Location :
Somaliland, Putland (SOMALIA) and Nairobi, KENYA
Application Deadline :
15-Oct-13
Type of Contract :
Individual Contract
Post Level :
International Consultant
Languages Required :
English
Starting Date :
(date when the selected candidate is expected to start)
(date when the selected candidate is expected to start)
28-Oct-2013
Duration of Initial Contract :
44 days
Background
Position 1: FRA International Consultant- Team Leader
Position 2: FRA International Consultant- Public Financial Management Specialist
The Joint Programme for Local Governance (JPLG) for Somalia is a joint UN program of ILO, UNCDF, UNDP, UN-HABITAT and UNICEF which commenced in April 2008 and is now in its second phase running from 2013 – 2017. The JPLG responds to the priorities in the Somalia Reconstruction and Development Programme 2008 – 2012 (RDP) and to the United Nations Somali Assistance Strategy 2011 – 2015 (UNSAS) The JPLG is implemented in partnership with the Federal Government of Somalia (FGS, sometimes referred to as South Central (SC)), the Authority of Puntland (AoP) and the Authority of Somaliland (AoSL). The JPLG’s two specific objectives are :
- Communities have equitable access to basic services through local government;
- Local governments are accountable and transparent.
The JPLG works to ensure transparent, accountable and efficient local service delivery, by working at the following different enabling levels:
- Improving the legislative and regulatory framework for decentralized service delivery in all three zones of Somalia;
- Improving the capacity of existing and upcoming district councils;
- Providing funding for service delivery through districts councils; and
- Developing the capacity of communities to generate the demand side governance at the local level.
Decentralization in Somalia is a response to the wide spread rejection of the centralized system of Somalia’s last central governments of 1961 – 1969 and 1969 -1991. Since the early nineties the establishment of local governance structures has proceeded at different paces and depth across the country. Today’s vision of local governance is the establishment in all Somalia of effective local governance systems and the support to existing systems that are participatory, that facilitate the delivery of good quality, reliable, affordable and sustainable services to Somali people - and that locally elected bodies at the district level are accountable and transparent to the people.
The Local Development Fund
Under JPLG there are currently 14 target districts in Somaliland and Puntland which receive transfers from the JPLG’s Local Development Fund (LDF). The LDF has been operational since 2011. The predecessor to this fund (2009-2010) was called the district based basket fund. The LDF supports the implementation of the district’s local development priorities, which are highlighted through a process supported by the JPLG. The LDF is financed by the UN programme, and also receives intergovernmental fiscal transfers from the national budget in both Somaliland and Puntland. The qualifying districts also contribute to this fund from own source revenues.. These funds appear in the national budgets and are transferred through the central banking system to district branches of the central bank at which time the funds are available to the relevant districts. The UN JPLG LDF funds (and previously the DBF funds) are transferred from UNCDF (formerly UNDP) into respective Dahabshiil accounts held at the districts based on certain triggers and reports.
There are three main operational environments in Somalia: Federal Government of Somalia, Puntland, and Somaliland.
Somaliland has had a functioning decentralized structure in place since early 2000. Some capacities exist in most district councils, which have also been granted authority to generate own source revenue . However, planning processes are poor and in most cases non-existent leaving development activities to more ad hoc decision-making. Some capacity development has taken place in particular in the district councils in larger towns related to financial management and raising and recording own source revenues. There is, however a need for continued capacity development in all fields of local government Public Financial Management (PFM) processes.
PFM reform initiatives have been underway at the central level in Somaliland for some time but donors and the government admit that relatively little sustainable progress has been made. The Government of Somaliland is currently preparing a new PFM Strategy with support from the World Bank and DFID which it will use to guide reforms going forward.
In the southern area of Somalia, the Federal Government of Somalia (FGS) is in the process of establishing regional and district councils in areas under its control. The process entails substantial community mobilization and reconciliation in order to gain confidence and support from all clans within the regions and districts. A number of initiatives to define inter-governmental relations and administrative structures are just evolving. JPLG is engaging with relevant government officials but is yet to commence with any funds transfer to any level of government structures.
Public Financial management In South Central Somalia (now under FGS) has historically been very weak. A series or reports released in 2012 spelt out “the systematic misappropriation, embezzlement and outright theft of public resources that have become a system of governance” in Somalia under the previous Transitional Federal Government (TFG). However, the new Federal Government of Somalia (FGS) has prioritized the reform of the public finance system, undertaken a frank PFM assessment, and developed a PFM reform plan intended to create the basis for long-run fiscal sustainability and improve Somalia’s ability to deliver on its objectives by strengthening the institutions mandated to manage public finances.
Puntland has a decentralized structure in place, but with limited available capacity at the present stage and not all named districts have elected councils established. Basic understanding of council functions exists among council members, but capacity to understand the need for accountability mechanisms and transparency is generally weak, and basic elements such as budgeting, accounting and auditing are in early stages of development. The public financial management framework at the central level in Puntland is also extremely weak, with a fairly ad hoc budgeting process that is largely not adhered to. The zone government has a low collection rate for formal revenue.
PFM reforms at the District Level As most diagnostics and strategies have taken place at the central levels, relatively little is known about the level, or trajectory of PFM reforms at the District level. The JPLG programme has carried out activities at the district level designed to strengthen management of public finances. These have been delivered by the following UN agencies: UNICEF, UNCDP, UNDP, UNHABITAT and ILO. The objective is to increase Local Government PFM capabilities and promote a functional and fiscal decentralization policy. The ILO is supporting procurement reform; UNHABITAT is developing roadmaps for the development of municipal finance policy, financial management guidelines including asset management, service-based accounting and budgeting formats for districts and setting up of automated accounting and revenue billing system.
DFID is not able to spend through the LDF until a fiduciary risk assessment is undertaken. An initial assessment was done, but was not sufficient to address and clarify risks associated with this mechanism at the district level. Therefore these terms of reference have been prepared to contract individuals or a team of individuals (if provided by one company) which can undertake this fiduciary risk assessment.
Objective
The primary objective of the FRA is to understand the fiduciary risk environment with respect to the use of a specific aid instrument - the Local Development Fund, which is channeled through Local Government systems. The FRA should also provide guidance on mitigating any significant risks to the proper use of funds and outline a suitable process for monitoring performance. The LDF instrument operates at the Local Government level, and so the FRA should be carried out at that level, but referring to relevant national level policies and procedures and reforms where relevant. The FRA should look specifically into the following areas:
- The PFM systems and fiduciary risks at a sample of District/Local Government administrations;
- The process of transferring and managing the Local Development Fund. The flow of funds from donors via the current systems or Central Bank systems through the JPLG Local Development Fund to Local Government administrations, the extent to which the funds are truly channeled through Government systems, and the associated fiduciary risks;
- The extent to which the Local Development Fund procedures act in practice as effective safeguards to mitigate fiduciary risks identified within the PFM system, and the proposal of further safeguards and a method of monitoring.
The assessment will enable the Management of JPLG, the Donors, UN agencies, Government and Managers of the LDF, to assess the level of risk, mitigate against these risks, give a sense of capacity requirements and accountability initiatives for the LDF process and funds transfers to Ministries and through central government institutions to districts.
Approach
The consultants will follow the guidelines set out in DFID’s How To Note on Managing Fiduciary Risk of June 2011. There is no completed Public Expenditure and Financial Accountability (PEFA) assessment available and so the FRA should be undertaken using DFID’s Framework of 15 benchmarks instead of the PEFA indicators. The 15 benchmarks should be adapted to the context of the Aid Instrument (the LDF) and the local government level, and look at national level processes only to the extent that they are relevant to the fiduciary risks identified within the Local Development Fund.
As the first stage of the assessment, the consultants will identify relevant district level PFM performance indicators and risks to be assessed. The proposed approach will be approved by JPLG, UNCD and DFID. Indicators may be derived from relevant areas of the PEFA framework and sector specific analysis, such as technical reviews and financial management reports for existing programmes. (Guidance on conducting FRAs at the sub-national level and for specific aid instruments is available in Annex 11 of the DFID How to Note).
The fiduciary risk assessment will be a combination of desk review of available information, assessment visits to a sample of District and (where relevant) National level institutions’ offices and premises to interview Partners, review implementation of recommendations made in previous assessments, evaluations and audits of the District and National level institutions(if there are), and verify a sample of transactions, sufficient to formulate an opinion on:
- The level of fiduciary risk, institutions capacity to manage funds, and the general effectiveness of the internal control system in protecting assets and resources and corresponding to the expected role in the implementation of the LDF;
- The institutions’ capacity to implement planned projects, the effectiveness and predictability of the system operated by the institutions in providing the JPLG-PCU or UNCDF with useful and timely information for the proper execution of the assigned role in the implementation of the LDF.
Task Methodology:
- Upon commissioning, the consultant will be briefed by UNCDF who will also supervise the assignment on a daily basis;
- The mission team will be expected to study the listed documents;
- The consultant will hold consultations with relevant stakeholders and officials at national and district levels cutting across the four stakeholder groups of public officials, development partners and the private sector and Civil Society.
- Upon completion of the draft report, the Consultant should first hold a debriefing meeting with the relevant District and National level institutions to discuss findings and recommendations for future improvements, as well as to seek their feedback;
- The Consultant will then meet with the Agencies and DFID to discuss the draft report prior to its finalization;
- A validation meeting will be held with a wider constituency of stakeholders to consider the proposed interventions. Participants will include representative from the central ministries, agencies and Local Government officials, Civil Society, NGOs and the Development Partners.
Sources of Information
The consultants should draw on existing sources of information as far as possible. There are no PEFA assessments for Somalia, and much of the available sources of information are focused at the central, rather than the local level.
The consultant should have full and complete access at any time to all records and documents (including books of account, legal agreements, minutes of committee meetings, bank records, invoices and contracts etc.) and all employees of the District and National level institutions. The consultant should be advised that he/she has a right of access to banks and depositories, consultants, contractors and other persons or firms engaged by the programme/project management. If the consultant is not given unrestricted access to any records, person or location during the course of the assessment, this restriction should be clearly defined, with reasons, in the report.
Other sources include:
- Federal Government of Somalia Public Financial Management Strategy, 2013;
- Federal Government of Somalia Budget 2013;
- Federal Government of Somalia Outturn report 2012;
- Draft Somaliland Public Financial Management Strategy, Somaliland 2013;
- Somaliland National Budget 2012;
- Informal Somaliland PEFA 2007;
- Somaliland Political Economy Analysis 2007;
- JPLG Local Development Fund Manual, 2012;
- JPLG reports on institutional capacity building at the local leve;l
- DFID Due Diligence Report on JPLG, KPMG 2012;
- Transparency International Corruptions Perceptions Index.
Consulation
The consultants should seek to minimize the burden on government counterparts and not duplicate the collection of information which is available from other reliable diagnostics. Instead, interviews with key counterparts (government, civil society, and other donors) should be used to fill gaps in information and/or update old data, and to conduct a ‘reality’ check on analysis in existing diagnostics. The Consultant should hold meetings with relevant UN Agencies and donors to hear their concerns or areas to pay more attention to. The UN JPLG team will usually be the first point of contact for available information concerning local government.
Duties and Responsibilities
Key Tasks
- Agree a work plan with the JPLG team and DFID Somalia for the Somalia, local government level, Local Development Fund review, including the identification of interlocutors;
- Become thoroughly conversant with DFID guidance on managing fiduciary risk;
- Become thoroughly conversant with the findings and conclusions of any existing materials on public financial management environment and the Local Development Fund, including those referred to above;
- Adapt the PEFA indicators and DFID’s Framework of 15 benchmarks to the Somalia District / Local Development Fund context;
- Propose any additional indicators not addressed in sufficient detail by PEFA but which are pertinent to the context. Agree the proposed indicators with the JPLG team and DFID;
- Understand the rules and procedures of the Local Development Fund. Understand the de jure and de facto flow of funds from donors and Central Government, and decision making involved in governing the Local Development Fund and its receipts and expenditures;
- Identify the main institutions implementing the Local Development Fund (include all bodies involved in collecting and distributing the funds, implementing the services, regulating, setting policy, and exercising scrutiny and oversight);
- Identify to which level of government each organisation belongs;
- Document the flow of funds in the Local Development Fund (DFID, other donor funds and partner government funds) and the process of financial control over aid funds and government funds;
- Identify a sample of District administrations to be visited and to be included in the fiduciary risk assessment. Identify the other key government institutions that have a specific role in the flow of funds into the Local Development Fund to be visited and included in the fiduciary risk assessment;
- For the agreed sample of District administrations, understand the PFM system at the Local Government level in Somalia and identify and evaluate their strengths and weaknesses;
- For each of South Central Somalia, Puntland and Somaliland, understand the extent to which the PFM system at the national level impacts PFM issues at the District level – in theory and in practice;
- Using the adapted indicators (see above), assess the overall level of fiduciary risk to funding at the Local Government level as per the DFID guidance, ensuring the relevant governance and institutional factors are taken into account, including the capability of the relevant institutions, risk of corruption, the credibility of existing reform programmes at the District level, or programmes at the National level which in practice impact fiduciary risk at the local level;
- This assessment should identify the de facto practices, rather than rely on the formal requirements set out in manuals;
- Results of any available assessments and audits should be brought to bear;
- Differences in compliance between national and local PFM systems (which may be due to different capacity levels) The existence of PFM sub-systems unique to certain sectors of spend Risk factors or compensating controls which may be unique to certain sectors of spend the sector or more significant in it than across government generally
- Identify key fiduciary risks, focusing in particular on high value, high impact risks;
- Assess the extent to which the procedures and rules governing the Local Development Fund act as effective short term safeguards mitigating the fiduciary risks present;
- Suggest other existing short term safeguards;
- Where risks are not adequately addressed by the Local Development Fund, set out the level of remaining risk to donor finance channeled through the Fund;
- Suggest other potential safeguards that could be implemented and the pros and cons of using them;
- Outline any further diagnostic work necessary, and the options for monitoring future performance.
Outputs
Inception report – within the first 10 days of the assignment which includes how the consultants will address the TOR and their detailed workplan and schedule.
A draft technical Fiduciary Risk Assessment Report The report should cover all of the adapted PEFA indicators and include a statement of the overall risk related to funds channelled through the LDF; the risk rating can be low, moderate, substantial or high.
- A "low risk" rating represents a situation where the structure of the PFM system broadly reflects good international practice and there is routine compliance with the majority of controls within the system;
- A “moderate risk” represents a situation where the structure of the PFM system broadly reflects good international practice, although there may be some gaps or inefficiencies;
- There is basic compliance with controls within the system, and although regular exceptions occur, these are not financially significant;
- A "substantial risk" represents a situation where the structure of the PFM system falls short of good international practice in a number of areas and/or there are numerous and/or material weaknesses in compliance with many of the controls within the system;
- or "high risk" rating represents a situation where the structure of the PFM system shows a significant divergence from good international practice and/or there is widespread lack of compliance with many of the controls within the system. Inefficiencies and leakage from the system may be financially significant.
The report should include:
- Executive Summary – one page;
- Country context: Historical, governance, political economy;
- A summary of the LDF process and Management;
- Sampled institutions for the assessment and the rationale e. Analysis of the public finances and performance of PFM systems (details of the Fiduciary Risk Assessment process);
- Assessment of the risk of corruption;
- Assessment of the financial impact of risks;
- Assessment of PFM, accountability and anti-corruption reforms;
- Safeguards and residual risks (expected to focus on the controls imposed by the LDF process);
- Dialogue and monitoring;
- Recommendations and Conclusion;
- Bibliography.
Impact of Results
The financial management process of the stakeholders and District and National level institutions shall improve by reducing the risk and inefficiency. The LDF of the JPLG shall be more attractive to donors and ensure a more dependable government financial management system in Somaliland and Puntland. The transfers from JPLG to National level institutions and districts will be cognizant of the risks involved and how these can be mitigated against.
Assessment Team:
The assignment shall conducted by a team of 2 International Consultants assisted by a National Consultant from each of the zones: Puntland, Somaliland and Federal Government of Somalia:
- 1 International Consultant (Team Leader ) who has carried out similar assignment (The Team Leader have over all leadership in guidance and delivery);
- 1 International consultant (Public Financial Management -PFM Specialist) to provide support to the Team Leader and provide inputs on sub-national PFM aspects of the assignment;
- 3 National Consultants (one from each zone PL, SL and FGS with a working experience in public finance and understanding of government systems and procedures in their respective zones) - to provide support to international teams including accompanying them to all meetings and providing interpretation/translation services where applicable).
Time Frame and Work Load
Period: To be agreed with successful candidates between 28 October 2013 and 20th February 2014
Estimated work load: 44 working days for International Consultant (10 PL; 10 SL, 3 FGS, 17 Nairobi and home- adjustable, 4 SSAFE Training) and 30 working days each of the three National Consultants.
Mission days for International consultants: (estimate, including travel): Puntland 14 days, Somaliland 14 days, Federal Government of Somalia-Mogadishu 3 days (if confirmed), SSAFE Training in Nairobi -4 days, Nairobi and home 17 days (adjustable). This schedule may be adjusted based on realities on the ground and the bidding international consultants may propose alternative mission arrangements. (There is a possibility that the Mogadishu mission may not be carried out, subject to situation analysis)
Interested and qualified individuals should upload their Technical Proposals (Statements of Suitability for the assignment not exceeding one page) and CV indicating references and requested daily fees (in US$)as one document. Per diem, Travel and logistics to and from Nairobi and Somalia shall be paid/arranged directly by UNCDF or/and through reimbursement.
Competencies
Functional Competencies:
- Solid understanding of contemporary thinking of fiduciary risk environment, notably in the region;
- Familiarity with the region, and/or the country’s overall governance features, development needs, and directions;
- Analytical skills, excellent communications abilities;
- Excellent writing, and communication skills;
- Ability to work swiftly and commitment to deliver the expected results in a short period of time.
Required Skills and Experience
Position 1: FRA International Consultant/Team Leader:
Education:
- A minimum of Master’s Degree in Financial Management, Economics, Social Science, Business/ Public Administration or any subject of relevance.
Experience:
- Significant proven experience in the area of Public Financial Management and Accountability issues in post-conflict situations;
- Forensic accounting/investigations or auditing background;
- A good working knowledge of DFID’s approach to managing fiduciary risk and its methodology for carrying out Fiduciary Risk Assessments and of the PEFA Framework approach;
- A sound understanding of local government issues;
- Strong English oral and written communication skills;
- Willing to travel to Somalia;
- (Ideally) a sound understanding of the political economy, technical and institutional aspects of PFM in Somalia;
- (Ideally) knowledge of the decentralisation process in Somalia, and familiarity with the JPLG.
Language Requirements:
- Fluent in English (Knowledge of Somali would be an asset).
Position 2: FRA International Consultant (PFM specialist)
Education:
A minimum of Master’s Degree in Financial Management, Economics, Social Science, Business/ Public Administration or any subject of relevance.
Experience: - At least 5 years of proven experience in the area of Public Financial Management and Accountability issues in post-conflict situations;
- Forensic accounting/investigations or auditing background;
- A good working knowledge of DFID’s approach to managing fiduciary risk and its methodology for carrying out Fiduciary Risk Assessments and of the PEFA Framework approach;
- A sound understanding of local government issues;
- Strong English oral and written communication skills;
- Willing to travel to Somalia;
- (Ideally) a sound understanding of the political economy, technical and institutional aspects of PFM in Somalia;
- (Ideally) knowledge of the decentralization process in Somalia, and familiarity with the JPLG.
Language Requirements:
- Fluent in English (Knowledge of Somali would be an asset).
UNDP is committed to achieving workforce diversity in terms of gender, nationality and culture. Individuals from minority groups, indigenous groups and persons with disabilities are equally encouraged to apply. All applications will be treated with the strictest confidence.
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