PAD - LGED

• Monitoring and Evaluation System (M&E) covering the key performance indicators for
input, outputs and outcome monitoring. RHD’s Central Monitoring System (CMS) might
be adapted to deliver some of these functions, after customization for LGED’s needs. The
IDSS may also contain:
i) Financial Management;
ii) Standard Schedule of Rates (SSR) which generates the Bill of Quantities (BOQ);
iii) Human Resource Database;
iv) E-Procurement;
v) Centralized Contractors Database (covering all contractors who have executed or
are executing any project for LGED) to facilitate contractors’ performance
evaluation, comparison and monitoring.
Governance risks in LGED and RTIP-II
12. The governance assessment during the project preparation has identified risks in the
following areas of governance at the project level for which a number of mitigation measures are
proposed in the GAAP Matrix:
• Allocation and use of resources in rural road maintenance and asset management. LGED
management has realized that allocated resources are often spent by local governments on
development and major improvement works rather than maintenance works in some districts.
• Internal integrity. Integrity mechanisms (e.g., public information disclosure, vigilance,
grievance redress mechanism), while in place, are still not fully used and need substantial
improvement to demonstrate their effectiveness.
• Transparency in Procurement Process and Contract Management. During 2004-06 a few
cases of inappropriate bidding practices including possible indications of collusion/fraud
were identified in RTIP by the Bank and also by LGED. Subsequently, LGED debarred 20
firms under RTIP. For prior review contracts (~ 150 contracts, six percent of 2,700 RTIP
contracts and 20 percent of project financing), the Bank consistently applied its due diligence
as part of the review, and for contracts below the prior review limit (94 percent of RTIP
contracts), procurement post reviews were conducted consistently every year. The postreviews
of FY10/11 revealed a few instances of poor practices but not of significant nature to
call for Bank's remedial measures. There has been no INT investigation under the project
Over the years, the RTIP unit of LGED, demonstrated better performance compared with
LGED's other units. About 60 percent of LGED Upazila offices have at least one
procurement trained staff.
• Inadequate financial management. There have been outstanding audit issues dating back to
2004 which during the preparations of the RTIP-II were addressed and resolved fully. To
overcome the inconsistencies on accounting data and financial reporting prior to the closure
of the recently completed RTIP project, an Accounting Specialist was hired to reconcile the
accounting data of all the cost centers, including PIU expenses. The full roll out of the
Unified Financial Management System (UFMS) which was planned under RTIP-I, has not
yet taken place. As such, a project specific computerized accounting system has been agreed
to be set up for RTIP-II. Timely submission of FMRs has also been an issue under RTIP.
Fund flow and financial reporting arrangement have been modified in the RTIP-II so that this
is not repeated.
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