1. finance
2. accounting and auditing

Terms of Reference for Financial Management Capacity Development in the DDCs and the
DTOs of seven districts in the Eastern Region of Nepal
Final Draft
Background
UNNATI is an Inclusive Growth Programme in Nepal being implemented under the grant assistance
from the Danish Government with an allocation of DKK 400 million (approximately USD 70 million)
for a five-year period commencing from January 2014. The geographic focus of the programme is in
the seven districts of Eastern Nepal – Dhankuta, Terhathum, Bhojpur, Sankhuwasabha, Ilam,
Panchthar, and Taplejung.
Out of the total grant assistance of 400 million DKK, 190 million DKK (48%) has been allocated for
the Infrastructure component. According to the programme design, DDC and DTOs of the
programme districts will manage the funds under prevailing Acts and Regulations to develop and
improve infrastructures in the districts in support to the selected value chains of the programme. The
Embassy of Denmark (EoD), DoLIDAR, and the DDCs of seven programme districts have signed a
Tripartite Memorandum of Understanding for the implementation of Infrastructure Component of the
programme.
A pre-disbursement study was carried out as per the Memorandum of Understanding in order to assess
the financial management capacity of the DDCs and DTOs and to recommend for building up the
capability before the grant is released to the DDCs. The study assessed the financial management,
control, accounting and procurement systems in the DDCs and DTOs of the programme districts with
respect to the set national and international standards and identified the areas that need development of
system and its implementation including building the capacity.
The pre-disbursement study has identified a number of areas for improvement in the financial
management aspects in DDCs and DTOs. This ToR elaborates tasks for a local consulting firm in
improving financial management of DDCs and DTOs.
Objectives
In the context of working with DDCs and DTOs on improving infrastructure in the districts, the
primary objective of the assignment is to help DDCs and DTOs in building capacity for good financial
management and provide assurance to UNNATI programme that the funds provided are used
effectively and efficiently.
Scope of Work
The main tasks under this assignment are to build the capacity of DDCs and DTOs in the areas
identified as weak in the pre-disbursement study. The specific tasks include:
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Plan, organize and conduct training courses for relevant officials of seven districts on different
aspects of financial management
Follow up on the recommendations made by the pre-disbursement study
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Closely coordinate with activities of other programmes, such as LGCDP on improving Public
Finance Management at DDC and DTO level.
Monitor UNNATI related procurement at the districts and provide opinion on it.
More specifically, the consulting firm is expected to provide the following services, divided into two
phases that build on the following paragraph quoted from the agreement with the seven districts:
“The Grant will be disbursed upon trimester written requests from Implementing
Partners based on the financial needs of the Infrastructure Component, except the first
request, according to approved work plans and budgets. Before the first payment a predisbursement study will be carried out and the first disbursement will be paid after
satisfactory follow-up on the pre-disbursement study. The following disbursements will
depend on satisfactory financial management of funds.”
Phase 1 activities (follow-up on pre-disbursement study):
Phase 1 activities are basically follow up on the pre-disbursement study, which provides a number of
trainings and on-the-job assistance in carrying out activities that improve financial management in the
districts. It is envisaged that Phase 1 activities should be conducted within current fiscal year 2014/15.
PEFA-Fiduciary Risk Reduction Action Plan (FRRAP)
1. Assist the DDCs in developing and implementing the local PEFA-FRRAP,
 Orient to officials on local PEFA-FRRAP and its accounting/reporting process
 Assist DDCs in developing local PEFA-FRRAP implementation matrix including
Municipalities and VDCs' activities
 Assist DDCs in developing achievement accounting format of the PEFA-FRRAP at district
level
 Assist to consolidate the achievement at district level
Planning and Budgeting
2. Conduct training to planning officers and finance officers about planning and budgeting along
with the cost estimates, Medium Term Budget Framework (MTBF), Medium Term
Expenditure Framework (MTEF) and on the provisions of Local Body Resource Mobilization
and Management Guidelines (LBRMMG) etc. The provisions include appropriation of
earmarked budgets, matching funds, contingency expenditures etc.
Procurement and Contract Administration
3. Support in preparation of procurement manual (based on Public Procurement rules and
regulations) and job description of chief of procurement unit of DDCs and DTOs. Assist to
prepare procurement plans by the DDCs and the DTOs,
4. Assist in developing a uniform format for procurement notice, bid document, evaluation
criteria and procedure, notification of contract award, reminder for complying contract
agreement etc. according to the prevailing laws and guidelines.
5. Conduct training on procurement including on e-bidding system and contract management
procedure for procurement staffs.
6. Develop template to monitor the procurement progress.
7. Assist to prepare the procurement monitoring report
Accounting and Financial Reporting
8. Design a check list comprising minimum documentation and procedure for any accounting
transaction, e.g. the list of minimum documents and processes for making a final payment to
the contractor.
9. Analyze and recommend the improvements needed in the DDC financial management
software- Financial Administration and Management Package (FAMP).
10. Conduct training on Financial Management (including accounting) and the DDC FAMP.
11. Develop simple Financial Management Information System showing physical as well as
financial progress in the DTOs for UNNATI programme. Design a project accounting and a
financial reporting template for UNNATI Programme in accordance with the GoN rules.
12. Ensure that the finance staffs are generating and submitting financial reports including the
project financial statements on time,
13. Develop capacity of the finance staffs in dealing with taxes, retention money, liquidated
damages etc.,
14. Assist the DDCs and DTOs in introducing modified cash based accounting and Nepal Public
Sector Accounting Standards (NPSAS),
Internal Auditing
15. Orient DDCs on updated internal audit manual, particularly on planning and reporting
templates.
16. Carry out an orientation programme to internal audit staffs about the internal audit manual and
current sound internal audit practices.
17. Assist in introducing and using the internal audit tracking form that the MoFALD has
developed.
External Auditing
18. Assist in introducing the audit tracking system that the MOFALD has developed.
19. Assist the DDC and the DTO finance staffs in reporting about the status of audit arrears with
certain disaggregation.
20. Hold a workshop among the DDCs and the DTOs and recommend about possible ways for
resolving the audit arrears on time.
Monitoring
21. Design a monitoring format for every project that can be made a crucial document for project
clearance and final payment.
Public Oversight Mechanism
22. Orient and train DDC and DTO staffs on public hearings, public audit and social audit
procedure and reporting templates.
Information, Communication and Technology (ICT)
23. Assist in dissemination of project information through DDC websites and other means.
Phase 2 activities (DDC and DTO offices)
In Phase 2, the consultant is supposed to provide assistance to DDCs and DTOs on carrying out
review of financial and physical progress after completion of each trimester. The consultant should
provide observations and recommendations on the issues identified from the review of procurement
procedures and contract management, accounting etc.
The consultant should assist with following up on the issues and recommendations including possible
improvements of systems and procedures.
Methodology
The consulting firm is expected to mobilize two teams of two experts each on public procurement and
public finance management in Mechi (3 districts) and Koshi (4 districts) clusters of UNNATI
programme districts in an intermittent basis throughout the year. At least five travels to each of the
districts by the experts are envisaged during the contract period. The consulting firm can use
UNNATI project offices in the region for the office space during their work in the districts. A yearly
plan of operation should be prepared in the beginning, which shows different activities in different
districts with a timeline. The Management Contractor staffs in the districts shall facilitate the consultant
in conducting the tasks mentioned above.
Inputs
A total of 240 person-days input divided between the four experts over one year are expected from the
consulting firm. It includes preparatory time plus actual work in each of the programme districts. The
initial contract will be until two weeks after end of fiscal year 2015/16 to allow the consultant to make
review of last trimester of the fiscal year and to prepare the final report. The contracts for subsequent
years are subject to renewal upon satisfactory performance. Inputs and the scope of work for the
subsequent years will be reassessed at the end of first year and negotiated accordingly following the
same rates plus inflation adjustment.
Deliverables
Following deliverables are expected from the consultant:
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An Inception Report describing the work plan and approach (within 15 days of signing of
contract)
Phase 1 Report (within end of current fiscal year 2014/15, describing activities carried out
under this contract and financial management situation of districts)
Phase 2 Review reports for each district on a trimester basis (FY 2015/16) describing the
financial management status and the activities carried out to follow-up on the review findings.
End of Assignment Report (final report)
Background documents
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UNNATI-Inclusive Growth Programme in Nepal Programme Document
Component 2 Description, UNNATI
LGCDP II Programme Document
PEFA-FRRAP, LGCDP
Pre-disbursement study report
Please contact Mr. Saroj Nepal ([email protected]) for the background documents.
Submission of Proposal
Interested companies are requested to submit their proposals in the following format:
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Introduction of the company (briefly describe similar assignments undertaken before-max. 1
page)
Approach and Methodology (to undertake activities under this ToR- max. 3 page)
CVs of two Public Procurement Experts and two Public Finance Experts (in the format
annexed to this ToR)
Budget (in the format annexed to this ToR)
Please submit the proposal as one PDF file to [email protected] before 3 April 2015.
Annex 1: Format for Curriculum Vitae (CV) for proposed Key Staff (please use this or similar format.
Maximum five pages)
Proposed Position
Name of Staff
Date of birth:
Nationality:
Permanent Address:
Employment Record (starting with present position)
Dates of employment
Name of employing
organization
Positions held
Education (indicate college/university and other specialized education)
1.
Names of institutions
2.
Degree obtained
3.
Dates of obtainment
Languages (indicate proficiency: good, fair, or poor in speaking, reading, and writing)
Language
Speaking
Reading
Writing
Professional experience (indicate the following information for those assignments that best illustrate staff capability
to handle the tasks of this assignment. Add number of assignments as applicable by copying the boxes below)
Name of assignment
Year
Location
Client
Main project features
Position held
Activities performed
Name of assignment
Year
Location
Client
Main project features
Position held
Activities performed
Name of assignment
Year
Location
Client
Main project features
Position held
Activities performed
Annex 2: Budget Format
The budget should be provided in the attached format. The budget is divided between fees and
reimbursables.
Fees:
Name of the
consultant
Position in the team
Rate per day (NRs)
Total
days
Total fees
Grand Total (fees)
Reimbursables: (Please add on rows as necessary)
Subsistence Allowance
Number
Rate
Total
of days
NRs
NRs
Total
Local Travel
Unit
Rate
NRs
Total
NRs
Project related expenses
Item
Unit
Rate
NRs
Total
NRs
Total
NRs