Extensions and cancellations by lina salazar

OA-421 - Table of Authority for Non-Reimbursable and ContingentRecovery Technical Cooperation Operations

ORP/GCM April 2013

Today’s Fun Topic

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What is the OA-421 Why the OA-421 has been modified What has changed OA-421 Sections I-X – Detailed description of possible extensions – Cancellation of TCs

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OA-421: Table of Authority for TCs 

The President is responsible for delegating authority through OA-421

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This table designates the Bank officers who have authority to approve the matters identified during the TC cycle –

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Identifies rules and procedures for compliance with the Bank’s contractual commitments

Delegation of a given authority is understood to be granted to – – –

The person that holds the title Whoever is acting in his/her capacity during his/her absolute or temporary absences The person’s direct or indirect hierarchical superiors

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OA-421 mandates ORP/GCM to process cancellations

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Current version: – – –

IDBDOCS 36983769, as of July 5, 2012 Grace period was granted during 2012 “Clean Slate”  Regardless of the extensions processed in the past, all operations have two extensions (or three, as applicable)

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Why a New OA-421 ? Why was the OA-421 updated? •

Before 2012, TCs had never-ending extensions  Very inefficient use of resources  In 2011, +US$14M of TC’s were cancelled

Main Differences vs. previous OA-421

•

Limited number of extensions and deadlines for:  Signature of TC Agreement  Effectiveness*  Eligibility  Last disbursement

*Effectiveness occurs at different stages depending whether it is recipient or Bank-executed TC, or if it requires Gov. Ratification

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Constant Improvement  There are still some issues that have not been resolved 

Exceptional extensions requested to the President 

What is the maximum extension that can be requested? As of today, the same period for extension as those defined in OA-421

 There have been misinterpretations 

Example: IGR’s  

< US$3Million, follows TC rules and thus, OA-421 > US$3Million, follows OA-420 (SG) or OA-424 (NSG) as applicable

 Refer to FAQs to clarify  

Additional resources on ORP website ORP/GCM continues to work on the

OA-421 & FAQs

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I. Compliance  Conditions precedent to the first disbursement and eligibility • Full eligibility – Representative or Division Chief  As opposed to partial eligibility

• Legal report – Project Attorney • Contractual conditions precedent to first disbursement – Project Team Leader  Includes standard conditions and special conditions, if applicable

II. Extension of Deadlines Stricter deadlines for:  Signature of the TC agreement  Date of entry into force of the agreement – Ratification

 Compliance with conditions prior to first disbursement  Final disbursement II. Other sections:  Presentation of Audited Financial Statements – Fiduciary Specialist – For MIF, SCF, OMJ: Team Leader

 Other extensions – Team Leader

Most relevant changes to look out for!

II. Extension of Deadlines Decision Tree Approval Date

On or After 2012

Before 2012

Executed By

Bank

Recipient

Requires Signature of Agreement

Bank

Requires Signature of Agreement

Requires Ratification

Yes

Recipient

Yes

Requires Ratification

Yes

If approved on or after 2012

3 months +3 months

Depends on the project

6 months +3 months

Recipient executed

Bank executed

+12 months

Disbursements

Approval Date

Signature Date (EF)

Eligibility

R /DC

Original Expiration Date

6 months +3 months

Signature Date

Depends on the project

Ratification (EF)

R /DC

+12 months

Eligibility

Disbursements

Approval Date (EF)

R /DC

Depends on the project

+12 months

Disbursements

3 months

R /DC

Extended Disbursement Expiration Date

R /DC

3 months +3 months 12 months +3 months

Approval Date

Legend

R /DC R /DC

R /DC

Eligibility*

Original Expiration Date

Extended Disbursement Expiration Date

Original Expiration Date

Extended Disbursement Expiration Date

*Exception: Bank-executed operations requiring nonobjection by the government, will be treated as recipient-executed (See # 1)

Extension must be authorized by Representative (R) or Sector Division Chief (DC), if new commitments have been made in the last 12 months Extension must be authorized by Country Manager or Manager (M), if TC has disbursed at least 60% of total amount approved

Bank-Executed TCs Workflow  When a TC is Bank-executed (generally not needing a TC agreement), the Team Leader must ensure that eligibility is reached ASAP after approval – –

ONLY 3 months from approval to reach eligibility and no extensions In order to reach eligibility, an approved TC must have the SIG (Signature) by LEG and the COI (Categories of Investment) entered in the WLMS. Depending on the Department, COI’s are set by Team Leaders or the Department’s Operations Analysts/Assistants.

 Steps to follow from Approval to Eligibility Team Leader or Operations Analyst/Assistant enters Categories of Investment (COI) in WLMS

Declare Eligibility in WLMS

 Team leader is responsible for ensuring each step of the process is ON-TIME!! - 10 -

If approved before 2012 3 months +3 months

Depends on the project

6 months +3 months

Recipient executed

Bank executed

R /DC

+6 months

+12 months

Disbursements

Approval Date

Signature Date

Eligibility

R /DC

Original Expiration Date

Extended Disbursement Expiration Date TL

R /DC

+6 months

+12 months

R /DC

3 months +3 months 12 months +3 months

6 months +3 months

Depends on the project

5 Disbursements

Signature Date

Approval Date

Legend

TL R /DC

R /DC

3 months

Depends on the project

R /DC

+6 months

+12 months

Disbursements

Approval Date TL

Eligibility

Ratification

Eligibility*

Original Expiration Date

Extended Disbursement Expiration Date

Extended Disbursement Original Expiration Date Expiration Date

*Exception: Bank-executed operations requiring non-objection by the government, will be treated as recipient-executed (See # 4)

Extension must be authorized by Team Leader (TL). This extension applies only if TC was approved before Jan. 2, 2012 Extension must be authorized by Representative (R) or Sector Division Chief (DC), if new commitments have been made in the last 12 months Extension must be authorized by Country Manager or Manager (M), if TC has disbursed at least 60% of total amount approved

Extension of Disbursement Period  Only 3 extensions will be granted for TCs approved prior to 2012 – Regardless of their length Depends on the project

R /DC

+6 months

+12 months

Disbursements

Eligibility

Original Expiration Date

Extended Disbursement Expiration Date

 Only 2 extensions will be granted for TCs approved on or after 2012 – Regardless of their length

Depends on the project

R /DC

+12 months

Disbursements

Eligibility

Original Expiration Date

Extended Disbursement Expiration Date

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How to request an extension?  Two steps: 1. 2.

Fill out Extension Request and Justification Form “OA-450 Model 1” form http://manuals/pdf/english/Oa450m1e.pdf Once approved, the form must be uploaded in IDBDOCs (Read-Only permissions for Docs Users) and sent to ORP-GCM inbox (ORPGCM@IADB.ORG)

 Responsibility: – –

Team Leader is ultimately responsible for processing the appropriate extensions when necessary The authority that approves the extension relates to where the UDR is

 IMPORTANT: All extensions must be made prior to the expiration date. If the deadline is past due, the Team Leader must cancel the TC or request an exception to be approved by the President.

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VIII. Cancellation 

Expired deadlines for Agreement Signature and Eligibility Deadlines (A & B) – – –

Enforcement: GCM must process cancellation of expired operations BUT!!! GCM, not being the UDR, cannot effect the cancellation in WLMS Instead, GCM will inform the project team that the operation must be cancelled •

GCM will send notification only after considering all possible extensions

 Example: If approved on or after 2012, Recipient executed, notifications will be sent on:

3 months +3 months

R /DC

+12 months

R /DC

6 months +3 months

Depends on the project

Disbursements

Approval Date

Signature Date (EF)

Eligibility

Original Expiration Date

Extended Disbursement Expiration Date

Warnings will be sent automatically 2 months prior to deadline –

UDR must cancel those operations with expired deadlines and with no more possible extensions possible

VIII. Cancellation 

[PARTIAL] Cancellation and return to funding source of any unused balances (C) – –

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Project Team Leader processes cancellation Manager authorizes cancellation. MIF: Deputy Manager

Cancellation and return to funding source of all uncommitted resources within the disbursement period (D) – –

Either execution of the operation is completed or disbursement period has expired Project Team Leader authorizes cancellation

VIII. Cancellation Important considerations:  Projects with multiple operations (multiple ATNs): – If one is “compliant”, all related ATNs are considered as compliant – Same applies to projects with multiple project numbers, if approved in the same document

 Cancellation enforcement will occur considering the allowed extensions – Therefore, Team Leader is responsible for processing extensions in a timely fashion and prior to reaching the deadline

Exemptions?  Yes!  Cancellation Exemption – May be requested to the President – Memo template available on ORP/GCM website – Exemption from the President applies only to the condition requested

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Alert System

ď&#x201A;§ Alert Reports available at ORP/GCM website

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Pantallazo

III. Amendments  To the executing agency – Change in name (of beneficiary or executing agency) - Project Attorney – Change of executing agency - Representative or Division Chief with favorable opinion from LEG

 To the expenses to be charged against the contribution – Representative or Division Chief

 To the revolving fund – Project Team Leader, for increases of up to 10% more than the approved amount of the revolving fund. – Representative or Division Chief for greater increases.

 To other contractual clauses or other amendments – Project Team Leader; if amendment is substantial and fundamental, with concurrence of Division/Unit Chief

IV. Waiver of contractual obligations  Presentation of audited financial statements – FM Fiduciary Specialist, with favorable opinion of the ORP/GCM Chief – In case of SCF and OMJ operations, Division/ Unit Chief, with favorable opinion of the ORP/GCM Chief – In case of MIF financed operations, Fiduciary Specialist

 Presentation of progress reports covering a specific period – Project Team Leader with favorable opinion of the ORP/GCM Chief – In case of MIF financed operations, Deputy Manager

 Other waivers – Project Team Leader – If waiver is material, with concurrence of Division/Unit Chief

V. Procurement Decisions 

According to the competent authorities appointed to provide “mandatory consultations” & decisions •

OP- 272 and OP- 639

VI. Suspension of Disbursements VII. Partial or Total Relinquishment of the Contribution  

Representative or Division Chief Regional TCs: Managers or General Managers

IX. Accelerated Maturity   

Country General Manager and respective Manager Regional TCs: Managers or General Managers MIF-financed TCs: MIF General Manager

Other considerations 

All documents* used to implement approvals in this table must be: – –



Prepared with the participation of LEG Signed by the authorities indicated in AM-120: Designation of Authorized Signatures

For OS TC’s approved with SCF, OMJ or MIF loans and guarantees, or MIF equity investments –

Deadline extensions for signature and disbursements shall follow the authorizations and internal approvals applicable to the respective loan, guarantee or equity investment (footnote 6)

*Contracts, contractual modifications, certifications, consents or other written instruments

Today’s takeaways…  Team leader is the ultimate responsible for supervising every step of the TC – In case of auditing, the Team leader will be required to respond to any inconsistencies during the execution of a TC. Therefore, Team Leaders benefit from complying with the policies.

 All documents related to the projects saved in IDBDOCS – Make sure all supporting evidence for extensions are saved in IDBDOCS with Read-Only permissions to DocsUsers

 For Bank-executed TCs (generally not needing a TC agreement), the Team Leader must ensure that eligibility is reached immediately after approval – ONLY 3 months from approval to reach eligibility and no extensions

 Visit the ORP/GCM website for related information  Questions? – Seek advice with the Project Attorney (especially if there is a signed contract with the recipient) and/or with ORP/GCM (Sergio Zwi x1307 or Ana Paula Sanchez x3678)

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Thank You!