OFFICIAL DOCUMENTS. INDIA: Bihar Panchayat Strengthening Project (Credit No.5160-IN) Amendment to Project Agreement
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1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized ' The World Bank New Delhi Office,NTER~4",TIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT 70 Lodi Estate l~ternational DEVELOPMENT ASSOCIATION New Delhi India Mr. Anjani Kumar Singh Chief Secretary Government of Bihar Secretariat Patna Mr. Kuldip Narayan Project Director Bihar Gram Swaraj Y ojana Society Department of Panchayati Raj Government of B ihar Patna Dear Mr. Singh and Mr. Narayan: OFFICIAL DOCUMENTS INDIA: Bihar Panchayat Strengthening Project (Credit No.5160-IN) Amendment to Project Agreement Phone: / Mailing Address: P.O Box 416 June 15, 2016 C\Z s! 6J- l f'/ We refer to: (i) the Financing Agreement between the International Development Association (the Association) and India (the Recipient) dated September 27, 2012 (the Financing Agreement); (ii) the supplemental lett the same date regarding performance monitoring indicators agreed further to the Financing Agreement; and (iii) the Project Agreement of the same date between the Association and the State of Bihar (Bihar) and Bihar Gram Swaraj Yojana Society (Society) (the Project Agreement). We also refer to the Department of Economic Affairs' letter dated April 25, 2016, and to the discussions among India, Bihar and the Association, relating to amendments to the Project design. We are pleased to inform you that the Association concurs with the above-mentioned request, and proposes to amend the Project Agreement as follows: I. A reference to "Local Area Engineering Organization" in Section l.a.4 (Institutional Arrangements) of the Schedule is inserted to be read as follows: "Bihar shall take all necessary administrative and governmental measures required on its part to ensure that the Society, Bihar's Building Construction Department and Bihar's Local Area Engineering Organization, respectively, are staffed with... " 2. Section I.A.5(c) (Institutional Arrangements) of the Schedule is amended to read as follows: "( c) designate and maintain a senior official in its Building Construction Department and Local Area Engineering Organization for supervising the carrying out of Part A. I of the Project, and for ensuring coordination between the Society and the Building Construction Department and the Local Area Engineering Organization." 3. Section I.D (Sub-projects under Part D of the Project) of the Schedule is deleted. HeadquarterW Washington DC W l)sa
2 Messrs. Singh and Narayan -2- June 15, Section II.A.3 (Project Reports) of the Schedule is inserted to be read as follows: "3. Without limitation of the provisions of Section II.A above, Bihar and the Society shall: (a) (b) for the purpose of verifying the DU Targets, engage and thereafter maintain, throughout the period of implementation of the Project, an independent third party entity or entities, with qualifications, experience and terms of reference satisfactory to the Association, to undertake the verification process referred to in Section 11.AJ(b) below; undertake, at least annually, a verification process in accordance with the DU Verification Protocol and in a manner satisfactory to the Recipient and the Association, through the independent third party entity or entities engaged pursuant to Section 11.AJ(a) above, to ascertain whether the DU Targets have been achieved for the respective DLI Period(s) under review; and ( c) furnish to the Recipient and the Association corresponding verification reports, in form and substance acceptable to the Association, by not later than thirty (30) days after the end of the relevant period." 5. Section II.B.3 (Audits) of the Schedule is replaced to be read as follows: "3. Bihar and the Society shall: (a) (b) with respect to the Project (except for Part A.2): (i) have its financial statements referred to above audited by independent auditors acceptable to the Association, in accordance with consistently applied auditing standards acceptable to the Association; and (ii) ensure that the audited financial statements for each period shall be furnished to the Recipient and the Association not later than nine (9) months after the end of the period; and with respect to Part A.2 of the Project: (i) have its financial statements referred to above audited by independent auditors acceptable to the Association, in accordance with consistently applied auditing standards acceptable to the Association; and (ii) ensure that the audited financial statements for each period shall be furnished to the Recipient and the Association not later than one ( 1) year after the end of the period. 6. Section 11.B.4 (Audits) of the Schedule is inserted to read as follows: "4. Bihar and the Society shall ensure that each audit of these financial statements: (a) covers the period of one fiscal year of Bihar; and (b) is made publicly available in a timely fashion and in a manner acceptable to the Association."
3 Messrs. Singh and Narayan -3- June 15, 2016 The attachment to the supplemental letter regarding performance monitoring indicators agreed further to Section 11.A.1 of the Schedule is amended to read as set forth in the Attachment hereto. All other provisions of the Project Agreement, except as amended herein, remain unchanged. Please confirm your agreement to the foregoing by signing the form of confirmation set forth below, and returning one fully executed original of this amendment letter to us and retaining one original for your records. This amendment letter shall become effective upon the effectiveness of the amendment letter to the Financing Agreement of the same date as of this amendment letter. Sincerely yours, Onno Ruhl Country Director, India South Asia Region AGREED STATE OF BIHAR By:,,c_c1 ~_0_, --- Date: \ ' "2..0\b Secretary, Panchay-ati Raj Department, (;cvernment of E'.,;;Br AGREED BIHAR GRAM SW ARAJ YOJANA SOCIETY By: '-''--'-"=-t KIA lou:p Nava.~att. *"' <.f 'I,/ \ c :S \ Patna,,, ~-- Title: PY-QJ ~t -:Di ve.c.hrr, ~sys ~ '1.. \,. Date:,_'l..._ _0_1-'-- _2.._o_\_f> ~:~~ 0 ;~>/
4 Messrs. Singh and Narayan -4- June 15,2016 cc: Mr. Rishikesh Singh, Director (MI), DEA, Ministry of Finance
5 Attachment Results Indicators PDO Indicator I. Gram Sabhas in Project meet regularly to consider issues of importance to the. PDO Indicator 2. Women participate in regular Gram Sabha meetings in Project. PDO Indicator 3. Project disclose annual plans, annual budget, statement of accounts and progress reoorts. x Currently no MIS Currently not measured j None er JOO JOO meeting at least 4 times a year Records of Minutes of the GS meeting & observation of active participatio n. MIS system I BGSYS Revised. Gram Sabhas meet regularly and discuss the budget and financial statement, progress against the annual plan and mandatory function. To be measured in project. Targets are cumulative. Revised. It is proposed to measure only numb where "women attendance to GS" is recorded and uploaded in the MIS system, given the difficulties in measuring 'active participation" and in identifying ST/SCs. To be measured in project. Targets are cumulative. New indicator. Disclosure means publicly available in a friendly format such as the PSB Wall. Targets are cumulative. Intermediate Results: Component One - Panchayat Sarkar Bhawan construction and making functional I. new Panchayat Sarkar Bhawans constructed 2. functional Project with newly j 0 er under I 200 I 330 constructio constructed constructed n 130 under constructio n not I er; fully functional LAEO MIS I LAEO system Records of I BGSYS., and verified by New indicator. Revised. Proposed as DLI. "Fully functional'' means full time availability of key public officials (as per verification protocol) and 1
6 constructed Bhawans Panchayat the BGSYS. Gram Sabhas and Standing Committees operational as per PR! rules. Targets are cumulative. 3. Standing Committees constituted in Project 4. Project where Standing Committees meet regularly to discharge their statutory functions. 5. Project where attendance to Gram Sabhas is systematically recorded. Either not constituted or not functional Standing committees generally not functioning Currently no MIS system JOO Intermediate Results: Component Two - Panchayat Capacity Building and Component Three - Managing Decentralization I 6. Project preparing designed annual plans and monitoring implementation. Records of I BGSYS Record of I BGSYS SC meetings Records of I BGSYS I I 0 I Training I 200 I 330 I I GS meeting I I Not yet due I J minutes I I Training Strengthened capacity designed I VC monitoring of village committees reports (VC) on subject matters I BGSYS None PRJ Rules FM FM training Govemmen 8. Financial management & training rolled out t Gazette Accountin rolled out Slight(v revised. This indicator will only apply to the 330 project. Targets are cumulative. Slightly revised. Remains the same but targets have been modified. Minutes of Standing Committee meetings should reflect their discussions on priority programs, including funding, convergence with centrally-sponsored schemes and implementation issues. Targets are cumulative. New indicator. This indicator will measure the numb Project where attendance to Gram Sabhas is recorded and uploaded in the MIS svstem. Slightly revised. preparing annual plans as per the requirements of the 14 1 h Finance Commission, and monitoring progress in implementation. Training to be designed by the Department and rolled out. New indicator. Project whose VCs have been trained New indicator. It requires the Government of Bihar to issue Rules under the Bihar Panchavat 2
7 'I capacity of Project strengthened 9. trained elected representatives (ERs) in Project. Training modules are being designed and FM manuals drafted and issued. FM training rolled out At least 50% At 60% least At least 70% Records of ZP/PS/ DPMIJ &BPMU staffs Act 2006 & issue the Panchayat Accounting manual and Financial Management manual. trained on the new rules. Slightly revised. IO. Project producing consolidated annual financial statements i 11. Coverage of Project annual audit None I I audits of are delayed Scope and coverage of audit finalized and audit Finn/s aooointed Financial statements Audit reports New indicator. Project producing consolidated annual financial statements. During the first year, annual statements could be manual. Slightly revised. A firm or finns of chartered accountants will be appointed to conduct annual audits in Project. 3
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