Presentation on theme: "Starting-up the Project April 2012. We would like to acknowledge the contribution of the Programme Management Department in the preparation of this presentation."— Presentation transcript:
Starting-up the Project April 2012
We would like to acknowledge the contribution of the Programme Management Department in the preparation of this presentation that will introduce some concepts and guiding principles for the starting-up of a new project For more information on the topic please refer to the supervision training material of February 2012 Starting-up the Project 1
2 Starting-up the Project Learning Objectives What happens after the Board approves the loan and before actual project implementation begins? What are the legal prerequisites for effectiveness? What is the Letter to the Borrower? What should be included in the first years Annual Work Plan and Budget (AWPB)? What is the Project Start – up Workshop?
Starting-up the Project Starting-up The third and fourth crucial stage in Implementation (Letter to the Borrower and Start-up) Here you: 1.Translate all design, negotiation and legal documents into ACTION 2.This phase sets up the software of how your project will be run – difficult to change later 3.Clearly establish projects responsibilities in implementation 3
Starting-up the Project Support for Start-up: Pre-Entry into force Ensure rapid signature of financing agreement Ensure necessary steps are taken for ratification, if required and stipulated in the Financing Agreement Initiate actions with the Authorised Representative of the Borrower to include in the National Budget the Annual Counterpart funding requirements Selection and Limited contracting of essential start-up staff Open Designated and Project Accounts as required To facilitate rapid Start-up, several actions can be taken before effectiveness: 4
5 The financing agreement enters into force upon signature, or, if ratification is required, when the instrument of ratification is received by IFAD An official notification is sent to Borrower by IFAD when conditions are met to IFADs satisfaction, and financing agreement enters into force Starting-up the Project Support for Start-up: Entry into Force
6 Starting-up the Project Letter to the Borrower Is the operational guideline for withdrawal of loan funds for project expenditures (procurement) on goods, works and consulting services, details of financial and audit reporting requirements Sent to the Borrower after the loan/grant has entered into force Is explained to the PMU/Implementing Agency during Start-up mission LTB goes hand in hand with the Loan Disbursement Handbook (LDH), which includes prescribed forms to be used by the Borrower in withdrawing funds from loan The Letter to the Borrower...
7 Starting-up the Project LTB and the LDH Eligible expenditures Evidence of authority to sign Withdrawal Application (WA) Disbursement procedures Designated Account Statement of Expenditure Conditions for disbursement Allocation of loan proceeds Explains the following topics: Withdrawal applications Project Completion and Loan Closing Dates Procurement Review of documents by IFAD Project reviews, periodic assessments and reporting Financial reporting and auditing
8 Starting-up the Project LTB and the LDH 1.Sample letter of evidence of authority to sign WA 2.Operation of Designated Account 3.Direct payment procedure 4.Special commitment procedure 5.Reimbursement procedure 6.SOE provision and eligibility 7.Schedule 2 and guidelines for withdrawal of loan proceeds 8.Project Checklist – Form and Instructions in completing form 9.List of IFAD Member States 10.Flow Charts for the disbursement procedures 11.Register of Contracts 12.Status of Financial Statement and Audit Report Loan Disbursement Handbook includes several attachments:
9 Starting-up the Project Letter to the Borrower Drafted by Controller and Financial Services Division Reviewed by Country Programme Manager Cleared by Country Programme Manager, Controller and Financial Services Division, Office of the Secretary, Office of the General Counsel Signed by the President Amendments to Letter to the Borrower, including SOE thresholds, are delegated by the President to Letter to the Borrower s signatories The LTB is:
10 Starting-up the Project Designated Account - Initial Deposit (1) Imprest account - Based on authorized allocation with determined ceiling e.g. USD 2 million. Replenishment made against justification of expenditures (i.e. amount justified = amount replenished) Revolving Fund - Based on AWPB. Advances made to cover a specific reporting period (e.g. 6 months). Replenishment made against justification of previous advances (e.g. 100% of penultimate advance) The DA has two modalities...
11 Starting-up the Project Designated Account - Initial Deposit (2) In most cases, it is the first withdrawal request The advance or authorized allocation (AA) is usually limited to an amount sufficient to cover expenditures for a period of four to six months Amount of AA is provided in the LTB AA could be paid in one tranche or in 2 or more tranches (Check out provision in LTB) Payment of second tranche of authorized allocation could be subject to meeting condition/s provided The initial deposit is subject to a number of conditions...
Starting-up the Project Designated Account - Initial Deposit (3) Increase in authorized allocation is subject to amendment of the LTB Expenditures funded from the Designated Account are replenished by submission of WA During typical project life, 70 – 80% of WAs are replenishment to the Designated Account 12
13 Usually have 2 sessions: a) General-with all participants; b) Technical-with project staff and key operational stakeholders Reach clear and common understanding of Project objectives and goals, and roles and responsibilities of each stakeholder Establish working relationship between IFAD, project staff, stakeholders Starting-up the Project Start-up Workshop: Objectives (1) Starting-up the Project Start-up Workshop: Objectives (1)
14 Ensure Borrower understands project financing plan in AWPB, and in the Procurement Plan and relationship between procurement and disbursement Confirm with government the budgeting and allocation procedures for financing its contribution to project cost (counterpart funding), as well as any co-financiers Establish appropriate financial management (using national systems consistent with IFAD guidelines) and M&E systems and agreed reporting requirements useful to IFAD and Government Starting-up the Project Start-up Workshop: Objectives (2)
15 The Borrower organizes start-up workshop with stakeholders (same as members of the CPMT), e.g., Government, beneficiaries, project staff, NGOs, co-financiers. CPM actively supports process Discuss all aspects of Project: e.g., project components, logframe, risks, reporting formats, IFAD safeguards, AWPB, procurement plan, M&E, auditing, coordination of components Explain procedures and guidelines for disbursement of IFAD loan, and common reasons for delays Agreement on Supervision/Implementation support set up – e.g., responsibilities of PMU including what should be prepared in advance of Supervision/implementation support mission How to work as a team-common interest in satisfactory outcomes Starting-up the Project Start-up Workshop
16 Starting Up the Project: Project Planning and Budgeting Annual Work Plan and Budget – Purpose AWPB is part of the Financing covenants. It is an essential managerial tool. It consists of specific time and activity schedules and detailed budgets for the impending year. It is a key moment to organize beforehand for Implementation. Why do we need it? serves as the instrument for emphasising and integrating management priorities for implementation, forecasting procurement requirements and facilitating the mobilisation of staff and resources when they are needed required for the release of funds by the financiers as a tool for Project Management, Government and IFAD to control costs, review and assess the performance and achievement of targets at the end of each year
17 Starting-Up the Project: Project Planning and Budgeting Annual Work Plan and Budget (AWPB) Starting-Up the Project: Project Planning and Budgeting Annual Work Plan and Budget (AWPB) Timely submission of draft AWPB to IFAD (as stipulated in the financing agreement general provisions agreement) IFAD (CPM) – No Objection to draft AWPB and communication sent usually within 30 days as stipulated in the loan agreement Finalization of AWPB by PMU (within the timeline stipulated in the loan agreement but prior to the start of the implementation year) Procedures
18 Starting-Up the Project: Project Planning and Budgeting Annual Work Plan and Budget – General Format Starting-Up the Project: Project Planning and Budgeting Annual Work Plan and Budget – General Format Summary of progress and performance since effectiveness Description of Work Plan of current year including: objectives (why?); activities (how?); deliverables & outputs (what?); required inputs; implementation arrangements (when?); institutional responsibilities (who?); key M&E indicators; etc. M&E activities (bench-marking, operation of M&E system); impact-oriented data related to participating villages and households, expected outputs, etc. Quantitative data of planned inputs in table format including: detailed physical and financial targets, sources of funds, and budget summary tables Monthly activity schedules and timelines (Implementation Schedule)
19 Starting Up the Project: Project Planning and Budgeting Annual Work Plan and Budget 1. Introduction 2. Activities and Resources Schedule 3. Procurement Plan 4. Summary Training & Technical Assistance Schedule 5. Budget & Financing Plan The consolidated AWPB is expected to contain several key elements…
20 Starting-up the Project: Project Planning and Budgeting Annual Work Plan and Budget Review Procedural aspects – is it submitted by the authorised official(s) within the time-lines and methodology set in the Loan Agreement?
21 Starting-up the Project: Project Planning and Budgeting AWPB Review – Setting Your Checklist Tips: Is the AWPB complete? Does it include summary progress, activities & resource schedule, budgets, procurement plan, training & TA schedule? Is the work plan linked to project log-frame (activities, inputs, outputs)? Is the strategic direction adequately reflected in the work plan (and component sub-plans)? Are inputs & outputs adequately quantified and is there coherence between inputs & outputs? Do implementation schedules appear realistic, appropriate milestones/ targets? Is there evidence of adequate M&E system in place & operating? Are measures and activities for impact monitoring & reporting adequate? Is the budget generally consistent and coherent with the planned activities, inputs & outputs?
22 Starting-up the Project: Project Planning and Budgeting First Year Annual Work Plan and Budget (AWPB) Plan actions for coming year Responsibilities Determine what needs to contract/purchase, and how to purchase it Is main tool to measure progress towards development effectiveness and impact
23 1. PMU: Vehicles and Office Equipment 4WD vehicles desktop and notebook computers printers software fax machine photocopier telephones office furniture air conditioners stationery etc. Start-up : Project Planning and Budgeting AWPB – Typical First Year Inputs Start-up : Project Planning and Budgeting AWPB – Typical First Year Inputs 3.Sub-Contracts accounting software English language training computer training 4.Recurrent Costs salaries & allowances for PMU personnel vehicle operation and maintenance office operation and maintenance office utilities and supplies 2.Technical Assistance Inputs contracting specialist monitoring and evaluation specialist other technical assistance as required
Start-up : Project Planning and Budgeting Additional elements to AWPB From Project Year 2, the consolidated AWPB will contain the following additional key elements: Physical progress made in prior year, including quantitative data Financial progress in prior year, including cost overruns & savings, analysis of flow of funds from financiers Procurement performance Constraints & problems from prior year, & recommendations to resolve them; good practices to be scaled up Lessons learned & rationale for the activities proposed 24
25 Starting-up the Project: Project Planning and Budgeting Procurement at Start-Up Desired Features of a Procurement Plan 1.Ideal Structure 2.Coherence with project objectives and annual work plan 3.Financial estimates in line with annual budget and overall funds allocation 4.Procurement methods in line with regulatory framework 5.Realistic timing and scheduling of procurement activities
26 Ideal Structure The plan covers 18 months and shows for each procurement action: the loan category, financing rate, procurement method, estimated cost, quantities, IFAD review requirement, and anticipated timeline for the entire process Procurement actions are presented by project component and properly identified and referenced Procurement actions are grouped according to categories (goods/works/services) for each component Within each category, procurement actions are grouped into coded lots or packages for increased competition, efficiency and better prices Starting-up the Project: Procurement Review of Procurement Plan (1) (refer to checklist) Starting-up the Project: Procurement Review of Procurement Plan (1) (refer to checklist)
27 Coherence with project objectives and annual work plan Procurement actions are relevant to project objectives Nature and quantity of goods/works/services are consistent with appraisal report (detailed cost tables) Nature and quantity of goods/works/services are consistent with activities in the annual work plan Financial estimates in line with annual budget and overall funds allocation Estimated costs for each procurement action are reasonable Cost estimates are properly reflected in the annual budget Cost estimates are within overall project funds allocation (by expense category) Starting-up the Project: Procurement Review of Procurement Plan (2) Starting-up the Project: Procurement Review of Procurement Plan (2)
28 Procurement methods in line with regulatory framework Compliance with the loan agreement Compliance with the procurement guidelines and national regulations Realistic timing and scheduling of procurement activities Anticipated timeline for each procurement action (from preparation of bidding documents to signature of contract) is realistic Anticipated delivery dates of goods/works/services are consistent with physical targets as per the AWPB Starting-up the Project: Procurement Review of Procurement Plan (3) Starting-up the Project: Procurement Review of Procurement Plan (3)