Terms of Reference. Macro Assessment of Rwanda s Public Financial Management (PFM) System

Transcription

1 Terms of Reference Macro Assessment of Rwanda s Public Financial Management (PFM) System Location: Kigali, Rwanda Application Deadline: 25/03/2014 Type of Contract: UNDP Individual Contract on behalf of UNDP, UNFPA, WFP, UNICEF, UN Women. Institutional Arrangement The consultant will report to the Programme Planning Oversight Committee (PPOC) in close consultation with Operations Management Team (OMT). Languages Required: English. Starting Date: 1 April 2014 Duration: 14 working days over a period 30 days. 1. Background 1.1 Pursuant to the UN General Assembly Resolution 56/201 on the Triennial Policy Review of operational activities for development of the United Nations System, UNDF, UNICEF, UNFPA and WFP (the United Nations Development Group (UNDG) Executive Committee Agencies) adopted a common operational framework for transferring cash to and non Implementing Partners. In April 2005, the UNDG formally released a Harmonized Framework for Cash Transfers to Implementing Partners (HACT, hereinafter called as the Framework ). Its implementation will significantly reduce transaction costs and lesson the burden that the multiplicity of UN procedures and rules creates for its partners. This framework applies to the UNDG s Executive Committee Agencies (ExCom Agencies being UNDP, UNICEF, UNFPA and WFP) and other UN Agencies that choose to adopt it. It calls for an upfront assessment of the programme country s public financial management system (macro assessment) and similar assessments of Implementing Partners (IPs) financial management capacity (micro assessment). The HACT Framework has been revised in February In order to ensure adequate awareness of the Public Financial Management (PFM) environment within which agencies will provide cash transfers to IPs, a desk review of existing assessments of the PFM system will be conducted. The term PFM in the HACT framework is broadly defined to include a range of considerations for operating within the country, not limited solely to the financial environment, but also including national procurement capacity, exchange rate volatility, presence of informal/black markets etc. This assessment is called a Macro Assessment. 1.3 The two primary outputs of the Macro Assessment are: 1) An outline of risks related to the use of the PFM for cash transfers within the country by IPs, as well as other country specific knowledge for non-al IPs (e.g. environmental conditions, exchange rate volatility, presence of black markets, etc.); and 2) A determination on whether the Government s Supreme Audit Institution (SAI) has the capacity to undertake the scheduled and special audits of IPs. 1.4 Within this context, the relevant UN agencies in Rwanda (i.e. UNDP, UNICEF, UNFPA, WFP, UN Women) plan to undertake a macro-assessment of Rwanda s public financial management system in order to enable them to take appropriate decisions on cash transfer modalities, procedures and assurance activities for their programmes/projects during the current United Nations Development Assistance Plan (UNDAP)

2 2. Scope 2.1 The macro-assessment will be based entirely on PFM-related work that has already been conducted by development partners. In addition, the consultant shall review other relevant reports and documents which would be useful for this exercise. 2.2 In order to ensure that the review is of maximum usefulness and relevance, the above assessment reports should be as recent as possible, but not more than five years old. 2.3 The review will cover areas of the national budget development and execution process, the functioning of the public sector accounting and internal control mechanisms, legal regulations and judicial environments, the procurement system and tender process, audit and oversight, financial recording systems, staff qualifications, environmental conditions, exchange rate volatility, and existence of black markets. 2.4 Should further clarification or verification be required to substantiate the review, responsible officials of relevant agencies may be consulted. The Ministry of Finance and Economic Planning (MINECOFIN), the Office of the Auditor General and the Rwanda Public Procurement Authority (RPPA) will be among agencies for clarification/verification exercise. The following provides typical sources of existing PFM assessments: Assessments by the World Bank: Country Financial Accountability Assessment. CFAAs vary in format and presentation. Public Expenditure Review. This analyzes a country s fiscal position, expenditure policies, and public expenditure management systems. Country Procurement Assessment Review. This reviews public procurement institutions and practices. Institutional and Governance Review. This reviews the quality of accountability, policymaking, and service delivery institutions. Capacity Assessments of Heavily Indebted Poor Country PFM. Done jointly with the IMF, this assessment covers some of the same issues as a CFAA. Public Financial Management Performance Report (PFM-PR), Rwanda. Final Report was published in November 30, 2010 (The World bank Group was the lead agency with the involvement of other agencies such as DFID, EU, KfW, SIDA, USAID). Assessments by Other Institutions: Fiscal Transparency Review. IMF. This uses the code of good practices on fiscal transparency adopted by the IMF in Diagnostic Study of Accounting and Auditing. Asian Development Bank. Ex-ante audits of PFM systems undertaken by the EC. Assessments by CIDA, DFID, EU, SIDA, ADB and other Agencies. DFID s assessments include: o Rwanda: Independent Evaluation of the Implementation of the PFM Reform Strategy o Fiduciary Risk Assessment (FRA) of the Education Sector in Rwanda SIDA s assessments include: o Overall PFM assessment in Rwanda and the assessments of the social protection sector and the forestry, land and environment sector. Items to be provided to the Consultant in advance of starting fieldwork: Summary of primary programme initiatives and IPs within the country; and 2

3 Details of previously performed Macro Assessment performed in the country (if any); and Any other documentation that may help the third party service provider better understand the country context from a United Nations perspective. 3. Methodology 3.1 The consultant will begin by reviewing the information provided by the agency and with the collection of existing PFM review reports and will also consider the relevant UN Agencies own experience and knowledge of PFM in Rwanda. The consultant will review the existing documentation and the relevant UN Agencies experience to address the issues raised in the checklist for determining risks related to a country s PFM (Please refer to Annex 1). 3.2 The consultant will prepare a draft report on the results of the macro-assessment. The preliminary results of the Macro Assessment will be discussed with agencies that are implementing the HACT framework, both to provide a summary of the results and to incorporate agency-specific experience and knowledge of the country into the final assessment as appropriate 3.3 The consultant will finalise the macro-assessment report taking into account comments received on the draft report and submit a final report to UN Resident Coordinator Office, who will share the report with the relevant UN Agencies. 4. Deliverables 4.1 A draft macro-assessment report summarizing the findings regarding the risks related to the use of PFM systems for cash transfers within the country in the Macro Assessment Checklist (included in Annex I: General Overview of the Macro-Assessment and Risk Considerations). The report should include: Objective of the review and statement of process and participating institutions. Summary of findings to address each of the issues identified in checklist. Any key risks the PFM poses to the functioning of the cash transfer framework Assessment of the Supreme Audit Institution s capacity to undertake required audits Annex - the completed checklist. 4.2 A final macro-assessment report incorporating the comments received on the draft report. 5. Price Proposal and Schedule of Payments The consultancy fee will be paid as a Lump Sum (inclusive of all expenses related to the consultancy), and will be fixed regardless of changes in the cost components of the consultancy. The consultancy fee will be paid upon completion of the following milestones. 30% after preparation and submission of the draft macro-assessment report. 70% after submission of the final macro-assessment report and its acceptance by the RCO. 6. Qualifications of Consultant 6.1 The assessment will be conducted by a consultant, independent of the Government of Rwanda. The consultant is expected to have the following qualifications and competencies: Education: Masters of Finance, Accounting, Economics, Public Administration or equivalent. Experience: Minimum of 7 year experience in PFM systems. 3

4 Experience and expertise in reviewing PFM systems, assessing risks related to them and in performing similar assessments. Ability to identify and collect reports on the PFM system in Rwanda Knowledge of the United Nations system and familiarity with UN agencies financial management policies/practices and assistance projects Prior consultancy experience on HACT Macro-assessments a strong advantage Broad understanding of governance and accountability issues Experience and knowledge of the Government of Rwanda s policies and systems. Language requirements: Excellent written and oral communications skills in English. Knowledge of French and /or Kinyarwanda is an added advantage. Competencies Core Competencies: Demonstrates integrity by modeling the UN s values and ethical standards Displays cultural, gender, religion, race, nationality and age sensitivity and adaptability Treats all people fairly without favoritism Functional Competencies: Knowledge Management and Learning Ability to provide top quality policy advice services on economic issues. In-depth practical knowledge of inter-disciplinary development issues. Management and Leadership: Consistently approaches work with energy and a positive, constructive attitude Demonstrates strong oral and written communication skills Capacity to engage with a wide audience and to maintain good working relationships is multicultural environments. 7. Timeline Date Tasks Note 5 March 19 March 2014 Advertisement for a Consultant/Call for UNDP proposal 19 March 2014 Closing date for Application 20 March 2014 Short listing of Candidates HACT Task Force March 2014 Selection of a consultant HACT Task Force 27 March 2014 Awarding a Contract UNDP 3 April 2014 Commencing work by a consultant Consultant 16 April 2014 Submission of draft report Consultant 23 April 2014 Review and comments HACT Task Force 30 April 2014 Submission of final report Consultant 8. Travel: In case there is travel involved, all envisaged travel costs must be included in the financial proposal. This includes all travel to join duty station/repatriation travel. In general, UNDP should not accept travel costs exceeding those of an economy class ticket. Should the IC wish to travel on a higher class he/she should do so using their own resources. 4

5 In the case of unforeseeable travel, payment of travel costs including tickets, lodging and terminal expenses should be agreed upon, between the respective business unit 10 and Individual Consultant, prior to travel and will be reimbursed. 9. Recommended presentation of Offer The Contractor offer must be composed by the following documents: a. Duly accomplished Letter of Confirmation of Interest and Availability using the template provided by UNDP attached to this notice; b. Personal CV or P11, indicating all past experience from similar projects, as well as the contact details ( and telephone number) of the Candidate and at least three (3) professional references; c. Brief description of why the individual considers him/herself as the most suitable for the assignment, and a methodology, on how he/she will approach and complete the assignment; d. Financial Proposal that indicates the all-inclusive fixed total contract price, supported by a breakdown of costs, as per template provided. If an Offeror is employed by an organization/company/institution, and he/she expects his/her employer to charge a management fee in the process of releasing him/her to UNDP under Reimbursable Loan Agreement (RLA), the Offeror must indicate at this point, and ensure that all such costs are duly incorporated in the financial proposal submitted to UNDP. 3. Evaluation The offer will be evaluated by using the combined scoring method. Technical proposal will be evaluated on 70%. Whereas the financial one will be evaluated on 30%. Below is the breakdown of technical proposal on 100% which will be brought to 70%. Technical Criteria Weight Max. Point Expertise and experience in the field of Public Financial Management 35% 35 Experience in preparing similar reports 30% 30 Prior consultancy experience on HACT 10% 10 Master s degree in Finance, Accounting, Economics, Public Administration or equivalent 10% 10 Familiarity with UN agencies financial management policies/practices 5% 5 and assistance projects. Understanding of governance and accountability issues 10% 10 TOTAL 100% 100 5

6 General Overview of Macro Assessment Country being Macro Assessed Agencies utilizing HACT framework in country Agency contact person(s) Annex 1 Macro Assessment Checklist Start/End Date of Macro Assessment (dd/mm/yyyy dd/mm/yyyy)) Has a Macro Assessment been performed for this country previously (by any organization) Member(s) of the Macro Assessment team (Name, Designation, Section/Organization) Sources of information utilized in assessment (title, date published, source, etc.) Approved by: Janvier K. Wussinu Deputy Country Director / Operations 6

7 Risk Consideration No Indicator High Risk Significant Risk Moderate Risk Low Risk 1 The annual budget contains all significant expenditures, including relevant donor contributions 2 Budget and performance No Yes Budget decisions are only nominally debated. Little consideration of previous performance is taken into account when setting future budgets. 3 Budget Execution Government historically does not execute budget as planned. 4 To what extent are internal controls and financial procedures adhered to? Procedures are frequently overridden or ignored. Emergency procedures are routinely used. Government historically executes budget as planned, however, there are significant exceptions Procedures are generally followed. However, there are significant exceptions. Government historically executes budget as planned with limited exceptions Procedures are generally followed. While exceptions exist, they are not frequently enough to prevent reliance on 7 Budget decisions are fully debated with assistance from expert committees. Full consideration of previous performance is taken into account when setting future budgets. Government historically executes budget as planned without exceptions Always. Indicator Risk Level Comment

8 Risk Consideration No Indicator High Risk Significant Risk Moderate Risk Low Risk 5 Bank reconciliations Many accounts are not reconciled monthly. Reconciliations are often poorly performed. 6 Transfer of cash resources 7 Reporting of cash and asset position to 8 Financial audit / the Supreme Audit Institution (SAI) Auditor General Cash transfers from central / regional levels to projects level takes more than one month. Analysis of cash and asset position made to contains significant omissions. External audit covers less than 80% of central Doubt exists as to whether or not the internal control system can be relied upon. A number of significant accounts are not reconciled monthly. Quality in is some instances is poor. Cash transfers from central / regional levels to projects level takes between two weeks and one month. External audit covers 80 to 90% of central the internal control system. Generally banks are properly reconciled each month. Exceptions exist but appropriate follow up action is taken in all cases. Cash transfers from central / regional levels to projects level takes between one and two weeks. External audit covers 90% of central expenditures. 8 Performed to a high standard for all bank accounts at least once a month. Cash transfers from central/ regional levels to projects level take a week or less. Full analysis of cash and asset position is made to. External audit covers all central expenditures. Indicator Risk Level Comment

9 Risk Consideration No Indicator High Risk Significant Risk Moderate Risk Low Risk *For decentralized s, consider the consolidated audit coverage, if available. expenditures. 9 SAI Independence SAI reports to Government agency 10 Audit standard applied by the SAI 11 Follow up action to audit reports 12 Country has a National Procurement Framework 13 Transparency of audit process SAI applies national audit standard, which are significantly inconsistent with international standards Points raised by external audit are infrequently followed up. expenditures Points raised by external audit are usually, but not always, followed up. A significant number of points re-occur in following years. SAI applies national audit standard, which comply with international standards Points raised by external audit are always followed up. In a few cases points re-occur in following years. 9 SAI reports to Parliament (or equivalent justice system) SAI applies international audit standard Points raised by external audit are always properly followed up. Points generally do not reoccur in following years. No Yes Statutory external audit reports are Most statutory external audit All statutory external audit reports are All statutory external audit reports are Indicator Risk Level Comment

10 Risk Consideration No Indicator High Risk Significant Risk Moderate Risk Low Risk 14 Staff qualifications and skills infrequently published. These are rarely debated in the press, even where of public interest. It is often not clear that staff have the skills and qualifications necessary to discharge their duties. 15 Financial systems Financial systems only capture and report on the most basic financial data, and this is frequently unreliable. System maintenance and performance is generally poor. 16 Environmental Conditions Regular occurrence of natural disasters or significant events that reports are published. These are sometimes debated in the press when of public interest. In some cases it is not clear if staff do not have the skills and qualifications necessary to discharge their duties. Financial systems only capture and report on the most basic financial data. While there are system maintenance and performance problems, generally the system is stable. published. These are usually debated in the press when of public interest. In only some isolated case is it not clear if staff do not have the skills and qualifications necessary to discharge their duties. Financial systems are adequate for most but not all existing data capture and reporting needs. They are reliable and properly maintained. 10 published. They are debated in the press where of public interest. It is always clear that all staff have the skills and qualifications necessary to discharge their duties. Financial systems are adequate for all existing data capture and reporting needs. They are reliable and properly maintained. Little or no occurrence of natural disasters or significant events Indicator Risk Level Comment

11 Risk Consideration No Indicator High Risk Significant Risk Moderate Risk Low Risk displace citizens and resources. 17 Exchange rate volatility Foreign exchange rates fluctuate significantly on a daily basis 18 Existence of a black market 19 <Any other specific items identified by agency> Examples: Inflation, Reliability of Bureau of statistics, Parliamentarian control, Unemployment rate, transparency of collecting information Black market is prevalent and influential within the country Foreign exchange rates fluctuate significantly on a weekly or monthly basis Black market exists and has significant influence within the country Foreign exchange rates have remained relatively consistent, with the exception of significant one off fluctuation Black market exists in the country, however effective actions are being taken to eliminate or limit influence within the country that displace citizens and resources. Foreign exchange rates do not fluctuate significantly Black market may exist but does not have an influence within the country Indicator Risk Level Comment 11