TASAF II OPERATIONAL MANUAL

Transcription

1 THE UNITED REPUBLIC OF TANZANIA OPERATIONAL MANUAL Prepared by Government Project Preparation Team Old Kilwa Road/Malindi Street P.O. Box 9381 Dar es Salaam Tanzania Tel: /4 Fax:

2 TABLE OF CONTENTS ACRONYMS AND ABBREVIATIONS...IV ACKNOWLEDGEMENT...VI PREFACE... VII CHAPTER PROJECT DESCRIPTION INTRODUCTION PROJECT DEVELOPMENT OBJECTIVE GUIDING PRINCIPLES PROJECTCOMPONENTS COVERAGE TARGET GROUPS RESOURCE ALLOCATION CRITERIA ELIGIBILITY CRITERIA FOR ACCESSING NVF S FUNDS SAFEGUARDS...3 CHAPTER NATIONAL VILLAGE FUND (NVF) INTRODUCTION OBJECTIVES OPERATIONAL PRINCIPLES BENEFICIARY TARGET GROUP COMMUNITY SERVICE PACKAGES IMPLEMENTATION ARRANGEMENTS PRE SUB PROJECT CYCLE SUB PROJECT CYCLE IDENTIFICATION DESK APPRAISAL FIELD APPRAISAL APPROVAL LAUNCHING IMPLEMENTATION SUPERVISION AND MONITORING COMPLETION AND INAUGURATION FLOW OF FUNDS POST SUB PROJECT CYCLE...6 CHAPTER CAPACITY ENHANCEMENT (CE) INTRODUCTION OBJECTIVES GUIDING PRINCIPLES RULES OF ACCESS BENEFICIARIES TARGET GROUPS CE COMPONENT SUPPORTED ACTIVITIES...2 i

3 CHAPTER INSTITUTIONAL ARRANGEMENTS INTRODUCTION TANZANIA MAINLAND NATIONAL LEVEL REGIONAL LEVEL LOCAL GOVERNMENT AUTHORITY LEVEL COMMUNITY LEVEL ZANZIBAR NATIONAL LEVEL ISLAND LEVEL COMMUNITY LEVEL...6 CHAPTER SYSTEMS MANAGEMENT INTRODUCTION OBJECTIVES SYSTEMS MANAGEMENT FUNCTIONS DEVELOPMENT COMMUNICATION TRAINING AND RESEARCH (T&R) INFORMATION TECHNOLOGY/MANAGEMENT INFORMATION SYSTEM MONITORING AND EVALUATION...3 CHAPTER ENVIRONMENTAL ASSESSMENT AND RESETTLEMENT PROCESS AND PROCEDURES INTRODUCTION: OBJECTIVES IMPLEMENTATION STRATEGY INTEGRATION INTO SUB PROJECT CYCLE PROCESS USE OF SECTOR CHECKLISTS ROLES AND RESPONSIBILITIES AT DIFFERENT LEVELS...4 CHAPTER FINANCIAL MANAGEMENT, DISBURSEMENT AND ACCOUNTING INTRODUCTION FINANCIAL MANAGEMENT AND ACCOUNTING RING FENCING APPROVAL AUTHORITIES DISBURSEMENT TO LGAS/ISLANDS AND COMMUNITIES ACCOUNTING STANDARD AND FINANCIAL MANAGEMENT SYSTEM INTERNAL CONTROLS REPLENISHMENT OF FUNDS...5 CHAPTER PROCUREMENT INTRODUCTION PROCUREMENT POLICIES AND GUIDELINES...1 ii

4 8.3 PROCUREMENT AT VARIOUS LEVELS PROCUREMENT PLANNING AND MANAGEMENT PRICE DATA BANK MONITORING OF PROCUREMENT...5 CHAPTER AUDITING INTRODUCTION OBJECTIVES TASAF AUDITING PROCEDURES INTERNAL AUDIT SYSTEMS AUDIT EXTERNAL AUDIT TECHNICAL AUDIT GENERAL RESPONSIBILITY TO AUDIT ACTIVITIES...2 ANNEXES...1 ANNEX I: ANNEX II: MAP OF TANZANIA...1 THE NATIONAL VILLAGE FUND RESOURCE ALLOCATION...1 ANNEX III: COMMUNITY SERVICE PACKAGES...1 ANNEX IV: CDD SUB PROJECT CYCLE...1 ANNEX V: SUB PROJECT CYCLE DELIVERY BENCHMARKS...1 ANNEX VI: MEMBERSHIP OF NATIONAL STEERING COMMITTEE...1 ANNEX VII: MEMBERSHIP OF SECTOR EXPERT TEAM...1 ANNEX VIII: TASAF ORGANGRAM...1 ANNEX IX: COMPOSITION OF REGIONAL CONSULTATIVE COMMITTEE...1 ANNEX X: MEMORANDUM OF UNDERSTANDING (MOU)...1 ANNEX XI: COMPOSITION OF MANAGEMENT TEAMS...1 ANNEX XII: FUNCTIONS OF VILLAGE FUND COORDINATOR (VFC) AND VILLAGE FUND JUSTIFICATION ASSISTANT (VFJA)...1 ANNEX XIII: COMPOSITION OF COMMITTEE FOR ZANZIBAR...1 ANNEX XIV: TASAF INSTITUTIONAL STRUCTURE...1 ANNEX XV: KEY PERFORMANCE INDICATORS...1 ANNEX XVI: SUMMARY OF ACTIVITIES FOR MAINSTREAMING ESMF IN SUB PROJECT CYCLE...1 iii

5 Acronyms and Abbreviations AIDS - Acquired Immune Deficiency Syndrome CBO - Community Based Organization CDD - Community Driven Development CE - Capacity Enhancement CMC - Community Management Committee CMO - Chief Minister s Office CSO - Civil Society Organization DC - District Commissioner DE - District Engineer DeC - Development Communication DED - District Executive Director DF - Director of Finance DFA - Development Financing Agreement DWE - District Water Engineer E-PRA - Extended Participatory Rural Appraisal ESMF - Environmental and Social Management Framework FMR - Financial Monitoring Report GAOB - General Advertising of the Opportunity to Bid GOT - Government of Tanzania HIV - Human Immunodeficiency Virus HQ - Headquarters HRMO - Human Resources Management Officer IA - Internal Auditor IBRD - International Bank for Reconstruction and Development ICB - International Competitive Bidding IDA - International Development Association IEC - Information, Education and Communication IFRS - International Financial Reporting Standards IFMAS - Integrated Financial Management and Accounting System IGA - Income Generating Activity LACI - Loan Administrative Change Initiative LGA - Local Government Authority LGCDG - Local Government Capital Development Grant LSP - Local Service Provider MACEMP - Marine and Coastal Environmental Management Project MC - Management Committee MDG - Millennium Development Goal MIS - Management Information System MoU - Memorandum of Understanding MT - Management Team MU - Management Unit MWK - Mfuko wa Kijiji NACP - National AIDS Control Program NAO - National Audit Office NCB - National Competitive Bidding NGO - Non-Governmental Organization NSC - National Steering Committee iv

6 NSGRP - National Strategy for Growth and Reduction of Poverty NVF - National Village Fund O&M - Operation and Maintenance OM - O-PRA - Open- ended Participatory Rural Appraisal PDO - Project Development Objective PO RALG - President Office Regional Administration and Local Government PRA - Participatory Rural Appraisal PRS - Poverty Reduction Strategy PS - Permanent/Principal Secretary RC - Regional Commissioner RCC - Regional Consultative Committee RPF - Resettlement Policy Framework SC - Steering Committee SET - Sector Experts Team SOE - Statement of Expenditure SPIF - Sub Project Interest Form TASAF - Tanzania Social Action Fund TMU - TASAF Management Unit TMAP - Tanzania Multi-Sectoral AIDS Project TOR - Terms of Reference TZS - Tanzanian Shilling VC - Village Council VFC - Village Fund Coordinator VFJA - Village Fund Justification Assistant VG - Village Government USD - United States Dollar WDC - Ward Development Committee v

7 ACKNOWLEDGEMENT This (OM) is a product of a collaborative effort that involved many stakeholders. The Project Preparation Team (PPT) led the process that involved stakeholders at all levels. These stakeholders included communities, Shehia representatives, Local Government Authorities, Councillors, Members of Parliament, Non Government Organizations (NGOs), Regulatory Bodies, Private sector organizations and Multilateral agencies. Many individuals worked tirelessly throughout the preparation process. However, mention should be made of Mr. Ramadhan M. Khijja Deputy Permanent Secretary from the Ministry of Finance for chairing the PPT, all PPT members that worked professionally to put together the vital inputs to this OM, Mr Emmanuel K. Kamba, who was the Executive Director of TASAF for his guidance and management support during the design process and the World Bank Team led by Mr Nginya M. Lenneiye for their constant inputs on the document. The members of Secretariat from TASAF are greatly appreciated for their dedication to the duty, meticulous and efficient service rendered to the PPT throughout the preparation process. vi

8 PREFACE As a result of positive outcomes of the first phase of Tanzania Social Action Fund (TASAF) interventions at the community level the Government of Tanzania (GOT) and the International Development Association (IDA) agreed for a successor project titled. The lessons learnt during implementation of TASAF I provided the framework for wide consultations between the Government, IDA and other Stakeholders involved in community development within the context of the Poverty Reduction Strategy. This (OM) is a synthesis of the said lessons and consultations. It is set to guide the operations of in compliance with the Development Financing Agreement (DFA) Number 4002-TA and Grant No. H134 -TA between the Government of Tanzania and the International Development Association. It is the reference document for TASAF operations. It is supported and complimented by a series of technical handbooks. The Handbooks are designed to provide detailed information and guidance for specific categories of beneficiaries and operational support processes. The and the technical handbooks are living documents and as such are subject to change and improvement. The provides brief reflections on the background from which evolves, describes the rationale, Project Development Objectives, project components, the institutional arrangement and operational principles. It promotes Community Driven Development (CDD) through the National Strategy for Growth and Reduction of Poverty (NSGRP) that is anchored on the attainment of selected Millennium Development Goals (MDGs) targets as detailed under specific categories of beneficiaries. To that end the Community Local Government Authority 1 (LGA) Partnership founded on the decentralized government structure and proven to have clear advantage over other mechanisms is consistently enshrined in the operational principles of this project. locus is the village, the shehia and mtaa. It aims at giving the poor the voice and access to resources held in a National Village Fund (NVF) and availed to the communities to finance their priorities in sub project managed by Community Management Committee (CMC) of their choice on the one hand, and empowering them to demand technical support from Village Councils/Shehia Advisory Councils as well as LGA/Island Management Team on the other hand. Amendments to the will require the approval of the National Steering Committee and clearance from IDA. 1 Local Government Authorities in this document are synonymous with Village Council, Mtaa, District Councils and Town/Municipal/City Councils vii

9 CHAPTER 1 PROJECT DESCRIPTION 1.1 Introduction Tanzania has put in place policies and strategies on poverty reduction. These include the Poverty Reduction Strategy (PRS) which was finalized in year The Strategy has enabled the government to make some achievements in reducing poverty particularly in respect to non-income issues such as in education and water. However, income poverty is still widespread both in rural and urban areas. is an important intervention at community level within the framework of Poverty Reduction Strategy with the aim of achieving the Millennium Development Goals. 1.2 Project Development Objective The Project Development Objective of is to empower communities to access opportunities so that they can request, implement and monitor sub projects that contribute to improved livelihoods linked to MDGs Indicator targets in the National Strategy for Growth and Reduction of Poverty (MKUKUTA). 1.3 Guiding Principles The following principles will guide TASAF operations: (i) Autonomous but operating in harmony with other ongoing initiatives within the Local Government Reform Program, in order to ensure sustainability of the Fund s achievements. (ii) Demand-driven and follows a bottom up planning and decision-making approach (iii) Finances community-initiated projects directly; (iv) Acts as a safety net by targeting vulnerable households and poor communities; (v) Conform to sectoral norms and standards. (vi) Non-partisan and apolitical. (vii) Modalities to access the Fund have to be clear; (viii) Delivery structure ensures speedy operations; (ix) Adequate and timely technical support; (x) Transparent and demonstrate full public accountability; (xi) Processing and management are cost-effective; and (xii) Strengthen community empowerment. 1.4 Project Components project will comprise two major components as described below: National Village Fund (NVF) The NVF component creates rules for communities to: (a) access resources that can stimulate economic activities and allow poor households to increase their incomes; (b) reduce vulnerability by empowering them with more instruments for insuring against the risks they face; and (c) improve access and use of social services. Thus, the Project provides a multi-sectoral response to the needs of 1

10 communities whose actions will better prepare them to take advantage of market-created opportunities as well as utilize resources made available from the Government Capacity Enhancement (CE) Under this component, communities and sectors (represented at Ward and District/Municipal levels) will be capacitated to undertake activities that assist Tanzania meet its targets as laid out in the NSGRP (in health, education, water and sanitation, savings mobilization, incomes for the poor, tackling vulnerability and increasing access to the market by the poor) by mobilizing both informal and formal mechanisms for responding to shocks. 1.5 Coverage operates nationally covering the mainland as well as the Islands of Unguja and Pemba in Zanzibar as shown in Annex I. 1.6 Target Groups The target groups under the two components are as described hereunder: National Village Fund The principal targeted beneficiaries of the NVF are those communities who: (i) lack access to basic social and market services; (ii) have able-bodied but food insecure households; and (iii) have household with vulnerable individuals (i.e. orphaned, disabled, elderly, affected/infected by HIV/AIDS, etc). Community means a group of people with common needs Capacity Enhancement Under this component beneficiaries will be: (i) agencies (public and private) that support communities to make the best use of resources made available under the NVF and (ii) poor individuals participating in groups savings and taking advantage of investment opportunities created by various private-public partnerships. 1.7 Resource Allocation Criteria resources for NVF will be allocated globally to the LGAs on the basis of a formula that includes population (40%), poverty data (40%) and geography (20%) for funding sub projects. An element of equity, (25%) will be applied prior to utilizing the allocation formula. NVF resources allocated to LGAs/Island are indicated in Annex II. 1.8 Eligibility Criteria for Accessing NVF s Funds TASAF will disburse funds for sub projects implementation direct to the CMC or through the Mfuko wa Kijiji/Mtaa or through the LGAs that have met Local Government Capital Development Grants (LGCDG) and the NVF access criteria. NVF criteria are that an LGA must have a Village Fund 2

11 Coordinator (VFC) and Village Fund Justification Assistant (VFJA) designated from amongst its employees. Access criteria for a Village Council (VC) are the existence of two satisfactory community Score Card reports and a person with demonstrated records-keeping skills. The LGCDG criteria includes: (a) Having the position of Council Director, Treasurer and Internal Auditor substantially filled; (b) Final Accounts for previous financial year produced as per sec 45 (4) LGA 1982 and submitted for audit on time, (c) Not receiving an adverse audit report for their last audited accounts (d) Having no financial irregularities reported either by the internal or external auditors in the previous 12 months; (e) Preparing months bank reconciliation statements for all accounts; (f) An internal audit is in place and functional as provided under section 45(1) of the Local Government Act 1982 and the LGFM 1997 order (at least 4 internal audit reports during the previous fiscal year) and (g) Regular production of financial reports all quarterly reports during the previous financial year presented to the Council with copies to PO- RALG. No funds will be provided from the NVF to any community, VC or LGA/Island if a Village Fund Coordinator and a Village Fund Justification Assistant (an Accounts Assistant) have not been designated by the LGA/Island from its staff. 1.9 Safeguards Communities are expected to implement sub projects that are small in size and in specific sites chosen by them. However, implementation will be required to comply with Resettlement Policy Framework (RPF) and Environmental and Social Management Framework (ESMF) that have been approved by the government and IDA for this Project. Involuntary resettlement and/or relocation issues should be resolved before a sub project is approved. 3

12 CHAPTER 2 NATIONAL VILLAGE FUND (NVF) 2.1 Introduction will set up a National Village Fund to finance sub-projects coming out of a community-driven development approach at the community level where there will be a Mfuko wa Kijiji/Shehia/Mtaa managed by a Village Council/Shehia Advisory Council/Mtaa. All sub projects will be managed by Community Management Committees (CMCs) democratically elected by beneficiaries. The CMCs will report to the Village Council/Shehia Advisory Council/Mtaa Committee. The NVF will also provide opportunities for other projects and funding sources to utilize NVF principles and processes to finance their community based components. 2.2 Objectives The major objectives of NVF are to: (i) Provide support to service poor communities that will contribute to increased availability and use of basic social and environment services in line with specified MDGs targets. Such services include: education, water and sanitation, roads, banking and markets in line with MDGs targets. (ii) Provide employment opportunities to able-bodied individuals in food insecure households, so as to increase their cash income, skills, and opportunities from working in NVF financed public works programs. (iii) Provide assistance to households with vulnerable individuals which include orphans, disabled, elderly, widows/widowers and those infected or affected by HIV/AIDS, among others to manage sustainable economic activities. 2.3 Operational Principles Operations of the NVF will be guided by the following key principles: (i) Ability of a community to contribute at least 20 percent in cash and/or in kind of the total sub-project costs except for subprojects related to vulnerable groups and water activities, which will only require a minimum community contribution of 5 percent; 1

13 (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) (x) (xi) There will be a CMC to manage day-to-day sub project implementation, elected democratically by at least 70% of the beneficiaries; Sub-projects to be supported must be within the capacity of the community to manage, implement and undertake operation and maintenance; Adherence to the requirements of Environmental and Social Management Framework (ESMF) and Resettlement Policy Framework (RPF); Sub-projects will promote labour-based technology, with at least 40 percent of the sub-project funds paying for unskilled labour wages; Targeting of resources guided by poverty and service coverage indicators as well as community demands; Protection of prevailing employment opportunities in targeted areas by paying a wage that is lower than the prevailing average wage in the area (a self targeting wage); Financing viable activities that lead to increased household income; Funding sub projects selected as a priority in a meeting attended by at least 70% of the beneficiaries (target group); Equitable participation between women and men in sub project management; and Funds to be spent in accordance with the approved procurement plan. 2.4 Beneficiary Target Group The NVF interventions will focus on the following target groups which: (i) lack access to basic social and market services; (ii) have able-bodied but food insecure households; and (iii) have vulnerable individuals (i.e. orphans, disabled, elderly, affected/infected by HIV/AIDS, etc). 2.5 Community Service Packages Community Service Packages will guide communities on activities that are eligible for funding and support from TASAF. The service packages, defined by the respective sector ministries comprise a minimum set of interventions that are (a) affordable and suited to community level management and maintenance, (b) are within national sector norms and standards and (c) will contribute to specified MDG indicators targets and National Strategy for Growth and Reduction of Poverty (NSGRP). A table on community service packages is shown in Annex III. 2.6 Implementation Arrangements Under the NVF communities will manage sub project with the oversight from the LGAs. Implementation of the subprojects will follow three 2

14 main phases, namely, pre sub project cycle activities, sub project cycle and post sub project cycle activities as detailed below. 2.7 Pre sub project cycle Pre sub project cycle activities include: awareness raising and sensitization; formation of relevant teams; determining LGA/Island specific self targeting wage rate; capacity building for LGA/Islands relevant staff. Any interested community will submit a Sub Project Interest Form (SPIF). The SPIF shows community interest in initiating a sub project. The SPIF gives information on beneficiary groups and a summary of types of possible community interventions. The Sub Project Interest Forms will be available at the Offices of VEO/Sheha/Mtaa Chairperson, WEO and VFC. After a community awareness raising on TASAF activities and before E- PRA, the interested community will fill in a Project Interest Form in three copies and submit to the Village Council. The VC/Shehia Advisory Council/Mtaa Committee will endorse the forms after ensuring completeness and accuracy and send the forms to the VFC s office and TMU, with one copy being retained at the offices of VEO/Sheha/Mtaa Chairperson, on behalf of the community. The VFC will sort and compile the forms by sector for presentation to the Management Team for review, targeting and decision for E-PRA. The targeting of resources within an LGA will be guided by poverty and service coverage indicators as well as community demands inline with their capacities. Interested communities will be notified if an E-PRA will be deployed. 2.8 Sub project cycle Communities targeted for NVF support will enter into the sub project cycle through the following eight stages. Sub project cycle is indicated in Annex IV. Details of activities, actors and time frame are indicated in the sub project cycle delivery benchmark in Annex V Identification E-PRA will be undertaken to arrive at a confirmed community sub project proposal which is in line with community service guidelines. This stage will also entail preparation of sub project write up. The CMC will then make a formal application for NVF funding by filling in a Sub Project Application Form (SPAF) Desk Appraisal All sub project applications will be Desk Appraised by LGA/Island Sector Expert to check the following among others: (i) Completeness of application forms. 3

15 (ii) Whether environmental protection measures and resettlement issues have been considered at all stages of sub project implementation, operations and maintenance. (iii) Whether the applications meet the requirements of beneficiary groups as detailed in the respective handbooks. (iv) Conformity to sectoral standards and norms Field Appraisal The field appraisal involves visiting the proposed sub-project site to confirm the following among other: (i) Whether the community participated fully in needs identification. (ii) If the proposal is a high priority for the community. (iii) Whether the sub project write-up was presented and discussed by the community. (iv) Confirmation that resettlement and environmental issues have been addressed. (v) (vi) Availability of community contribution, where applicable. Whether plans for operation and maintenance are in place Approval Sub projects will be approved at two levels; Village Councils (VCs) are authorised to approve sub projects whose NVF contribution is less than US$ 5,000, rising to US$ 10,000 equivalent for sub projects that are demonstrably designed to contribute to more than one MDG; and sub projects above the VC approval level, up to a maximum NVF contribution of US$ 30,000 will be approved by the LGA. The sub projects approved by the VCs will be sent to the LGA for endorsement prior to submission to the SET to verify and the NSC for endorsement. In the case of Islands, sub projects will be approved by Pemba and Unguja Steering Committees. Notwithstanding these approvals, these applications will still be reviewed by TMU and SET for compliance to NVF requirement and sector norms and standards, respectively prior to NSC endorsement. Only then will the TMU disburse funds. 4

16 2.8.5 Launching Sub projects launching will entail the following activities: entering into a sub project financing agreement between CMC, VC and LGA, opening of sub project bank account, training of CMC, orientation of VC/Shehia Advisory Council/Mtaa Committee and LSP. Launching will be done at the community level. During the launch, respective roles and responsibilities of various parties involved in implementation of the sub project will be clarified Implementation Sub project implementation will be the responsibility of CMC and beneficiaries. The CMC shall procure goods, works and services for implementation and will follow procedures as provided in the Community Procurement Handbook. Sub project implementation will not exceed twelve months Supervision and Monitoring Supervision, monitoring and evaluation and reporting will be done periodically by VC, technical staff from LGA (including Ward)/ respective Ministries in Zanzibar. Progress report will be prepared on quarterly basis Completion and Inauguration Once a sub project is completed, an inauguration ceremony will be held to officially commission the asset and a completion certificate will be presented to the community. This will be done after the sub project is evaluated and verified by LGA Sector Expert, Village Fund Coordinator and External Sector Expert that it has been successfully completed. Any community that will complete the sub project within the approved budget will keep the balance. Otherwise a community spending more than the sub project budget will return the balance to the NVF. 2.9 Flow of Funds At the beginning of LGAs/Islands will be informed of the total NVF allocations for the all period based on the resource allocation criteria. This information will be made public through the mass media. LGAs/Islands will send applications to TMU for funding. Subproject with TASAF contribution of less than US$ 5,000 and those that address more than one MDG and have a contribution of less than US$ 10,000 will be released in a single tranche. Funding for all 5

17 subprojects ranging from US$ 10,001 up to 30,000 will be released in a single tranche to those LGAs that meet LGCDG criteria which in turn will release them in two tranches of 50:50 basis. In LGAs that do not meet LGCDG criteria, TASAF MU will disburse funds to the CMC/VC in two tranches. The second tranche will only be disbursed once 70% of the previous tranche has been accounted for. In the case of support for vulnerable groups, tranches may if deemed appropriate, be disbursed on an activity basis Post Sub project Cycle After sub project completion/inauguration, evaluation will be done on the following issues: (i) Performance- the extent to which the facility functions satisfactorily; (ii) (iii) (iv) (v) (vi) (vii) (viii) Utilisation - the extent of use of the facility or service; Community obligation - the degree to which the community has met its obligations to manage, maintain and repair equipment or structures, collect user fees and promote the use of services; LGA/CMO obligation the extent to which LGA/Island met its obligation; Other Collaborators obligations - the performance of any collaborators, such as, sectors, NGOs in providing staff, operating funds; and other inputs to support the community; Skills developed during the course of implementation with a view of promoting further development for future use; Overall assessment of impact of the intervention on poverty alleviation in contexts of MDGs and NSGRP. Beneficiaries - analysis of the number and composition of people benefiting from the sub-project and the beneficiaries own assessment of the value of the asset and the return on their investment; (ix) Environmental Impact Assessment Environmental Impact Assessment will be made to determine the compliance of the guidelines provided and propose any improvement necessary. The instruments for caring out evaluation will be: (a) (b) (c) Community Score Card, every six months; Citizen Report Card, every two years and Social Impact Assessment, at the end of the project. 6

18 CHAPTER 3 CAPACITY ENHANCEMENT (CE) 3.1 Introduction Communities and sectors (represented at Ward and District/Municipal levels) will, though the CE component, be capacitated to undertake activities that assist Tanzania meet its targets as laid out in the NSGRP (in health, education, water and sanitation, savings mobilization, incomes for the poor, tackling vulnerability and increasing access to market by the poor) by mobilizing both informal and formal mechanisms for responding to shocks. This component will provide resources for community mobilization as well as the monitoring and evaluation of activities financed from the NVF component. It will also support individuals interested in the formation of voluntary savings groups and respond to LGAs/Islands where various agencies need capacity to support Village Governments (communities and village councils) implement sub projects. 3.2 Objectives (i) To promote formation of voluntary savings groups; (ii) To promote transparency and accountability in the management of TASAF funded activities at all levels. (iii) To enhance capacities of communities and other stakeholders 3.3 Guiding Principles The following principles will guide the CE component: (i) CE funds will be allocated based on need and demand (ii) CE funds will be used for activities which facilitate the smooth implementation of the NVF component 3.4 Rules of Access The following rules of access will apply: (i) (ii) Funds for any training will be provided on the approved demands; Approved budget of operating cost for TMU and specified capital cost for LGAs approved by the NSC; (iii) Funds will not be provided for credit/loans and/or grants to voluntary savings groups. 3.5 Beneficiaries Target Groups The beneficiaries will be TMU, agencies (public and private) that support communities to make the best use of resources made available under the NVF, as well as poor individuals participating in groups savings and 1

19 taking advantage of investment opportunities created by various privatepublic partnership. 3.6 CE Component Supported Activities The Component will support the following activities: (i) Finance TMU staff to manage Fund operations; (ii) Facilitation of the processes of the NVF; (iii) Capacity enhancement to LGAs/Islands; (iv) Promotion of savings by the poor as a way of equipping them with tools to better manage social risks and respond to shocks; and (v) Demand driven capacity enhancement to NVF stakeholders. (vi) Development communications to raise awareness of the rules of access to the NVF, the systems necessary to monitor and evaluate Project supported activities. 2

20 CHAPTER 4 INSTITUTIONAL ARRANGEMENTS 4.1 Introduction TASAF is organized in a decentralized manner to facilitate greater autonomy and empowerment to local government structures and the community in conformity with the provisions for the Local Government Act No. 7 and 8 of 1982 for Mainland. is set to operate within the three spheres of government i.e. national, LGA and village levels in mainland Tanzania. Similarly, in Zanzibar the operational set up will be at national, island (Unguja and Pemba) and Shehia. Roles at the national, LGA/island and village/shehia/mtaa levels are defined in line with the main operational framework of community sub projects realization and management of created assets. 4.2 Tanzania Mainland National Level At the national level TASAF is administered under the President s Office. The Permanent Secretaries in each relevant sector 2 will appoint members of the Sector Experts Team to be chaired by PO- RALG. There shall be a management unit to manage day to day activities of the project National Steering Committee (NSC) The NSC ensures that TASAF activities are carried out in accordance with the Development Financing Agreement (DFA) and (OM), and provides overall policy guidance. The NSC will be chaired by the Permanent Secretary in Vice Presidents Office and the Executive Director of TASAF will be the Secretary. The NSC will be responsible for recruitment of relevant personnel at TMU, hold quarterly meetings to review the annual work-plans and budgets, endorse community sub projects verified by SET and discuss progress reports. It will also be responsible for caring out staff performance appraisal. It may also meet on an extraordinary basis or conduct special meetings whenever an issue that needs immediate attention arises; and undertake field visit as needed. The time limit for NSC membership shall be three years. The NSC has 12 members drawn from public and private sectors and NGO s, and has gender representation, i.e., at least 2 Education, Health, Water, Social Welfare, Banking, Marketing, Cooperative, Fisheries, Forestry, Mining, Food Security, and Community Roads, HIV/AIDS, Environment 1

21 four of the members are women. Membership of the NSC is given in Annex VI Sector Experts Team A Sector Experts Team (SET) constituted from senior sector experts to support the NSC and will be chaired by PO-RALG. The functions of the SET include among others; (i) on quarterly basis, review sub-projects submitted to the NSC for endorsement and make a judgement of their conformity with sector norms and standards, (ii) recommend funding of sub projects using NVF resources or defer sub project funding until review has been undertaken by sector experts; (iii) on annual basis, review the cases which have been outside sector norms with a view to determining if any or some of them could offer a substantial basis for recommending changes to sector norms (iv) to provide technical advise on cost effectiveness of the sub projects (v) undertake field visits on half yearly basis. The SET members drawn from relevant Sectors are indicated in Annex VII TASAF Management Unit The TASAF Management Unit (TMU) headed by Executive Director and staffed with appropriately qualified individuals, will be responsible for the day-to-day operation of TASAF and answerable to the NSC. The functions of the TMU include among others; (i) Ensure that the project is carried out in accordance with (ii) the OM; Ensure that project funds are disbursed promptly and accounted for in accordance with the financial management principles set forth in the DFA; (iii) Carry out all the procurement not being undertaken by the communities; (iv) Prepare annual work plans and budget in accordance with the DFA for the approval of the NSC; (v) Carry out regular service audit; (vi) Prepare the Financial Monitoring Reports (FMRs), quarterly and annual progress reports; and (vii) Report on the Performance of its staff TMU organogram is as indicated in Annex VIII. 2

22 4.2.2 Regional Level The Regional Consultative Committee (RCC) will monitor the progress made by LGAs in developing resource accountability measures. It will also provide a platform for collating and coordinating TASAF accountability reports from their LGAs. The secretariat of the RCC shall report back to the NSC and to the Ministry of Finance s quarterly sector consultations on a six-monthly basis. The RCC will be chaired by the Regional Commissioner. RCC Composition is as indicated in Annex IX Local Government Authority Level At the LGA level the project will be managed by District Executive Director 3 (DED), with LGA Finance Committee 4 having responsibility for approving and overseeing sub projects. TASAF shall enter into a Memorandum of Understanding (MoU) with the District Executive Director from each LGA. The MoU will clearly articulate roles and responsibilities of the parties, as it relates to TASAF supported activities. The MoU is indicated in Annex X LGA Finance Committee The committee will be responsible for approving community sub projects with a NVF contribution of USD 10,001 USD 30,000 and endorse subprojects with a NVF contribution of up to US$ 10,000 approved by VCs Council Management Team (CMT) The CMT is a technical working committee chaired by the District Executive Director. The CMT is responsible for the appraisal, technical support, monitoring of sub-projects during implementation and oversee operation and maintenance. The CMT will also receive progress reports on sub-projects implementation. The CMT will review Sub Project Interest Forms (SPIFs) and target communities where E-PRA will be conducted. The Composition of MTs is given in Annex XI. Respective LGAs will appoint the VFC and VFJA to coordinate the activities of NVF. Their functions are appended in Annex XII Ward Level Ward Development Committee (WDC) will: (i) support single and multi-village facilitation; (ii) provide technical appraisal and report back to the MT; (iii) provide technical support to CMCs and Village Councils to facilitate sub projects implementation; (iv) ensure technical oversight. 3 Town Director/City Director/ Municipal Director for urban Councils 4 Refers to Finance, Administration and Planning Committee for District Councils; and Finance and Administration Committee for Urban Councils 3

23 4.2.4 Community Level At the community level there will be a Village Assembly, a Village Council and a Community Management Committee. Each Village will establish a Mfuko wa Kijiji (MWK) which is under the management of the VC, elected by the Village Assembly Village Assembly The Village Assembly will endorse interest expressed by respective beneficiary group in the village during E-PRA, endorse CMC members proposed by the respective groups (whereby 70% of the eligible voters are represented), receive and discuss sub projects progress reports submitted by the VC. For service poor communities CMC will be elected by the Village Assembly. VA shall also endorse the beneficiaries for food insecure and vulnerable group support The Village Council The Local Government Act 1982 calls for each village in a Ward to elect a VC, which is conferred with the powers to do, among other thing, all acts and things necessary or expedient for the economic and social development of the village and encourage the residents of the village to undertake and participate in community enterprises. The VC will ratify the CMC elected/endorsed by the Village Assembly and delegate the responsibility of day-to-day management of the sub project to the CMC. The VC will receive and process the Sub Project Interest Form (SPIF) and forward to LGA and TMU. The VC will receive sub projects progress reports from CMC and make quarterly public reports to the Village Assembly before submitting reports to the LGA. The VC will supervise the process from pre sub project cycle to post completion stage Community Management Committee (CMC) There will be a Community Management Committee democratically elected during a meeting attended by at least 70% of the intended beneficiaries of voting age. Members of this committee will be between 6 and 10; with 50% being women. This requirement does not apply to sub projects whose beneficiaries are of same sex. The CMC will be responsible for implementing the sub projects in accordance with the Community Sub Project Management Handbook. Where applicable the CMC will be linked to a Local Service Provider (LSP) for technical support. 4.3 Zanzibar In Zanzibar the operational set up will be at national, island (Unguja and Pemba) and Shehia. 4

24 4.3.1 National Level The Chief Minister s Office will coordinate all activities relating to TASAF. There will be one National Steering Committee for both Mainland and Zanzibar. Membership will be drawn from both sides. TASAF shall enter into a Memorandum of Understanding with the Permanent Secretary Chief Ministers Office in Unguja A Sector Experts Team (SET) constituted from senior sector experts to support the NSC will comprise of similar sectors as Tanzania Mainland. The Chief Minister s Office will appoint the chairperson. The SET will be responsible for ensuring that community sub projects submitted for TASAF funding comply with sector norms and standards and are in harmony with the operational arrangement at the CMO in Zanzibar Island Level Steering Committee (SC) for Unguja and Pemba The Chief Minister s Office (CMO) will establish a Steering Committee for Unguja and Pemba, respectively. In Zanzibar the CMO will perform similar function and share its reports with the President s Office, relevant Government Ministries and the National Steering Committee. The Steering Committee membership is also shown in Annex XIII. It is chaired by Regional Commissioner for one of the Regions in Pemba and Unguja respectively. The main function of this committee is to approve community sub projects with a NVF contribution up to USD 30,000. The Steering Committee will continue to approve sub projects until when the regulations are modified to allow Shehia to perform this function Management Team (MT) for Unguja and Pemba The Chief Minister s Office (CMO) will establish a Management Team for Unguja and Pemba, respectively. The MT is a technical working committee chaired by the Commissioner for Development Project and Officer in Charge of Ministry of Finance for Unguja and Pemba, respectively. The MT will review Sub Project Interest Forms (SPIFs) and target communities where E-PRA will be conducted. The MT will also be responsible for appraisal, technical support, monitoring of sub-projects during implementation and oversee operation and maintenance. The Chief Ministers Office will as well appoint the VFC and VFJA to coordinate the activities of NVF. Their functions are appended in Annex XII. 5

25 4.3.3 Community Level Community Management Committee There will be a Community Management Committee democratically elected during a meeting attended by at least 70% of the intended beneficiaries of voting age. Members of this committee will be 50% women 5. The CMC will be responsible for implementing the sub projects in accordance with the Community Sub Project Management Handbook. Where applicable the CMC will be linked to a Local Service Provider (LSP) for technical support. Summary of Roles The function of the organs described above are summarised below Body Broad Functions/Mandate Membership Meeting Frequency NSC Approval/policy for TASAF Government and Quarterly MOF Quarterly Sector Consultations Foster accountability in NSGRP reporting NGOs/CSOs GOT, Civil Society, Development Partners SET Oversee sector norms Line Ministry Representatives MU-MC Direct management and Executive Director & oversight of TASAF Directors Regional Accountability monitoring RC, DC, District Consultative Chairpersons, DED Committee Quarterly Quarterly Fortnightly Half-yearly LGA Finance Approval of VF sub projects Councillors and Technicians Quarterly Committee MT Technical appraisal DED and Technical Monthly Departments WDC Provide technical support Councillor and Village Quarterly Council member VA Receive and discuss progress All over 18 years + As needed report extension staff VC (i) Receive and process the SPIF Elected village representatives Quarterly Monthly (ii) Oversee development projects CMC Implementation of sub Elected Fortnightly projects Communities Mobilization for sub projects Village Assembly As needed institutional structure in Mainland Tanzania and Zanzibar is provided in Annex XIV (a), XIV (b) and XIV (c) 5 This requirement does not apply to sub projects whose beneficiaries are of same sex. 6

26 CHAPTER 5 SYSTEMS MANAGEMENT 5.1 Introduction The Systems Management will foster transparency and accountability as an overriding principle of TASAF operations. 5.2 Objectives The objectives of Systems Management are to: (i) Promote transparency and accountability in management of activities funded by TASAF at all level of project management and implementation (ii) Strengthening institutional and human resource capacities for community development, management and local governance and (iii) Support the enhancement of institutional linkages, knowledge and information management and communication systems 5.3 Systems Management Functions The Systems Management will perform the following functions (i) Development Communication; (ii) Training and Research; (iii) Information Technology/Management Information Systems; and (iv) Monitoring and Evaluation Development Communication will seek to intensify, integrate and innovate Development Communication (DeC) activities in an inclusive manner to promote these objectives and assist in converging the capacities of stakeholders to contribute to the achievement of the MDGs in the context of Tanzania s NSGRP. The project will support the regular implementation of Community Statistics Days, Community Score Cards and Citizen Report Card exercises. Institutionally, there will be a clear focus on strengthening the capacity and involvement of the LGA level DeC Committees in formulating and implementing the DeC strategy. The project will also focus on developing a targeted DeC initiative for the savings promotion element. The project will support the setting-up of a Knowledge and Information Dissemination System (KIDS) which will enrich TASAF-II monitoring and evaluation initiatives. 1

27 5.3.2 Training Research and Participation (TRP) Training The Project will support demand driven training of stakeholders based on the expressed and ascertained needs. Supported training will be geared towards strengthening capacities of stakeholders involved in the implementation of TASAF funded activities to perform effectively, efficiently and development of positive culture in the organization. Since there are other players supporting and collaborating with LGAs/Islands in undertaking development activities, TASAF-II resources will only finance training activities which will not be/had not been funded by other projects/ development partners so as to avoid unnecessary duplication of efforts and ensure optimal use of resources. Research Research activities will be forward looking aimed at informing TASAF-II operations in a timely manner. Since the Project is a community level intervention within the framework of the National Strategy for Growth and Reduction of Poverty (NSGRP), the research agenda will be defined in line with the NSGRP three clusters, namely, growth and reduction of income poverty, improvement of quality of life and social well being, and governance and accountability, focusing much more explicitly on the broad social protection agenda. To capture the dynamics of TASAF interventions and inform future delivery modalities, operational research will be conducted to take stock and analyse anecdotal evidence and reports so as to facilitate informed decision making at all levels and hence enable TASAF attain its objective. Project research activities will be linked up with the Poverty Monitoring System (PMS) of the NSGRP as overseen by the Research and Analysis Working Group. Participation Participation of communities and other stakeholders will be promoted and facilitated during all three phases, namely, pre-sub project cycle, sub project cycle and post sub project cycle. Guidelines will give details of activities to be performed in all phases and those responsible. Regarding the sub project cycle, guidance on participation of communities and stakeholders in all the eight stages of the CDD cycle will as well be provided. The guidelines will be prepared and provided to the communities and other stakeholders to guide and facilitate participation process in various activities to be supported and implemented. 2

28 5.3.3 Information Technology/Management Information System The project Management Information System (MIS) will monitor implementation at the community level with support from the LGAs. It has been designed to incorporate a paper-based component at the community level and an interface to an LGA computerized system. To ensure sustainability, it will be harmonized with LGA level processes and systems. Progressively it will be mainstreamed into the district systems and processes. The MIS (at the MU) should be capable of interfacing with other MIS system currently existing or being proposed both at the national and district levels. The outputs of these various sub systems, along with the development communication initiative will be brought together under a Knowledge Information Dissemination System (KIDS) to strengthen learning and capacity building in the context of the CDD approach Monitoring and Evaluation The overall objective of Monitoring and Evaluation (M&E) in TASAF II is to ensure better planning, targeting, feedback to relevant stakeholders and timely decision making in order to improve service delivery. It will help to: (i) improve management of programs, sub projects and (ii) supporting activities; improve service delivery in order to promote active community participation, quality of sub projects, transparency and accountability with a view to ensure that resources made available to sub project are used to meet the intended purposes; (iii) draw lessons from experience so as to improve the relevance, methods and outcomes of cooperative programs; (iv) ensure optimum use of funds and other resources; (v) strengthen the capacity of co-operating agencies, nongovernmental organizations and local communities to monitor and evaluate; and (vi) improve information sharing systems and enhance advocacy for policies, programs and resources that improve the contribution towards poverty alleviation. A result-based M&E system will monitor project processes using the following methods and tools: (i) a well defined result framework that is derived from clearly defined goals, objectives, outcomes, outputs and activities with corresponding indicators, means of verification and key assumptions; 3

29 (ii) a well defined M&E strategy for project processes, information requirement, tools and methodologies for data collection, analysis and reporting; (iii) a comprehensive M&E plan with clear roles and responsibilities as they relate to indicators tracking with respect to data gathering and reporting; (iv) a project tracking system based upon agreed indicators as derived from the logical framework matrix of the (v) program; internal and external periodic assessment and evaluations which would include baseline studies, beneficiary assessments, mid-term evaluations, ex-post evaluations and impact evaluations; and (vi) participatory community monitoring and accountability approaches and systems (e.g. community score card, citizen report card and social impact assessment). TASAF will assess its project management systems and procedures in respect of their relevance effectiveness, efficiency and impact at community, LGA/Island and national levels. The key performance indicators are indicated in Annex XV. TASAF will collaborate with other Government initiatives such as the National Level Poverty Monitoring being facilitated by the Vice President s Office. 4

30 CHAPTER 6 ENVIRONMENTAL ASSESSMENT AND RESETTLEMENT PROCESS AND PROCEDURES 6.1 Introduction: Environmental and resettlement issues will be actively integrated into the sub project cycle process in order to contribute towards sustainable management of natural habitat. Hence, Environmental and Social Management Frameworks (ESMF) and Resettlement Policy Framework (RPF) have been instituted with the view to achieving effective environmental assessment and mitigation measures in operations. Like in TASAF I, operations in will be required to ensure environmental and social sustainability of the funded sub projects are taken into consideration. As the type and specific geographical location of the sub project are not predetermined prior to the project effectiveness, the types of sub projects are reasonably well defined, and a safeguard measures to support appropriate environmental and social sustainability can only be established during sub project implementation This chapter will generally describe the process and procedures for Environmental Assessment and Resettlement. The detailed sub project environmental checklist, mitigation measures, and appraisal forms, land acquisition forms are contained in respective ESMF and RPF handbooks. 6.2 Objectives The Environmental Assessment and Resettlement procedure under TASAF II is to institute a consistent and effective environmental assessment and resettlement process at the community, LGAs/Island and at national levels for all funded sub projects. The specific objectives of environmental assessment and resettlement process are as follows: (i) To ensure that environmental assessment, resettlement procedures and mitigation measures are undertaken during the sub project cycle implementation. (ii) To support and empower communities to implement and monitor mitigation measures for all TASAF funded activities. (iii) To establish a unified process and methodologies for environmental assessment and resettlement procedures within the sub-project cycle. 1

31 6.3 Implementation Strategy The environmental assessment and resettlement frameworks will follow the Government of Tanzania existing legislations on environmental assessment and resettlement through community empowerment. will encourage environmental friendly sub projects e.g. afforestation and the use of environmental friendly technologies in implementation of sub projects. Further, involuntary resettlement and land acquisition should be avoided where feasible, or minimized exploring all viable alternatives. will support capacity enhancement and training of communities to be aware of and able to carry out environmental assessment and resettlement process through LGAs/Island. Involuntary resettlement and/or relocation issues should be resolved before a sub project is approved (e.g. eviction of squatters, loss of land whether ownership recognized by customary land tenure or land titles, impact on cultivations and property, loss of access to property, loss of access to natural and other economic resources). The environmental assessment and mitigation measures are designed to ensure that it is agreeable for application at all levels of sub project management. Principally, it will entail identification of activities with negative effects and establishment of measures to limit the undesirable effect arising from sub project activities. The various actors responsible for environmental assessment and mitigation measures for funded sub projects is as indicated in Annex XVI. 6.4 Integration into Sub Project Cycle Process Each sub project funded by will be subjected to environmental assessment and resettlement process. Environmental assessment will start with screening process to determine whether the sub project is likely to have potential environmental and social impact. Identification of adverse environmental impact will determine appropriate mitigation measures which will be incorporated into the sub project design and hence monitor environmental parameters during implementation. The screening process will lead to four safeguard requirements as follows: i) No further action, if the sub project has no impact on the environment. ii) Carry out simple Environmental Review if sub project may create a few minor and easily mitigated environmental problems iii) Carry out Limited Environmental Review if sub project may create minor environmental problems that require frequent site visit or construction modifications to minimize or eliminate impact 2

32 iv) Carry out full Environmental Impact Assessment if sub project may result into potentially significant direct or indirect adverse impact In this regards, sub project applications and appraisal forms have been designed to include aspects requiring that environmental assessments are undertaken, and action plans developed to limit the negative effects arising from the sub project activities. Sector checklist has also been developed for each sector to guide the environmental assessment and mitigation planning. The LGAs/Island EPRA team will guide and facilitate communities to fill and complete these forms during sub project identification process. Activities for mainstreaming environmental assessment process into the sub project cycle are detailed in the ESMF. The resettlement process will entail filling a special designed form during sub project identification stage. This will determine whether or not the proposed sub project will entail acquisition of land, required area and availability. Community will then propose a sub project location and available alternatives and will be advised whether or not resettlement policy will be triggered. At this stage, communities may decide to drop the sub project on that basis. If they decide to continue with the sub project, they will be advised and assisted to prepare a resettlement plan. Preparation of resettlement plan will entail undertaking socio-economic assessment to determine the impact of displacement, resettlement action plan and a valuation report of land assets and landed properties at the site. 6.5 Use of Sector Checklists A generic checklist for each sector has been prepared to facilitate environmental assessment and action planning for mitigation measures. This will ensure a systematic approach is followed in assessing sub project activities for environmental effects. The checklist will allow for capturing adequate information pertaining to environmental assessment and mitigation of sub projects. Main features of the checklist include a detailed description of the activities to be undertaken, potential negative environmental impact, possible mitigation measures to be undertaken and responsible person to undertake. Village Chairperson/Sheha, Village executive Officer, Chairperson of CMC and a member of EPRA who facilitated filling the form, will sign the form. 3

33 6.6 Roles and responsibilities at different levels Community level Communities will be responsible for filling ESMF form No 1 and RPF Form No 1, 2 and 3. Extended PRA team will facilitate and guide communities in filling these forms. The EPRA team will use sector specific checklists to draw out environmental related information and possible mitigation measures. In this regard, communities will be enlightened on the importance of environmental assessment and management, and that this aspect will be one of the key criteria for deciding whether a sub project will be funded or not. These forms will be submitted together with the application forms to the LGAs/Island for appraisal. The community will also be responsible for environmental monitoring once the sub project has been approved for funding during implementation LGAs/ Island level At the LGAs/Island level, the MT will appraise the sub project proposal received from Village Council/Shehia Advisory Council. The appraisal process will take the form of identifying and assessing potential impact for the proposed sub project. They will also determine the environmental category and the extent of environmental work required based on screening results. The MT will also screen the sub project on resettlement process to identify whether the land is required, whether displacement or loss of access and/ or property may occur. Also they will determine whether or no involuntary resettlement policy will be triggered. The MT will generally reject a sub project proposal that will be found to have cumbersome mitigation measures. If the sub project passes the screening process, it will be subjected to field appraisal. During the field appraisal, the EPRA team and sector experts will assess the information contained in the application form on the environment and assess the adequacy of mitigation measures. A checklist requiring the appraisal team to include information on the steps that a community went through in conducting the environmental assessment and proposed mitigation measures. The team will go through the community action plans on environmental and resettlement to assist them strengthen the proposed mitigation measures. Once the EPRA team and experts are satisfied with the field appraisal, they will forward it to the 4

34 relevant committee for approval. The community and LGAs/Island will be responsible for monitoring the plan National Level At the national level, TMU and SET will be responsible for checking whether environmental assessment has been carried out for each funded sub project. It will also check whether resettlement issues have been addressed adequately. If the environmental assessment and resettlement process has not been carried out, TMU will request the relevant LGAs/Island to ensure these two safeguards policies are carried out before funds are released for the sub project. 5

35 CHAPTER 7 FINANCIAL MANAGEMENT, DISBURSEMENT AND ACCOUNTING 7.1 Introduction TASAF will maintain a Directorate of Finance whose main function is the development and maintenance of a sound Financial Management and Accounting Systems (FMAS) to support TASAF activities at all levels i.e. at TMU, LGA/Island and Communities. The Directorate of Finance is responsible for the overall management of liquidity to ensure that sufficient funds are available all the time to finance sub projects under the NVF and CE activities. To prepare monthly, quarterly and annual financial reports for management, NSC, Government, and IDA decision making. The Directorate will ensure that funds spent are replenished accordingly from the World Bank and other Development Partners and make follow up with Ministry of Finance and President s Office for Government contribution. 7.2 Financial Management and Accounting The Financial Management System will ensure that project funds are appropriately managed, expended for the intended purposes, fully and timely accounted for. The system will be simple enough to be used and maintained by the community, LGAs/Islands and other implementing agencies. The funds are drawn from the IDA credit and grant, the Government of Tanzania, communities and other development partners. Funds from the IDA are transferred to special accounts with the Bank of Tanzania and denominated in US dollars. The funds are then transferred to the project local bank accounts and denominated in TZS. Funds from the GOT are also deposited into the project local bank account. Funds from the communities are held in their sub project bank accounts. The Finance Management System will capture and track all the financial transactions in such a way that the financial reports can be timely produced to monitor financial and physical performance, ensure accountability of funds. Besides producing the traditional financial statements, i.e. the income and expenditure account, the balance sheet and funds flow statement, the financial accounting system will also produce the Special Account Statements and the Statement of Expenditure (SOE) and the Financial Monitoring Report (FMR) as agreed with IDA. The financial management system shall comply with the International Financial Reporting Standards (IFRS). 1

36 7.3 Ring Fencing The total IDA funding is USD million comprising of million credit and USD 21.0 million grants. It is envisage that, if desired, funding from other sources including other IDA financed projects (e.g. the community support component of Zanzibar HIV/AIDS Commission, the Marine and Coastal Environment Management Project (MACEMP), the Tanzania Forest Conservation and Management Project (TFCMP), Organization of Petroleum Exporting Countries (OPEC), etc), or other donor financing for community activity desirous of following the TASAF principles and processes, will formalize their intent in their legal agreements and. The Grant portion of the Project, amounting to USD 21 million, will be ring-fenced to finance support provided to the able-bodied food insecure, and the vulnerable. Once these amounts have been exhausted, the Credit portion of the NVF can provide funding for these beneficiary groups. Separate codes will be created in the chart of accounts to track down the usage of these funds for reporting purposes. 7.4 Approval Authorities Approval authorities for community sub projects financed by the National Village Fund are at two levels as shown below: No. Sub project VC LGA 1 Addressing a single MDG <USD 5,000 USD 5,001 30,000 2 Addressing 2 or more MDGs <USD 10,000 USD 10,001 30, Disbursement to LGAs/Islands and Communities The NVF access criteria will be used to disburse funds to the LGAs/Islands. The NVF access criteria consist of the LGA/CMO having appointed VFC and VFJA. The LGCDG access criteria will also apply to TASAF when disbursing funds to LGAs. On annual basis, PO-RALG will provide the TMU with a list of LGAs who have met LGCDG access criteria, and these will receive NVF resources. In non-lgcdg Councils, TASAF access criteria for Village Council (VCs) to channel resource to communities would apply. Disbursement of funds to the LGA will be accompanied with a schedule showing which sub projects have been approved, what resources are to: (a) be retained at LGA level(2.5%) to finance facilitation and reporting on sub project using LGA and Ward level extension staff, 2

37 (b) be sent to a MWK account (2.5%) to cover cost of facilitation, monitoring, and reporting by the VC, (c) be sent either to the VC or LGA (5%) for sub project supervision, and (d) be sent to an account (90%) in the name of the CMC for approved sub projects. Disbursement to the MWK (92.5% 97.5% of funds) will be made where the VC has attained a pre-defined fiduciary capacity (two half yearly satisfactory Community Score Cards and a trained person with demonstrated records-keeping skills). The VC will then disburse to the CMC. Community Sub Project Management Handbook provides details of accounting at the community level. Details of flow of funds are provided in the diagram below: 3

38 FLOW OF FUNDS FROM IDA, GOT AND OTHER DONORS TO COMMUNITIES LGA does not qualify CREDIT / GRANT/OTHER ACCOUNTS Supervision LGA qualifies Supervision SPECIAL ACCOUNT- CREDIT SPECIAL ACCOUNT- GRANT Local Account (Ring fenced) THREE TASAF LOCAL BANK ACCOUNTS Local Account GOT If LGA does not qualify under LGCDG & VF access criteria NATIONAL VILLAGE FUND CAPACITY ENHANCEMENT TMU If LGA qualifies under LGCDG & VF access criteria. LGA gets 2.5% only of subproject cost for operations LGA gets 100% of Sub project cost from MU & retains 7.5% for supervision VC uses 5% to pay Local Service Provider for supervision of CMC VC gets 7.5% from MU of sub project cost for 2.5 % VC for facilitation, monitoring and reporting of CMC activities & 5% for supervision VC is paid by LGA 2.5% of funds received by LGA for supervision of CMC 90 % of Subproject cost deposited into Subproject Bank Account. Single Tranche if less than $10,000 Two tranches of 50 % each if project cost is above $10,000 4

39 7.6 Accounting Standard and Financial Management System Financial accounts will be maintained on an accrual basis of accounting in accordance with International Financial Reporting Standards (IFRS) in a computer based standard Financial and Accounting software/package (epicor). To facilitate the production of financial information that will allow it to be linked to components and technical and operational data, an MIS that will finally permit the full integration of accounting information has been developed. The financial accounting system will be compliant with the Financial Monitoring Reporting (FMR) system that is in use for IDA projects reporting. In addition to identifying and defining TASAF chart of accounts to be utilized, the Directorate of Finance will be responsible for preparing and submitting financial reports monthly, quarterly, annually and cumulative information on the status of funds. Financial Reports will be prepared using FMR system. The annual financial statements will be prepared using FMR format but will include additional schedules of supporting information on the accounting policies and notes to the accounts. TASAF will submit to IDA, President s Office and Ministry of Finance copies of its quarterly and annual financial reports as stipulated in TASAF Financial Management Accounting Manual. 7.7 Internal Controls The internal control guidelines and procedures defined and articulated in the accounting manual provide assurance regarding the achievement of objectives in the following categories: - Effectiveness and efficiency of Operations. Reliability of financial reporting. Compliance with applicable laws and regulations Safeguarding of assets Since the disbursement of funds will be on block transfers to the LGAs/Islands bank accounts, or direct to the community bank accounts, an efficient system of internal controls at the LGA/Island level is in place to ensure funds are utilized appropriately. The internal controls are elaborated in the Financial Management Accounting System Manual. 7.8 Replenishment of Funds As funds are utilized at TASAF MU, LGA/Island and community level, the reporting of the funds utilized as per each sub-project/activity of project category and bank reconciliation, will be done on monthly basis to allow the Directorate of Finance to submit withdrawal application to IDA for the replenishment of funds to the Special Account. Within 45 5

40 days after the end of the quarter, TASAF will be required to submit to IDA a withdrawal application attached with FMRs, bank reconciliation, and cash forecast covering the following six-months. Details of this arrangement are provided in the Loan Administrative Change Initiative (LACI) Implementation Handbook, the DFA and the Disbursement Letter. For all expenditures claimed all supporting documents will be retained at TASAF MU for internal and external audit review, and IDA mission. 6

41 8.1 Introduction CHAPTER 8 PROCUREMENT The objective of procurement is to ensure economy, efficiency, transparency and accountability as well as participation of the many providers of works, goods and services. Procurement procedures are detailed in the TASAF Procurement Manual and the Community Procurement Handbook. The bulk of the procurement will take place at community level and therefore cannot be identified ahead of time. Community Management Committees (CMCs) shall be responsible for procurement of goods, works and general services according to the procurement plan derived from the sub projects work plans and budgets. LGA/Island will provide technical support to the CMCs. 8.2 Procurement Policies and Guidelines Procurement is guided by policies from the Guidelines of Procurement under IBRD Loans and IDA Credits, Guidelines for Selection and Employment of Consultants by World Bank Borrowers dated May 2004, and the Government of Tanzania Public Procurement Act 2004, Procurement of Goods and Works Regulations and Selection of Employment of Consultant s Regulations and provisions stipulated in the Legal Agreement. Community based procurement of Goods and works would be procured in accordance with procedures acceptable to the IDA and documented in the Project Manuals in accordance with World Bank Guidelines for simplified procurement and disbursement of community based investment issued in March 03, In the event where there is a conflict between the Public Procurement Act 2004 and World Bank Guidelines described in TASAF Procurement Manuals and Handbooks, the Bank policies shall prevail. 8.3 Procurement at various levels Procurement for TASAF takes place at three levels: - Community level - LGA level - National level 1

42 8.3.1 Community level Procurement of goods and services at the community level will be the responsibility of the Community Management Committees. Procurements of goods and services for sub-projects will be carried out using Community Participation method in accordance with the laid down procedures acceptable to IDA and the Government and described in the Procurement Manuals. These methods include: Local Shopping where a contract is awarded competitively on the basis of quotations obtained from three qualified local contractors and/or suppliers in response to a written specification; Local Bidding where a contract is awarded competitively on the basis of bids obtained from qualified domestic contractors and/or suppliers in response to a local advertisement; Direct contracting only when justified and when the contract price is within the regional market price; and Force Account when the communities implement subprojects using their own skilled and unskilled labor particularly for Food Insecure subprojects. CMCs will be trained in procurement and will prepare sub project Procurement Plans which will guide implementation of sub projects. Advantage and risks for the four types of procurement methods are as detailed in the table below: 2

43 TYPE OF PROCUREMENT ADVANTAGES RISKS CONDITIONS FOR USE Local Shopping: Getting at least three quotations from suppliers and selecting the best buy based on price, quality, availability, and transport fees. Direct Contracting: Purchase from a buyer without getting other quotations when there is only one supplier or the amount is small. Comparison of prices enables efficient use of funds. Can be managed by the Commiunity without outside help. Can stimulate the local economy. Saves time (compared with local bidding). Process is transparent if good records are kept. Quick and flexible; saves time. Can build relations of support for community projects. Takes time and may require transportation costs. Committee may not know enough about technical issues to select the best materials. Potential for trade off of quality for lower price. Potential for abuse by supplier or committee members. Abuse is possible. May result in less value for money (high costs). Use where community is organized for decision-making and the skills and items required are locally available. Requires participation of three committee members, including two signatories. Requires recording quotations with supplier s signature and making notes about quality Use in areas with a limited retail sector and/or transportation costs are high. Use when very small amounts or unique items are needed or urgency of need. Make sure the price is market value. Committee needs to approve it. Local Bidding: A request for bids is issued and advertised locally, detailing the work required and selection criteria. Bids are generally used for large activities and often include materials as well as labor. Enables several businesses to compete for the work. Usually involves established businesses. Assures the best price and skills for large tasks (through competition). Can be a very transparent and fair process. Takes time to prepare solicitation for bids. The bid process is more complex and expensive. Community may not be able to manage the process. ;may require PMU and other support. Incentive for abuse because funding is larger. Use for larger scale, higher cost, projects where the community has the experience to manage the process. Solicitation is posted on local bulletin boards and advertised in papers and elsewhere. Criteria for selection are stated in the solicitation. Bids are opened in public. Selection is reported in public. Community Force Account: Community implements subproject using its own resources and may subcontract part of the work. Community driven (local ownership. Cost effective (inputs by community may be below market costs). Injects funds into community (payment for wages and materials). Can be capacity building. 3 Potential misallocation of funds. Difficulty of estimating and controlling costs. Potential quality issues. May take longer to implement. Loss of interest by community members can lead to abandonment. Use for simple, labor intensive works with low up front costs. Ensure that the community has the necessary resources and commitment. Ensure that all community members are informed about projects. Have three committee members present when local workers are paid.

44 8.3.2 LGA/Island level The LGA/Island is responsible for providing procurement expertise to CMCs. In cases where the CMCs require assistance in procurement of LSPs, the VFC shall provide the requested assistance e.g. posting on the Councils advertisement boards (or other places where potential contractors (LSP) and suppliers are likely to visit all opportunities available for employment. However, the entire procurement process will be left to the CMCs. Furthermore the LGA/Island will: (a) Provide the community with standard operational bills of quantities and drawings (developed by sector ministries) (b) Assist communities with technical standards required in procurement of goods, works and services, e.g. cement, timber, water pumps, etc. (c) Collect market prices of basic goods and services that are commonly used in the implementation of the sub projects (not less than forty (40) items in number) and forward to TMU for compilation and updating of Regional market prices data bank. (d) Regularly provide the communities with updated regional market unit prices (from a LGA/Island data bank.) (e) Provide procurement expertise to communities and supervision of procurement works. (f) Facilitate communities to maintain appropriate community contracting documents. (g) Prepare quarterly report on the Sub project procurement contracts information and status and submit it to TMU TMU Level At this level, procurement of goods and materials, general and consulting services is carried out to support the TMU and LGAs/Islands. Contracts for goods equal to USD 150,000 equivalent or above shall be procured using International Competitive Bidding (ICB). Contracts for goods estimated to cost less than USD 150,000 may be procured following National Competitive Bidding (NCB). Goods estimated to cost less than USD 50,000 per contract may be procured under contracts awarded on the basis of National Shopping procedures or through IAPSO. Consultants will be hired in accordance with the Bank Guidelines on Consultants, and will be selected through the following methods; (i) Quality and Cost-based selection (ii) Quality-Based Selection (iii) Least-Cost Selection (iv) Consultants Qualifications, (v) Single Source or (vi) Individual Consultants in accordance with provisions in the guideline. 4

45 The procurement of general services will follow NCB and National Shopping methods. TMU will update semi annually Regional market prices data bank of basic goods and services using data provided by VFCs. It will also provide guidelines for procurement of LSPs and samples of contract agreement forms between CMCs and LSPs. 8.4 Procurement Planning and Management The TMU will prepare and submit to the Bank a draft General Procurement Notice. The Bank will arrange for its publication in UN Development Business online (UNDB online) as well as in paper format and in the Development Gateway s (dgmarket). The related prequalification or bidding documents as the case may be, shall not be released to the public earlier than the date of publication of the General Procurement Notice. Invitation to bid and expression of interest shall be advertised as Specific Procurement Notices in at least one newspaper of national circulation in Tanzania Such invitation shall also be published in UNDB online and in dgmarket for ICB contracts and consultants contracts of value USD 200,000 equivalent and above. Notification shall be given sufficient time to enable prospective bidders to obtain bidding documents and prepare and submit their responses. Consultants shall be given not less than 14 days from the date of posting the expression of interest on UNDB or dgmarket and national newspapers to submit their expressions. The TMU shall prepare and furnish to the Bank for its approval a procurement plan acceptable to the Bank. The Procurement Plan shall be updated annually or as needed throughout the duration of the project. TMU shall implement the Procurement Plan in the manner in which it has been approved by the Bank and report on actual status of all procurement in quarterly and annual reports. 8.5 Price Data Bank TMU will develop and maintain a database of LGA/Island specific market unit prices, as part of the cost control system and to ensure that pricing of sub projects is transparent and economical. LGA/Island will submit to TMU specific market unit prices for goods and services for at least 40 of the most commonly required items. Such unit prices will be updated on semi-annual basis. 8.6 Monitoring of Procurement Monitoring of the procurement activities for the sub projects will be done by LGAs/Island and TMU. Such monitoring will include random field visits and review of procurement processes and documentation e.g. General services relates to services such as transportation, insurance, installations, commissioning, training and initial maintenance. 5

46 number and amount of contracts awarded, procurement methods, amount and nature of contracts procured through each method, number and amount of contracts subject to prior review by IDA and number of beneficiaries that have been directly contracted to execute works, etc. The TMU will also be responsible for conducting ex-post audits of the adequacy of procurement procedures by the LGA/Islands. 8.7 Capacity Building on Procurement Communities will be trained in procurement. TMU will facilitate this training however training will be conducted by LGAs. Relevant TMU staffs will be trained in IDA Procurement procedures, and on going support will be provided from the World Bank throughout the project life. TMU will organize periodic procurement training and support to the LGA/Island on procurement policies and procedures guiding the implementation of TASAF supported sub projects. TMU shall organize need based training in procurement for LGA/Island subject to the results of training needs assessment and in response to community training needs on procurement. TMU Tender Board as well as local government tender boards will receive training in procurement to acquire some basics of procurement. This will be done by TMU procurement staff. 6

47 9.1 Introduction CHAPTER 9 AUDITING Auditing in TASAF is aimed at contributing to improved management and cost effectiveness of Project delivery and internal operational activities. It also aimed at strengthening accountability for funds advanced for the sub projects in line with governing instruments of TASAF. Audit of TASAF activities is divided into Internal, Systems Audit, External and Technical audits. 9.2 Objectives (i) To ensure that there is proper accountability and transparency at all levels of implementation of the sub projects; (ii) To ensure that TASAF stipulated systems of internal controls and financial and accounting procedures are being complied with; (iii) To ensure that project management processes are in accordance with the OM and DFA; (iv) To ensure value for money; (v) To comply with the provisions of the DFA and statutory requirements; (vi) Safeguard assets from various types of risks 9.3 TASAF Auditing Procedures Internal Audit Internal Auditing activities will be undertaken at two levels: (a) (b) LGA level LGA will carry out audits of activities being financed from in their jurisdiction and report to the LGA for action as per their agreed terms of reference and internal audits guidelines prepared by TASAF. TMU level TASAF Internal Auditors from TMU will conduct financial and non-financial audits of TASAF supported activities at TMU, and spot audits in randomly selected LGAs/Islands. The reports will be shared with respective accounting officer at TMU, LGA/Island and the Director of Internal Audit. The Director of Internal Audit will compile a consolidated quarterly report for submission to the TMU and the NSC. 1

48 9.3.2 Systems Audit TASAF will assign a Village Fund Systems Auditor (VFSA) to 2 or more LGAs to provide them with technical support in accounts, audits, procurement and justifications. The VFSA will be located in one LGA, under the day-to-day management of the LGA Director while remaining technically accountable to the Directorate of Audit External Audit As per Public Finance Act, 2001, the NAO has the responsibility for the audit of all government organizations including local authorities and public corporations and donor funds. Controller and Auditor General have the power to authorize any person carrying on the profession of accountant to conduct an audit on his behalf. The auditors will be required to express an opinion on the audited project financial statement only, in compliance with International Standards on Auditing (IFAC pronouncements). In addition, provide a detailed management letter containing the auditor s assessment of the internal controls, accounting system and compliance with financial covenants in the Development Financing Agreement Technical Audit TASAF will engage an external consultant to conduct a technical Audit on sample basis, as and when required. The TMU will prepare the TOR for the technical audit and coordinate the assignment. The technical audit report will be shared with NSC, IDA and other relevant stakeholders. 9.4 General Responsibility to Audit Activities The general audit responsibilities to be observed by all LGAs/Islands, VCs, Shehia Advisory Councils, Mtaa Committees, CMCs, LSPs and individuals utilizing TASAF funds are to: (i) Cooperate with the teams conducting audits and provide all relevant information (ii) Act on the audit recommendations in an appropriate manner including addressing the weaknesses identified in the audit reviews expeditiously. 2

49 ANNEXES Annex I: Map of Tanzania 1