World Bank Project Appraisal Document - GAFSP

- including regular reconciliation of bank statements with project records. It also includes the
procedures on the selection of the beneficiaries, provisions to pay the beneficiaries through bank
transfers (no cash payments) and physical verifications of works prior to making payments.
17. PMU Financial Management (FM) staff currently includes the Chief Accountant, the Senior
Financial Specialist and the Accountant-Cashier. Previous experience of the PMU has shown that the
existing organizational structure, with the Chief Accountant responsible for the implementation of
several projects at the same time, led to downgrading of one of the projects. To reduce this risk, for
PAMP II the PMU will hire additionally two more dedicated staff (Finance Manager and
Disbursement Consultant), who will be responsible for all fiduciary aspects of the project and will
directly report to the Chief Accountant. The recruitment of both these local consultants will be
conducted prior to the start of active phase of field works (approximately September 2013). The Chief
Accountant will have overall responsibilities for both projects and together with the PMU Director
will be accountable for any actions of the PMU.
18. Disbursement methods. The following disbursement Methods may be used under the
Financing: (i) reimbursement, (ii) advance, (iii) direct payment and (iv) special commitment. Details
on the ceiling of the DAs will be provided in the Disbursement Letter. Withdrawal applications for
replenishment of the DAs will be sent to the World Bank at least on a quarterly basis. There will be no
Government contribution of funds to the project.
19. Designated accounts. The PMU will open two Designated Accounts in US dollars (one is for
IDA Grant and another one is GAFSP TF) for administering project funds, in a commercial bank
acceptable to the World Bank. PMU is capable managing these accounts as the finance team is already
managing two DAs under Ferghana project. The ceiling for the Designated Accounts and other
disbursement details will be provided in the Disbursement Letter. However, due to the lapsing of four
loans in the Tajikistan Country portfolio no new Designated Accounts will be established for the
proposed under this IDA Grant, until the refund or documentation has been received for all
outstanding projects in Tajikistan. Hence, provision for use of a Designated Account as a disbursement
method in the Disbursement Letter for the proposed IDA Grant might not be included. If the issues
involving these operations are resolved prior to the issuance of the Disbursement Letter (i.e. at the
signing of the new operation), then the letter will be revised to include such a provision. If the issues
are resolved subsequently, then an amended Disbursement Letter will be issued to include the
provision for a Designated Account
20. Project Financial Reporting. The PMU must submit quarterly interim un-audited financial
reports (IFRs) that will be generated by the accounting system based on formats agreed with the World
Bank. The reports, to include Statement of Sources and Uses of Funds, Uses of Funds by Project
activities (Components & Expenditure Categories) and Statements of Designated Accounts (DA), will
be submitted to the World Bank within 45 days of the end of each quarter, with the first reports under
the proposed Project being submitted after the end of the first full quarter following initial
disbursement. Draft formats of these IFRs have been developed and agreed with the PMU during the
negotiations.
21. Auditing arrangements. The project audit report for the original PAMP which was due on
August 31, 2012, was received on time and found to be satisfactory to the Bank. With some delays the
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