1. Overview on Fiduciary Aspects, Procurement and Audit IFAD India Country Office

2. What is IFAD? IFAD (International Fund for Agricultural Development) was established in 1978 Headquarters at Rome, Italy One of the International Financial Institutions India is a Founding Member

3. IFAD Loan Assistance On Highly Concessional terms No interest charged for the loan Service charge of 0.75% on loan disbursed Repayment over 35 years Back-to-back loan Repayment responsibility with Govt. of Maharashtra

4. Important dates Approval of IFAD Executive Board April 2009 Programme Effectiveness 4 December 2009 Programme Completion date 31 December 2017 Programme Closing date 30 June 2018

5. Basic documents  Programme Financing Agreement (and amendments)  Agreed Minutes of the Negotiations  Project Appraisal Report (Design document)  Co-financing Agreement  Disbursement Guidelines  IFAD Guidelines on Project Audit  IFAD Procurement Guidelines  Project Implementation Manual

6. Project Financing Agreement  Legally binding document for compliance  Modified/amended with mutual concurrence of Government/IFAD  Appraisal Report is only a road map for implementation; not binding  Compliance to Loan Covenants to be reported during each JRM  JRM recommendations shall be in line with the PLA

7. How IFAD funds are routed? Loan Account for each project Distinctive Loan Number/Grant Number Loan denominated in Special Drawing Rights (SDR), a notional currency Special Account denominated in United States Dollar or any fully convertible currency Programme Accounts denominated in local currency (INR)

8. Loan and Grant Assistrance from IFAD Two Special Accounts in RBI Loan Special Account will have an initial deposit of USD 2 million Grant Account withdrawal will be on the basis of estimates in AWPB

9. Fund Flow CAA&A IFAD RBI Special Account Govt. of Mah. LPA/PMU PMU submits WA

10. Counterpart and Parallel funds Department of CMT to create a budget line under EAP GoM to release funds as per AWPB (ideally quarterly) Close followup/liaison required PMU to maintain records for Govt. share (taxes etc)

11. Tracking of funds from different sources IFAD Govt. of Maharashtra counterpart funds SRTT Cofinanced funds Parallel financing from the State (convergence of existing programmes) Beneficiary contribution Formal Financial Institutions

12. Important Reporting Section 4.02 Progress Reports (6 monthly and annual – November and June) Section 5.01 Financial Statements (6 monthly and annual – December and June) Section 5.02 Audit Reports (30 th September

13. Procurement IFAD Procurement Guidelines apply for the Loan and Grant funds Reference in Schedule 4 Procurement methods available for Goods, Works and Services Prior review by IFAD

14. Some facts on Procurement Procurement is a much maligned word in implementation Procurement is blamed for lack of effective planning or incomplete planning Procurement is a disciplined process approach

15. Procurement – Overall Considerations Economy & efficiency Equal opportunity to all eligible bidders Fairness, integrity, transparency & good governance Competition as per procurement methods

16. Procurement Cycle Identification – needs or wants Planning Method of Procurement Bidding Process Evaluation and Award Contract Management Monitoring Disposal

17. Contract Management Vital when many contracts/partnership agreements crucial for implementation exist Site review/Progress reports Identification of bottlenecks – delays, slow performance Amendment in contracts Frequent consultations

18. Audit Report and Financial Statements  Auditors to be appointed within 90 days of effectiveness for the first year and within 30 days of start of the year subsequently  Section 5.02 (b) covers audit report and timeline  In case, no audit report the Fund shall suspend the right of the Borrower to request withdrawals from the Loan Account and Grant Account.

19. IFAD’s Policy on Anti-Corruption and Fraud IFAD follows zero tolerance on corruption and fraud IFAD Policy available on website www.ifad.org www.ifad.org IFAD’s whistle blower policy protects the confidentiality Office of Investigative Audit reports directly to the EB

20. Auditing The terms of reference to be in line with the IFAD Guidelines on Project Audit The auditor has to provide certification of PFS, audit report, management letter, separate opinion on SoE. Reporting templates available Audit Log of Observations Before 30 September every year

21. IFAD Policy on Anti-Corruption (contd) In case of fraud and corruption, IFAD will: Reject award recommendations Cancel relevant portion of loan if borrower fails to take action Sanction firms or individuals involved and declare ineligible for stated or indefinite period of time IFAD has the right to require a provision in the bidding documents / RFP enabling IFAD’s inspection and audit of accounts related to contract

22. Thank you