TERMS OF REFERENCE FINANCIAL CONSULTING FIRM 6 MONTHS, NATIONAL

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1 TERMS OF REFERENCE FINANCIAL CONSULTING FIRM 6 MONTHS, NATIONAL 1. Background Financial statement of the social insurance offices consists of 8 main financial statements and these financial statements are generated by 4 different IT systems. The process of converting, combining and checking the financial statements between these systems always takes a lot of time and efforts. This process should be changed, thus the following should be done for the IT systems, including: - Make it possible for the responsible accountant to record the completed basic financial documents (to comply with the article 7 and 8 of the accounting laws) - Strengthen the registration internal control (to comply with the article 20 of the accounting law). Currently, social insurance inspector is responsible for financial recording and reporting apart from his/her main duty of collects the information of employer and insured; and determines and monitors the pension as well as the allowances; and also prepares the basic financial documents. - Restructure the organizational structure and update the responsibilities of the departments. - Make up a team, which will be responsible for creating the guidelines on changes that needed to be done in the IT systems. 2. Objective(s) of the Assignment The following outcomes are expected from upgrading the social insurance offices financial management systems: - Being complied with Accounting law, National sector s accounting standards and International accounting standards. The budget consumption related fault as well as fine will be reduced by strengthening the registration internal control. - Easy to reflect the changes immediately into the accounting policy, once it is clearly defined. - The responsibility level will be increased by coherence and thresholds are clearly defined between the social insurance s basic offices and central offices. - The financial reporting time will be reduced, thus the customers can get real time information on time. - Reliability of financial reporting will be improved. - Duty duplication will disappeared, thus the information will be registered correctly. - Social insurance service will be improved and administered the law. - Accounting law will be administered and then internal control will be improved, thus the liability system will be defined. 3. Scope of Services, Tasks (Components) and Expected Deliverables By collaborating with consultants working on improving the IT processes and systems for SIGO (output 3.2), the MOF, MPDSP, Auditing authority and SIGO staff; the financial consulting firm will: I. Understand and analyze the current status of the financial state of the Social insurance, then create a report and other necessary documents for the international financial expert (should conduct the analysis at all level, including, SIGO, Metropolitan Social Insurance Office, aimag, district, soum and khoroo). Compatibility of accounting policy documents and its changes with the related laws and legal documents. Update the organizational structure, operations, sufficiency of personnel, workload estimation and human resource policy. Guidance on how to record the financial documents and forms Current status of the social insurance fund accounting

2 Current status of the Social insurance agency accounting Current status of making social insurance fund and offices work schedule by month as well as by the offices. Cash flow, clearing estimation, receivable from state budget Current situation of accounting and financial reporting of social insurance offices which are participated in the survey Current situation of the financial management and accounting IT systems Sector s database, its updating and dataflow II. Develop and design accounting policy documents, which is well complied with the international financial reporting and accounting standards, and also state sector s accounting standards. III. Design and develop TOR for implementation firm on how to make changes according to the legal, IT and financial aspect changes and what method should be used for that. IV. Automate the manual processing of making social insurance fund and offices work schedule by month as well as by the offices V. Design and develop a solution for automatically generate the monthly budget utilizations of social insurance fund and offices within legal date. VI. Develop and print guidelines, handouts for social insurance services, registration and report preparation. VII. Deliver trainings for the accountants. VIII. Work together with others during implementation process of IT systems. IX. Work together with the international financial expert to make a feasibility study on how to make changes into the policy document for financial management when some changes made in the relevant laws and regulations, such as Social insurance laws, concept papers on pension from the Mongolian government, other legal changes etc. X. Work together with the international financial expert to define all business processes for the financial management IT systems and create an evaluation criteria for the firms, who will select and implement the IT systems, which is suitable for Social insurance sector s financial management as well as well align with the international financial standards and national financial standards. XI. Work together with the international financial expert to perform a diagnostic of SIGO s procedures related to the processing of contributions, distributions, and setup of participants to identify control steps that can be added or automated; XII. Work together with the international financial expert to perform a detailed assessment of SIGO s finance function to design and develop a roadmap for reaching a target operating model (TOM) where financial statements are generated in a timely manner and in conformance with international accounting standards; XIII. Work together with the international financial expert to define required changes for reaching the TOM. In conjunction with IT expertise under output 3.2., design and deploy an IT solution that addresses required changes to technology, data capture, business process, and governance; and XIV. Work together with the international financial expert to after the deployment of the solution, transition finance operations to a steady state and establish effective procedures for ongoing maintenance. a. Deliverables: I. Analysis report with detailed recommendations for (I) above

3 II. Legalize the accounting policy documents and related regulations, which is being comply with the international financial reporting standards, international accounting standards, and the national sector s accounting standards. III. Design and develop the TOR for (III) above IV. Design and develop the TOR for (IV) above V. Design and develop the TOR for (V) above VI. Policy document for accounting, and guidelines for (VI) above (for all type of social insurance services) VII. Report on implementation results, including results of testing and training Qualification Requirements a. Consulting firm: I. The consulting firm should be local financial or auditing consulting firm and must be have good knowledge of International financial and accounting standards, as well as National financial and accounting standards. II. The consulting firm must have a team of financial analyst-team leader, financial analyst, auditor, certified public accountant, legal expert and IT expert. III. The consulting firm should have at least 10 years of proven experience in financial auditing sector. IV. The consulting firm should have extensive experience with designing and developing accounting policy document which is well complied with the International as well as national accounting standards. Also the consulting firm should have an experience with implementing similar projects. b. Financial analyst (team leader): II. The consultant should have at least 10 years of proven experience in financial analysis field. IV. The consultant should have profound theoretical as well as practical knowledge and experience in the relevant fields, such as economy and finance. V. Good at organizing as well as leading the team. VI. Any internationally recognized certificate in the relevant domains is VII. International project experience in finance sector is desired. VIII. Fluent English is preferable. c. Financial analyst: II. The consultant should have at least 5 years of proven experience in financial analysis field. IV. The consultant should have profound theoretical as well as practical knowledge and experience in the relevant fields, such as economy and finance. V. Good team working skill is preferable.

4 VI. VII. VIII. Any internationally recognized certificate in the relevant domains is International project experience in finance sector is desired. Fluent English is preferable. d. Auditor: II. The consultant should have at least 5 years of proven experience in financial audit. IV. The consultants should not evade article 21 of the Audit laws. V. The consultants should meet the requirement in article 17 of the Audit laws. VI. The consultant shouldn t have any issue related to the professional etiquette. VII. The consultant should have profound theoretical as well as practical knowledge and experience in the relevant VIII. Any internationally recognized certificate in the relevant domains is IX. International project experience in finance sector is desired. X. Fluent English is preferable. e. Certified public accountant: II. The consultant must be Certified Public Accountant. III. The consultant should have at least 5 years of proven experience in making financial analysis, financial statement and balance sheet equation. V. The consultant shouldn t have any issue related to the professional etiquette. VI. The consultant should have profound theoretical as well as practical knowledge and experience in the relevant VII. Any internationally recognized certificate in the relevant domains is VIII. International project experience in finance sector is desired. IX. Fluent English is preferable. f. Legal expert: I. The consultant should have a postgraduate degree in law or related II. The consultant should have at least 5 years of proven experience in law field. III. The consultant should be passed the Lawyer s examination. social insurance laws as well as financial laws. V. The consultants should not evade article 27 of the The Law on Legal Status of Lawyer's. VI. Fluent English is preferable. g. IT specialist: I. The consultant should have a postgraduate degree in computer systems, database, programming or related

5 II. The consultant should have at least 5 years of proven experience in IT field. financial management IT systems. web based IT systems. V. The consultant should have a good experience with database management systems, preferably with Oracle. VI. Good team working skill is preferable. VII. Fluent English is preferable.