CONFORMED COPY. March 20, 2011

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Worl hakae-32, Ban Offce, CONFORMED COPY Agargoon, Sher-a-Bangla Nagar, World Bank Office, Dhaka , Bangladesh INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Tel: (880-2) , (880) INTERNATIONAL DEVELOPMENT ASSOCIATION Fax:(880-2) Telex IDA BJ hffp:1/w.wordbank.org.bd Ms. Janet Durno Country Director and Head of Development Cooperatior (CIDA) High Commission of Canada Government of Canada United Nations Road, Baridhara Dhaka 1212, Bangladesh Dear Administration Arrangement between the Government of Canada, represented by the Minister for International Cooperation acting through the Canadian International Development Agency and the International Bank for Reconstruction and Development and the I zternational Development Association concerning the Multi-Donor Trus Fund for the Strengthening Public Expenditure Management Progran (SPEMP) (TFO 71187). Janet March 20, We are pleased to acknowledge on behalf of the International Bank for Reconstruction and Development ("IBRD") and the International Development Association (collectively, the World Bank; referred to, hereinafter as the "Bank") the intention of the Government of Canada, represented by the Minister for International Cooperation acting through the Canadian International Development Agency (CIDA) (the "Donor") to make available as a grant the sum of nineteen million, eight hundred thousand Canad an Dollars (CAD 19,800,000) (the "Contribution") for the Strengthening Public Expenditure Management Program in Bangladesh (the "Project"). Other donors are also expected to contribute to this trust fund on the terms and conditions specified in the Annexes to this Arrangement. 2. The Contribution will be used to finance the ac ivities and categories of expenditure set forth in the "Description of Activities and Expenditures under the Multi-Donor Trust Fund for the Strengthening Public Expenditure Management Program TFO71187" (the "Description of Activities and Expenditures") attached hereto as Annex. Annex 1 constitutes an integral part of this Arrangement. 3. The Contribution will be administered by the B on behalf of the Donor in accordance with the provisions of this Arrangement and the "Standard Provisions Applicable to the Multi- Donor Trust Fund for the Strengthening Public Expenditure Management Program TFO71187" (the "Standard Provisions") attached hereto as Annex 2 Annex 2 constitutes an integral part of this Arrangement. 4. The Donor will deposit the Contribution into su h bank account designated by the Bank, in accordance with the following schedule': (a) A first installment payment in the amount of ten million Canadian dollars (CAD 10,000,000) for the Donor's fiscal year 2011/2012, upon countersignature of this Arrangement by the Donor and submission f a payment request by the Bank. 'This instalment payment schedule may be only amended in Writing between the Donor and the Bank.

2 Ms. Janet Durno -2- March 20, 2011 (b) A second installment payment in the amour of four million, nine hundred thousand Canadian dollars (CAD 4,900,000) for the Donor's fiscal year 2012/2013, upon submission of a payment request by the Bank. (c) A third installment payment in the amount f four million, nine hundred thousand Canadian dollars (CAD 4,900,000) for the Donor's fiscal year 2013/2014, upon submission of a payment request by the Ban. 5. When making such deposit, the Donor will instruct its bank to include in its payment details information (remittance advice) field of its SWIFT payment message, information indicating: the amount paid, that the payment is made by -he Donor for TFO SPEMP, and the date of the deposit. In addition, the Donor will provide a copy of the Donor's deposit instruction to the Bank's Accounting Trust Funds Division by sent to tfremitadvice@worldbank.org or by fax sent to (202) The offices responsible for coordination of all matters related to the implementation of this Arrangement are: For the Bank: Senior Governance Specialist, South Asit Governance and Public Sector Poverty Reduction and Economic Management The World Bank Plot No. E-32, Agargaon, Sher-e-Bangla Nagar, Dhaka-1207, Bangladesh Telex: IDA BJ acsimile: For the Donor: Omar F. Khan Senior Development Advisor High Commission of Canada Government of Canada United Nations Road Baridhara, Dhaka 1212 BANGLADESH Tel: (8802) , Ext.: Cell: Fax: (8802) omar.khan(@intemational.gc.ca

3 Ms. Janet Durno -3- March 20, Use of Funds: a. No offer, gift or payment, consideration or benefit of any kind, which constitutes an illegal or corrupt practice, has been o will be made to anyone, either directly or indirectly, as an inducement or reward for the award or execution of this b. Arrangement. Any such practice w 11 be grounds for terminating this Arrangement or taking any other correctilve action as required. c. No member of the Canadian House of Commons will be admitted to any share or part of this Arrangement or to any benefit to arise therefrom. d. No current or former public office holde or public servant of the Government of Canada who is not in compliance with the Conflict of Interest and Post- Employment Code for Public Office Holders or the Values and Ethics Code for the Public Service will derive a direct benefit from this Arrangement e. Any payment to be made under this AFrangement is subject to there being an appropriation by the Parliament of Cnada for the fiscal year in which the payment is to be made. If the DoAor's appropriation is changed by the Parliament of Canada, the Donor may reduce the Grant or terminate this Arrangement. 8. This Arrangement may be amended only by wr tten approval between the Bank and the Donor; provided, however, that Annex 1 and Annex 2 to this Arrangement may only be amended with the agreement of all Donors contributing to this trus: fund. 9. All references made in Annexes and related documents to "Administration Agreement" or this "Agreement" will have the same meaning as the term "Administration Arrangement" or "Arrangement" used herein. 9. This Arrangement is not an international tre. It is an administrative arrangement between the Bank and the Donor. 10. Please confirm your understanding with the oregoing, on behalf of the Donor, by signing, dating, and returning to us the enclosed copy of this Arrangement. Upon receipt by the Bank of the copy of this Arrangement countersigned by you, this Arrangement will become effective as of the date of the countersignature. Sincerely, INTERNATIONAL BANK FOR RECONSTR CTION AND DEVELOPMENT/ INTERNATIONAL DEVELOPMENT ASSOCIATION /s/: Ellen Goldstein Ellen (oldstem Country Directcr

4 Ms. Janet Durno -4- March 20, 2011 CONFIRMED AND AGREED: GOVERNMENT OF CNADA as represented by ihe MINISTER FOR INTERNATIONAL COOPERATION acting through tlhe CANADIAN INTERNATIONAL DEVELOPMENT AGENCY (CIDA) /s/: Janet Durno Date: March 27, 2011 'Janet Durno Country Director and Head of Development Cooperation (CIDA) Bangladesh Program

5 Ms. Janet Durno -5- March 20, 2011 ANNEX I Description of Activities and Expenditures under ihe Multi-Donor Trust Fund for the Strengthening Public Expenditure Manaiement Program TF Objective and Purpose (a) (b) The objectives of the Multi-Donor Trust Fund (MDTF) are to: (a) strengthen and modernize budget management instit4tions within the People's Republic of Bangladesh (the "Recipient") with a particular emphasis on introducing a performance orientation in public financial management; and (b) improve the effectiveness of formal institutions of financial accountability through strengthening (i) the capacity of the pffice of the Comptroller and Auditor General; and (ii) the functioning of pa liament bodies that deal with allocation and monitoring of government resource4. The purpose of the activities to be funded by the MDTF is to (i) improve the Recipient's public financial management capacity in order to strength governance, auditing and accountabilit3 mechanisms; and, (ii) build a solid and informed legislative oversight that upports public financial management reforms. 2. Use of Contribution Funds: The Donors' contributions allocated to the MDTF will be used for the following activities: (a) Recipient executed activities: The MDTF will support an umbrella public fin ncial management program built around three priority key areas: (i) budget preparation and execution: (ii) internal and external auditing; and (iii) legislative and public oversight. (i) Part A: Budget Preparation and Execution: Deeping the Medium Term Budget Framework and strengtheniag financial accountability by: 1. Strengthening strategic budget management in the Finance Division of the Ministry of Finance; 2. Developing capacities for debt policy and management; 3. Developing public financial management within ministries part of the Recipient's public financial management reform strategy; 4. Developing the Planning Commission capacity within the Recipient's public financial management reform strategy approach; 5. Implementing and strengthening accounting and financial reporting; 6. Strengthening Treasury and cask management systems;

6 Ms. Janet Durno -6- March 20, Developing and reviewing public financial management legislation and regulations; 8. Reviewing payroll, pensions, general provident funds, loans and advances and existing physical assets of the Recipient; and 9. Supporting training and human tusources development; Activities related to program management and coordination will also be included as required. (ii) Part B: Internal and External Auditing: Strengthening the Office of the Comptroller and Auditor General, including: strengthening the Audit Directorates, and restructuring and Itrengthening the Financial Management Academy., among others. (iii) Part C: Legislative and Public Oversight: Improve the legislative and public oversight, including providing support to: Parliamentary Committees, the Parliament Secretariat; and to the Bangladesh Institute of Parliamentary Studies, as necessary. (b) Bank executed activities: (i) (ii) (iii) Provide special technical, financial, fiduciary and performance reviews and reports; Deliver analytical and advisory reports; and Provide Bank's program management, including trust fund administration activities, supervision, implementatin support, quarterly interim and annual donor reports. The categories of expenditures will include staff costs, consultant fees, contractual services, travel expenses, associated overheads, media anc workshop costs. 4. Governance Structure of the Multi-Donor TrUst (a) Joint Government Donor Committee: (i) (ii) will be co-chaired by the Finance Secretary and the MDTF administrator and willl include representatives from Project Specific Steering Comn'littees established for each of the three priority areas of the MDTF project directors, MDTF's contributing donors and representatives of five or six ministries involved in the Recipient's public financial management reform strategy; will have overall respon ibility for: (i) reviewing and monitoring the implementation of tle overall performance of the MDTF in line with the Recipient' public financial management reform strategy; (ii) reviewing funding proposals submitted by the Recipient to ensure consistency and relevance to the Recipient's

7 Ms. Janet Durno -7- March 20, 2011 strategic priorities ini public financial management; (iii) monitoring progress qn the annual MDTF work program, budgetary allocationfuinding commitments and disbursements and any other adjustments that might be necessary. (iii) will meet not less than emiannually. (b) The World Bank, as the MDTF adminis rator: (i) (ii) will consult with contributing Oevelopment partners and will report on performance of the MDTF including on program implementation, disbursement, procurement adtivity and new commitments for the program, as per requirements to be specified under the Administration Agreement; will review and approve, in cnsultation with the Donors, all funding proposals submitted by the Rdcipient to the Joint Government Donor Committee.

8 Ms. Janet Durno -8- March 20, 2011 ANNEX 2 Standard Provisions Applicable to the Mult-Donor Trust Fund for the Strengthening Public Expenditure Management Program TF The following provisions (hereinafter referred to as the "Standard Provisions") shall be applicable to and form an integral part of all agreemen{s entered into between the International Bank for Reconstruction and Development ("IBRD" and the International Development Association ("the Bank") (collectively, the "Bank") a0d donor countries and/or organizations (hereinafter referred to as the "Donors") that provide grahts (referred to as the "Contributions") to be administered by the Bank for the Multi-Donor Tiust Fund for the Strengthening Public Expenditure Management Program in Bangladesh (the " roject"). 1. Administration of the Contributions The Bank shall be responsible only for performing those functions specifically set forth in this Agreement, and shall not be subject to any otheil duties or responsibilities to the Donors, including, without limitation, any duties or obligations that might otherwise apply to a fiduciary or trustee under general principles of trust or fiduciary law. Nothing in this Agreement shall be considered a waiver of any privileges or immunities of the Bank under its Articles of Agreement or any applicable law, all of which are expressly reserved. 2. Commingling. Exchange and Investment of the Contributions 2.1. The Contribution funds shall be accounted for as a single trust fund and shall be kept separate and apart from the funds of the Bank. The Con1tribution funds may be commingled with other trust fund assets maintained by the Bank The Contribution funds may be freely exchang ed by the Bank into other currencies as may facilitate their disbursement. 2.3 The Bank shall invest and reinvest the ContribOtion funds pending their disbursement in accordance with the Bank's policies and procedures for the investment of trust funds administered by the Bank. the Bank shall credit all incoine from such investment to the trust fund established under this Agreement to be used for the same purposes as the Contribution funds. 3. Administrative Cost Recovery 3.1 In order to assist in the defrayment of the colts of administration and other expenses incurred by the Bank under this Agreement, the Bank may, following deposit of the Contribution by the Donor, deduct from the Contribution and retairn for the Bank's own account an amount equal to 0.61% (zero point six one percent) of the conribution. In addition, the Bank may also charge actual costs of program management and admiliistration expenses up to a maximum of two hundred and seventy thousand five hundred ninety seven United States dollars (US$ 270,597). 4. Grants to Recipient 4.1. The Bank shall, as administrator on behalf of the Donors, enter into grant agreements (the "Grant Agreements") with the People's Republic of Bangladesh (the "Recipient) for the provision of Contribution funds for the purposes of this Agreement and on the terms and conditions set

9 Ms. Janet Durno -9- March 20, 2011 forth in the Grant Agreements. The Bank shall furnisl a copy of the Grant Agreements to the Donors The Bank shall be solely responsible for the supervision of Project activities financed under the Grant Agreements If, in the Bank's opinion, an amount of the C6ntribution funds allocated to any of the activities specified in Annex 1 to this Agreement will be insufficient to finance the expenditures for such activity, the Bank may reallocate to such actiyity an amount of the Contribution funds then allocated to another activity which, in the Bank's opinion, will not be necessary to meet other expenditures. The Bank will notify the Donors of $uch a reallocation. 5. Employment of Consultants and Procurement of Goods The employment and supervision of consultant and the procurement of goods financed by the Contributions shall be the responsibility solely of the Bank and shall be carried out in accordance with its applicable policies and procedures. The Grant Agreements shall provide that the Contributions shall be used by the Recipient to finance expenditures for goods and services, as the case may be, in accordance with the World Bank's Guidelines on "Procurement under IBRD Loans and IDA Credits" and the World Bank's Guidelines on the "Selection and Employment of Consultants by World Bank Borrowei," as in effect at the date of the Grant Agreements. 6. Accounting and Financial Reporting 6.1. The Bank shall maintain separate records 4nd ledger accounts in respect of the Contributions deposited in the trust fund account and dislbursements made therefrom The Bank shall furnish to the Donor current fibancial information relating to the Trust Fund via the World Bank's Trust Funds Donor Centeel secure website. Within six (6) months after all commitments and liabilities under this trust fuhd have been satisfied and the trust fund has been closed, the final financial information relating to the trust fund will be made available to the Donor via the World Bank's Trust Funds Donor Center secure website The Bank shall provide to the Donors, within dix (6) months following the end of each Bank fiscal year, a management assertion together wi an attestation from the Bank's external auditors concerning the adequacy of internal control over cash-based financial reporting for trust funds as a whole. The cost of such attestations shall be I?orne by the Bank. 6.4 If a Donor wishes to request, on an exceptiona basis, a financial statement audit by the Bank's external auditors of the trust fund established under this Agreement, the Donor and the Bank shall first consult as to whether such an external audit is necessary. The Bank and the Donor shall agree on the most appropriate scope and terfns of reference of such audit. Following Agreement on the scope and terms of reference, the B*nk shall arrange for such external audit. The costs of any such audit, including the internal costi of the Bank with respect to such audit, shall be paid by the Donor. 6.5 The Bank shall provide the Donor with copiesi of all financial statements and auditors' reports received by the Bank from the Recipient pursuant to the Grant Agreements. 7. Coordination and Project Reporting

10 Ms. Janet Durno -10- March 20, The Bank shall provide the Donors with an aanual report on the progress of activities financed by the Contributions. Within six (6) months of the final disbursement date specified in paragraph 8.1, the Bank shall furnish to the Donors a fin I report on the Project activities The Bank shall promptly inform the Donors of any significant modification to the terms of the Grant Agreements and of any contractual remedy that is exercised by the Bank under the Grant Agreements. To the extent practicable, the Bank hall afford the Donors the opportunity to exchange views before effecting any such modification cr exercising any such remedy. 8. Disbursement Deadline; Cancellation; Refund 8.1. It is expected that the Contribution funds will be fully disbursed by the Bank in accordance with the provisions of this Agreement by January 31, The Bank shall only disburse Contribution funds for the purposes of this Agreement after such date with the written approval of the Donors Any Donor or the Bank may, upon three (3) months' prior written notice, cancel all or part of the Donor's pro rata share of any remaining balance of the Contribution funds that is not committed pursuant to any agreements entered into beteen the Bank and any consultants and/or other third parties for the purposes of this Agreement pribr to the receipt of such notice, including the Grant Agreements. 8.3 Upon the final disbursement date specified in aragraph 8.1, the Bank shall return any remaining balance of the Contribution funds to the Dohors on a pro rata basis based upon the ratio of each Donor's paid-in Contributions to the sum of all Donors' paid-in Contributions. In the event of a cancellation of an individual Donor's pro rata share of uncommitted Contribution funds in accordance with paragraph 8.2, the Bank shall returnl such cancelled balance to the Donor on the same pro rata basis. 9. Disclosure The Bank may disclose this Agreement and information on this trust fund in accordance with the World Bank's policy on disclosure of informati6n. 10. Visibility All contracts or grant agreements entered intb by the Bank in relation to activities financed under the trust fund, all publications, training programs, seminars or symposia financed under the trust fund, and all press releases or other information materials issued by the World Bank with respect to the trust fund shall clearly indipate that the activities in question have received funding from each of the donors to this MDTF.