Document of
The World Bank
FOR OFFICIAL USE ONLY
Report No: 107669
PROJECT PAPER
ON A
PROPOSED GRANT
IN THE AMOUNT OF US$ 0.7 MILLION
TO THE
PALESTININAN CENTRAL BUREAU OF STATISTICS
FOR A
Palestine PECS 2016/17 (P158633)
This document has a restricted distribution and may be used by recipients only in the
performance of their official duties. Its contents may not otherwise be disclosed without World
Bank authorization.
CURRENCY EQUIVALENTS
Exchange Rate Effective N/A
FISCAL YEAR
January 1 – December 31
ABBREVIATIONS AND ACRONYMS
CAS Country Assistance Strategy
CPI Consumer Price Index
CQS Consultant Qualification
DA Designated Account
DHS Demographic and Health Survey
DL Disbursement Letter
FM Financial Management
GDP Gross Domestic Product
GNP Gross National Product
IBRD International Bank of Reconstruction and Development
IDA International Development Association
IFR Interim Financial Report
IPF Investment Project Financing
LFS Labor Force Survey
MoF Ministry of Finance
MENA Middle East and North Africa
PA Palestine Authority
PCBS Palestinian Central Bureau of Statistics
PECS Palestinian Expenditure Consumption Survey
PMO Project Management Office
PP Procurement Plan
QCBS Quality and Cost Based Selection
SSS Single Source Selection
TFSCB Trust Fund for Statistical Capacity Building
ToR Terms of Reference
WA Withdrawal Application
Regional Vice President: Hafez M. H. Ghanem
Country Director: Steen Lau Jorgensen
Global Practice Senior Director: Ana L. Revenga
Practice Manager: Benu Bidani
Task Team Leader: Sergio Daniel Olivieri
WEST BANK & GAZA
Palestine PECS 2016/17 (P158633)
TABLE OF CONTENTS
Page
STRATEGIC CONTEXT .............................................................................................................7
A. Country Context ............................................................................................................ 7
B. Sectoral and Institutional Context ................................................................................. 7
C. Higher Level Objectives to which the Project Contributes .......................................... 8
PROJECT DEVELOPMENT OBJECTIVES ............................................................................8
PDO..................................................................................................................................... 8
Project Beneficiaries ........................................................................................................... 8
PDO Level Results Indicators ............................................................................................. 8
PROJECT DESCRIPTION ..........................................................................................................9
Project Components ............................................................................................................ 9
Project Cost and Financing ................................................................................................. 9
IMPLEMENTATION ...................................................................................................................9
Institutional and Implementation Arrangements ................................................................ 9
Results Monitoring and Evaluation .................................................................................. 10
KEY RISKS AND MITIGATION MEASURES ......................................................................10
APPRAISAL SUMMARY ..........................................................................................................10
Other Safeguards Policies Triggered ................................................................................ 11
World Bank Grievance Redress ........................................................................................ 11
Annex II: Financial Management and Disbursement ..............................................................13
Annex III: Procurement ..............................................................................................................16
DATA SHEET
West Bank and Gaza
Palestine PECS 2016/17 (P158633)
Small RETF Grant Project Paper
.
Middle East and North Africa
GPV05
.
Basic Information
Date: March 8, 2016 Sectors: Poverty
Country Director: Steen Lau Jorgensen Themes: Social protection and risk management
Practice Manager/Global Benu Bidani / Ana L. Revenga EA Category: C-Not Required
Practice Senior Director:
Project ID: P158633
Instrument: Investment Financing Project
Team Leader(s): Sergio Daniel Olivieri
.
Recipient Palestinian Central Bureau of Statistics
Executing Agency: Palestinian Central Bureau of Statistics
Contact: Fida Twan Title: Director of Living Standards Department
Telephone No.: 9729702-2982700 Email: tfida@pcbs.gov.ps
.
Project Implementation Period: Start Date: 01-March-2016 End Date: 30-June-2017
Expected Effectiveness Date:
Expected Closing Date: 31-July-2017
.
Project Financing Data(US$M)
Total Project Cost : 0.70 Total Financing : 0.70
Financing Gap : 0.00
.
Financing Source Amount(US$M)
BORROWER/RECIPIENT 0.00
Trust Fund for Statistical Capacity Building 0.70
Financing Gap 0.00
Total 0.70
.
Expected Disbursements (in USD Million)
Fiscal Year 2016 2017 2018
Annual 0.20 0.48 0.02
Cumulative 0.20 0.68 0.70
.
Project Development Objective(s)
The PDO is to support the Palestinian Central Bureau of Statistics (PCBS) in collecting the next round of
the Palestinian Expenditure Consumption Survey (PECS) for monitoring regularly different socio-
economic indicators. The original intended PECS survey in 2015 has faced severe budget constraints.
Despite PCBS’s readiness to implement the full survey by revisiting questionnaires, sampling design and
piloting; PCBS has been unable to go to the full implementation stage. This puts at risk the ability to run
the full survey on time in 2016 which has already several months delayed.
.
Components
Component Name Cost (USD Millions)
Implementation of PECS survey 2016/17 0.70
.
Compliance
Policy
Does the project depart from the CAS /CPS/CPF in content or in other significant respects? Yes [ ] No [X]
.
Does the project require any exceptions from Bank policies? Yes [ ] No [X]
Have these been approved by Bank management? Yes [ ] No [X]
Is approval for any policy exception sought from the Board? Yes [ ] No [X]
Does the project meet the Regional criteria for readiness for implementation? Yes [X] No [ ]
.
Safeguard Policies Triggered by the Project Yes No
Environmental Assessment OP/BP 4.01 X
Natural Habitats OP/BP 4.04 X
Forests OP/BP 4.36 X
Pest Management OP 4.09 X
Physical Cultural Resources OP/BP 4.11 X
Indigenous Peoples OP/BP 4.10 X
Involuntary Resettlement OP/BP 4.12 X
Safety of Dams OP/BP 4.37 X
Projects on International Waters OP/BP 7.50 X
Projects in Disputed Areas OP/BP 7.60 X
.
Legal Covenants
Name Recurrent Due Date Frequency
Description of Covenant
.
Team Composition
Bank Staff
Name Title Specialization Unit UPI
Sergio Daniel Olivieri Team Leader Senior Economist GPV05 316966
Tara Vishwanath Team Member Lead Economist GPV05 87596
Christina Wieser Team Member Economist GPV05 458837
Cornelia Mirela Catuneanu Team Member Program Analyst GPV06 152088
Riham Hussein Financial Management Financial Management GGO23 448674
Specialist
Lina Fathallah Rajoub Procurement Specialist Senior Procurement GGO05 351327
Specialist
Mohammad Nadeem Legal Analyst Legal Analyst LEGAM(08815) 231091
Vidya Narasimhan Financer Officer WFALN WFALN 255977
Non Bank Staff
Name Title Office Phone City
.
Locations
Country First Administrative Location Planned Actual Comments
Division
.
STRATEGIC CONTEXT
A. Country Context
1. The Palestinian economy was slowing down even before the eruption conflict in Gaza in early
2014. Following a period of sustained economic recovery between 2007 and 2011 when average yearly
growth exceeded 8 percent, the economy has been struggling. The decline started in 2012 when the overall
growth rate halved, falling to about 6 percent as a result of a sharp drop in foreign aid. This, against a
backdrop of ongoing Israeli restrictions and high political uncertainty, led to significant fall in public and
private consumption which caused growth rates to continue their decline, down to only 1.9 percent in 2013.
The economic situation significantly deteriorated in 2014. The sharp drop in Gaza’s growth was primarily
caused by the closures of the tunnels with Egypt, which represented the main trade channel for imports and
exports for Gaza.
2. The economic decline is resulting in growing unemployment. Unemployment reached 26 percent
by the middle of 2014: 16 percent of the workforce in the West Bank and a staggering 45 percent in Gaza.
At 40 percent each, women and youth have particularly high levels of unemployment. What is more, almost
23 percent of the workforce is employed by the public sector, an uncommonly high proportion that reflects
the lack of dynamism in the private sector.
3. Even though the Palestinian economy has made considerable progress towards the twin goals of
eradicating extreme poverty and shared prosperity, challenges remain both on poverty and inequality. The
share of people living on less than US$1.25 a day is less than 1 percent. However, the $1.25 poverty line
is not appropriate for the Palestinian situation, as evidenced by 25.8 percent living in poverty in 2011(latest
data available) according to the national, basic-needs based poverty line. In addition, a GINI coefficient of
40.3 percent indicates a significant level of income inequality in the Palestinian territories.
B. Sectoral and Institutional Context
4. The Palestinian Central Bureau of Statistics (PCBS) conducted the first household expenditure and
consumption survey in 1995/96. Since then, PCBS has tried to maintain an annual series which was only
interrupted by the eruption of conflicts. This effort has resulted in eleven fruitful rounds of the Palestinian
Expenditure and Consumption Survey (PECS) for years 1996-1998; 2001; 2004 up to 2011/12. This survey
is very comprehensive and gathers information beyond consumption and expenditure like education, health,
labor market status and social welfare programs which is representative at region (i.e. West Bank and Gaza
Strip) and Locality (i.e. urban and rural).
5. The findings of these surveys constituted a solid database and enabled PCBS to publish detailed
statistics regarding expenditure consumption patterns, and individuals’ and households’ incomes by
different sources. It also helped on measuring poverty from a monetary and non-monetary viewpoint, as
well as assessing copying mechanisms implemented by families living in a fragile environment.
Furthermore, this survey has also contributed to the estimation of Gross National Product (GNP),
improvement of a new Consumer Price Index (CPI) and provided necessary evidence for formulating
national policies at various levels.
6. PCBS has always provided public access to the data which is unique in the Middle East and North
African region (MENA). As a result Palestine has been up-to-date as one of the few MENA countries
which is part of the Global database – POVCALNET-
7. A multi-year programmatic and comprehensive collaboration between the World Bank and the
Palestinian Central Bureau of Statistics (PCBS) stated in 2010. This effort has produced several fruitful
outputs like producing consistent trends of poverty estimates from 2004 and 2009 based on a revised
methodology of poverty measurement. Furthermore, analytical work using multiple source of data – five
rounds of the Palestinian Expenditure and Consumption Survey (PECS) from 2004-2009, twelve years of
7
the Labor Force Survey (LFS) data (1998-2009), and three rounds of the Demographic and Health Survey
(DHS) data (2000, 2004, 2006) – created a strong evidence based diagnostic that has been used for policy
and program formulation.
8. At the same time, results from this analysis also contributed in many improvements in the overall
statistical system: Palestinian Expenditure and Consumption Survey’s questionnaire was revised and the
underlying sampling methodology reviewed. Additionally, PCBS decided to conduct this survey every
three to five years with short modules in between in order to enable continuous monitoring of poverty and
other critical welfare indicators.
C. Higher Level Objectives to which the Project Contributes
9. This project is fully aligned with the original Country Assistance Strategy (CAS) Pillar 1 of
“Strengthen the institutions of a future state to ensure service delivery to citizens”, and in particular to
Outcome 1.2 “Improved access to services by the poor and marginalized”. This activity is also associated
with these objectives for the remaining period of the CAS, in particular, to deliver basic public services,
especially in areas where the security threat has diminished, to reduce poverty and enhance citizen’s trust
in the government institutions, by providing the most recent poverty estimates in this rapidly evolving
context.
PROJECT DEVELOPMENT OBJECTIVES
PDO
10. The PDO is to support the Palestinian Central Bureau of Statistics (PCBS) in collecting the next
round of the Palestinian Expenditure Consumption Survey (PECS) for monitoring regularly different socio-
economic indicators. The original intended PECS survey in 2015 has faced severe budget constraints.
Despite PCBS’s readiness to implement the full survey by revisiting questionnaires, sampling design and
piloting; PCBS has been unable to go to the full implementation stage. This puts at risk the ability to run
the full survey on time in 2016 which has already several months delayed.
Project Beneficiaries
11. Major beneficiaries of the project are data producers and users in and out of Palestine such as the
Palestinian Central Bureau of Statistics (PCBS), the National Poverty Committee; policy makers and
planners, researches, local think tanks, academia, non-governmental organizations, international
organizations and donors, among others.
PDO Level Results Indicators
12. The key result that is expected from the Project is to collect the next round of the multi-topic
household survey for Palestine (PECS 2016/17). Moreover a usual report presenting typical statistics that
describe the current socio-economic situation in West Bank and the Gaza strip is also an important output.
13. Intermediate outputs include:
a. Analysis of Pilot results
b. Sampling design
c. Training of trainers and enumerators
14. Data quality and accessibility: it is important to acknowledge that PCBS has made remarkable
progress over the decades. As above mentioned, there have been not only significant improvements in
8
capacity evidenced by the high quality of the PECS surveys which has allowed analytical work, but also
has committed to open access to data – all rounds of PECS are currently available for public use.
PROJECT DESCRIPTION
Project Components
15. There is only one component of the proposed project which is the implementation of the next round
of PECS 2016/17. Different activities are part of the data collection process and are necessary to achieve
the proposed PDO. The set of activities financed by this grant includes from training, survey preparation
and design, up-to data processing and dissemination. This grant will also be used for purchasing some goods
PCBS requires to conduct this survey. Note that the amount allocated for the latter is less than 20% of the
total grant.
16. Fieldwork for the full Palestinian Consumption and Expenditure Survey (PECS) is planned to be
conducted from March, 2016 until March, 2017. The intended sample size will be around 4,700 households
which will be distributed on about 391 enumeration areas stratified by region: the West Bank (divided by
North Middle and South), and Gaza Strip; and type of locality: rural, urban and refugee.
Project Cost and Financing
17. The lending instrument will be Investment Project Financing (IPF), financed with a Recipient
Executed Trust Fund for Statistics Capacity Building (TFSCB) at the amount of US$ 0.7 million. It is worth
to mention that the total cost of data collection for PECS 2016/17 is US$ 1,20 million and the government
contribution is about 42% of the total budget (around US$ 0.5 million).
Project Components Project cost Grant Financing % Financing
Implementing PECS 2016/17 1,200,000 700,000 58%
a. Training, Survey preparation & design 352,225 29,159 8%
b. Survey implementation & data collection 696,850 598,500 86%
c. Data Processing & dissemination 132,026 53,341 40%
d. Goods 18,900 18,900 100%
Total Baseline Costs 1,200,000 700,000 58%
IMPLEMENTATION
Institutional and Implementation Arrangements
18. The Palestinian Central Bureau of Statistics (PCBS) is the recipient and implementing agency of
the proposed grant. The recipient received several Trust Funds for Statistics Capacity Building (TFSCB)
before which are described below:
a. National Strategy for development of statistics with an amount of $ 96,500 in years 2007 -
2008.
b. Trust Fund for Statistical Capacity Building with an amount of $ 400,000 in year 2008 -
2010.
19. The Project Management Office (PMO) will be located in the PCBS and will be responsible for a
day-to-day management of the project. The team will include staff from PCBS and consultants. It is relevant
to add that this staff has experience on managing these type of funds.
9
Results Monitoring and Evaluation
20. The recipient shall monitoring and evaluate the progress of the Project and prepare Project Reports
in accordance with the provision of Section 2.06 if the Standard Conditions and on the basis of the indicators
set in Annex 1.
KEY RISKS AND MITIGATION MEASURES
21. An overall risk of the Project is moderate. There are some potential risks to be considered on the
implementation of PECS. Some of these are typical when conduction a complex survey like PECS such as
households’ non-response produced by survey burden; and others are particular to fragile contexts such as
accessibility constraints to some areas like Jerusalem due to current political situation. All of these
difficulties are not unusual to PCBS and have been tackled in the past.
22. The Security situation will determine the geographic scope of the survey particularly in the Gaza
Strip. However, the pilot, which has been completed, tested the modalities in the relatively insecure parts
of Gaza, with considerable success. As it was in previous rounds of PECS, the security of the filed team
will not be compromised. The PCBS face security risks on a daily basis and have developed protocols over
the last decades to accurately judge and mitigate these risks. These and more abundant precautions will be
followed with safety and security being the most important element in the decision to undertake fieldwork
in any area.
23. The security of the field teams will not be compromised. The PCBS face security risks on a daily
basis and have developed protocols over the last decades to accurately judge and mitigate these risks. These
and more abundant precautions will be followed with safety and security being the most important element
in the decision to undertake fieldwork in the area.
APPRAISAL SUMMARY
24. The main economic benefits of this grant are supporting PCBS on keeping the regularity on
collecting one of the most comprehensive surveys in the country which contributes in calculating Gross
Domestic Product (GDP) and CPI. Furthermore, it mainly helps on measuring poverty from a monetary and
non-monetary viewpoint; assessing copying mechanisms implemented by families living in a fragile
environment, and informing policy design for the less well-off. On the other hand, the monetary and non-
monetary costs of implementing the project seems more than compensated to the benefits mentioned above.
25. The overall financial management risk for this grant is assessed as “moderate” . Overall
responsibility for the project’s financial management (FM) and disbursement functions will rest with PCBS.
PCBS will hold the sole responsibility to disburse on behalf of the project to suppliers, contractors, and
consultants and will be responsible for day-to-day project implementation and financial management.
World Bank funds will be disbursed through a segregated Designated Account (DA) in US Dollars. PCBS
already has a World Bank DA at the Bank of Palestine (in Ramallah), which is managed by them. They
have confirmed that it currently has a zero balance and will be used for this project. PCBS’s accounting
system will be used to record, report, and monitor the project’s accounts. They record in both Bisan and
Oracle systems. The system is capable of capturing all project-related transactions by component. PCBS
will submit the Interim unaudited Financial Reports (IFRs) to the Bank within 45 days after the end of each
period. An external auditor, acceptable to the Bank, will be appointed by the Ministry of Finance (MOF)
to audit the project’s financial statements based on terms of reference (TOR) acceptable to the Bank..
Disbursement methods will include advances, reimbursements, direct payments, and special commitments.
PCBS will be responsible for managing the DA and making all payments directly to contractors,
consultants, and suppliers, including any incremental and operating costs. The detailed project financial
management and disbursement are outlined in Annex II.
10
26. A Procurement Capacity and Risk Assessment carried out during preparation has determined that
the procurement risk rating for the project is moderate. Procurement for the Project will be carried out in
accordance with the ‘Guidelines: Procurement of Goods, Works and Non consulting Services under IBRD
Loans and IDA Credits and Grants by World Bank Borrowers’ published by the Bank in January 2011,
revised July 2014 and the ‘Guidelines: Selection and Employment of Consultants under IBRD Loans and
IDA Credits and Grants by World Bank Borrowers” published by the Bank in January 2011, revised July
2014 the Grant Agreement and the Procurement Plan approved by the Bank. The ‘Guidelines on Preventing
and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants”
published in October 2006 and revised in January 2011 shall also apply to the project. The overall
responsibility for the implementation of project procurement will rest with the PCBS. PCBS would act as
the main counterpart to the Bank for all procurement aspects of the project and would ensure that project
procurement is carried out in accordance with the Grant Agreement and the Procurement Plan. PCBS has
good experience implementing projects following the Bank’s Procurement and Consultants Guidelines,
including the PCBS component under the ongoing EconRIB (P118560). Procurement activities envisaged
under this grant are of simple nature. PCBS has in-house capacity and systems to handle project
procurement. For each contract to be financed under the project, the different procurement and consultant
selection methods, estimated costs, prior review requirements, and time frame are agreed between PCBS
and the Bank project team in the Procurement Plan (PP). A procurement plan for the duration of project
implementation was prepared by PCBS and will be agreed with the Bank prior to signing the Grant
Agreement. The PP will be updated at least annually or as required to reflect the actual program
implementation needs. The detailed project procurement arrangements are outlined in Annex III.
Other Safeguards Policies Triggered
27. The project does not trigger any other safeguards policies
World Bank Grievance Redress
28. Communities and individuals who believe that they are adversely affected by a World Bank (WB)
supported project may submit complaints to existing project-level grievance redress mechanisms or the
WB’s Grievance Redress Service (GRS). The GRS ensures that complaints received are promptly reviewed
in order to address project-related concerns. Project affected communities and individuals may submit their
complaint to the WB’s independent Inspection Panel which determines whether harm occurred, or could
occur, as a result of WB non-compliance with its policies and procedures. Complaints may be submitted at
any time after concerns have been brought directly to the World Bank's attention, and Bank Management
has been given an opportunity to respond. For information on how to submit complaints to the World
Bank’s corporate Grievance Redress Service (GRS), please visit http://www.worldbank.org/GRS. For
information on how to submit complaints to the World Bank Inspection Panel, please visit
www.inspectionpanel.org.
11
Annex 1: Results Framework and Monitoring
West Bank and Gaza: Palestine PECS 2016/17 (P158633)
Project Development Objective (PDO): 10. The PDO is to support the Palestinian Central Bureau of Statistics (PCBS) in collecting the next round of the Palestinian Expenditure Consumption Survey
(PECS) for monitoring regularly different socio-economic indicators. The original intended PECS survey in 2015 has faced severe budget constraints. Despite PCBS’s readiness to implement the full survey by
revisiting questionnaires, sampling design and piloting; PCBS has been unable to go to the full implementation stage. This puts at risk the ability to run the full survey on time in 2016 which has already several
months delayed
Core
Cumulative Target Values** Responsibility Description (indicator
Unit of Data Source/
PDO Level Results Indicators* Baseline Frequency for Data definition etc.)
Measure 2016 2017 YR3 YR 4 YR5 Methodology
Collection
Indicator One: PECS 2016/17 Yes/No No No Yes One every three PCBS One multi-topic
round or five years household survey.
Indicator Two: Tabulation Yes/No No No Yes One every three PECS PCBS Report on key statistics
report or five years 2016/17 based on new round of
PECS (i.e. Poverty
numbers,
demographics, etc)
INTERMEDIATE RESULTS
Intermediate Result (Component One):
Intermediate Result indicator Yes/No No Yes One-time Pilot PECS PCBS Check pilot results of
One: Review of Pilot 2016/17
survey instrument for
PECS
Intermediate Result indicator Yes/No No Yes One-time Last PCBS Revision of sample
Two: Sample design available design
Census
Intermediate Result indicator Yes/No No Yes One-time Staff PCBS Workshop for trainers
Two: Training training and enumerators on
records implementation of
survey instrument
*Please indicate whether the indicator is a Core Sector Indicator (see further http://coreindicators)
**Target values should be entered for the years data will be available, not necessarily annually
12
Annex II: Financial Management and Disbursement
Financial Management
1. The overall responsibility for the implementation of financial management (FM) and disbursement
arrangements will rest with PCBS. PCBS has worked with us in the past and has effectively administered
Bank and donor funds, and their respective fiduciary arrangements for projects.
2. The overall financial management risk for the project is assessed as “moderate,” mainly due to the
following factors:
a) Length of time between the last project and the current project.
b) The nature of the project, which will mainly finance one activity, may encourage collusive
behavior.
3. The following is a summary of the agreed actions/mitigation measures:
a) Contract management will be centralized at PCBS.
b) PCBS will have the sole responsibility to disburse to suppliers, contractors, and consultants on
behalf of the project.
c) An independent external auditor, acceptable to the Bank, will be hired on a competitive basis
to perform an external audit of the project’s annual financial statements, in accordance with
ToR acceptable to the Bank. In addition, the ToR will be expanded to include a provision for
annual technical audits of the project.
d) A separate Designated Account will be opened by the MoF and will be used solely for this
particular project.
e) PCBS will maintain separate financial transactions in its accounting software by opening a
separate cost centers for this project.
f) PCBS will maintain complete supporting documentation for each contract, including signed
contracts and invoices, and other related supporting materials, readily available for audit.
g) Quarterly financial management reports will be submitted to the Bank and supervision missions
will be undertaken by the Bank semi-annually.
4. Staffing at PCBS: PCBS staff consists of a full-time financial and administrative manager, as well
as a financial officer. The financial and administrative manager is a qualified accountant and is capable to
monitor the grant’s FM and disbursement functions. The FM team is familiar with the World Bank’s FM
and disbursements guidelines.
5. Budgeting and Funds Flow: PCBS will maintain a project budget and detailed disbursement plans.
The budget will be developed based on an initial procurement plan and revised as needed. The budget will
be analyzed quarterly as part of the Interim unaudited Financial Reports (IFRs).
13
Flow of Funds
World Bank
PCBS submits
WA for
MOF’s co- Suppliers,
Designated Contractors &
signature
Account consultants
Managed by
PCBS
PCBS
Payment requests to PCBS
Legend
Full Arrows Movement of funds
Dotted Arrows Request for fund transfer
6. Accounting & Reporting: PCBS has a fully automated accounting system in place. This system
is capable of capturing all project-related transactions. A separate cost center to track and report the use of
project funds will be created after the Grant Agreement is signed in the government accounting system,
Bisan. The accounting system, however, cannot generate the Interim Financial Reports (IFRs). Therefore,
IFRs will be compiled manually using Excel spreadsheets. Transaction statements from the accounting
system will be retained with the IFRs to provide an audit trail to the underlying documentation.
7. PCBS will be required to issue quarterly IFRs composed of (i) Statement of Sources and Uses of
Funds for the period and cumulatively by donor and by component and subcomponent; ii) Comparison
between budget versus actual along with explanations of significant variances between budgeted and actual
amounts; (iii) Statement of Designated Account reconciling the period’s opening and end balances; (iii)
Contract listing; (iv) Fixed assets schedule; and (v) Physical Progress Reports, which include narrative
information linking financial information with physical progress, and highlighting issues that require
attention. The IFRs will be comprehensive and will cover all aspects of the project including all financing
sources. IFRs content and format has been communicated and discussed with the project team.
8. Internal Control and Internal Audit: Project control procedures will follow the PCBS’s internal
control procedures, to ensure that project funds are used only for intended purposes and for financing
eligible expenditures. PCBS’s internal control procedures are summarized as follows: (i) Procurement
officer review and approval, and financial and administrative manager review and approval; (ii) MoF
financial controller review; and (ii) Each payment will be signed by two authorized signatories. All parties
must approve payment requests before the authorized signatories sign the requested check.
9. External Audit: The project financial statements will be audited annually by a qualified
independent external auditor acceptable to the Bank and in accordance with internationally accepted
auditing standards and ToR acceptable to the Bank. The audit will be comprehensive covering all financiers
and will be conducted in accordance with International Standards on Auditing. The scope of the audit will
be expanded to assess and report on the effectiveness of internal controls and compliance with the Grant
Agreement and applicable laws and regulations. Deficiencies will be reported through a management letter.
The audited financial statements and management letter will be sent to the World Bank not later than six
months following the end of the project.
14
10. PCBS in coordination with the MoF will be responsible for preparing the ToR for the external
auditors. The ToR is to be submitted to the Bank for clearance three months after project effectiveness. The
cost of the external auditor will be financed from the grant.
11. According to the World Bank’s access to information policy issued on July 1, 2010, the project’s
audit report with audited financial statements will be made available to the public.
12. Fixed Assets and Contracts Registers: The Fixed Assets Register (if needed) will be maintained
by PCBS and regularly updated and checked. The register will include all necessary information including
fixed asset description, location, type, identification numbers, purchase date, invoice number, etc. Contracts
registers will be maintained for all contracts.
13. Supervision: The project’s FM arrangements and activities will be supervised semi-annually. The
financial supervision activities will include review of IFRs, review of annual audited financial statements
and management letters, as well as timely follow up on issues raised by the auditor and a review of SOEs
if needed.
14. Record Management: PCBS will keep the project files for three years from the last audit of the
project.
15. Governance and Anti-Corruption: Although it is impossible to eliminate the risk of fraud and
corruption, prevention policies and internal control can reduce opportunities for it to occur. Fraud and
corruption may affect project resources, thereby negatively affecting project outcomes. The above-proposed
fiduciary arrangements are expected to reduce the risks of fraud and corruption that are likely to have a
material impact on the project outcomes.
Disbursements
16. The proceeds of the grant will be disbursed in accordance with the Disbursement Letter and the
Bank’s disbursement guidelines for projects. Transaction-based disbursement will be used under this
project. Authorized signatories, names, and corresponding specimens of their signatures will be submitted
to the Bank prior to the receipt of the first withdrawal application (WAs). For direct payments above the
“minimum application size,” as specified in the Disbursement Letter, withdrawal applications will be
submitted to the World Bank for payments to suppliers and consultants directly. A Designated Account
(DA) in US Dollars is open by the MoF. The DA will have a ceiling as specified in the disbursement letter.
There will be no subaccounts under this DA, and reimbursements to the PA for payments made from its
own resources will be made to accounts opened under the CTA with adequate safeguards to monitor
accounts to which reimbursements would be made. Withdrawal applications submitted to the Bank will be
prepared by PCBS and signed by the authorized signatories at the MoF, prior to submission to the Bank for
processing.
15
Annex III: Procurement
1. Procurement for the Project will be carried out in accordance with the ‘Guidelines: Procurement
of Goods, Works and Non consulting Services under IBRD Loans and IDA Credits and Grants by World
Bank Borrowers’ published by the Bank in January 2011, revised July 2014 and the ‘Guidelines: Selection
and Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank
Borrowers” published by the Bank in January 2011, revised July 2014 the Grant Agree ment and the
Procurement Plan approved by the Bank. The ‘Guidelines on Preventing and Combating Fraud and
Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants” published in October 2006
and revised in January 2011 shall also apply to the project.
2. Procurement of Goods: Goods packages are expected to cost less than the equivalent of
US$100,000 and would be procured using Shopping procedures on the basis of soliciting, receiving and
evaluating competitive quotations from at least three qualified suppliers. The award would be made to the
supplier with the lowest evaluated responsive price quotation for the required goods, provided it has
demonstrated capacity to execute the contract successfully. In situations and circumstances that are in
compliance with the provisions of paragraph 3.7 of the Guidelines for Procurement, Goods would be
procured through Direct Contracting with Bank prior review.
3. Selection of Consultants: Contracts for consultancy services will be procured through Quality and
Cost Based Selection (QCBS) procedures as described in Section II, paragraphs 2.1 to 2.35 of the
Consultants Guidelines.
4. Consultancy assignments estimated to cost less than the equivalent of US$300,000, that are of
routine nature (such as financial audits) where well-established practices and standards exist, may be
procured under Least Cost Selection (LCS) in accordance with the provisions of 3.1 and 3.6 of the
Consultant Guidelines.
5. Consultancy services estimated to cost less than the equivalent of US$300,000, for which the need
for preparing and evaluating competitive proposals is not justified, Selection based on Consultants’
Qualifications (CQS) may be used in accordance with the provisions of paragraphs 3.1 and 3.7 of the
Consultant Guidelines.
6. Consultants for services meeting the requirements of section V of the Consultant Guidelines may
be selected under the provisions for the Selection of Individual Consultants, i.e. in essence through the
comparison of the curriculum vitae of at least 3 qualified individuals. Individual consultants may be selected
on sole source basis with due justification in the exceptional cases specified in paragraph 5.4 of the
Consultant Guidelines.
7. Single Source Selection (SSS) may be used exceptionally in accordance with paragraph 3.8 to 3.11
of the Consultant Guidelines when hiring consultants through competitive process is not practicable and
upon Bank’s concurrence of the decision on the SSS method.
8. Shortlists of consultants for services estimated to cost less than US$300,000 equivalent per contract
may be composed entirely of national consultants in accordance with the provisions of paragraph 2.7 of the
Consultant Guidelines, provided that a sufficient number of qualified individuals or firms (at least three)
are available at competitive costs.
9. Operating costs: expenditures included in the operating costs expenditure category, and incurred
by PCBS for purposes of the implementation, management, and monitoring and evaluation of the Project
on account of office supplies and consumables, utilities, bank charges, communications, mass media and
printing services, vehicle rental, operation, maintenance and insurance, office space rental, building and
equipment maintenance, domestic travel, lodging, and subsistence allowances and salaries of contractual
and temporary staff contracted for conducting the PEC Survey, would be procured in accordance with the
established PA administrative procedures acceptable to the Bank.
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10. A post procurement review of contracts which are not subject to the above prior review
requirements shall be conducted once a year. The procurement post reviews should cover at least 10 percent
of contracts subject to post review. Complete procurement documentation for each contract, including
bidding documents, advertisements, bids received, bid evaluations, letters of acceptance, contract
agreements, securities, related correspondence etc., will be maintained by PWA in an orderly manner,
readily available for audit.
Table AIII.1: Thresholds for Procurement Methods and Prior Review
Category Method of Procurement Threshold (US$ Bank Prior Review
Equivalent) Thresholds (US$
Equivalent)
Goods Shopping < 100,000 None
Direct Contracting No threshold All contracts
Firms QCBS No threshold First contract
LCS/CQS <300,000 First contract
SS No threshold All contracts
Individual IC No threshold None
Consultants
SS No threshold All contracts
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