CDLD Grants Management Manual by Khyber Pakhtunkhwa CDLD Programme

CDLD GRANTS MANAGEMENT MANUAL

COMMUNITY DRIVEN LOCAL DEVELOPMENT PROGRAMME EUROPEAN UNION

Government of Khyber Pakhtunkhwa

The Manual on CDLD Grants Management has been published by the CDLD Policy Implementation Unit of the Local Government, Elections and Rural Development Department (Government of Khyber Pakhtunkhwa) with the technical assistance of the Khyber Pakhtunkhwa Community Driven Local Development (CDLD) Programme. Authored by: Fazal Hafeez, (Senior Public Financial Management Specialist, Khyber Pakhtunkhwa CDLD Programme) Zakia Mehnaz, (Devolved Public Financial Management Specialist, Khyber Pakhtunkhwa CDLD Programme) Reviewed by: Said Rehman, (Coordinator, Policy Implementation Unit, Local Government Elections and Rural Development Department, Khyber Pakhtunkhwa) Brian Fawcett (Team Leader, Khyber Pakhtunkhwa CDLD Programme) Edited and visualised by: Tariq Afridi, (Senior Strategic Communication Specialist, Khyber Pakhtunkhwa CDLD Programme) Designed by: Wasim Abbas (Ad.Sense Printing & Advertising, Peshawar) Publishing date and location: September 2018, Peshawar, Pakistan

The European Union supports the Government of Khyber Pakhtunkhwa to implement the Provincial Policy â&#x20AC;&#x153;Community Driven Local Development (CDLD)â&#x20AC;? through financial resources, and technical assistance provided by Hulla & Co. Human Dynamics KG. The overall objective is to build responsiveness and effectiveness of the State to restore citizen trust, stimulate employment and livelihood opportunities, and ensure the delivery of basic services. This manual has been produced with the financial assistance of the European Union. The contents of this manual are the sole responsibility of the CDLD Programme and can under no circumstances be regarded as reflecting the position of the European Union.

TABLE OF CONTENTS List of acronyms

About this manual

PART-A CDLD Funding, Grant Procedures and controls 1. CDLD pROGRAM OVERVIEw, INSTITUTIONAL FRAMEwORK AND FINANCING MODEL

1.1 Community Driven Local Development Policy

1.2 Extension and Expansion of the Programme

1.3 CDLD Financing

1.4 EU Budget Support

1.5 Performance Matrix

1.6 Funds allocation to Districts

1.7 Funds allocation to the VC/NC

1.8 Geographic Coverage

1.9 Institutional Framework

1.10 GRANT PROjECT COST AND DURATION

1.11 ELIGIBLE SECTORS UNDER CDLD POLICY

1.12 GENDER EqUALITY AND INCLUSION

1.13 PROjECT SELECTION CRITERIA

1.14 PROjECT ExECUTION

2. GRANT APPLICATION AND EVALUATION PROCEUDRES

2.1 Eligible organisations

2.2 Work plan for the year

2.3 General Round

2.4 Livelihood ProjectS Round

2.5 Call for Proposal Cycle (for General Round)

2.6 Call for Proposal Cycle (For Livelihood projects)

2.7 Evaluation of proposals by DDC

2.8 Approval by DDC

2.9 Agreement signing and instalment releases

3. FINANCE MANAGEMENT AND REPORTING OF GRANTS

3.1 Standards for financial management

3.2 Funds Management and its reporting

3.3 Funds flow from province to districts

3.4 Funds flow from district office to CBO

3.5 Maintenance of record by the district offices

3.6 MAINTENANCE OF OFFICE RECORD BY CBO

3.7 Procurement procedures for CBO

4. TRANSPARENCY, ACCOUNTABILITY AND INTERNAL CONTROL

4.1 Internal Monitoring

4.2 External Monitoring - Third Party Verification

PART-B Annexures ANNEx-A NARRATIVE REPORT

ANNEx-B FINANCIAL REPORT

ANNEx-c FUNDS REqUISITION FORM

ANNEx-D CDLD OPERATIONAL COST

ANNEx-E CDLD MONTHLY DISBURSEMENT REPORT

LIST OF ACRONYMS ADLG

Assistant Director Local Government

ADP

Annual Development Plan

CBO

Community Based Organisation

CDLD

Community Driven Local Development

CIF

Community Investment Fund

DAO

District Accounts Officer

Deputy Commissioner

DDC

District Development Committee

Director General

DMO

Divisional Monitoring Officer

DO(F&P)

District Officer (Finance & Planning)

DPP

Detailed Project Proposal

European Union

Finance Department

GoKP

Government of Khyber Pakhtunkhwa

Khyber Pakhtunkhwa

Local Government

LSO

Local Support Organisation

MAC

Monitoring and Audit Committee

MRS

Market Rate System

MIS

Management Information System

Neighbourhood Council

O&M

Operation and Maintenance

Planning Committee

PCRC

Policy Coordination & Review Committee

PFC

Provincial Finance Commission

PIU

Policy Implementation Unit

POE

Pool of Engineers

SRSP

Sarhad Rural Support Programme

SMP

Social Mobilisation Partner

TEC

Technical Evaluation Committee

TPV

Third Party Verification

Village Council

VCDP

Village Council Development Plan

Village Organisation

MANUAL

CDLD GRANTS MANAGEMENT

ABOUT THIS MANUAL The manual on CDLD Grants Management provides general information about the grants under the Khyber Pakhtunkhwa (KP) Community Driven Local Development (CDLD) Programme, including procedures to apply for a grant, approval and implementation process, record keeping and reporting requirements for grant management. The manual is based on the implementation mechanism laid out in the CDLD Notification which is the basis for the implementation of the CDLD Policy at the district and provincial levels in KP.

This manual is intended to provide guidance to CDLD Programme districts and Community Based Organisations (CBOs) on the responsible award and management of grants, which is consistent with the Government of Khyber Pakhtunkhwa regulations and the CDLD Policy framework.

The manual has two main parts:

PART A

PART B

CDLD Funding, Grant Procedures and controls

Annexures

This part focuses on the CDLD funding, procedures and controls including grant application, evaluation and award cycle, grant implementation, administration and close-out, financial management, accountability, and internal controls.

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This part puts forward the templates and forms which will be used for various activities and steps in the process of implementation of the CBOsâ&#x20AC;&#x2122; projects approval, implementation and monitoring phases.

PART A

CDLD FUNDING, GRANT PROCEDURES AND CONTROL

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CDLD GRANTS MANAGEMENT

CDLD PROGRAM OVERVIEW, INSTITUTIONAL FRAMEWORK AND FINANCING MODEL

1.1 Community Driven Local Development Policy The provincial Government of Khyber Pakhtunkhwa (GoKP) in 2013 approved the Community Driven Local Development (CDLD) Policy, which provides a framework and governance structure for ensuring the key role of citizens in development planning and implementation, especially for the marginalised groups in society. The CDLD Policy framework was developed and approved by the Provincial Cabinet in the best interest of communities, and to bridge the trust deficit between the communities and government by improving service delivery. The CDLD Policy is intended to restore and improve the quality of frontline service delivery. To respond to the local needs through citizen engagement, the European Union (EU) and GoKP mutually agreed to implement the approved CDLD Policy. In 2014, a four-year budget support programme was launched which was meant to bring social and structural improvements in the six districts of the Malakand Division. According to the Policy and Programme structure, it is a public– private partnership, which sets out a fiscal and regulatory framework by encouraging district authorities to work directly with local communities. The selected districts of Malakand Division, for the implementation of the programme included Chitral, Dir Lower, Dir Upper, Malakand, Shangla, and Swat.

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The CDLD Programme was rolled out in 2014 by the GoKP with financial assistance of € 64 million from the EU. While the social mobilisation process and designing was undertaken by the Sarhad Rural Support Programme (SRSP), community schemes identification was done by communities and the district administration is assumed overall responsibility for project selection and implementation.

1.1.1 Objectives of the policy The CDLD Policy goal is to achieve sustainable improvement in the coverage and quality of frontline public service delivery through the active involvement of local communities. The Policy has been developed to achieve the following key objectives: ÆÆ Put in place a fiscal and regulatory framework which can help the local communities in executing local development / service delivery initiatives. ÆÆ Build the capacity of government line departments at the district level to be able to operationalise the CDLD Policy. ÆÆ Provide an enabling environment to community based organisations (working on behalf of target communities) to access funds allocated for CDLD projects.

1.2 Extension and Expansion of the Programme In June 2017, through a summary approved by the Chief Minister, the CDLD Policy was extended to 2020 and geographical coverage was expanded to six new districts, in a phased manner. After the expansion, the CDLD Policy is currently implemented in 11 districts of KP, namely Buner, Battagram, Chitral, Dir Lower, Dir Upper, Haripur, Malakand, Nowshera, Shangla, Swat, and Torghar. Selection of the twelveth district as was agreed in 2018-19, is in process.

1.3 CDLD Financing The EU is providing budgetary support to the GoKP for the implementation of the CDLD Policy. In this regard, a Financing Agreement was signed between the GoKP and the EU in 2013 to provide budgetary support of â&#x201A;Ź 64 million to GoKP to successfully implement the CDLD Policy framework. Under this Financing Agreement, the EU has been providing support for community driven projects in the already specified 11 districts of the province plus complementary funds from the GoKP over the period of 2014 to 2020. Below is the total worth of CDLD (EU + GoKP Funds), over the period of 6 years (2014 to 2020).

CDLD Total Worth

(PKR in million) Phase I

Phase II

(1 March 2015 to 30 June 2017)

(1 July 2017 to 30 June 2020

14-15

15-16

16-17

17-18

Grand Total

18-19

19-20

GoKP Share Commitment for the Programme

500

800

1,280

1,650

2,063

2,269

8,561

Annual allocation

500

800

350

382

2,269

4,651

Actual received / Receivable (Euros)

9.00

10.80

9.90

6.60

10.90

9.93

Actual received / Receivable (PKR)

987

1,289

1,156

893

1,472

1,340

7,137

1,487

2,089

1,506

1,243

1,854

3,609

11,788

EU Share

Grand Total Number of Districts

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1.4 EU Budget Support While GoKP provides its contribution through its annual budgetary allocation in the Annual Developmental Plan (ADP), EU has agreed to provide periodic budget

support tranches. The EU periodic tranche consists of a fixed and variable portion. Certain programme-specific conditions are set each year (Performance Indicators, shown as Table 1.5 below) to avail the fixed and variable portion of the tranche. Following are the conditions set for fixed and variable tranche:

Fixed Tranche ÆÆ Satisfactory progress in the maintenance of a stability-oriented macroeconomics policy. ÆÆ Satisfactory progress in the implementation of its programme to improve Public Financial Management. ÆÆ Transparency and oversight of the budget.

Variable Tranche ÆÆ Progress in the achievement of Performance Matrix indicators in below para 1.5.

1.5 Performance Matrix In the financing agreement signed between the EU and GoKP, certain conditions are set to measure the yearly

performance of the CDLD Programme, which will help in determining the value of Variable Tranche. Below are the Performance Matrix Indicators agreed for year 2017-18 to 2018-19.

No.

Indicators

Baseline 2017 - 18

Targets 2017 - 18

Targets 2018 - 19

Financial weight

% of VCs/NCs with VCDPs prepared by planning committees

35%

40%

10%

Percentage of annual CDLD planned disbursement disbursed to CBOs

75%

20%

Percent of VCs/NCs having full LSO/VO/CBO networks established

10%

20%

15%

% of CDLD funds disbursed for livelihoods, and women projects

15%

20%

25%

15%

GoKP additional annual contribution to CDLD in endowment fund

N/A

PKR 1.65 billion

PKR 2.06 billion

20%

Percentage of government officers, VC/NC notified planning committees and CBOs with minimum acceptable score on Competency and Institutional Maturity Index

30%

40%

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No.

Indicators

Baseline 2017 - 18

Targets 2017 - 18

Targets 2018 - 19

Financial weight

Annual review of CDLD Notification completed based on multilevel-multi stakeholder CDLD Policy review dialogues (government, elected representatives, and civil society)

Joint annual review by PCRC and EU of Social Mobilisers performance and approval of Social Mobilizersâ&#x20AC;&#x2122; contract extensions

Third party audit reports and recommendations are reviewed and approved by PCRC and EU for implementation

worked out by the PFC for distribution of funds to local governments shall govern the allocation of funds in the CDLD Programme districts.

1.6 Funds allocation to Districts CDLD funds are distributed to in the programme districts as per applicable Provincial Finance Commission (PFC) formula. The resource distribution

The current formula with the following factors and respective weightage is adopted by the Provincial Finance Commission;

Variable Factors Population

Multiple Indicators Cluster Survey Based Backwardness

Lag in Infrastructure

60%

20%

As per the latest applicable PFC formula, the district wise PFC score and respective percentage in CDLD funds is as follows; No.

District

Districtâ&#x20AC;şs PFC Score

PFC Score % applicable in CDLD Funds

Swat

6.22

13.90%

Dir (Lower)

3.93

8.78%

Dir (Upper)

3.82

8.53%

Shangla

3.37

7.53%

Chitral

2.35

5.25%

Malakand

2.72

6.08%

Nowshera

4.51

10.08%

Buner

3.18

7.10%

Haripur

3.66

8.18%

Battagram

2.52

5.63%

Torghar

4.24

9.47%

District X

4.24

9.47%

44.76

100%

Total

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For working out the shares of individual village and neighbourhood councils in the target districts, population shall be the sole criterion as calculated on the basis of last preceding census officially published.

1.7 Funds allocation to the VC/NC

Population of VC or NC Funds of VC or NC = Total district funds in particular year x Total population of the district

1.8 Geographic Coverage After successful implementation of the CDLD Programme in the six districts of Malakand Division which includes Chitral, Dir Lower, Dir Upper, Malakand, Shangla, and Swat, the Chief Minister KP gave approval in June 2017 to extend the

programme to the six more districts in a phased manner. Accordingly in 2017-18, three more districts (Buner, Haripur, and Nowshera) were added. In 2018-19, two new districts (Battagram and Torghar) have been added. Decision of the third district to be added in 2018-19 will be taken in due course.

Program Extension Map Districts till 2016 - 17

Districts added in 2017 - 18

Districts added in 2018 - 19

Chitral

Buner

Battagram

Dir Lower

Haripur

Torghar

Dir Upper

Nowshera

District X*

Malakand Shangla Swat * Third district to be added in 2018-19, will have to be agreed upon.

1.9 Institutional Framework

The three-tiered institutional framework is available for the implementation of the CDLD Programme. This framework is present at Provincial, District and VC/NC levels.

Provincial Level ÆÆ Policy Coordination and Review Committee (PCRC). ÆÆ Policy Implementation Unit (PIU).

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District Level ÆÆ District Development Committee (DDC). ÆÆ Technical Evaluation Committee (TEC).

Village Council/Neighbourhood Council Level ÆÆ Planning Committee (PC).

1.9.1 Policy Coordination and Review Committee (PCRC) The PCRC exists as a higher level steering committee, under the chairmanship of Secretary Local Government, Elections and Rural Development Department, responsible for the policy level guidance for the CDLD. Its functions includes reviewing the progress of its implementation and making recommendations on the refinement of policy parameters.

1.9.2 Policy Implementation Unit (PIU)

monitor and coordinate the CDLD Policy implementation. Coordinator of the PIU is chair the unit which is based at the Local Government Elections and Rural Development Department.

1.9.3 District Development Committee (DDC) The DDC under the chairpersonship of the Deputy Commissioner is the management body of the CDLD Programme in the respective districts. The DDC is responsible for the implementation of the CDLD Programme within the respective districts.

The Policy Implementation Unit provides secretarial functions to the PCRC to District Development Committee (DDC) DDC Composition Deputy Commissioner District Education Officer (male)

Status

DDC Functions

Chairperson • Approve annual work plan at the start of each fiscal year specifying VC/NCs to be covered in each round. Member • Approve projects submitted by CBOs.

District Education Officer (female)

Member

• Process and approve the proposals for livelihood projects on competitive basis as per instructions provided in the CDLD Policy Notification.

District Health Officer

Member

• Constitute TEC for technical evaluation of projects under CDLD Policy.

District Planning Officer

Member

• Monitor physical and financial progress of projects.

Member

• Resolve issues and bottlenecks in the implementation and execution of approved projects.

District Director Agriculture

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CDLD GRANTS MANAGEMENT

District Development Committee (DDC) DDC Composition

Status

DDC Functions

District Director Livestock & Dairy Development

Member

• Re-appropriate allocated resources to the most deserving VCs/NCs.

District Director Fisheries

Member

Executive Engineer, Communication & Works

Member

Executive Engineer, Public Health Engineering

Member

• Assign specific role and responsibility to various district officers for effective and timely implementation of projects.

Executive Engineer, Irrigation

Member

• Hold district pre-budget consultations ascertaining citizens’ needs and priorities.

Assistant Director, Local Government

Member

District Officer, Social Welfare & Women Empowerment

• Ensure adherence to revised planning guidelines for VCs/NCs with assistance and facilitation from the SMP.

Member

District Officer, Water Management

Member

Tehsil Municipal Officer, District Headquarter

Member

One woman representative nominated by DDC

Member

One representative from Civil Society

Member

District Officer Finance & Planning (DO F&P)

Secretary

Representative from SMP

Facilitator

1.9.4 Technical Evaluation Committee (TEC)

• Ensure compliance with recommendations of the third party continuous audit, Divisional Monitoring Unit, Planning & Development Department and policy directions of the PCRC.

for

• Oversee development of VCDP by the SMP on the template indicated with participation from VCs/ NCs representatives, members of the CBOs, and other stakeholders. • Ensure achievement of annual targets of project approvals, execution of agreements with CBOs and release of instalments within stipulated time mentioned in work plan.

Under the chairmanship of the District Officer Finance & Planning, TEC members evaluate the project proposals received as per the provided guidelines of the CDLD Policy revised notification.

Technical Evaluation Committee (TEC) TEC Composition

Status

Function

Chairperson

• Carry out technical appraisal and evaluation of project proposals.

District Planning Officer, District Government

Member

One Engineer from District Line Department

• Provide recommendations to DDC on project proposal and applications for financing under the CDLD Policy and Programme.

Member

• Grant technical sanction of projects submitted by CBOs under the CDLD Programme.

Assistant Director, Local Government

Member

• Act as price evaluation committee for approving the projects.

CDLD Programme Engineer

Member

• Evaluate and approve itemised costs of the project as per Market Rates Schedule (MRS).

A female nominee of the Social Welfare & Women Development

Member

• Assess and approve the quality of items given in the project design documents.

District Officer Finance and Planning

Note: District Incharge of the relevant sector department shall attend as member when projects related to the sector are considered in the TEC.

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1.9.5 Planning Committee (PC) VCs/NCs and CBOs/VOs will be sensitised by the SMPs initially to constitute a planning committee through a consultative

process and provide necessary capacity development trainings on the model itself, revised planning and budgeting procedures, village development plan preparation, etc.

Planning Committee (PC) Composition

Status

Function

Chairperson

This committee will be responsible to undertake the following tasks:

Secretary VC/NC

Secretary

1. Development of VC/NC Village Development Planss.

VC/NC representatives

Members

2. Prioritisation of projects as per allocated budget of VCs/NCs.

Nazim VC/NC

3. Nominate members of the monitoring committee.

Representatives of CBOs CBOs (in equal proportion to the VC/NC members and representation from all geographical hamlets, villages, minorities, youth, and women)

Members

1.10 Grant project cost and duration The minimum cost of a project for consideration under the CDLD Policy is Rs. 500,000. The maximum cost of project is Rs. 2,500,000.

4. Provide guidance to the forum during any unforeseen scenario. 5. Coordination and linkages with tehsil and district councils, line agencies, banks, private sector, and other donor funded initiatives.

Maximum period for this completion of a project under CDLD shall not exceed 12 months. In exceptional cases, if a project falls outside the maximum limits in terms of cost and/or duration, the DDC shall refer such a project to the PCRC with its recommendations.

12 Minimum cost of project Rs.

500,000

Maximum cost of project Rs.

2,500,000

1.11 Eligible Sectors under CDLD policy Projects relating to functions devolved to local governments under the Khyber Pakhtunkhwa Local Government Act, 2013 (as amended from time to time) and

Maximum duration of project

12 months

Irrigation are eligible for financing under the CDLD Policy. Direct interface with the public service delivery and amenability by the CBO to execute the project are the determinant factors for evaluating eligibility of a project proposal. Applications can be given for project finances in the following sectors:

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Sector

Indicative Interventions

Education

Construction of additional rooms, missing facilities, rehabilitation.

Health

Construction of additional/missing facilities, rehabilitation.

Roads

Link/rural roads, bridges, culverts, protection walls for roads.

Works

Street pavement, waiting areas in public service areas, street lights.

Water Supply

Motor pumps, hand pumps, gravity.

Sanitation

Drainage, community latrines, solid waste collection and disposal, dumping sites for solid waste.

Agriculture

Fruit and food processing, packing and preservation units, godowns, warehouses, missing facilities in veterinary clinics and hospitals, fish farms, hatcheries, poultry and dairy development, orchard development, kitchen gardening, land development.

Irrigation

On farm water management, water conservation, soil conservation, water courses, irrigation channels, check dams, flood protection walls, water storage tanks.

Sports

Rehabilitation and improvement of playgrounds.

Tourism

Improvement of tourist resorts, facilities and services.

Culture

Development and marketing of local folk products.

Welfare

Special education, vocational centers, graveyard, funeral places.

1.12 Gender equality and inclusion GoKP is committed to advancing equality between females and males, and empowering women and girls to participate fully in social, political and economic aspects of their societies as well as benefit from the development of their societies. Annually a minimum of 19% budget is allocated for women specific projects in a district. Gender equality in CDLD is addressed through integration of gender considerations in all project aspects and phases including identification, design, planning, implementation, management and monitoring and evaluation. All CDLD grants support GoKP goals towards gender equality and inclusion of marginalised groups (such as persons with disabilities, youth, women, elderly, etc.). Grantee CBOs are encouraged to pay special attention to gender and inclusion as a cross cutting theme and an integral

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part of their proposed interventions. GoKP continues to work with all CBOs to ensure that grant projects and activities address gender issues in a manner consistent with the GoKP Policies.

1.13 Project Selection Criteria Selection of projects are based on the following criteria: ÆÆ Only those applications are considered for evaluation whose projects are present in the approved Village Council Development Plan (VCDP). ÆÆ The project proposal application must invariably relate to the sectors and themes mentioned in the call for proposal. ÆÆ The project proposal application must confirm to the maximum budget allocated to the VC or NC. It must range between Rs. 0.5 million to 2.5 million.

ÆÆ The verified first application received automatically evaluated by the CDLD Management Information System (MIS) under the defined criteria. ÆÆ The project application, meeting all the criteria is funded under the CDLD Policy from the share of the VC/NC in which the CBO operates and where the project is to be implemented.

No.

1.13.1 Ranking Project Proposal Application In case, the total cost of eligible projects in a VC/NC exceeds the total funds allocated for that council, only highest ranked project applications are funded until the allocated funds are exhausted. For the purposes of ranking projects proposal applications, the following criteria must be used.

Attributes

Weightage

Cost per household investment cost.

35%

Project having both gender as beneficiary.

15%

Project proposed by registered organised community.

15%

Project proposed by women groups.

10%

Duration of the project.

15%

Project contributes to income generation for enhanced livelihood.

10%

1.14 Project Execution Projects are implemented by the concerned CBOs, for which they either have the implementation capacity or their capacity strengthened by the

SMP. Also, operation and maintenance are the responsibility of CBOs. The project implementing CBOs are from the same village where the project is being implemented and having 70% of beneficiaries coverage. No CBO can implement project in another village or hamlet other than thier own.

TRAINING MANUAL CDLD GRANTS MANAGEMENT MANUAL

GRANT APPLICATION AND EVALUATION PROCEUDRES

2.1 Eligible organisations

2.2 Work plan for the year

All the CBO, which are membership based, i.e. 70% of the beneficiaries of the project have also to be the members of the organisation. Other eligibility creatria include:

At the beginning of the fiscal year, a work plan is developed jointly by the district team of the SMP and the district government team headed by the Deputy Commissioner. The work plan considers targeting a particular geographic area in a specific round of “Call For Proposals” adhering to the following principles:

a. List of all households in the village. b. List of households with resolution stating their willingness to be part of the organisation. c. Registered with a government agencies or any other organisation mandated to do so.

ÆÆ The annual work plan is divided into 2 rounds and based on annual funds allocation. ÆÆ Exact number and names of VCs/NCs are identified for each round of call for proposals in the work plan. As per the revised the CDLD revised Policy Notification, the call for proposal rounds have been distributed in two catagories.

Call for Proposal Rounds

Livelihood Projects Round

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2. Livelihood projects round.

General Round

9th, 10th,.....

1. General round.

Women Specific

2.3 General Round General round covers both male and female projects. To encourage women specific projects, a specified percentage of the total funds is allocated each year. Women specific projects are those projects in which the number of the women benificiaries are more, even if it is implemented by male applicants.

ÆÆ Inviting application from the CBOs, primary and secondary networks such as VOs, LSOs and Business Interest Groups (BIGs) networks created under EU funded Programme for Economic Advancement and Community Empowerment (PEACE) initiative. ÆÆ Annually an amount of 6% has been allocated from each district share for livelihood component. ÆÆ The total cost for livelihoods projects can not exceed Rs. 3 million.

2.4 Livelihood ProjectS Round

ÆÆ Livelihoods projects can only be initiated with VOs, LSOs or BIGs Networks.

In the extension phase a new component has been included for the livelihood projects to promote income generation. Main fetures of the livelihood projects are;

ÆÆ The livelihoods component consists of three sub components i.e. physical infratstructure, value addition and investment funds.

ÆÆ For Livelihood projects there shall be separate advertisement for CDLD Livelihoods component.

Livelihood component

Livelihoods physical infrastructure

Skills and value addition

The first component i.e. physical pnfrastructure projects can be addressed through normal call for proposals, whereas the livelihoods special call for proposal

Community nvestment Fund

shall be applicable for the remaining two sub-components i.e. skills development and value addition and Community Investment Fund.

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2.5 Call for Proposal Cycle (for General Round)

The following diagram shows the steps, required to complete the entire Call for Proposal cycle.

STEP 1

STEP 2

STEP 3

STEP 4

Formulation of District Annual Work Plan

Orientation of Village Councils

Announcement of Pre-Village Council Development Plan Consultations

Preparation of Village Council Development Plans

STEP 5

STEP 6

STEP 7

Call for First Applications

Entries to Management Information System

Prioritisation of Shortlisted Applicants

STEP 8

STEP 9

STEP 10

STEP 11

Social Mobilisation and Preparation of Detailed Proposals

Submission of the Detailed Proposals

Processing by District Officer Finance & Planning

Meeting of Technical Evaluation Committee

STEP 12

STEP 13

STEP 14

Submission to District Development Committee

Release of 1st Installment

Release of 2nd and 3rd Installments

PREPARATION

PLanning

IMPLEMENTATION, MONITORING AND COMPLETION

The following diagram shows the steps, required to complete the entire Call for Proposal cycle. Step No.

Steps

Main Features

Responsibility

• The work plan should ensure development of the VCDP. 1

Formulation of District Annual Work Plan

• Approval of target number of projects. • Exact number and names of VCs/NCs to be identified for each round.

District Administration

• VC/NCs selected in a round shall be contiguous. 2

Orientation of Village • Organise an orientation workshop. Councils

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DG & ADs, Local Government & SMPs

Step No.

Steps

Main Features

Responsibility

• Publishing of advertisement for the development and revision of VCDPs.

Announcement of Pre-Village Council Development Plan Consultations

Preparation of Village Council Development Plans

Nazims, • Prioritisation of local needs through VCDP preparation Secretaries VCs/ and revision of VCDPs. NCs & SMPs

Call for First Applications

• Advertise a call for proposals for submission of an District Expression of Interest called first application via in two Administration local and national newspaper.

District • Awareness campaign through appropriate mediums Administration e.g. radio, disseminating pamphlets, text messages and website, etc.

• The first application evaluation process is completely automated. • The MIS evaluates the first application on the following criteria: 6

Entries to Management Information System

District Administration & Project Staff

• Number of beneficiary households. • Cost of project. • Duration of project. • Contribution to gender equity. • Community engagement. • Cost effectiveness are double.

Prioritisation of Shortlisted Applicants

Based on MIS score, first applications fulfilling the criteria District checked to avoid possible funding duplication. Administration & The concerned line department issues a non-duplication Project Staff certificates for projects falling in their mandate. This process must not take more than three calendar months for one CFP cycle which includes the following steps:

Social Mobilisation and Preparation of Detailed Proposals

• Pre-feasibility. • Social mobilisation. • Capacity building and networking of CBOs.

SMP

• Registration of CBOs. • Designing of DPPs. • Implementation supervises of CBO projects. 9

Submission of the Detailed Proposals

3 copies of the DPP are submitted by CBO to the DOF&P CBOs and SMP office.

Processing by District Officer Finance & Planning

• DOF&P within three working days, send the DPP to the focal person notified by the concerned department for technical review and to check the duplication of funding District from any other source and then respond within three Administration & days. Project Staff • CDLD Programme Engineer will analyse the DPP technically.

Meeting of Technical Evaluation Committee

• For projects validated by the CDLD Programme Engineer at first place or after the removal of deficiencies by SMP, the DOF&P convenes a meeting of the TEC within one District Administration & week. Project Staff • The TEC reviews and finalises their recommendations on all the proposals.

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CDLD GRANTS MANAGEMENT

Step No.

Steps

Main Features

Responsibility

• DDC will review and approve final list of projects in a meeting to be convened by the DC, within ten days after District Submission to TEC meeting. Administration & District Development • After mutual agreement the contract shall be signed Project Staff Committee between the parties, specifying the agreed terms and performance requirements.

Release of 1st Installment

• Upon receipt of funds the DC shall release the first installment. District • The payment shall be directly credited into the jointly Administration & District Account operated account of the CBO. • After the release of 1st installment, the DO F&P shall issue Office the work order to CBO within 10 days

Release of 2nd and 3rd Installments

• Release of second and third installments into the CBO account shall be contingent upon submission of statement of expenditure and physical progress District according to the agreed milestones Administration & • The first installment shall be 40% of the total cost. While District Account second and third installments shall be 50% and 10% Office respectively • The CBO shall submit progress reports

2.6 Call for Proposal Cycle (For Livelihood projects) In each district, a specified amount of percentage of the total district CDLD funds are earmarked for livelihood component projects. Given the potential demand for livelihood projects in each district, it has been decided to advertise livelihood project calls for proposal separately and to provide a competitive bidding environment to all LSOs to access these funds.

2.6.1 Selection Criteria ÆÆ The organization has a legal status, must be registered with Social Welfare Department or any other entity authorised by the GoKP for the CDLD Programme.

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ÆÆ The organisation has an established office in that particular district. ÆÆ The organisation has complete records of the previous works undertaken and has or willing to acquire capacities required for the implementation of the projects. ÆÆ The organisation has audited statement of accounts for at least one year. ÆÆ The organisation has experience in community driven projects implementation. ÆÆ The organisation has trained cadre of community resource persons especially trained CIF Accountants or is willing to acquire capacities to implement the project. ÆÆ The organisation has coverage of women CBOs and as such has state in the proposal about the activities being undertaken with the women members as direct beneficiaries.

ÆÆ The organisation is not blacklisted or debarred by any government department or similar organisation.

2.6.2 Advertisement ÆÆ Request for Proposals (RFPs) are floated through an open advertisement in local newspapers with a minimum of two weeks and maximum one month time limit for proposal submission. ÆÆ The advertisement clearly indicates the two livelihood subcomponents i.e. skills enhancement and value addition, and community investment fund. ÆÆ The maximum time for submission of detailed technical and financial proposals is one month as stated in the advertisement.

ÆÆ Cross check of the information in the proposals and verifies if there is any duplication with any other donor agency or programme working in the area. ÆÆ Cross check the possible double reporting of the project beneficiaries, proposed project, etc. ÆÆ The total proposed cost of the proposal can not exceed Rs. 3 million. Under CIF per beneficiary grant can not exceed Rs. 30,000/-. This grant is given to the successful trainees for purchasing tools and equipment. However, for women specific enterprise development per beneficiary grant can not exceed Rs. 50,000.

2.8 Approval by DDC

2.6.3 Eligible Proposal submission by LSOs, VOs, and BIGs networkS

ÆÆ The DDC chaired by the Deputy Commissioner approves the most feasible proposals.

ÆÆ Eligible registered organisations (VOs, LSOs, and BIGs networks) must submit their proposals to the office of the Deputy Commissioner on the prescribed format within one month.

ÆÆ DDC will review all the proposals, including those rejected to confirm the validity of the rankings and to reduce the element of subjectivity in the process.

2.7 Evaluation of proposals by DDC ÆÆ The proposals are evaluated by the DDC chaired by the Deputy Commissioner ÆÆ Verification of the details of the organisation, such as, bank account, registration document, office holders, area of operation and reference check for the previous work or record.

ÆÆ The District Focal Person submits the budget release request within 7 days after the DDC approval. ÆÆ The province releases the budget to the district within 7 days after the receipt of the request by the district.

2.9 Agreement signing and instalment releases ÆÆ The agreement is signed with the applicant organisation within 10 days of the budget release to the district.

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ÆÆ After approval, the successful organisation is called for agreement signing with the Deputy Commissioner. ÆÆ The District Focal Person submits the budget release request within 7 days after the DDC approval. ÆÆ The province releases the budget to the district within 7 days after the receipt of the request by the district.

CIF Component

Micro Grant Fund

ÆÆ For skills development and value addition projects, the first installment amount is 60%, second installment 30%, and final installment 10%. For the CIF subcomponent, the following installment schedule must be followed: The SMP will provide assistance to the applicant organisation (i.e. LSOs, VOs or BIGs) in the CIF.

Installment percentage of the total CIF • 1st installment of 60% soon after signing the agreement for initiating the capacity building or for other required inputs if any. • 2nd Installment of 30% after successful evaluation of the 1st installment. • 3rd Installment of 10% after the complete evaluation of the MGF utilisation.

Micro Revolving Loan

After successful implementation of the CIF, the full amount for micro revolving fund to be released to the organisation.

TRAINING MANUAL CDLD GRANTS MANAGEMENT MANUAL

FINANCE MANAGEMENT AND REPORTING OF GRANTS

3.1 Standards for financial management For financial management of CDLD funds, a system is required that: ÆÆ Maintains separate accounting records and source documentation for activities funded under CDLD grants. ÆÆ Provides accurate financial information in progress reports and any other financial status reports in the form specified by the GoKP. ÆÆ Provides accurate, current and complete disclosure of the financial status of the project. ÆÆ Establishes record of budgets, receipts and expenditures for every approved activity and demonstrates the sequence and status of receipts, obligations, disbursements and fund balance. ÆÆ Is consistent with Generally Accepted Accounting Principles (GAAP) and supports the audit requirements set forth in the CDLD Programme procedures.

3.2 Funds Management and its reporting CDLD funds (EU and GoKP share), are pooled at Provincial Account - I (Non-Food) and are used for two main categories; i) Developmental Expenditure (disbursement to CBOs), and ii) Operational Expenditure. 92.5% of the pooled funds are utilised for

Developmental Expenditure, whereas 7.5% are utilised for Operational Expenditure. ÆÆ Developmental Expenditure (92.5%): Developmental expenditure includes the three instalment payments to CBOs for the project implementation. ÆÆ Operational Expenditure (7.5%): This includes CDLD project staff salaries, POL, office equipment, stationary, project monitoring, payment to SMP and routine office expenses. A possible list of allowable objects (expenditure) under the CDLD Programme is attached as (CDLD operational cost) Annex-D.

3.3 Funds flow from province to districts At the start of fiscal year, CDLD Programme districts send their requirement for both Developmental and Operational Expenditures. These release requests are compiled by the CDLD Policy Implementation Unit (PIU). PIU prepared release request and submits to Finance Department for the release. After scrutiny and analysis of the available funds, Finance Department release amount to Local Government Elections and Rural Development Department, which further authorises respective districts. The funds transferred are utilise in operational and developmental expenditures. The funds utilised are reported on monthly basis to the CDLD PIU. Specimen of monthly reporting template is at (CDLD Monthly Disbursment Report) Annex-E‫۔‬ MANUAL

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Districts send its funds requirement to PIU

Funds are utililiSed at districts

PIU compiles all fund requests

Local Government authorises respective Deputy Commissioner

FINANCE DEPARMENT decide about amount to be release Funds are released to Local Government Department

3.4.1 1st Installment payment process

Planning reviews the request and submits a simple receipt bill to the District Accounts Officer (DAO), supported by a copy of letter conveying release of funds from Finance Department, DDC minutes with list of approved CBOs and list of bank details of CBOs.

After signing of Grant Agreement with the successful CBO, Deputy Commissioner office issues Work Order to the successful CBO. The CBO submits its requisition of 1st Instalment (Specimen of Funds Requisition Form is attached as Annex-C). Upon submission of Fund Requisition Form for 1st instalment by the CBO, the office of the District Officer Finance and

The DAO, after processing the bill, sends advice to the National Bank of Pakistan to transfer funds in the account of the CBO or the DAO issues cheque in CBOâ&#x20AC;&#x2122;s name for the 1st instalment. The intimation regarding the transfer of funds is sent to the office of the Deputy Commissioner by the DAO.

3.4 Funds flow from district office to CBO

Fund request is submitted to Finance Department

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1st installment payment process

Work order is issued to the CBO

CBO submits fund requisition for 1st Installment

DOF&P reviewS request

DC office is intimated for payment

Bill is prepared and submitted to DAO

DAO issues cheque or bank transferS to CBO account

3.4.2 2nd and 3rd Installment payment process: The same process is adopted for the second and third instalment of each scheme. DOF&P scrutinises the CBO fund release requests at the office of the Deputy Commissioner before submission of simple receipt bill to DAO for fund transfer. The supporting documents for

the 2nd and 3rd instalments comprise of accounting records (cash book, stock registers and vouchers), visit report from the relevant line department verifying the completion of milestones agreed in the contract along with certificate of quality assurance from the engineer and photographic proof to be retained by the DOF&P. (Specimen of Funds Requisition Form is attached as Annex-C).

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SECOND AND THIRD INSTALLMENT PAYMENT PROCESS

CBO prepares progress report

Physical verfication is carried out

CBO submits progress report & funds requisition

Engineer submits certificate to DC office after survey

DOF&P reviews request

Bill is prepared and submitted to DAO

DAO issues cheque or bank transfers to CBO account DC office intimated for payment

3.5 Maintenance of record by the district offices The funds released by Finance Department to the respective district are disbursed as per existing rules and procedures of the GoKP for admissible costs. The CDLD funds released to the districts are non-lapsable with the provision that the DOF&P sends a

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summary of total funds to be utilised until the end of financial year and funds to be carried forward to the next financial year. The major accounting records to be maintained by the offices of the CDLD Programme include: ÆÆ Cash book ÆÆ Vouchers and bills

ÆÆ CBO ledger ÆÆ CBO files ÆÆ Project staff ledger ÆÆ Expenditure reconciliation statement ÆÆ Monthly progress reports ÆÆ Fund releases, appropriations and surrenders ÆÆ Fund distribution to VCs/NCs ÆÆ Stock register ÆÆ Measurement book and engineer verifications

3.5.1 Cash book All entries in the cash book are checked by the disbursing officer as soon as possible after date of their occurrence. It must be ensured that all receipts have been properly credited and that the payments are supported by vouchers which have been approved by the disbursing officer. The cash book is initialed and dated under the last entry checked. Also, the cash book is closed and balanced monthly.

3.5.2 CBO ledger A ledger is maintained for all the DDC approved CBO projects. Each CBO record must contain approved budget and consequent payments made to the CBO against approved grant budget.

3.5.3 CBO File

the first application along with the TEC score, detailed project proposal with its corresponding TEC score, DDC approval, signed agreement, fund requisitions, copy of bank transfer advice or cheques, progress reports, financial reports and engineer verification certificates. The file title must contain CDLD MIS Project ID, Project Name, Sector and CBO Name.

3.5.4 Project staff ledger A ledger is maintained for individual consultants hired for the Programme. These staff members include Senior Programme Engineer, Livelihood and Monitoring Officer, Pool of Engineers, Female Facilitation Officer and Data Entry Officers. The ledger contains information on joining date, monthly consultancy fee as per agreement, and contract end date. All payments made to the Pool of Engineers are recorded to the concerned individual consultant accounts.

3.5.5 Expenditure reconciliation statement A monthly expenditure statement is prepared and reconciled with the DAO records. Reconciled expenditure statement is submitted to the office of the CDLD PIU, within 10 days after the month ends.

3.5.6 Monthly progress reports Offices of the CDLD Programme provide regular feedback and information to the CDLD PIU, on the physical and financial progress of the Programme.

File record is maintained for all the DDC approved projects. A separate file for each CBO project is maintained contains

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CDLD GRANTS MANAGEMENT

3.5.7 Fund releases, appropriations and surrenders Record of funds released by the district Finance Department for CBO grants and operational cost are properly maintained. Re-appropriations and surrenders made, have to be recorded properly.

3.5.8 Fund distribution to village and neighborhood councils A list containing fund share of each VCs/NCs is maintained and tracked for projects being approved against the allocated budget. For working out the shares of individual VCs/NCs in the target districts, population is the sole criterion as determined under the latest approved and notified census.

3.5.9 Stock register Stock register for office supplies purchased from operational cost funds is maintained. Stock register must contain information on item description, quantity purchased and concerned staff to whom it is issued.

3.5.10 Measurement book and engineer verifications Payments for the 2nd and 3rd instalments are made on verification of work done by engineers on the basis of measurements recorded in the measurement books. All the books belonging to CDLD are numbered serial wise and a register of them is maintained in the office of the DC showing: 1. The serial number of each book,

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CDLD GRANTS MANAGEMENT

2. The name and designation of the person to whom issued, 3. The date of issue and 4. The date of its return. Document on which payment is to be made must invariably bear a reference to the number and page of the book in which the detailed measurements are recorded.

3.6 Maintenance of office record by CBO CBOs are required to read their award agreements, attachments and provisions. Any questions must be referred to the responsible staff at the office of the DC for CBO award. The financial management system of a CBO must provide for accurate, current and complete disclosure of the financial results of CDLD awards. Records must clearly identify the source and application of funds. The concerned CBO shall keep record of all expenditures incurred and payments made for audit, including by the independent third party verification. Such records are to be maintained for a minimum of 7 years or until 3 years after the audit takes place, whichever is later. CBO must keep separate books of accounts for each project. Name of project and code as assigned by the DDC are mentioned on all accounting records. The CBO shall maintain the following records. ÆÆ Cash Book. ÆÆ Ledger. ÆÆ Stock Register. ÆÆ Community Contribution Ledger.

ÆÆ Vouchers and Bills. ÆÆ Reporting of Project Progress.

The amount committed, the amount received and when, and the balance to be received.

3.6.1 Cash book A cash book is maintained showing receipts and cash disbursements. Cash book must show all financial transactions by grant activity.

3.6.2 Ledger A ledger must be updated on a regular basis. There shall be a comparison of actual expenditure in each activity to the budgeted total for each activity. The budget figures for each activity are the amounts authorised in detailed project proposal by the office of the DC as part of the grant agreement, and they cannot be exceeded without prior notification and approval from the office of the DC.

3.6.3 Stock Register The grantee has to maintain a register for the material at site, reflecting stock balance of all construction related items, including daily issuances.

3.6.4 Community contribution ledger The community contribution consist of actual cash expenditures or cash in-kind expenditures. An example of a cash inkind situation is the wages of a volunteer devoted to work as mason, but it does not seek reimbursement with CDLD grant funds. In-kind contributions are also acceptable as community contribution for which a ledger must be maintained to meet the following criteria for each source of community contribution.

The documentation of the amount expended and when, and for what purpose. Acceptable documentation for expenditures includes copies of invoices, time sheets, receipts and cancelled checks.

3.6.5 Vouchers and bills CBO needs to maintain vouchers on formats provided in the CDLD Policy Notification. The supporting documentation typically consists of the following items: ÆÆ Bid and quotation analysis. ÆÆ Original invoice, receipt or contract. ÆÆ Entry in accounting records indicating the date, amount and purpose of expenditure. ÆÆ Confirmation of payment. ÆÆ Documentation of receipt of goods. ÆÆ Bank account statement and transfer order or petty cash record with signed receipt.

3.6.6 Reporting of project progress The CBOs must submit progress report as per the agreed timeline and should include: Narrative: The narrative summary describes project achievements, such as milestones achieved, type and number of activities, beneficiaries reached and

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CDLD GRANTS MANAGEMENT

explanations of deviations, if any. This must be submitted by the 5th working day following the end of the reporting period. Specimen of Narrative Report is given at Annex-A. Financial: The financial summary reports expenditures as compared to the budget in the project summary and must be accompanied by original receipts. Grantee will submit the financial report on a periodic basis, upon completion of milestones. This must be submitted by the 5th working day following the end of the reporting period. Specimen of Financial Report is given at Annex-B.

3.7 Procurement procedures for CBO Procurement of goods or services by the grantee using CDLD grant must comply with the policies and procedures using transparent processes, fair competition and approval in line with the project procurement governance plans in the full project proposal. Expenses incurred under the grant must meet the following criteria: ÆÆ Reasonable: They are generally recognised as ordinary and necessary. ÆÆ Allocable: They must be incurred specifically for the award. ÆÆ Allowable: They conform to limitations in the award. ÆÆ Accountable: They are based on legal transactions and supported with appropriate documentation.

TRAINING MANUAL CDLD GRANTS MANAGEMENT MANUAL

TRANSPARENCY, ACCOUNTABILITY AND INTERNAL CONTROL

All stakeholders of the CDLD Programme, i.e., Government Officials, SMP and CBOs must be attentive to the general requirements for transparency and accountability. This can be best achieved through clear documentation of criteria, processes and decisions.

4.1 Internal Monitoring

All the administrators of CDLD grants, whether government officials or other parties, are vulnerable to complaints of inequitable treatment, political interference and other forms of patronage or bias. The design of the CDLD Programme ensures that decisions in relation to the approval or refusal of applications for grants are transparent and well documented.

a. District Administration.

A transparent and systematic appraisal process assists in informing decisions and enhances confidence in the selection process and programme outcomes for both stakeholders and the citizens. This can assist government officials in promoting the benefits of the CDLD Programme. At the same time, it can also help in demonstrating commitment to public accountability by providing the necessary assurance to the various stakeholders that public funds have been spent for the approved purposes and are achieving the best possible results.

In the revised CDLD Policy Notification approved guidelines, the following stakeholders are responsible for monitoring and transparency:

b. Social Mobilisation Partners. c. Community Based Organisations.

4.1.1 District Administration The critical part of the CDLD Programme implementation is to ensure transparency of all project steps which require continuous monitoring. The district administration is advised to ensure high quality outputs through the following means: 1. Site Visits. 2. Monitoring Reports. 3. Coordination Meetings. 4. Monthly Reports. 5. Visits of Pool of Engineer. 6. Commissioner Office Monitoring.

Two layers of monitoring is designed for the CDLD Programme, categorised as Internal and external monitoring.

1. Site Visits The DC supervises/oversees schedule to be prepared for random checking of the progress of the CDLD projects, ensuring that at least 30% of the ongoing the CDLD projects in the district are visited

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CDLD GRANTS MANAGEMENT

by the district officials. The visiting officer may include Head of relevant District Department, Assistant Commissioner and Additional Assistant Commissioners. The concerned Line Department head may also authorise officers from the field formation or district headquarter office to conduct such monitoring and report back as per format in Monitoring, Supervision and Inspection manual. 2. Monitoring Reports Monitoring reports on prescribed format are submitted to the DOF&P in the DC Office, who prepares a summary for review by the DC. The DC in turn supervises the preparation of quarterly monitoring reports to be presented to the quarterly divisional monitoring meetings chaired by the Commissioner of the respective divisions. Copies of the monitoring reports are also sent to the CDLD PIU in the LGE&RDD. 3. Coordination Meetings Regular coordination meetings are ensured at district level by the DC through DOF&P to review progress and to ensure targets are achieved in a timely manner and that the quality of projects is satisfactory.

5. Role of Pool of Engineers (PoE) The POE are responsible for the technical monitoring and supervision of CBO project implementation. POEs must: ÆÆ Ensure verification of MBs and monitoring visits. ÆÆ Proper submission of each visit report by POEs to CDLD Senior Programme Engineer and Monitoring and Livelihood Officer for monitoring, supervision and audit purpose. ÆÆ Coordinate with SMP to support CBOs during conflict management process. 6. Monitoring by Commissioner Office ÆÆ The Divisional Monitoring Officer (DMO) in the Commissioner Office reviews quarterly progress reports received from the DOF&P on an agreed template. ÆÆ DMO prepares a random inspection schedule for its monitoring team, covering between 3% to 5% of the ongoing the CDLD projects every quarter in each district. ÆÆ The Commissioner calls and chairs the divisional monitoring meeting on quarterly basis to ascertain progress of the the CDLD Programme.

4. Monthly Reports DOF&P being the CDLD focal person at district level compiles monthly report received from SMP (on 5th of each month) After review, the report is forwarded to the CDLD Programme Coordinator, Commissioner Office and Chief Foreign Aid at Planning and Development Department on monthly basis before 10th of each month.

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4.1.2 Social MobiliSation Partner (SMP) SMP has the responsibility to support all the CBO related activities. The SMP ensures transparency through the following: ÆÆ M&E materials and reporting templates designed, pre-tested, and produced on time to fulfill standards.

ÆÆ CBO status monitoring reports are prepared.

ÆÆ Overseeing cash flow and other money management issues.

ÆÆ Success stories and case studies are completed.

ÆÆ Flagging potential problems. There are numerous such problems that might come up. Income might look like it’s going to be lower than anticipated, or O&M expenses higher. Incomeproducing activities (fundraising, paid services) might be delayed, or not proceeding according to plan. There may be unnecessarily high expenditures.

ÆÆ Physical and financial progress reporting on standard format within timelines to DOF&P for further consolidation and dissemination. This includes the following: • Monthly, quarterly, and annual work plans. • Monthly quarterly, and annual financial reports.

ÆÆ Formulating plan to correct problems found in audit of documents.

• Weekly, biweekly, monthly, quarterly, and annual progress reports.

ÆÆ Monitoring the implementation of plans to correct problems identified by the audit.

• Evidence based activity reports. • Results based output reports.

4.1.3 Community Based OrganiSation Each CBO is liable to organise a Monitoring/Audit Committee (MAC). Following are the tasks to be performed by MAC: ÆÆ Inspecting the material and work quality and quantity, identifying issues and reporting to general body of CBO. ÆÆ Checking progress of work, identifying issues and reporting to general body of CBO. ÆÆ Preparing action plan for resolving issues and fixing responsibility for implementation ÆÆ Giving verifiable proof that all the members are trained for undertaking the monitoring and audit tasks by fully understanding the respective roles and responsibilities of all.

ÆÆ Playing role in pointing out post O&M requirements not identified by O&M Committee. ÆÆ Monitoring O&M activities, auditing budget vis-a-vis physical work. ÆÆ Checking bills and vouchers with the materials procured during implementation and maintaining check and balance between released amount and expenditures.

4.2 External Monitoring Third Party Verification An accredited audit firm has been hired for Third Party Verification (TPV), which comprises of both physical asset verification as well as continuous verification of the CDLD projects. The TPV firm submits quarterly reports with recommendations to PCRC through the CDLD PIU. The recommendations cover both the CDLD projects’ specific observations as well as systemic issues to

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improve the CDLD Policy the Programme implementation. The CDLD PIU and the respective district administration takes appropriate action in the light of the TPV firm findings and recommendations.

4.2.1 Objectives of the verification The purpose of the verification is to get an independent and objective assurance that the CDLD funds have been spent for the intended purposes to ensure value for money and also suggest course correction in project management at the district level and at the provincial level. The specific objectives of the verification are to ensure that internal control procedures are in place, principles of due diligence are complied with, risk of fraud is minimised, quality infrastructure is built, and recommendations are provided in the light of the verification findings to improve effectiveness of risk management arrangements in various governance processes. Continuous verification and asset verification aims to determine the following both at government and grantee level.

Sectors defined by CDLD Programme

The TPV firm is expected to come up with a detailed M&E/Verification Plan based on the accepted principles of M&E including performance and compliance audit and reviews. The TPV team would also carry out physical visits to a representative sample of the CBO projects. The visits to the sample projects shall be at least twice during the implementation phase of the projects. The visits shall be planned in such a way that the maximum activities of the implementation of the projects cycle are captured during the survey inspection for making course correction and adjustments in the CDLD Programme implementation. The TPV firm is expected to verify the number of projects given in the table below, that are calculated based on taking a representative stratified random sample of completed as well as ongoing projects. The stratification is made on the basis of the 10 sectors identified in the table below, with the total number for each sector also indicated in the table. The sampling frame is expected to cover all the years of the CDLD Project implementation. Total Projects*

Projects to be Verified

Roads

3,076

506

Works

1,845

458

Drinking Water

1,758

450

Irrigation/Water Management/Conservation

1,142

400

Education

527

272

Social Welfare & Community Development

176

125

Health

Sanitation & Solid Waste Management

Agriculture, Livestock, Fisheries

8,788

2,433

Grand Total * Approved and expected to be approved.

4.2.2 Scope of TPV services

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4.2.3 Functional areas to be covered by TPV

No. Functional Area 1

Policy and Procedure Compliance (General)

TPV and asset verification aim to cover the following stages and processes at the government and CBO levels, as indicated in below Table.

Government Provincial

District

Verify that all relevant policies and procedures and contractual obligations have been adhered to

CBO Verify that all relevant policies and procedures and contractual obligations have been adhered to

Village Council Development Plan has been adopted, approved and is updated annually Regular meetings of DDC Based on various reports, strategic decisions are taken and TEC are held for the improvement of the CDLD Policy Periodical review of the CDLD Policy and framework based on quarterly feedback 80 percent of the TPV findings are responded to within the time frame set (this is relevant from second round of TPV) 2

80 percent of the TPV findings are responded to within the time frame set (this is relevant from second round of TPV)

Approval Process Expression of Interest

Invitation to EOI is made according to the prescribed procedure EOI is received, scrutinised and evaluated as per specified procedure

Database of Applicants

District uploads status of the applications on the CDLD website

Social Mobilisation & Eligibility

All viable EOIs presented by CBOs that have not gone through the process of social mobilisation will be passed on to SMP for social mobilisation training of the CBOs and assistance with proposal preparation

Fulfils the eligibility criteria as defined in notification

Social Mobilisation & Eligibility

Social mobilisation criteria has been verified and checked

Is socially mobilised, records for meetings etc. verified

Proposal

Proposals are duly received within stipulated time

Line Department Comments

Relevant Line Department has provided comments

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Government

No. Functional Area

Provincial

District

Technical Evaluation Committee

TEC’s meetings have evaluated the submitted proposal and offered recommendations to DDC. TEC has performed duties as per prescribed procedure

District Development Committee

DDC meetings, with required quorum, held as prescribed to consider recommendations of TEC and LD reports. DDC has performed its duties according to the approved procedures

Contracting and FD intimation

Contracts with CBOs are negotiated and entered into transparently and in accordance with prescribed procedure

Contracting and Finance Department intimation

Approval received from Finance Departmen within stipulated time

List of approved contracts are submitted to Finance Departmen

Reporting

District wise report on overall quarterly assessment of successful proposal over total applications including percentage of successfully approved projects vs. completed projects

Financial Management

EU and GoKP ensure timely release of funds to the endowment fund based on requests from District Governments

Preparation of budget/ fund requirement and send request to GoKP for timely release of funds

Proper record for district wise allocation of funds and their release is maintained as specified

Proper record for district wise fund allocation, release and balance is maintained as specified

CBO

VCDPs prepared, highlighting budget projections, resource allocation and prioritisation of development projects

MANUAL

Maintain project wise record. Including funds requisition, progress reports, contracts, verification reports, visit reports, etc.

Books of accounts and records, as specified, are maintained and updated regularly, related to the project

Programme funds have been approved at the correct level of delegated authority

Payments made to CBOs are properly authorised and on simple receipt format

Transparency and authorisation in financial expenditures is maintained

Funds related to CDLD are transferred to district government within a stipulated time

Progress payments are made according to the contract and milestones achieved, and on the basis of engineer’s certificate within stipulated time

CBO’s share whether in kind or cash is properly accounted for in the project

CDLD GRANTS MANAGEMENT

No. Functional Area

Government Provincial

District

CBO

Verify that district government has taken measures to ensure that CBOâ&#x20AC;&#x2122;s share whether in cash or in kind has been provided Report on annual budget allocation, incremental increase including reasons for incremental increase

Rate of disbursement for allocated budget every year at provincial and district levels

Procurement Management

Transparency is ensured in processing material and labour by verifying that proper record for minutes/ resolutions for decisions are maintained

Drawing & Design

TPV firm will verify that construction work is as per approved design. Also that SMP engineer designs and drawings are as per the CDLD engineering standards and defined procedures. TPV firm should also verify that SMP design engineer visited the project site during the project design phase Project cost estimates are Cost estimates are as per reasonable and approved by market rates of GoKP or as the competent authority specified

(A) Technical Supervision and Physical Inspection

Technical/engineering assistance/guidance is available at critical construction stages as agreed in the contract

Pool of engineers hired as per government policies and procedures

(B) Physical verification of asset created as per the detailed list in MIS

Authorised engineer has certified the milestone achievement correctly

Physical inspection/ verification of work done has been done as per CBO and government records

Reports for each inspection is prepared, submitted and uploaded in the system (to verify minimum of 7 visits per project are made by POE engineer)

Civil works are executed according to the specifications of the approved design and drawing

Government engineer has verified quality and other standards have been observed

Quality of works has been maintained as specified in contract

New infrastructure projects are inventoried in MIS at accurate cost and with coordinates

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Government

No. Functional Area

Provincial

Monitoring & Evaluation

Identification of key learning Effective and efficient M&E system is adopted (gaps, failures, areas of further improvement) and action points are made and corrective measures are recommended and key achievements are highlighted Based on periodic M&E reports and third party verification reviews, quarterly feedback is provided to the CDLD PIU Monitoring plans are prepared and implemented as specified (line departments have to monitor 30% of projects and divisional monitoring office to cover at least 3% to 5% sites) All projects are supervised and certificates for progress payments issued by engineers as notified by the government Monitoring reports are prepared, issues are reported and resolved within stipulated time Periodic physical and financial progress of the schemes is undertaken and discussed at competent forum

Complaint Redressal

Effective system of grievance redressal is maintained by the Commissionerâ&#x20AC;&#x2122;s Office Records for all complaints along with their resolution are maintained Periodic progress meetings with Finance Department/ Deputy Commissioners are held

MANUAL

CBO

Verify that necessary prefeasibility tests are made (clean drinking water etc)

District

CDLD GRANTS MANAGEMENT

Assess the effectiveness of the monitoring system/ mechanism adopted by CBO for physical monitoring of the projects

PART B

ANNEXURES

MANUAL

CDLD GRANTS MANAGEMENT

ANNEX-A

Narrative Report Project MIS Code: .........................................

Reporting Period: ..........................................

Name of the CBO: ................................................................................................................................

Name of the Project: .............................................................................................................................

A. Activity during this period: ................................................................................................................ ............................................................................................................................................................... ............................................................................................................................................................... ............................................................................................................................................................... ...............................................................................................................................................................

B. Achievement of milestones: No.

Milestones

Target Set

Percentage Completed

Milestone

I certify that the above information is correct and complete.

President of CBO: .........................................

Secretary of CBO: ..........................................

Name: ...........................................................

Name: ............................................................

Signature: .....................................................

Signature: .......................................................

MANUAL

CDLD GRANTS MANAGEMENT

ANNEX-B

Financial Report Dated: ............................................................

Project Code: ............................................

Period: ............................................

Name of the CBO: ................................................................................................................................

Name of the Project: ............................................................................................................................

B. Achievement of milestones: Budget Line

Agreed Budget

Expenditure till Last Report

Expenditure this Report

Total Expenditure

(Item 1) (Item 2) (Item 3) (Item 4) (Item 5) (Item 6) (Item 7) Total We certify that the above financial information is correct and complete.

President of CBO: .........................................

Secretary of CBO: ..........................................

Name: ...........................................................

Name: ............................................................

Signature: .....................................................

Signature: .......................................................

MANUAL

CDLD GRANTS MANAGEMENT

ANNEX-C

Funds Requisition Form Project Code: ........................................................................................................................................ Name of the CBO: ................................................................................................................................ Name of the Project: ............................................................................................................................. Location of Project: .......................................

Name of Village: .............................................

Union Council: ..............................................

Village Council: ..............................................

Tehsil/Subdivision/District: .................................................................................................................... CBO Bank Account Title: ...................................................................................................................... CBO Bank Account Number: ................................................................................................................ Bank Name: .......................................................................................................................................... Bank Branch Address: ..........................................................................................................................

Project Total Cost: ........................................................................... GoKP Share: ....................................................................................... Funds Already Received: .............................................................. Balance GoKP Share: ..................................................................... Amount Requested: ....................................................................... Installment #: ................................................................................... Amount in Words:

President of CBO: .........................................

Secretary of CBO: ..........................................

Name: ...........................................................

Name: ............................................................

Signature: .....................................................

Signature: .......................................................

MANUAL

CDLD GRANTS MANAGEMENT

ANNEX-D

CDLD Operational Cost Allowable Objects (Expenditure) Object Code

Object Description

A01273

Special Project Incentive / Honoraria

A03201

Postage and Telegraph

A03202

Telephone and Trunk Calls

A03303

Electricity Charges

A03304

Hot & Cold Weather Charges

A03402

Rent for Office Building

A03805

Travelling Allowance

A03807

POL Charges

A03901

Stationary

A03902

Printing & Publications

A03904

Hire of Vehicles

A03905

Newspapers Periodicals and Books

A03907

Advertising & Publicity

A03919

Payments to Others for Services Rendered

A03970

Others

A06301

Entertainment & Gifts

A09106

Plant & Machinery

A09107

Furniture & Fixtures

A09201

Hardware

A09202

Software

A13001

Repair of Transport

A13101

Repair & Maintenance

A13201

Repair & Maintenance of Furniture

Amount Released

Expenditure till Last Month

Expenditure till Cumulative Current Month Expenditure

Total

MANUAL

CDLD GRANTS MANAGEMENT

ANNEX-E

CDLD Monthly Disbursement Report Name of District: ............................................... Reporting Month: ..............................................

No.

Description

Developmental Funds

Operational Funds

DDO Code

Amount Released by Finance Department

Expenditure till Last Month

Expenditure Current Month

Accumulative Remaining Expenditure Amount

Total

(Prepared By)

(Verified By)

District Officer, Finance & Planning

District Accounts Officer

District .................................................

District ..................................................

MANUAL

CDLD GRANTS MANAGEMENT

FINANCIAL MANAGEMENT IS A KEY PILLAR OF SUSTAINABLE DEVELOPMENT

EUROPEAN UNION

COMMUNITY DRIVEN LOCAL DEVELOPMENT PROGRAMME Government of Khyber Pakhtunkhwa www.cdldta.pk www.issuu.com/kpcdld www.facebook.com/kpcdld