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Implementation Arrangements

Financial and Contract Management

The biggest challenge in implementing the strategy for the second phase will be for the PCU to develop the capacity of the districts to be able to assume the prime responsibility for the whole financial cycle involved in planning (financially) and implementing Programme activities. The PCU through the newly recruited Management/Contracts Advisers will be the main instrument for the Programme to transfer the knowledge and skills to allow the districts to manage the tendering/contracting process. While this appears to be a daunting task, many of the districts have already developed skills and have had experience over the past year in managing the tendering/contracting process for the Common Development Fund. In fact in some cases, they were able to complete the tendering process in a shorter time than the PCU for similar investments. In addition to the support and training in tendering processes, the Programme will also assist the districts in the associated field of budget preparation, accounting, financial monitoring.

PCU Accountability.  The PCU will disburse programme funds in accordance with rules set forth in the Loan Agreements signed by the government with IFAD and OPEC. The PCU is ultimately accountable for the use of programme funds as well as for providing financial and physical progress reports, and for organising annual audits. To this effect, several mechanisms/rules were incorporated in the design of implementation arrangements, including:

· progressive transfer of responsibilities, based on annual capacity-building assessments;

· provision of technical assistance and advisory services to the districts in order to strengthen their management capacities;

· transfer of funds to districts by instalments and upon justification of expenses;

· creation of the Water and Roads Balancing Fund to adjust the amount of funds directly managed by the districts to their actual capacities;

· procurement rules aligned on national legislation, with PCU involvement ensured for all contracts above FRW 3 million;

· annual audits of district and provincial programme-related accounts;

· strong monitoring and evaluation system; and

· joint committees at all levels to regularly review programme implementation.

Financial Management.  Programme funds allocated to the province and to the districts have to be spent in accordance with respective province/district MOUs. In particular:

· programme funds accrued as district budget support are considered as district revenues and must be reflected in district annual budgets;

· a specific bank account must be opened by the province/each district to receive exclusively UCRIDP funds; and

· funds are transferred by instalments and a new instalment can be made only upon justification of expenses for the previous one.

Procurement by the Districts, the Province and PCU.  Districts are responsible for the procurement of goods, services and works that are directly related to their legal attributions and that benefit one single district (for example for a district water point). For goods, services or works that are to benefit several districts, procurement will be done jointly by the concerned districts through an association or union of districts in accordance with legal prescriptions. If there is no such an association or union, the PCU will coordinate procurement. The province is responsible for the procurement of goods, services and works that are directly related to its legal attributions and that are provincial in scope (for example an abattoir).  Procurement and contracting procedures are summarized in the table below:

NCB = National Competitive Bidding; DTB = District Tender Board; NTB = National Tender Board;

ICB = International Competitive Bidding; PTB = Provincial Tender Board