment in the contract payment record.

H. PAYMENT ORDERS
Payment orders shall be signed by the IU director (first signature) and the financial specialist
(second signature). A photocopy of the signed payment orders and, if signature authority has
been delegated, of the instrument incorporating such delegation, shall be attached to the
invoice before it is placed in the file of supporting accounting documentation kept by the
financial specialists for use by the auditors.

I. CLOSURE OF CONTRACT
Upon final acceptance of the good and consultancies performed all retention of money or the
balance thereof should be realized. The contract at that time is closed and any un-disbursed
commitment voided.

J. ACCOUNTING SOFTWARE
The accounting system for IU relies on the reporting system that is place nowadays, which is
ALFA that was specifically designed for the World Bank. Projects Through the use of IU‟s
own account system the contracts details will be captured enabling the quarterly reporting for
each contract.

K. MONTHLY / PERIODIC PROCESSING SCHEDULES

The IU accountant shall perform formal reconciliation of special account and the government
account with accounting records at least monthly. The reconciliation shall be documented by
relevant print-outs from the software and shall be signed by Director of IU.
IU will be registered as users of the Client Connection Website maintained by the World
Bank (clientconnection.worldbank.org). This will help IU to have all the information on the
disbursement made under this Trust Fund.

      The IU accountant will perform other reconciliations as needed.

      The IU accountant will be responsible for the production of financial reports as
       outlined below and also responsible for the quality and consistency of the data
       provided in these reports. The FMRs to the Bank are due 45 days after the end of each
       quarter. Reporting of the agreed recurrent costs to be covered by the project will be
       made to the IU Director on request.

      The IU will propose a revision in budget only according to the revision in the
       procurement plan.




_______________________________________________________ 33
OPERATIONAL MANUAL
L. REPORTING
The Yearly Project Financial Statements will include
(a) To be designed only after the approval of the procurement plan

The formats for the quarterly Financial Monitoring Reports are attached as annex 2.
Financial reporting to the management for budgeting and for recurrent costs are greed with
the IU Director.

M. INTERNAL CONTROL
Internal control is essentially based on a proper segregation of duties which enables the four
eyes principle for each single transaction or decision making operation.

INTERNAL CONTROL SYSTEMS
The Project internal control systems should be able to ensure that financial records are
reliable and complete. In particular, the internal control system should ensure proper
recording and safeguarding of assets and resources.

a) Contract approval. Contracts entered into on behalf of the Project in respect of the project
will be approved and signed by the Deputy Minister of Finance.
b) Reconciliation with World Bank records. The project's financial records will be reconciled
with the World Bank's Monthly Disbursement Summary statement on a monthly basis by the
Financial Specialist of the IU.
c) Reconciliation of Designated Account. The balance on Designated Account for the
project's accounting records will be reconciled with statements received from the bank at
which the Designated Account is held on a monthly basis by the Financial Specialist
d) Budgetary control. The project's financial status as presented by the project's financial
statements will be prepared on a monthly basis by Financial Specialist. These project
financial statements will be accompanied on a quarterly basis by formal reports explaining
the financial status and progress of the project and reconciling the statements with the
project's budget as well as the project's financial indicators with the project's physical
progress.
f)Policies and Procedures – Chair person of SC and WGSBI/ need to be regularly informed
both of their overall objectives and the organizational policies and procedures which are to be
followed in order to ensure the achievement of the operational activity.
g) Authorization - the Project will have proper authorization limits and levels in place to
ensure only appropriate transactions are processed. These may include decision authority and
payment authorities
i) Documentation - the Project should have adequate policies and procedures on the
safekeeping of documentation especially confidential information
h) Supervision - systems of supervision and internal check (e.g. division of duties,
independent check of work, quality control) should be maintained to ensure that breakdowns,
including irregularities and fraud, or weaknesses within the operation are revealed at an early
stage.




_______________________________________________________ 34
OPERATIONAL MANUAL
ACCOUNTING CONTROL SYSTEM
The accounting procedures include:
Receiving, verifying, approving, and paying invoices: Once the invoice is received they are
coded (financial code) by the Financial Specialist in Each spending unit. He/she has to check
the invoice formally and numerically, in accordance with related project activity. If it is
necessary such invoice will be submitted to hierarchical superior or Procurement Specialist
for verifying. Each invoice has to be approved by the designated official and or his delegated
persons. The Financial Specialist will effect the payment preparing the payment order and
providing authorized signature.

Preparing reports: Once the control is finished Financial Specialist will prepare the reports
in forms defined from DSDC will check if the amounts booked by him match to the amounts
on the statements of funds and general ledger kept by the sector of finance and budget.

FINANCIAL CONTROL SYSTEM
Supporting documentation, which provides objective and verifiable data, must reflect all
transactions. The process of registering the supporting documents is the first step for record
keeping and providing an audit trail. Support documents are normally received from external
source but are in some cases prepared internally. Source documents are to be registered by
Reference Codes with the following format:
Source of documents can be classified as bank statements, banks announcement, contracts,
invoices, purchase orders, traveling expense forms, others, etc. All transactions are registered
into the Protocol.

BANK CONTROL
A reconciliation of the bank book with the bank statements should be made on a monthly
basis.

FIXED ASSETS CONTROL
The internal control of fixed assets such as furniture, equipment, software packages any other
capital assets is to be maintained by the direct beneficiary (Line Ministries and DSDC). All
employees are responsible and accountable for fixed assets in their possession. Any acquired
or donated assets will be recorded in a Fixed Asset Record, if the item has a value of Euro 50
equivalent or more. This record will include a description of the asset, date received, cost or
estimated value, location, and an indication if it was purchased or donated. The Fixed Asset
Record will be maintained by the beneficiary entities who should be notified about worn out
or obsolete assets with no cash value.


N. REPORT ON IRREGULARITIES AND FRAUDS
In case of detected or highly suspected irregularities or frauds in the execution of activities
under the project component, copy of the report will be communicated by each Chairperson
of WGSBI to the SPC as well as to the to the Project Task Manager in Washington.




_______________________________________________________ 35
OPERATIONAL MANUAL
O. TOR OF THE AUDIT
The auditor will be appointed by the Ministry of Finance as part of an overall agreement for
the audit of the non-revenue earning Bank-financed portfolio in Albania. Specific terms of
reference are used for the projects covered by this agreement (please see below). Despite the
MoF arrangements, the implementing entity is responsible for delivering to the Bank, within
six months of the closing of each fiscal year, the audited financial statements. The annual
cost of the audits will be covered by the government part of the portfolio audit. The following
chart identifies the audit reports and submission dates for project implementation agencies.
The objective of the audit is to enable the auditor to express an opinion on the project
financial statements. The Project‟s accounting system (books and records) provides the basis
for the preparation of the PFS, was established to record the financial transactions of the
Project, and is maintained by the IU.
The audit will be conducted in accordance with International Standards on Auditing (ISA) as
published by the International Auditing and Assurance Standards Board of the International
Federation of Accountants (IFAC), with special reference to ISA 800 (Auditor‟s Report on
Special Purpose Audit Engagements) and to relevant World Bank guidelines. In conducting
the project audit, special attention should be paid to the following:
    a) External funds have been used in accordance with the conditions of the relevant
        general conditions, relevant financing agreements and disbursement letter, with due
        attention to economy and efficiency, and only for the purposes for which the
        financing was provided.
    b) Counterpart funds have been provided and used in accordance with the relevant
        general conditions, relevant financing agreements and disbursement letter, and only
        for the purposes for which they were provided;
    c) Goods and services financed have been procured in accordance with the relevant
        general conditions, relevant financing agreements and disbursement letter;
    d) Necessary supporting documents, records, and accounts have been kept in respect of
        all Project ventures including expenditures reported via Summary Report (or Interim
        Un-audited Financial Reports (Interim Reports)) if used as the basis of disbursement),
        or Designated Accounts (DAs). Clear linkages should exist between the accounting
        records and the financial reports presented to the Bank.
   e) Where Designated Accounts have been used, they have been maintained in accordance with
      the provisions of the relevant general conditions, relevant financing agreements and
      disbursement letter.
   f) The PFS have been prepared in accordance with generally accepted accounting
      principles and practices and relevant World Bank guidelines, and give a true and fair
      view of the financial position of the Project as of the end of the civil year and of the
      resources and expenditures for the fiscal year then ending.
   g) Review the compliance on each of the financial covenants in force for the execution
      of the borrower‟s obligations.



_______________________________________________________ 36
OPERATIONAL MANUAL
The documents to be audited are:
   a) the cash receipts and payments of the project during the civil year, showing the World
      Bank, project funds from other donors, and counterpart funds separately,
   b) A Summary Reports used as the basis for the submission of withdrawal applications
      in the notes, as appropriate;
   c) A Statement of Designated Account in the notes, as appropriate;
   d) A Balance Sheet showing Accumulated Funds of the Project, bank balances, other
      assets of the Project, and liabilities, if any.

As part of the audit of the PFS, the auditor is required to audit all Summary Reports and
Interim Un-audited Financial Reports (Interim Reports) used as the basis for the submission
of withdrawal applications.
These Summary Reports (or Interim Reports) should be compared for project eligibility with
the relevant general conditions, relevant financing agreements, and disbursement letter, and
with reference to the Project Appraisal Document for guidance when considered necessary.
Where ineligible expenditures are identified as having been included in withdrawal
applications and reimbursed against, these should be separately noted in separate note
disclosures and also in the management letter, by the auditor. The Project Financial
Statements (or included within the notes to the project financial statements) should be a
schedule listing individual Summary Reports (or Interim Reports if used as the basis of
disbursement) withdrawal applications by specific reference number and amount.
In conjunction with the audit of the Project Financial Statements, the auditor is also required
to audit the activities of the Designated Accounts associated with the Project. The Designated
Accounts usually comprise
    a) deposits and replenishments received from the Bank;
    b) payments substantiated by withdrawal applications;
    c) interest that may be earned from the balances and which belong to the borrower; and
    d) Remaining balances at the end of each fiscal year.

The auditor should pay particular attention as to the compliance with the Bank's procedures
and the balances of the Designated Accounts at the end of the fiscal year (or period). The
auditor should examine the eligibility of financial transactions during the period under
examination and fund balances at the end of such a period, the operation and use of the DAs
in accordance with the relevant general conditions, relevant financing agreements and
disbursement letter, and the adequacy of internal controls for this type of disbursement
mechanism.
The auditors will issue an audit opinion on the [NAME OF PROJECT] Project Financial
Statements (refer to the “Project Financial Statements” paragraph above for a definition of
the statements included therein).
In addition to the audit opinion, the auditor will prepare a "management letter," in which the
auditor will:


_______________________________________________________ 37
OPERATIONAL MANUAL
   a) give comments and observations on the accounting records, systems, and controls that
      were examined during the course of the audit;
   b) identify specific deficiencies and areas of weakness in systems and controls and make
      recommendation for their improvement;
   c) report on the lack of compliance of each financial covenant in the relevant financing
      agreement;
   d) communicate matters that have come to their attention during the audit which might
      have a significant impact on the implementation of the project;
   e) bring to the borrower's attention any other matters that the auditor considers pertinent;
      and
   f) Include management's comments in the final management letter.

The IU will co-operate fully with the auditor and will make available to the auditor whatever
records, documentation and other information is requested by the auditor in connection with
the audit. The auditor should be given access to all legal documents, correspondence, and
any other information associated with the project and deemed necessary by the auditor.
Confirmation should also be obtained of amounts disbursed and outstanding at the Bank and
of amounts disbursed under association of founders.


P. DOCUMENTATION
The supporting documentation for each payment (invoice and attached statements of work,
copy of the signed payment order, and copy of instruments delegating signature authority, if
appropriate) shall be filed by a chronological numbering system. A file of supporting
documentation shall be kept and regularly updated. It should allow for document selection
according to the following criteria (cross-referenced or not):
    - Financiers;
    - Project component;
    - Name of contracting company;
    - Date or time period;
    - Number of the invoices / WA supported by the pertinent documentation.


VII. REPORTING PROCESS

The Government will produce two types of reports, semiannual and annual to inform both the
GoA and the IPS Support Group on the progress of IPS MDTF implementation. The reports
will have the following structure:
   1. Assessing implementation of the IPS by components;
   2. Analyzing and quantifying       project outputs and outcomes following the Results
      Monitoring Framework;
   3. Provide evidence of the impact of the TA in benefiting entities;


_______________________________________________________ 38
OPERATIONAL MANUAL
   4. Highlight potential risks encountered during implementation of the project
      components and measures taken for their mitigation.

These reports will be accompanied with information on the procurement and financial plan
provided by IU.

DSCD and the Minstry of Finance will be responsible for preparation and distribution of
periodic reports (annual and semiannual) to IPS support group, to the relevant government
institutions, to the WB and Donors.. The progress report will be reviewed by the World
Bank. prior to distribution to the donors .


REPORTING TO THE DONORS
The IPS Support Group is the designated structure for reporting to the donors. It has been
already established and has also accumulated experience during the preparatory stage of the
IPS MDTF. The IPS support group will be gathered twice a year with the presence of the
Director of DSDC, Deputy Minister of Finance, Deputy Minister of Integration (MoI),
Director of the Department of Public Administration (DoPA), one Prime Ministerial Adviser
and representatives of the Donors Technical Secretariat, as well as those donors that have
made financial contributions to the Trust Fund. Formal progress report will be prepared by
the Government twice a year in June and December. The progress report will have a joint
supervision (WB, GoA and donors).

The meetings will be chaired by the director of DSDC and the Deputy MoF

The World Bank in its quality as TF administrator will disburse the funds in accordance with
terms of the Administrative Agreements with donors. The World Bank will monitor the
Grant activities, will assess achievement of grant objective and will report the final use of the
funds. The minimum standard financial reporting requirements are:
       1. Quarterly un-audited statement of receipts, disbursements and fund balances
       2. Annual single audit reports

The Bank will also perform formal Supervision Missions twice a year. Donors will be invited
to participate in the supervision teams and the meetings that will be conducted with
government counterparts. At the end of the supervision mission an Aide-Memoire will be
issued. The Aide-Memoire will be submitted to the Government and shared with the donors.
The findings and recommendations of the Aide-Memoire will be discussed with the
Government counterparts and will be a basis to assess progress against the agreed results.




_______________________________________________________ 39
OPERATIONAL MANUAL
_______________________________________________________ 40
OPERATIONAL MANUAL
_______________________________________________________ 41
OPERATIONAL MANUAL

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:6
posted:9/23/2011
language:English
pages:41