MEMORANDUM OF UNDERSTANDING WITH THE GOVERNMENT OF
BANGLADESH FOR
NON BUDGET SUPPORT FINANCIAL AID
Between
The Government of the United Kingdom of Great Britain and Northern Ireland acting
through the Department for International Development (“DFID”)
and
The Government of Bangladesh
together called “the Participants”
United Kingdom/ Bangladesh Primary Education Development Programme III
{ARIES number 202123} Grant 2011
1
Introduction
1.1
Whereas the Government of the People’s Republic of Bangladesh (hereafter
referred to as “the Government of Bangladesh”) has requested the support of the
‘Development Partners’ (hereafter referred to as “DPs”) to contribute towards the
funding of the third Primary Education Development Programme (hereafter referred
to as “PEDP III”).
1.2
Whereas the DPs have committed themselves to the principles of
harmonisation and aid effectiveness as reflected in the signing of the Joint Financing
Arrangement (hereafter referred to as the “JFA”) and strive for the highest degree of
alignment with the budgetary and accountability mechanism of the GoB so as to
enhance effective implementation of PEDPIII and to minimise transaction costs.
1
1.3
Whereas the GoB and the DPs have reached an understanding on common
procedures for consultation and decision-making, disbursement, monitoring and
reporting, review and evaluation, audit, financial management and cooperation
between the signatories to the JFA.
1.4
Whereas respect for human rights, democratic principles, the rule of law and
good governance, including the fight against corruption, which govern the domestic
and international policies of the JFA signatories, are fundamental principles on which
the cooperation between the signatories rests and which constitute essential
elements of this MoU.
2.1
Following the recent discussions between the Participants and the DPs, and
DFID’s commitment to support the PEDPIII programme, DFID will make available:
2.2
A sum not exceeding £110 million in Non-Budget Support Financial Aid to
support PEDPIII. The amount will be paid in the following tranches and will be
disbursed as follows:
a)
In June of each year 30% Fixed Tranche based on satisfactory expenditure
presented in Interim Unaudited Financial Reports (hereafter referred to as
“IFRs”), plus ongoing satisfactory completion of quarterly financial reports,
post procurement audits and other assessment of the fiduciary environment.
b)
In December of each year 70% Variable Tranche based on a Results
Compact (RC), which will be subject to reviews of particular agreed indicators
and financial accountability requirements. The RC will be linked to pre-agreed
achieved results in the education and gender MDGs in primary education.
Disbursements will be released as per verification of performance.
Indicative Funding Schedule, including Fixed and Variable Amounts :
2011/2012
2012/2013
2013/2014
2014/2015
2015/2016
£25 million
£25 million
£20 million
£20 million
£20 million
Fixed Variable Fixed Variable Fixed Variable Fixed Variable Fixed Variable
30%
70%
30%
70%
30%
70%
30%
70%
30%
70%
2
3.
DFID’s total support to PEDP III will be up to £120 million, of which £10
million will be provided as technical assistance to be managed separately by DFID
(or channelled through a multilateral or other partner). The MoU will come into effect
from November 2011 until and the end of June 2016, over which period the grant will
be disbursed. The end date is subject to change on the basis of prior negotiation
between our two Governments.
4.
The purpose for which the Grant will be used is set out in the attached
Business Case (Annex 3) and GoB’s PEDPIII programme document. Relevant
procedures are also summarised in Annex 1 on partnership commitments governing
British aid. Collectively these will be referred to as “this Arrangement” throughout the
remainder of this MoU. The details may be varied within the total Grant by mutual
arrangement between our two Governments.
5.
In addition to the (a) Provisions in this MOU and (b) the partnership
commitments outlined in Annex 1, (c) the GoB accepts additional specific
commitments relating to this Arrangement. These are laid out in the Joint Financing
Arrangement (Annex 4). The JFA outlines the jointly agreed terms and procedures
for Development Partners’ support to PEDPIII. It serves as a coordinating framework
for consultations with the GoB, for joint reviews of performance, for common
procedures on disbursement, reporting, procurement and audits. The provisions of
this MoU are compatible with the spirit and the provisions of the JFA.
6.
The Grant will be paid in accordance with the attached Procedures and
Practices For United Kingdom Non Budget Support Financial Aid (Annex 2,
hereinafter referred to as "the Procedures"), which are closely aligned with the Joint
Financing Arrangements.
7.
DFID, in consultation with other DPs, will base 70% of its support to the
results achieved by the GoB in implementing the Primary Education Development
Programme III (hereafter referred to as Disbursement Linked Indicators, “DLIs”).
8.
Upon signature by the Participants of this Memorandum of Understanding
(MOU) Crown Agents Bank will automatically be appointed the Agent of the GoB in
the United Kingdom to manage the financial arrangements set out in this MOU.
Crown Agents Bank is therefore authorised by the GoB to open an Account in
accordance with Section 4 and 5 of the Procedures, which are attached to this MOU.
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The title of the Account will be United Kingdom/ Bangladesh Primary Education
Development Programme Grant 2011 Account ("the Account".) The GoB will
indemnify and keep indemnified Crown Agents Bank against third party claims and
liabilities (other than overhead expenses) incurred in the proper performance of their
duties under the Grant.
9.
Representation
9.1
The Ministry of Finance (hereafter referred to as “MoF”) will represent the GoB.
The Government of the United Kingdom will be represented by the UK Department for
International Development (hereafter referred to as “DFID”).
9.2.
In all matters relating to implementation of this JFA the Ministry of Primary and
Mass Education (hereafter referred to as “MoPME”) will serve as the focal point of the
GoB.
10.
Disbursements by Development Partners
10.1
Disbursements will be made against reporting on expenditure under specific
budget heads as annexed to the JFA (Annex III) that will comprise the programme
budget heads for financial reporting purposes. Any changes to these budget heads
due to revision of the chart of accounts and/or changes in the classification codes in
the PEDPIII activity based budget will be made in consultation with the DPs.
10.2
The Disbursement Schedule will be updated following outcomes of annual
reviews and consultations each year as specified in section 11 on Consultation and
Decision-Making.
10.3
Disbursement will be contingent on either or all of the following:
(i)
Spending on Programme Budget Heads (hereafter referred to as “PBHs”) as
presented in the IFRs as annexed to the JFA in Annex XII; IFRs will be prepared
from the GoB Integrated Budget Accounting System (hereafter referred to as “IBAS”).
The MoF will approve the IFRs before submission to the DPs. Disbursement by DPs
will be contingent on PBH for a given period exceeding the total disbursement to be
made by all DPs for the same period.
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(ii)
Achievement of DLIs agreed between the GoB and DPs as specified in the
Results Compact in Annex II of the JFA. The amount to be disbursed in each fiscal
year will be contingent upon number of DLIs achieved during the previous fiscal year.
10.4
Following the outcome of the review meetings referred to in Section 12, the
GoB will send a withdrawal application/request to respective DPs, together with
required financial and other reports agreed for their disbursement in accordance with
the disbursement schedule presented in Annex V of JFA.
10.5
DFID will transfer its contributions via Crown Agents Bank to a designated
account within the Consolidated Fund of the Bangladesh Bank (BB) in accordance
with the procedures and banking instructions established and agreed with GoB via
the Crown Agents Bank.
10.6
The Bangladesh Bank will credit an equivalent Taka amount to the
designated account as a result of conversion of receipt of foreign currency as soon
as possible. This will be certified by MoF for each disbursement in writing to DFID or
a designated DP within one month of the date of disbursement.
10.7
The first disbursement of the DPs will be made in or after July 2011 to the
designated account created for the purposes for receipts under PEDPIII as a
reimbursement of expenditures as already incurred as documented by the IFRs.
10.8
The next tranche of DPs funds will be disbursed to the designated accounts
as a reimbursement of expenditure already incurred as documented by the IFRs
10.9
Semi-annual disbursement procedures as specified in paragraph 30 of the
JFA will be repeated every July and January each fiscal year for the duration of the
programme.
11.
Consultation and Decision-Making
11.1.
MoPME will invite DPs for semi-annual reviews and consultations in May and
November each year to review progress in implementing PEDPIII in accordance with
The Schedule for Monitoring and Reporting as annexed to the JFA (Annex VI).
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11.2
The Signatories will conduct a Joint Annual Review Mission (JARM) in May
each year to:
a) Assess overall programme performance and implementation progress based on
the reports specified in Section 13.
b) Review the achievement of the annual DLIs
c) Review compliance with financial management responsibilities and procurement
procedures
d) Review the annual Audit Report
e) Review PEDPIII plans and budget for the next fiscal year
f)
11.3
Assess the outcome of other reviews
DFID with the JFA signatories will conduct a consultation meeting in November
each year to:
a) Assess overall programme performance and implementation progress
b) Review the Interim Financial Reports (IFRs) to date
c) Review progress in achievement of unmet DLIs from the previous fiscal year
d) Assess progress towards meeting the next year DLIs and identify steps to
remove obstacles, if any
e) Assess outcome of reviews on Section 16 (non-compliance).
11.4
The GoB and DPs will encourage ongoing effective communication and
engagement to support the PEDPIII achievement of results. To support a process of
effective communication and dialogue the MoPME Secretary will chair joint quarterly
meetings, and additional meetings may be requested by the signatories on any subject
relevant to PEDPIII implementation and this MoU.
12.
Reporting
12.1.
GoB will provide the DPs with all the information relevant to the implementation
of PEDPIII in accordance with the Schedule and Monitoring and Reporting Annex in the
JFA, including the following:
a)
Quarterly Interim Financial Reports (IFR) showing expenditures by the budget
heads/item code for PEDPIII comparing actual and budgeted figures and other
statements as per Annex IV (JFA) to be submitted within 30 days after the end of each
quarter
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b)
A statement of progress in achievement of results including achievement of
DLIs by April and October each year.
c)
An Annual Sector Performance Report (ASPR) reporting on sector
developments as among others, reflected by Key Performance Indicators to be
submitted by the end of the year.
d)
An annual external audit report to be submitted by the end of December each
year.
e)
Reports from other reviews as mentioned in Section 16 on Non-Compliance.
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Review and Evaluation
13.1
Reviews will be conducted as appropriate, to assess progress. The timing of
reviews will where possible be aligned with existing national processes. The detail is
specified in section 7 of the JFA.
13.2.
DPs will implement a rolling 3-year Fiduciary Risk Assessment according to
TORs to be agreed to between the DPs. The timing of these assessments will be
decided upon in the Joint Annual review and Consultation meetings.
13.3
The GoB and DPs may commission external technical reviews and other
studies in support of the programme.
13.4
The GoB will conduct a mid-term review of PEDPIII during the third year of
PEDPIII in collaboration with the DPs.
13.5.
Whenever required and practicable, the GoB will permit DPs and DFID
authorised personnel to visit the Programme in respect of this Grant and/or examine
documents and records relating to the Grant. The GoB should also provide any
information that may be necessary to help DFID’s consideration of the documents, the
Grant, its progress and financing.
7
14.
Procurement
14.1
The GoB is accountable for all procurement of goods, works, and services, and
is responsible for the contracts to be signed. For all co-financed eligible expenditure, the
Asian Development Bank (AsDB) and the World Bank’s International Development
Association (IDA) will jointly manage the Annual Fiduciary Review (AFR) and the
Quarterly Fiduciary Review (QFR) in accordance with the mechanisms set out in Annex
VIII of the Joint Financing Arrangement.
14.2
All procurements requiring National Competitive Bidding (NCBs) will be
performed in accordance with the Government of Bangladesh Public Procurement
Rules (PPR), 2008 with modifications (these are specified under paragraph 55 of the
JFA) to be consistent with the AsDB Procurement Guidelines and World Bank
guidelines.
14.3.
Goods with estimated cost of US$600,000 and above, and works with estimated
cost US$2 million and above, will be procured using international competitive bidding
(ICB) methods following the Word Bank guidelines.
14.4
All consultancy services will be procured following the Asian Development Bank
guidelines.
14.5.
All ICB procurements and all consultancy services will be prior–reviewed
respectively by the World Bank and the Asian Development Bank.
14.6
DFID and other DPs reserve the right also to conduct post procurement audits
of both NCB and ICB procurements. All procurements must ensure that maximum value
for money is achieved.
14.7
GoB will ensure that all goods and services financed from the Grant will
continue to be used for the original purpose, as long as this remains feasible. In the
event of such goods or services being used for other purposes, the GoB must notify
DFID in writing and DFID may seek to recover from the GoB the value of the goods and
services concerned.
15.
Audit
8
15.1
The GoB is responsible for ensuring that the Grant provided in support of and
transferred to the pooled fund is used for the intended purposes, i.e. the
implementation of the nationally owned PEDP III programme.
15.2
The GoB will within 9 months of the end of each financial year provide DFID
with Annual Audited Statements from its Accountant General confirming that DFID’s
Grant has been used for the intended purposes;
15.3
All funds of the PEDPIII channelled through the GoB will be managed under
the IBAS that is being rolled out across the GoB. The procedures specified in the
JFA will apply to all PEDPIII activities budgeted and accounted for in the state budget
in accordance with the current chart of accounts of the GoB.
15.4
The annual financial statements of PEDPIII will be subject to an independent
audit by the Controller and Auditor-General of Bangladesh in accordance with
international standards of auditing. These audited financial statements along with the
auditor’s opinion (in the management summary) and will be submitted to the DPs within
seven months after the close of the fiscal year.
15.5
GoB regulations for timely resolution and settlement of audit observations will be
applicable to PEDPIII. GoB will provide evidence to DPs that financial irregularities are
resolved through tri-partite meetings within six-months after the date of the audit report.
The Controller and Auditor General of Bangladesh are required to follow-up all material
areas of risk identified.
15.6
The DPs may commission financial and compliance audits as well as special
purpose audits to be carried out by an international audit firm. The scope of these audits
will be agreed upon by the JFA signatories, and funded by the DPs unless otherwise
agreed between the signatories.
15.7
The specific commitments made by the GoB in this Arrangement, referred to in
paragraph 6 of this MOU, will be monitored as detailed in the Joint Financing
Arrangement.
15.8
The MoPME accounts will be subjected to external audits and inspections as
defined by GoB regulations and guidelines.
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15.9
MoPME audited financial statements and reports will be ready no later than
six months of the financial year end.
16.
Non-Compliance
16.1
Except in extreme circumstances, if DFID is concerned that the provisions of
this MOU, or partnership commitments made under this Arrangement may not have
been fulfilled by the GoB or if any changes occur which in the opinion of DFID impair
significantly the development value of the programme, DFID will discuss with the GoB
and where appropriate take any of the following actions

signal a possible future response

change the way DFID delivers aid

delay all or part of a specific aid disbursement to the GoB

reduce, suspend or stop aid under this Arrangement or terminate this
Arrangement under paragraph 17 of this MOU.
16.2
Only in exceptional circumstances will DFID interrupt planned disbursements of
aid within the GoB’s financial year. In the event that DFID funds are used in ways that
DFID considers inappropriate in terms of this MOU, DFID reserves the right to reclaim
all or part of such funds, following discussion with the Government of Bangladesh and
other DPs as necessary.
16.3
In the event of force majeure beyond the control of GoB, which hinders effective
implementation of the PEDPIII, the DPs may wish to consider continuation of
disbursements without consideration of achievements of DLIs.
16.4
DFID will not be responsible for the activities of any person or third party
engaged by GoB as a result of this Memorandum, nor will DFID be responsible for any
costs incurred by GoB in terminating the engagement of any such person.
17.
Modifications and Handling of Disagreements
17.1
The procedures outlined in this MoU will be subject to review by MoPME and
the DPs as the need arises.
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17.2
Any modification of the terms, conditions and operational modalities of this
MoU can only be made by mutual agreement in writing between all the signatories.
17.3
The signatories welcome the participation in the JFA by other DPs who wish
to the support the PEDPIII under the JFA framework.
17.4
Under a new DP’s written request and written acceptance of the TORs of the
JFA, the MoF may in common agreement with all the signatories, as an annex to the
Arrangements, give a DP written authorisation to become a signatory. The MoF will
in advance furnish the DPs with a copy of the letter of acceptance.
17.5
If at any stage the GoB should become aware of, or suspect, any
misappropriation or diversion of funds or possible fraud or corruption relating to the
programme activities funded by the DFID grant, the GoB must report the matter
immediately to DFID.
17.6
This Arrangement including this MOU can be terminated by three months’
written notice by either Government. It is accepted nonetheless that any decision of
either Government regarding termination of this Arrangement will first be subject to
discussion, but any other step under paragraph 13.1 of this MOU may be taken in the
meantime by DFID.
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Communications and Branding
18.1
GoB commits to collaborate with DFID to build support for development and
raise awareness of the UK government's funding for development activity. Both will
proactively look for ways to raise awareness of UK government funding for
development. GoB will explicitly acknowledge DFID's support through use of DFID's
UKaid logo in all communications with the public or third parties about this
programme, unless otherwise agreed.
GoB also commits to collaborate with DFID
on other awareness raising activities where feasible and appropriate, in the UK and
overseas, to profile the partnership and the results it is delivering.
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18.2
In line with DFID's Transparency commitments, the GoB gives consent
for this arrangement (and any subsequent amendments) to be published on DFID's
website.
19.
Signatories to the Memorandum of Understanding
19.1
If the arrangements set out in the MOU above, its Annex 1 “Partnership
Commitments Governing all British Government Financial Aid”, in the “Business Case”
(Annex 3) and in the attached Joint Financing Arrangement and annexes to the MoU
{4} are acceptable to the Government of Bangladesh, this Arrangement and this MOU
will place on record the understanding of the Participants and will come into operation
on the date of the GoB signature below. The GoB should please sign both copies of the
original, retain one for its own records and return the other to DFID.
19.2.
In the event of translation the English text of this document will prevail.
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Signed on behalf of DFID:
Name: Gwen Hines
Head of DFID Bangladesh Office
Address/Contact Details: 10 Gulshan Avenue, Gulshan 1, Dhaka 1212, Bangladesh
Date:
Signed on behalf of the Government of Bangladesh:
Name:
Position:
Address/Contact Details:
Date:
November 2011
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ANNEX 1:
Partnership Commitments Governing all British Government financial aid to the
Partner Government –
The Partnership commitments
1.1
Our development partnership in Bangladesh is based on a shared principle commitment
to the following four commitments:
- Reducing poverty and achieving the Millennium Development Goals (MDGs) in Bangladesh;
- Respecting human rights and other relevant international obligations;
- Strengthening financial management and accountability and reducing the risk of funds being
misused through weak administration or corruption.
- Promoting transparency and accountability to citizens
1. 2
Our development partnership commitments specifically relating to the education and
gender MDGs, and the results outlined in the Primary Education Development Programme
(2011-2016). The overall objectives of the sector programme are: the provision of quality
education for all children through the establishment of an efficient, inclusive and equitable
primary education system delivering effective and relevant child-friendly quality learning to all
Bangladesh’s children from pre-primary through to Grade 5.
The expected results are
elaborated in the Programme and Results Matrix which include Disbursement-Linked
Indicators. These are outlined in the Business Case and the Joint Financing Arrangement.
1.3 All commitments attached to DFID’s aid are made public via the DFID website.
Assessing the Partnership Commitments
2.1 The above commitments made by the Bangladesh will be assessed using benchmarks set
in the Primary Education Development Programme (2011-2016) and information drawn from
Bangladesh systems and other sources of data.
2.2 These benchmarks are attached as an Annex I and II of the Joint Financing Framework.
These include both the Programme and Results Framework and the Disbursement Linked
Indicators. These benchmarks have been jointly decided with the Government of Bangladesh
and other development partners working in the primary education sector in Bangladesh.
2.3 DFID is committed to publishing benchmarks on the DFID website.
14
2.4 Partnership talks will be held as appropriate to assess the commitments and review
progress. The timing of reviews will where possible be aligned with existing national
processes.
Responding to a Breach of the Partnership Commitments
3.1 A failure to fulfil any of the commitments referred to in paragraph 1.1 and 1.2 of this
annex may lead to DFID’s aid being interrupted, reduced, suspended, delivered in a different
way or terminated.
3.2 Except in extreme circumstances, if DFID is concerned that the commitments may not
have been fulfilled by the Government of Bangladesh (GoB), DFID will commence an
assessment and discussion with the Government of Bangladesh and the Ministry of Primary
and Mass Education to: enable DFID to explain their concerns; better understand the GoB
position and rationale; explain possible implications for the provision of further aid that DFID
may deliver or the way it is delivered; and seek solutions where possible.
3.3 If DFID considers that there has been a failure to fulfil the commitments of the signed
MoU DFID will send a clear, transparent signal that the GoB’s actions or omissions are being
considered in a serious way and may take any of the following actions: signal a possible
future response; delay all or part of a specific aid disbursement to government; change the
way DFID delivers aid to government; switch some or all of the aid away from government to
other channels; reduce/stop aid to Bangladesh or terminate all or any aid arrangement.
3.4 Only in exceptional circumstances will DFID interrupt planned disbursements of aid to
government within the GoB’s financial year.
3.5 The appropriate response will depend on the seriousness of the specific situation and the
circumstances that led to the failure to fulfil the partnership commitments. In particular DFID
will consider the scale, severity and trend of the change, and the impact that any decision will
have on poor people and longer term poverty reduction efforts.
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February 2011
16
ANNEX 2
PROCEDURES AND PRACTICES FOR UNITED KINGDOM BUDGET SUPPORT & NON
BUDGET SUPPORT FINANCIAL AID
Introduction
1.
This document which must not be amended by DFID or Government of Bangladesh is
a standard, practical guide for the Government of Bangladesh. It sets out the procedures and
practices applicable to Poverty Reduction Budget Support (BUDGET SUPPORT) and nonBudget Support Financial Aid provided by the United Kingdom, including payment,
procurement and audit arrangements. This guide should be read in conjunction with the
Memorandum of Understanding (MOU).
FOR ALL FINANCIAL AID
Agency fees
2.
The MOU confirms the appointment by the Partner Government of Crown Agents
Bank as its agent in the United Kingdom to manage the financial arrangements set out in the
MOU upon signature. Crown Agents Bank’s fees for its services are met centrally by DFID
and not from the Grant.
3.
The partner Government may also appoint a DFID approved Procurement Agent.
Fees for procurement agents are met from the Grant.
Funding procedures
4.
As soon as the MOU has been signed, Crown Agents Bank will open an account
("the Account") for the Grant. The Account will be operated solely for the purposes of, and in
accordance with, the MOU.
5.
As soon as the Account is opened, the Government of Bangladesh must submit to
DFID, Crown Agents Bank, specimen signatures of persons authorised to sign the indents
and claims for reimbursement (if goods are to be purchased). Any change of such persons
must be notified to all parties.
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Disbursement of the Grant for BUDGET SUPPORT
6.
In accordance with the arrangements set out in the Business Case or the Programme
& Results Framework of the Bangladesh Primary Education Development Programme
document the GoB will request DFID to fund all or part of the Grant. DFID will authorise and
make payment of the funds into the Account. Crown Agents Bank will then transfer the funds
to an account, which forms part of the Consolidated Fund or equivalent account of the
Government for amounts provided in support of the general revenue budget. The Accountant
General (or equivalent) of the Government of Bangladesh will provide written confirmation to
Crown Agents Bank that funds have been received into the Consolidated Fund (or equivalent)
including a copy of the voucher which records receipt into the payee account. Audit
arrangements will be as specified in the MoU.
Disbursement of the Grant for Non Budget Support Financial Aid
7.
In accordance with the arrangements set out in Joint Financing Arrangements for the
Primary Education Development Programme document the GoB, or the Procurement Agents
will through Crown Agents Bank, request disbursement of all or part of the Grant. DFID will
authorise and make payment into the Account. Crown Agents Bank will then transfer funds to
an account specified by the GoB for the project expenditure, other than amounts to which
paragraph 11.1.3 applies for goods and services procured through a Procurement Agent.
8.
Any monies paid out of the Account and subsequently to be refunded to the GoB by a
contractor or by a guarantor must be returned to the Account by the contractor or guarantor.
9.
Any outstanding claims must be submitted within three months of the project end
date.
10.
Crown Agents Bank will send to the GoB at the end of each month a detailed
statement showing all debits and credits to the Account during that month.
FOR NON-BUDGET SUPPORT FINANCIAL AID
Procurement
11.
Where an MOU allows for the purchase of goods and services, the Partner
Government may, using the draft Contract in Appendix 1, appoint a Procurement Agent
approved by DFID’s Procurement Group, or may undertake procurement through its own
systems.
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11.1
Procurement through a Procurement Agent
11.1.1 The partner Government must notify the appointed Procurement Agent of authorised
signatories mentioned in paragraph 5. The Partner Government will subsequently submit
signed indents to the Procurement Agent for goods and services to be procured.
11.1.2 The Procurement Agent sends the indent, proposed contract and any other relevant
documents to Crown Agents Bank. Crown Agents Bank authorises the Procurement Agent to
proceed where there are sufficient available funds.
11.1.3 On delivery of the goods or services, the Supplier sends invoices to the Procurement
Agent who submit these to Crown Agents Bank for payment. Crown Agents Bank makes
payments directly to suppliers of goods and services, and fees to the Procurement Agent.
11.1.4 Accounts for direct payments are not audited but are retained by Crown Agents Bank
with all the associated documents and are available for audit examination by the UK’s
National Audit Office (NAO).
11.2
Procurement by the Partner government
11.3
Procurement guidelines are outlined in detail in the MoU and the Joint Financing
Arrangements.
Submission of claims for Partner Government expenditure
12.
For reimbursement of payments already made for goods and services in the partner
country, payments from the Account to an account specified by the GoB for the project
expenditure will be made on submission of a claim.
13.
Claims must be forwarded in duplicate to the DFID spending department,
accompanied by the relevant supporting documents. Before submission to Crown Agents
Bank, all claims for payment must be approved by the DFID spending department.
14.
Claims may be submitted in the form of a letter, which should include necessary
information to allow DFID and subsequently Crown Agents Bank to release the funds and/or
make payments. This must include the following information:
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(i) Title of Grant
(ii) Project location/official address
(iii) Amount of claim
(iv) Details of expenditure (attach details of how the amount claimed is calculated; e.g. work
carried out, name of supplier/contractor, material purchased, labour used, machinery hired or
bought, contracts entered into, and services used etc)
(v) Details of any local procurement expenditure provided by other organisation
16.
All claims must include the following certification statements:
“I certify that this claim for {insert amount} is correct and that the sum requested is properly
due on the basis of the information provided and on the work carried out, material bought in,
and other expenses necessarily incurred in connection with the Project. I have the authority
to sign this on behalf of the Government of ............................
Authorised Signatory ............................
17.
Date .....................”
All claims must bear the authorised signatures provided for in paragraph 5. Claims
must additionally specify the means of audit discharge for partner government expenditure,
and confirm that the audit authority has been informed and been given details of the claim. If
the means of discharge is other than audit, original documents supporting the claim must be
included.
Audit discharge for Partner Government expenditure
18.
There are three options through which GoB expenditure under this
project/programme is to be audited. These are:
Annual Audited Statements
18.1.
A Partner Government certifies that a particular sum of money has been spent on
agreed purposes and this statement is independently audited and a certificate given by a local
independent audit authority. Each annual audited statement is provided in triplicate to DFID
and is countersigned by the appropriate audit authority; it shows the drawing made from the
Grant and the actual expenditure incurred during each financial year and certifies that the
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expenditure was incurred in accordance with the provisions of the MOU and any conditions
on which the project/programme was accepted for financing from the Grant. Completed
Annual Audited Statements relating to expenditure actually and necessarily incurred and paid
within a particular financial year must be received by the UK Government no later than 9
months after the end of the financial year.
Agency Audit
18.2
A self-contained accounting and audit system is established within the management
supervisory structure of a large scale project/programme. Local payments are paid direct to
the contractor against claims certified by a consultant; an external auditor acceptable to DFID
is appointed to the consultants to audit the accounts. Reports or certificates should be
available to DFID and the National Audit Office (NAO) as of right;
Continuous Audit
18.3
Each request for reimbursement made by the Partner Government is certified by an
external auditor acceptable to DFID and the Partner Government. The auditor confirms that
the claim is correct and accords with the MOU and is acceptable for payment.
November 2011
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