PIFRA
PIFRA
PAKISTAN
August 5, 1996
Table of Contents
Page No.
This report is based on findings of an appraisal mission to Pakistan in March 1995. Project team
members included: Mr. G. Lee (Senior Municipal Financial Specialist, SAIIN), Task Manager and
Mission Leader; Ms. Antoinette Sayeh (Macro Economist, SAlCA); Mr. Ali Hashim (Senior
Information Technology Specialist,EMTDR); Mr. Akbar Khawaja (Informatics Specialist, ITSIE);
Messrs. Omer Morshed, Riyaz Bokhari and Vinod Sahgal (Consultants).The project is endorsed by
Ms. Mieko Nishimizu, Director, Country Department I, South Asia Region, and Ms. Marie
Robinson, Chief, Infrastructure Operations Division. The Peer Review team comprised
Messrs. John Graves (Training and Staff Development), George Russell ( Financial Management);
Al Kennefick (Accounting Systems), Pervaiz Rashid (Audit), and Eduardo Talero (Information
Technology). Ms. Bina Duggal and Mr. Jack Williams (SA1IN) assisted in the production of this
report.
IV. PROJECT IMPLEMENTATION . ...........................21
A. OrganizationsResponsiblefor the Project.21
B. ImplementationResponsibilities.22
C. ImplementationStrategy.23
D. Statusof Preparation.28
E. Project Sustainability.28
F. Accountsand Audit.29
G. Monitoringand Evaluation.29
V. BENEFITS ANDRISKS .. 31
A. Benefits.31
B. EconomicAnalysis.32
C. Risks.32
ANNEXES
1. ProjectCosts
2. Government'sVisionStatementfor FinancialReportingand Auditing
3. Scopeof Work for SystemsConsultants
4. InformationSystemsArchitecturefor GovernmentFiscal Management
5. TrainingPlan
6. Implementation Plan
7. DisbursementSchedule
8. ProjectMilestonesand PerformanceIndicators
9. SupervisionPlan
10. TechnicalAssistanceObjectives,Classification,Activitiesand Outputs
11. Documentsin ProjectFile
Implementing Agencies: Pakistan Audit Department, Ministry of Finance and the Planning
Commission
Commitment Fee: Standard (a variable rate between 0% and 0.5% of the undisbursed
credit balance, set annually by the Executive Directors of IDA)
EconomicRat
of Retu: Unquantified
Project Identification
Number: PK-PA-36015
PAKISTAN
1.1 The Government of Pakistan's financial management cycle begins with planning
and programming and runs through budget formulation,budget execution, accounting, financial
control and audit/evaluation. The cycle is iterative; new plans are influencedby past results.
Reliable financial information is a key requirement for all phases.
1.2 The Constitution of Pakistan prescribes that all government expenditures, revenues,
loans and their repayments shall form part of provincial or federal consolidated funds and
withdrawals from the consolidated funds shall be regulated by law. The system of financial control
and budgeting is based on federallprovincial secretaries being designated as the principal
accounting officers of their respective departments,with the responsibility to ensure that funds
allotted to their departments are spent for authorized purposes and that expenditure is not incurred
in excess of budget allocations.
1.3 The Pakistan Audit Department (PAD) plays a key role in government financial
management. The functions of the Auditor General of Pakistan are defined in the Constitution of
Pakistan and regulated by statutory orders issued from time to time. The most recent of these is the
Pakistan Audit and Accounts Order 1973. Under this authority, PAD is responsible for keeping the
accounts of the federal and provincial governments, with the exception of certain departmentalized
accounts, defense, and railways. PAD is also responsible for audit of all expenditure and income of
the federal and provincial governments. As a crucial part of budget preparation and execution,
PAD prepares the accounting information which is used by executive agencies for planning and
programming purposes, and which forms part of the payments control process. PAD's audit
function maintains public accountability by auditing the accounts of government entities and
presenting audit findings to the legislature's Public Accounts Committee (PAC).
1.4 PAD's responsibility for accounting for both the Federation and the Provinces is
discharged through a network of offices under five Accountant Generals (AGs), one for each
province and the fifth, Accountant General Pakistan Revenues (AGPR), for the federal government,
with each office supported by District Accounts Offices (DAOs) and/or Treasury Offices which are
functionally responsible to it. The governments' accounts are prepared by PAD at the respective
AG's office located in each provincial capital, and by the AGPR in Islamabad for the Federation.
The accounts are based upon the primary financial transactions of payments and receipts which take
place at DAOs/Treasuries, the process being as follows. The executive agencies submit claims for
payment to the local DAO/Treasury, which authorizes payment by the local branch of the National
Bank of Pakistan, acting as the government's cashier. In case of receipts, the depositor is required
to deposit the amount in the bank/treasury. The bank sends a daily record to the local
DAO/Treasury which records the transactions. Transaction information, complied into accounts by
DAOs or in the form of individual transactions from Treasuries, is submitted to the AG, who
compiles an account of aggregate receipts and expenditures for reconciliation with departmental
records and government information.
1.5 PAD produces monthly and annual (Civil) accounts on the basis of information
received from the DAOs, Treasury offices, agencies with departmentalizedaccounts and inter-
government and inter-office adjustments. At the year end, annual appropriation accounts, annual
finance accounts and the combined finance and revenue accounts are prepared and supplied to the
federal and the provincial governments.
1.6 The government's fiscal reporting system and the institutional arrangements for
accounting and auditing were reviewed by a diagnostic consultancy financed under the Third
Technical Assistance Credit (Cr. 1755-PAK)to assess the adequacy of current institutional
arrangements, systems and procedures and to formulate a long term strategy for improvement. The
key findings of this study are:
a) reports produced by the PAD do not meet the objectives of a fiscal reporting
system. Crucial financial information such as budget data and revenue collection
details are not reported. Financial information is fragmented between various
agencies and a reliable cohesive picture cannot be obtained. As a result the
reporting system does not provide government with an effective method to: (i)
monitor the fiscal deficit and its financing for aggregate control; (ii) manage its
cash and debt position; (iii) monitor expenditures in relation to appropriations; or,
(iv) provide analyses of spending and revenue trends to assist with policy
formulation and performance measurement;
C. Government'sStrategy
d) make increasing use of the private sector to supplement public sector resources; and
e) adopt improved standards for private sector financial disclosure.
1.10 The redefinition of public/private roles which forms a core element of Pakistan's
structural reform program requires a diminished public sector involvement in productive
activities but imposes increased demands on the government for economic policy coordination
and economic information. However, the current capacity of the Ministry of Finance and the
Planning Commission to prepare medium-to-longer term policy options on key development
finance issues and to monitor the implementation of related reforms is weak and requires
strengthening. In particular, improved skills and policy formulation capacity are needed to:
a) manage an increasingly open economy in the face of large capital inflows and
outflows;
b) implement policies to improve and make more competitive the enabling
environment for the private sector; and
c) develop more efficient resource allocation and expenditure utilization structures
required for the expansion of basic social services.
1.11 In this connection, the government will need to follow through on the
implementation of the recommendations of the 1993 Economy Commission on the
administrative restructuring and organization of the Federal Secretariat. MOF and the Planning
Commission -- which are the primary users of the financial information prepared by PAD -- have
requested assistance to strengthen their analytical and policy formulation capacity in these and
other areas of macroeconomic management.
1.12 Policy Changes To address problems in accounting and auditing described above,
the government has agreed to introduce policy changes relating to:
1.13 Government has requested IDA's assistance to implement these strategies, which
it is considered would require a sequence of projects. This project would address standards for
accounting and auditing, design improved systems and start implementation of selected
improvements (with greater initial emphasis on accounting),strengthen capacity, initiate
institutional changes, such as the phased transfer of accounting responsibilitiesto the executive arm
of government, and identify further strengthening of financial management, particularly with regard
to audit. The project will provide a basis for improvements in governance and accountability.
Private sector firms have been consulted during the design of this project, and the project includes
assistance to increase further private sector participation in public finance. Subject to satisfactory
performance, subsequent projects would, in conjunction with the executive agency created for
government accounting, complete the replication of accounting systems across all accounting
offices, and with the restructured Audit Department help to address matters to further enhance
capacity and independence which need to be handled over the longer term, providing tools for
further enhancing governance. In all, about a 10 to 15 year period of involvement in improving
financial management is envisaged.
1.14 IDA's past experience with similar projects demonstrates the need for:
a) a high level of commitment on the part of the member country to project objectives;
b) well defined objectives, consistent with the country's absorptive capacity;
c) thorough preparation and accurate assessment of needs; and
d) rigorous supervision.
1.15 IDA's previous experience of PAD is limited to project audit, and PAD's
component of the Third Technical Assistance Credit (Cr.1755-PAK) which had four sub-
components:
1.16 Experience gained in this project highlights the necessity of setting up appropriate
mechanisms for involving and obtaining agreement from federal and provincial government at an
early stage of the project. Project management requirements include setting up clearly defined
project management structures, for proper planning in the use and development of new
application software, and for developing appropriate performance indicators to judge
effectiveness. Training programs need clear statements of objectives and benefits of training,
local participation in course development, appropriate procedures for selecting trainees and
deploying trained staff, training for senior officers, and use of in-country courses where
appropriate since foreign training is expensive.
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I. THE PROJECT
2.1 The project is based upon diagnostic analysis undertaken by PAD of the status of
government accounting and audit, which resulted in the preparation of the strategies underpinning
the project. Internal ownership of the project is strengthened as the project would build on PAD's
own computerization initiatives and training undertaken prior to and as part of the Third Technical
Assistance Project (Cr. 1755-PAK). The project concept has been widely discussed within PAD, to
inform departmental staff of the objectives of change and the opportunities generated thereof. PAD
has developed external ownership within the government, through discussions with and
involvement of the main users of financial reports and information, the major intended beneficiaries
of the improved accounting systems and financial reporting. The relevant agencies concerned with
HRM, particularly the Establishment Division and the Federal Public Services Commission have
also been consulted about project design. A Committee has been established comprising the key
federal and provincial government users of financial information,to advise on the improvementsto
financial systems and to monitor implementation.
.R Objectives
C. Project Description
2.3 The project would comprise components for public sector financial management
including accounting, auditing and institutional development, economic policy-making and
management.
2.4 GovernMent Accounting and Financisl Reporting (base cost USS 12.3
millio) The government wishes to develop accounting standards, reporting systems and
financial administration procedures conforming as far as practicable to internationally accepted
principles. In view of the very high and continuously increasing volume of financial transactions,
a completely manual recording and processing system for PAD's accounting and auditing needs
is no longer feasible for the delivery of the type of information required for financial
management. Therefore, the adoption of some degree of automation is inevitable. Properly
designed computer based systems would, in addition to managing the processing of a large
number of transactions and the corresponding information retrieval needs, efficiently, also help
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ensure that controls prescribed for financial transactions are adhered to, thereby improving the
effectiveness of public expenditure management processes. Accordingly, PAD wishes to
implement a set of high priority computer based financial application systems. The project
includes consultancy assistance to define a modem set of accounting standards, for
implementation of the improved standards, and computer hardware, software, consultancies and
training required for the design, development and implementation of the following high priority
financial systems at about 21 of the total 95 sites:
a) Core Accounting and Reporting System: This system would provide integrated
government-wide accounting, encompassing the functional requirements for
budget execution, and covering the appropriation, commitment, funds allocation,
and payment processes for investment and current budgets.
It would be used by: (i) PAD (including its subordinate units and its successor
organization) to perform the basic accounting functions; (ii) the federal MOF and
the provincial Finance Departnents to perform the processes associated with budget
execution, monitoring and control; implement cash limits, as may be required; (iv)
the federal Planning Division and the provincial Planning Departnents to obtain the
status of actual expenditures on ongoing programs and projects. Data would also be
directly available for use by agencies/spendingunits for program and project
management.
c) Cash Flow Forecasting and Financial Analysis System: One of the MOF's
main information needs is to establish a system for forecasting likely flows of
payments and receipts, and the consequent impact on cash balances and issue of
debt instruments. The cash flow and financial analysis system would be designed
to meet this requirement. It would provide a powerful facility for retrieving
current and historical data from the accounting system, and it would allow end-
users to manipulate the data for forecasting and analysis purposes.
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2.5 A more detailed description of the information systems, their scope in terms of the
functional processes and agencies they cover, how they fit in the context of the overall
information systems architecture for fiscal management in Pakistan, and a description of the
proposed technology architecture, is given in Annex 4 and shown schematically in Figure 1 in
the Annex.
2.6 A study would also be made to assess the impact to date of departmentalized
accounting, and to recommend future strategy options. PAD would also, within its existing
resources, establish as needed continuous review of government rules and regulations to:
2.7 Government Auditing (base cost US$ 6.6 million) This component focuses on
audit systems improvement and systems development. It includes:
b) Automated Tools: Provision of hardware and audit software for audit planning,
sampling and documentation, and for audit of automated accounting systems.
d) Use of Private Sector Firms: Assistance with developing modalities for utilizing
private sector firms, and finance for private audit firms' fees.
a) Human Resource Management (HRM) (base cost US$ 1.3 million): The
HRM component would involve organizational and systems development.
Although PAD would implement most components without external support, the
project would provide consultant assistance for managing the process of change,
for preparation of job descriptions and performance standards, and for installing
an MIS system for HRM planning and monitoring. PAD would share the details
and results of its HRM policies with provinces and the Establishment Division.
b) Training (base cost US$ 6.0 million): The training component includes moving
towards professional-level training, providing retraining associated with the
changes introduced by the project, strengthening the quality of training and
training facilities, and expanding the circle of beneficiaries. The project would
provide refurbishment and some extension of existing facilities, equipment,
computer hardware, materials, and consultants to assist in training needs
assessments, course design, materials development and training of trainers. The
component would also include international scholarships for faculty trainers, and
seminars. In addition to including provincial staff in its training programs, PAD
would share training course materials with provincial training institutes as
appropriate. A detailed training plan is attached at Annex 5.
c) Administration (base cost US$ 6.3 million): The project would include
administrative capacity development as follows:
i. MIS Wing: The project would support the creation of an MIS Wing and
would provide for the following:
* a Software Development Center;
* selected posts to be staffed by contract professionals (such as the
General Manager (MIS) and other technical specialists);
* local training for PAD staff in systems development; and,
* recurrent costs for systems maintenance.
iv. Office Automation: Provision for a local area network and associated office
software for PAD.
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2.9 Other Policy Support for Economic Management (base cost US$ 1.7 million)
MOF and the Planning Commission would manage selected studies on economic and financial
policy issues related to the on-going macroeconomic and structural reform program, a diagnostic
study of the institutional arrangements for macroeconomic policy-making, and technical
assistance/training to upgrade staff skills. Specific areas include international capital markets,
foreign asset/liability management, improving the revenue yield of certain taxes, on-the-job
specialized training in macro modeling, and assistance for establishment of a nucleus in the
Planning Commission for analyzing and monitoring poverty. The project would finance the
costs of (mostly local) consultancy services required for the studies and short-term technical
assistance for staff training. Terms of reference for key studies would be completed prior to
negotiations.
2.10 To measure implementation performance, and to monitor the project's impact, the
following key indicators, discussed and agreed with government, would be selected from the
project's implementation plan (Annex 6) and milestones and performance indicators (Annex 8):
a) Implementation Performance
E. IDA's Strategy
F. Environment
C. Human Resource
Management 23.4 21.1 44.5 0.7 0.6 1.3 47 4
Total Project Costs 814.1 686.4 1500.5 20.1 17.1 37.2 46 109
(Totals may not add due to rounding)
US$ I = Rs. 40.4 (average)
2.16 The base cost estimates reflect price levels in March 1996. Estimates for materials,
equipment, vehicles and technical assistance have been based on recent quotations from suppliers,
market surveys of manufacturers, and contracts. Physical contingencies of 5% on computer
hardware and purchased software, and 10% on software development services have been allowed.
Price contingencies and foreign exchange conversions have been calculated in accordance with
Bank guidelines, using World Bank estimates prevailing at the time of appraisal. Foreign inflation
rates are estimated as 3.6% for the calendar year 1996, and about 2.4% annually thereafter.
Domestic annual inflation is estimated to be 12% for calendar year 1995 and 7.5% annually
thereafter. No price contingencies have been included for hardware. Price contingencies amount to
5.4% of the total estimated project cost. Estimated exchange rate parities between US dollars and
Pakistan Rupees result in an average Rs. 40.4 per US dollar over the course of the project.
2.17 The proposed IDA credit of US$28.8 million equivalent would finance about 77%
of project costs, covering 100% of foreign exchange and 56 % of local currency requirements.
Federal govemment (23 %) would finance the balance. The government's contribution would
include finance for duties, taxes, and recurrent costs, including incremental staff salaries,
maintenance, consumables and other recurrent costs. The project financing plan is summarized in
Table 2.2 below.
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US$ million
Foreign ................................................................
,~~~~~~~~~~~~~~..........
oal ...... .
Government of Pakistan 8.4 -
~~~~~~~~~~.................................................................... 8.4 23
................................................................................................
11 7
IDA 17.1 .2 I 77
Tota21i i 17.1 37;2 100
2.18 The IDA credit would be made available to GOP on standard terms. US$26.9
million equivalent would be passed to PAD, US$0.7 million equivalent to the Planning
Commission and US$1.2 million equivalent to MOF through normal budgetary procedures.
H. Procurement
2.19 Procurement of goods and civil works would be carried out in accordance with
World Bank procurement guidelines, with arrangements as indicated in Table 4.1 below.
2.20 Works: Procurement of civil works for site preparation at the 12 sites where
computer systems would be installed and renovation of training facilities would be in accordance
with national competitive procedures acceptable to IDA. The estimated cost of civil works for
site preparation and renovation is US$ 0.9 million equivalent inclusive of contingencies with
individual contracts under US$ 100,000 equivalent. The small scattered nature of the work
would limit the interests of foreign bidders. Existing procurement procedures of the
implementing agency have been reviewed to ensure adequate competition and encourage
economy and efficiency.
2.21 Goods: The estimated cost of goods (mainly computer hardware and software,
office furniture and equipment, and vehicles) is US$10.0 million inclusive of contingencies.
Procurement of the main computer systems would be in accordance with IDA's procurement
guidelines. A total of 12 computer systems are to be procured for accounting and financial
reporting; one system for the Software Development Center, and the remaining 11 for accounting
offices nationwide. The computer system required for systems development and testing at the
Software Development Center, about two years prior to the main procurement, would be
procured as a separate item following national competitive bidding procedures (NCB). The
technical specification for this system would be based on UNIX and OPEN system standards,
thereby not pre-determining the procurement of the remaining 11 systems. These will be
packaged as a single international competitive bidding (ICB) procurement, with phased delivery
of equipment. Other contracts over US$ 100,000 equivalent would be awarded on the basis of
ICB, including the procurement of vehicles and equipment. Local suppliers and manufacturers
competing for the supply of goods under ICB would be granted a margin of preference of 15% of
the CIF bid price for locally manufactured goods or the applicable custom duties and taxes-
whichever is lower-during bid evaluation. Other procurement of vehicles and equipment in
contracts of less than US$ 100,000 equivalent would be carried out under NCB procedures
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aggregating not more than US$ 2.8 million. Minor items including office furniture and
equipment, personal computers, vehicles and items in small quantities which would not attract
the interest of foreign suppliers, would be procured through local shopping obtaining price
quotations from not less than three suppliers, in packages not exceeding US$50,000 equivalent,
and not exceeding US$ 0.3 million equivalent in aggregate.
Technical Assistance
Implementation Assistance 1.9 1.9
(1.9) (1.9)
2.22 Consultancies. Incremental Staff and Operating Costs: The estimated cost of
service contracts, consultants and training is US$19.8 million equivalent. Consultancies
incorporating substantial international expertise include: development of accounting standards,
financial systems design and implementation (base costs US$ 3.7 million); assistance to strengthen
audit (base costs US$ 1.5 million); development of training and training materials (base costs US$
0.6 million); and change management assistance for HRM (base costs US$ 0.3 million).
Consultancies and service contracts incorporatingmostly national expertise include: financial
systems software coding (base costs US$ 1.7 million); fees for private sector audit firms (base costs
US$ 2.0 million); economic management studies (base costs US$ 1.1 million); assistance to the
Planning Commission (base costs US$ 0.6 million); and assistance to replicate systems
implementation (base costs US$ 0.6 million). Training courses and attachments include
international training in financial management/MBAs (base costs US$ 1.0 million) and attachments
with SAIs (base costs US$ 0.5 million). Technical training of computer staff (base costs US$ 0.5
million) and seminars and conferences (base costs US$ 0.1 million) would be mainly national.
Consulting services would be procured in accordance with The World Bank Guidelines for Use of
Consultants. Incremental staff and operating costs would be financed by government.
2.23 Contract Review. All individual contracts for civil works and goods estimated to
cost the equivalent of US$ 100,000or more and contracts for the employment of consulting firms
estimated to cost US$ 100,000 equivalent each or more and contracts for the employment of
individuals estimated to cost US$ 50,000 equivalent each or more would be subject to IDA's prior
review and approval. For consultants contracts below these thresholds, prior review would be
required of: (a) terms of reference; (b) single source selection of firms; (c) assignments of a critical
nature, as reasonably determined by the Bank; (d) amendments to contracts for the employment of
consulting firms or individuals that would raise the contract values to these thresholds. It is
estimated that 70% of the contracts for civil works and goods would be subject to prior review.
Post review would be undertaken of the remainder on a random basis.
I. Disbursement
2.24 The IDA Credit would be disbursed over a period of five years and would finance
about 77% per cent of the cost of the project. The proceeds of the Credit would be disbursed
against eligible expenditures, net of taxes and duties, as indicated in Table 4.2 below. The
estimated disbursement schedule is shown in Annex 7.
2.25 Disbursements would be fully documented except those for expenditures: (a) under
contracts not exceeding the equivalent of: (i) US$ 100,000 each for goods and civil works, (ii)
US$ 100,000 for the services of consulting firms, and (iii) $50,000 for the services of individual
consultants; and, (b) for training. Such disbursementswould be made against Statements of
Expenditure (SOE), the documentation for which would not be submitted to IDA but retained by
PAD in Islamabad and made available during the course of project supervision. It is estimated that
about US$ 8.6 million equivalent would be disbursed through SOEs. Individual small contracts
for works, goods, services and training can be claimed through submission of Statement of
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Expenditures. PAD would be required to keep all documentation relating to these activities for
inspection by IDA and for audit.
111.INSTITUTIONAL ARRANGEMENTS
3.1 PAD, which is presently responsible for most of governments' accounting functions
and for the external audit of government's financial transactions, has an established organization
and structure, including decentralizedoffices providing accounting, treasury functions and audit for
each of the federal and four provincial governments. Financial regulations and procedures are in
place. PAD has some experience of introducing and operating computerized financial systems,
although these have tended to automate the previously existing procedures rather than to amend
systems to introduce modern financial management. It has a network of training institutes. Staff in
PAD belong to the audit and accounts service, which is a recognized category (cadre) within the
Civil Service of Pakistan. These features provide a positive base from which to develop PAD's
capacity. Nevertheless, the detailed evaluation of current institutional arrangements for
government's fiscal reporting and auditing (para. 1.6) highlights weaknesses in the outputs from
existing financial systems. It identifies institutional constraints including the lack of arrangements
to ensure that systems respond to users' needs, the limited availability of staff with up-to-date
professional or technical skills, the lack of independence of audit from accounting, and poor human
resource management practices within PAD.
3.2 The project scope and design addresses the institutional constraints through:
3.3 Separation of Audit and Accounts As a first step towards separation of the
audit and accounts functions, PAD has already initiated moves to bifurcate the two functions
under the Auditor General to such an extent that the eventual transfer of the accounting function
to the executive would not have any wide-ranging organizational implications. As part of the
bifurcation process it would be necessary for the Auditor General to ensure that essential internal
controls are in place and operating in the accounting wing. Following full implementation of this
bifurcation PAD would, by 1997/98, set up a task force to identify and address issues
(legal/regulatory, administrative and procedural) relating to the transfer of the accounting
function to the executive. Regulatory changes would be prepared as required, and the separation
would be planned to become effective from July 1, 2000 subject to government approval.
Agreement was obtained at negotiations that GOP shall prepare a plan for the separation of the
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Auditor General's accounting and audit functions by July 1, 2000, and to achieve the separation
by that date, shall : (a) complete bifurcation of the audit and accounting functions by June 30,
1997; (b) complete detailed proposals for the functional separation of audit and accounting by
March 31, 1999; and (c) thereafter take all measures necessary to effect the separation of these
functions (para. 6.1).
3.4 Creation of an MIS Wing The project would strengthen PAD's capacity by
reorganizing the existing Computer Directorate and creating an Management Information Systems
(MIS) Wing, headed by a General Manager (MIS). The General Manager (MIS) would be a
computer professional, recruited externally on a project post for a period of up to 5 years. During
this period, PAD would attach officers to be trained to potentially take over this position by the
end of the project. The General Manager (MIS) would have the status of a Deputy Auditor
General, reporting to the Auditor General, with complete autonomy with respect to technical
issues.
3.5 There would be three sections in the MIS Wing each headed by a Director
General:
a) a Standards and Policies Section would be responsible for defining and keeping
under review PAD's standards and policies with regard to information systems,
and also responsible for detailed technical aspects of any central acquisition of
hardware and software;
b) a Systems Development Section which would be responsible for the development
and maintenance of the application systems with the assistance of consultants; and,
c) an Implementation Section which would be responsible for the implementation of
developed systems and the day to day operations of the computer installations
around the country.
3.6 In the case of field offices, all personnel (including those responsible for day to
day field operations) would report within the field office structure, (i.e. to the DAO or AG),
except for a limited number of technical positions under the Director General Implementation,
responsible for providing technical support, but located at AG offices. A key factor in the overall
implementation strategy would be that the responsibility for implementation would be assigned
to an end-user support group formed at each AG office which would be headed by a Deputy
Accountant General and which would be dedicated to systems implementation. The end-user
support group would be trained by the technical team and would thereafter be responsible for
training all other personnel at the AG offices as well as at DAOs.
3.7 Involvement of the Private Sector Information about the project and its
proposed approach is being made widely available and comments sought from the accounting
profession in Pakistan. These comments have been incorporated in the project design. PAD has
proposed a phased strategy to initiate further private sector participation based upon:
scope for joint working between public and private sector auditors, and the
comparative advantages of each sector;
b) pilot introduction of audits by private sector firms under amended procedures,
joint audits, staff exchanges, etc.;
c) extension of trial public/private partnerships in government auditing, together
with preparation of revised operating procedures, manuals, and quality control
arrangements; and
d) gradual expansion of the program as appropriate.
a) developing a structured career path for specialist staff including auditors and
accountants;
b) rotating staff on assignments in accordance with this career path and prior experience,
and assigning jobs for a nornal period of at least three years;
c) defining standard job descriptions for recruitment, deployment, training and
evaluation purposes;
d) enhancing the effectiveness of training, including requiring staff to be committed to
remaining in PAD prior to receiving entry-level training, and relating training more
closely to job descriptions and training needs assessments;
e) developing a system of quantifiable and transparent evaluation and evolving an open,
merit-based, promotion and reward system; and
f) detailed manpower planning.
a) replacing the current eight month entry-level training for probationary officers with a
two year course;
b) substitution of the SAS examination for mid-level staff by that of the Association of
Accounting Technicians;
c) substantial reduction in promotion of unqualified candidates from mid-level grades,
and allowing direct-entry recruitment of individuals with appropriate MBA/graduate
qualifications, subject to accountancy examination success within a prescribed period;
d) training for officers due for promotion to B- 19;
e) encouragement for officers to acquire an accredited financial qualification; and
f) instituting a program of training for continuing professional education.
3.13 PAD is coordinating the proposed changes for its career officers with the Federal
Public Service Commission and the Establishment Division. In addition to developing and
delivering training for the above, PAD's training strategy would also address training needs
related to the implementation of the new working arrangements and procedures to be introduced
through the project. A third aspect of PAD's training strategy would be to extend financial
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COMPONENT AGENCIF.S
Govenment FinancialManame
Overallresponsibility PAD (ProjectDirector)
xovmment AAcounting
Overallresponsibility PAD (CG (A))
Inter-agencycoordination PAD (CG(A))and SteeringCommittee
Core GovernmentFinancialSystems
Overallresponsibility PAD (GM MIS)
Inter-agencycoordination PAD (CG(A))and SteeringCommittee
GQovemmentAudi
Overallresponsibility PAD (DAG GA)
Advisory Services
Internal SteeringCommittee
External Panelof Experts
Auditor General
| Project |!
|Coordinato
Aui
DGot M(I)Controller General DAG
| AGA
B. Implementation Responsibilities
4.3 PAD's components of the project would be implemented by the sections within
the Department that are already responsible for the respective function, with suitable
strengthening as required. Hence, the Controller General (Accounts) would be responsible for
the accounting component. A new General Manager (MIS) would lead the computer systems
development as head of the MIS Wing. Since the bulk of the work related to information
systems development deals with the implementation of accounting systems, the Director General
(Implementation) who is part of the MIS Wing would have a dual reporting relationship and
would be functionally responsible to the Deputy Auditor General (Accounts & Payments) for
implementation. The Deputy Auditor General (Government Audit) would be responsible for
implementation of the audit component. The Director General of Training, head of the Audit and
Accounts Training Institute (AATI), based in Lahore and with regional offices in Balochistan
and NWFP, would be responsible for the training component. The Director General, Human
Resource Management, would be responsible for the HRM component.
- 23 -
4.4 For project administration and coordination purposes, the Controller General
(Accounts), the DAG (Government Audit), the General Manager (MIS), the Director General
(Training), and the DG (HRM) would report to the Project Director. The project director would
be assisted by the DG (R&D) as project coordinator and head of the Project Directorate. Initially,
the Auditor General would be the Project Director.
4.5 The Project Directorate, which is already established for project preparation,
would provide project coordination, administration and monitoring. It would have overall
responsibility for monitoring project costs, funds flow, adherence to schedules and quality of
work performed. It would receive monthly reports from heads of the units managing sub-
components from which it would prepare overall project summary progress reports. These
reports would summarize project expenditures by major project activities and category of
expenditure, report work progress relative to the major project milestones and performance
indicators, and would highlight any issues relevant to project progress. Summary reports would
be provided to the Bank on a quarterly basis. The Project Directorate would be assisted by a
local consultant, to provide backup services and peak-load facilities as required.
4.6 Agreement was obtained at negotiations that PAD would: (a) employ staff with
qualifications satisfactory to IDA in the key posts of Controller General (Accounts), Deputy
Auditor General (Government Audit), General Manager (MIS), Director General (HRM),
Director General (Training); (b) designate and maintain a Project Director satisfactory to IDA,
with overall responsibility for project implementation; (c) employ within the Project Directorate
a Project Coordinator and a Deputy Project Coordinator, with qualifications satisfactory to the
Association and other staff necessary for the carrying out of the Directorate's functions, and that
these key staff, subject to satisfactory performance, would be retained in post for a minimum of
three years (para. 6.1).
4.7 The MOF and the Planning Commission would set up project management
arrangements for managing the studies carried out and the short-term technical assistance provided
under their respective sub- components. Agreement was obtained at negotiations that MOF and the
Planning Commission would set up by December 31, 1996, project management arrangements
satisfactory to IDA for the studies carried out and the short-term technical assistance provided
under their respective components (para. 6.1).
C. Implementation Strategy
4.8 PAD's implementation strategy involves defining new standards for accounting and
auditing, which move closer to international standards, and introducing improved systems in a
phased manner with close involvement of end-users of financial reporting and auditing information.
The focus of development would first be upon accounting systems, although measures for the initial
strengthening of audit are also incorporated.
of a double entry accounting model, and a set of policies and procedures for accounts payable,
revenues and liabilities recognition, foreign loans, suspense accounts and development projects,
and prepare a plan for implementation government-wide. It would also review the financial
reporting needs of government and broadly determine the content, timing and distribution of
financial reports. This work is a prerequisite for the commencement of the main information
systems development consultancy, and would need to precede the design and development of the
Core Information Systems. It would be undertaken by the systems development consultants, and
financed up to Credit effectiveness by PPF P916-0 PAK.
4.10 Core Information Systems As PAD's account keeping operations for federal and
provincial governments are conducted by its network of AG's offices, each supported by
DAOs/Treasuries, PAD has overall control of the process, which enables flexibility during
implementation. A factor affectingthe implementation strategy is that all AG offices and several of
the larger DAOs are already operating computer-basedsystems, and therefore would face less
difficulty than a green field site in installing new software.
4.11 Accordingly, the core information systems will be implemented in a phased manner as
follows:
b) In Phase II, the systems would be implemented at the federal government's main
accounting office, the AGPR office in Islamabad, at the AG's office in Peshawar and
at two DAOs reporting to this AG which are already computerized. This is referred to
as the pilot implementation.
c) In Phase III the systems will be replicated over the course of this project to a total of
about 21 of the 95 sites, including all provincial AG offices, and selected DAOs
within each province. This would include maximum coverage in at least one
Province (presently identified as Sindh), referred to as the Province-wide system
replication. The remaining sites would be selected with a view to maximizing the
coverage of federal transactions.
4.12 For development of the applications software, the systems analysis and
comprehensive functional design would be carried out by consultants, who would also carry out a
search for suitable software packages. In the event of suitable packages being identified, the
consultants would prepare specifications for, assist procure and supervise an ICB turnkey contract
for acquisition and installation of the package, its customization, and acquisition and installation of
suitable hardware and operating software. In the event of no suitable package being identified, the
consultants would prepare specifications for, assist procure and supervise two contracts, one for the
development and testing of software, and another for the provision/installationof the hardware.
Supervision of implementation at about 12 sites (4 pilot sites and the first phase of replication -
about 8 sites) would also be the responsibility of the consultants selected for preparing the design.
- 25 -
The scope of workfor the consultantsis describedin moredetailin Annex3. The projectwould
financeassistancefrom privatefirmsfor furtherreplicationof systemsacrossthe remainingsites.
The implementationscheduleshowspossibletime savingsof 6-9 monthsif suitableapplication
softwarepackagescouldbe identified.
4.13 Technology Strategy for PAD's Core Information Systems Computer systems
would, as far as possible, be designed to:
4.15 The nature of the application systems requires that the application software be
able to run on small or large computers without major changes (scaleable) and be able to operate
on machines offered by several vendors (portable). The project proposes to use UNIX as the
operating systems environment since, in practice, this environment comes closest to an OPEN
systems environment and ensures a high degree of scalability and portability. In addition, the
application development environment chosen will use Fourth Generation Languages and
Relational Data Base Management Systems and associated development tools, Graphical User
Interfaces to increase application development productivity and offer a user friendly environment
for data access and usage.
4.16 Implications of large scale computerization on PAD staffing PAD recognizes that a
department wide introduction of computer based information systems would have significant
implications for staff. Although PAD does not expect overall staff reductions, it does expect
significant staff reassignments, and based on its past experience with the introduction of
- 26 -
a) the skills of staff who currently maintain the manual systems would be augmented so
that they are able to operate and maintain the new automated systems;
b) retraining or recruitment would provide for the jobs created related to the operation
and maintenance of the systems (both in the functional and the technical areas); and,
c) other staff would be re-trained and re-assigned, mostly to audit where additional staff
are required.
4.17 As part of this project, PAD are concurrently looking at the staffing and training/
re-training aspects under the HRM and training components respectively. An extensive training
program is envisaged for staff to enable them to operate and maintain the systems. In addition,
facilities for re-training would be created or augmented as part of the training component,
including training for reassignment.
4.18 Auditing Government plans to strengthen the legislative audit function, through the use
of consultants, within a conceptual framework comprising the following:
4.19 In the move towards adoption of INTOSAI standards of auditing, PAD considers
that it has adequate powers in respect of performance auditing and reporting to the legislature. The
practice of PAD conducting performance audit has been in place since the early 1980s and resulting
audit reports have been considered by the Public Accounts Committees of the federal and
provincial legislatures. The executive and the legislature's support for performance audit indicates
that PAD's mandate in the area is not disputed. This gives a firm basis to start the process of
adoption of standards in the auditing area.
4.20 HEM PAD recognizes that the project cannot be successfully executed and
sustained unless its human resources are efficiently deployed, are of substantially improved
quality, and are properly motivated. It would therefore implement an HRM policy designed to
raise the level of professional competence of staff, to institute a system of continuous
professional education, to provide a structured career path, to evolve a promotion and reward
- 27 -
policy based on open and quantified performance standards and a recognized merit system, and
to improve related management information systems.
4.22 The Audit and Accounts Training Institutes (AATI) would provide formal
training (for example, for accounting technicians and probationers), short courses, and provide
course material and backstopping for field office training. PAD would strengthen the AATI and
augment them by establishing Field Office Training Centers (FOTCs) at the larger accounting
offices to provide training in revised procedures, and basic computer skills. The component
would be implemented in the following sequence:
D. Status of Preparation
4.25 The Project is in an advanced state of preparation and hence proposed project
activities would commence without undue delay. Preparatory activities for the project, financed
by a Project Preparation Facility (P916-0 PAK), include:
4.26 The project's Planning Commission FormnI (PC-1) has been approved by
ECNEC. Consultants are selected for the accounting standards and systems design consultancy.
(The scope of work is summarized in Annex 3.) It was agreed at negotiations that PAD's
appointment of the accounting standards and systems design consultants (and of IDA to issue its
no objection) would be a condition of Credit effectiveness (para. 6.2). The project management
directorate is in place and PAD is in the process of recruiting key technical personnel. It was
agreed at negotiations that appointment of the General Manager (MIS) to the satisfaction of IDA
would be a condition of Credit effectiveness (para. 6.2).
E. Project Sustainability
4.27 The sustainability of the project would largely depend upon project ownership and
commitment to project objectives. Ownership is strengthened as the project builds upon
initiatives already taken by PAD to computerize accounting. PAD has extensively discussed its
development strategy internally within the department, including with middle management, to
attempt to build a broadly based consensus. Under PAD's direction, project preparation has tried
to develop participation through thoroughly canvassing user needs, and the development strategy
has obtained the commitment of federal government and three of the four provincial
governments, who would be directly involved in guiding and monitoring the project through
- 29 -
4.28 PAD, Planning Commission and MOF would maintain separate accounts for their
respective parts of the project, and would keep all the documentation including that for the
Statement of Expenditures. PAD would prepare consolidated project accounts annually. IDA
would require annual audit reports from external auditors (independent and suitably qualified) for
project accounts with a separate opinion on the Special Account and the Statement of
Expenditures. The Audit Reports would be submitted to the IDA within six months after the end
of a financial year. In order to assure transparency and independence, PAD has agreed that it
would engage a private sector audit firm for this purpose, subject to the concurrence of
government. PAD would prepare and submit to IDA within six months after the close of each
fiscal year fully audited consolidated project accounts including an auditor's opinion and report
for the project, SOEs and Special Accounts, undertaken by auditors satisfactory to IDA.
4.29 Significant performance indicators and project milestones (para. 2.10 and Annex 8) will be
used as a basis for monitoring and evaluating the project. A thorough mid-term review would be
incorporated to assess performance achieved, and to review the appropriateness and continuing
relevance of the project's design, including taking account of technology changes. PAD has
developed a project implementation management system to monitor progress. A summary of its
resulting implementation plan appears as Annex 6. Quarterly progress reports would be provided
to IDA. A mid-term review would be scheduled three years after credit effectiveness, to coincide
- 30 -
A. BENEFITS
5.1 Benefits would include improved, timely, accurate and consistent financial
information from the 21 automated sites to assist resource planning, cash management, budgeting,
management and control at provincial and federal levels of government, and improved fiscal
information flows for macro-economicmanagement. The improved financial informnationwould
assist Government in its efforts to complete fiscal adjustment. It would also provide a basis for
enhanced governance. The project would also set the stage for subsequent initiatives to improve
government financial reproting and auditing.
5.4 Governance would be assisted by the improved financial infornation and systems,
which would provide clearer linkages between budgeting, use of resources, internal controls and
accountability. The International Federation of Accountants considers that sound accounting is the
first line of good governance. As the project would address many of the weaknesses in the present
arrangements for government accounting, it would lay a stronger foundation for improved
governance. Greater capacity and independence of governments' external audit would enhance
transparency and accountability,thereby further assisting strengthened governance.
5.5 Assistance to MOF and the Planning Commission would enable the government to
better fulfill its redefined role by increasing capacity to formulate and monitor policies for
deepening macroeconomic and structural reforms, and by identifying the institutional changes
required for better coordination of such policies.
- 32 -
B. ECONOMIC ANALYSIS
5.6 The following aspects of the project were selected from the range of possible
alternatives in order to achieve a cost effective solution to Governments' financial information
needs, and to provide a set of efficient and effective tools for public expenditure management:
a) the financial systems improvements would initially focus upon improving the quality
of accounting and financial information, thus strengthening the platform for existing
financial management and control procedures, and all subsequent improvements
thereto;
b) the project would address a major structural weakness in present arrangements by
separating functional responsibilities for accounting and audit, thereby creating
independence which would enhance the contribution of both functions to improved
public expenditure management;
c) the project includes measures to increase institutional capacity through amending
manpower policies, training, use of the private sector in areas of comparative
advantage, and technical assistance, to enhance the development impact of improved
financial information, and to ensure sustainability of the improved procedures;
d) financial systems would be prepared in the context of an overall information
architecture for government fiscal management, to ensure they are integrated amongst
themselves and with other Government systems, and to avoid overlapping or
duplication of functionality;
e) the technological approach proposed in the project, based on distributed, OPEN and
scaleable systems, strikes a balance between large mainframe systems which would
be cumbersome and expensive and other PC-based options (e.g. stand-alone PCs)
which could be under-powered and not scaleable to sites with a large number of
transactions; and
f) the phased implementation strategy of the computerized financial systems, restricting
the implementation to 21 out of a total 95 sites, is a prudent approach to managing
implementation risks.
5.7 The total cost of the project amounts to approximately 0.25% of annual public
expenditure in Pakistan. The benefits of even minor improvements to the efficiency,
effectiveness or management of public expenditure, which would arise from improved financial
information and control, would exceed project costs. The net development impact of the project
is therefore expected to be positive. The fiscal impact of the project's cost would be negligible.
C. RISKS
5.8 Due to the extent of change envisaged, this project should be considered as high
risk. Although identified risks and mitigating measures are summarized below, as the project
would address sensitive areas related to control and reporting of financial transactions, would
introduce structural changes within PAD, and would install new technology, reluctance and at times
- 33 -
e) Project management. The complexityof the project, and the likelihoodof delays in
decision-makingand implementation,increaseprojectmanagementrisks. A committed
and stableteam of seniormanagementwithinPADis considereda criticalfactorto deal
with this risk. Many of these key staff have been involvedduringprojectpreparation,
thus developingownership. Project conditionalitylimiting key staff transfers would
help to retain a stableteam. Thereis an existingProjectDirectorate,with experienceof
implementinga componentof the Third TechnicalAssistanceProject (Cr.1755-PAK)
and this project's preparation,whichwill be strengthenedfurtherand given logistical
supportby consultants. Monitoringarrangementsinclude a detailed implementation
plan,performanceindicatorsand intensivesupervision.
REACHEDI
VI,AGREEMIENTS
a) GOP shall preparea plan for the separationof the AuditorGeneral's accountingand
audit functionsby July 1, 2000, and to achievethe separationby that date, shall: (i)
completebifurcationof the audit and accountingfunctionsby June 30, 1997;(ii)
completedetailedproposalsfor the functionalseparationof audit and accountingby
March 31, 1999;and (iii) thereaftertake all measuresnecessaryto effect the
separationof these functions.(para. 3.3);
b) PAD would: (i) employstaff with qualificationssatisfactoryto IDA in the key posts
of ControllerGeneral(Accounts),DeputyAuditorGeneral(GovernmentAudit),
GeneralManager(MIS),DirectorGeneral(HRM),DirectorGeneral(Training); (ii)
designateand maintaina ProjectDirectorsatisfactoryto IDA, with overall
responsibilityfor projectimplementation;(iii) employwithin the ProjectDirectoratea
ProjectCoordinatorand a DeputyProjectCoordinator,with qualificationssatisfactory
to the Associationand otherstaff necessaryfor the carryingout of the Directorate's
functions;and (iv) that these key staff, subjectto satisfactoryperformance,would be
retainedin post for a minimumof three years (para. 4.6);
PkM
ii GCoermet of Pakidtan
Fhiancil Fbponr9i*al Aud^iung
Prqoj klwbuqwoVing
Compm odS Cos fluiny
P_ect
Total BASELINE COSTS 629.220 552.129 1.181.348 47 100 18.238 16.004 34.242 47 100
A.l,S h _ - 17.11 35.44S 3S.79 40.743 18320 150240 - 0517 1 an I0 1.181 0560 4355
s,- DM.,rn4g 1111.169 2.33 SUN UN9 6391 78L413 - 0.324 0069 1.564 0156 0156 2273
s*0d9 2901i 3IL 11s0.501 4S134 24711 226.613 0841 1.110 2623 1 337 0716 662
C. Ihea U.emwc*U 96p35"Po
O __ _ 7-745 2164 2.164 2.164 2.164 2276 16676 0224 003 0053 0063 0063 0066 0541
- 1159 11735 18726 107I 16 25717 - 0034 0340 0311 0031 0031 0747
' 7745 3323 1330 12110 3242 1354 44454 0224 O009 0403 0374 0094 0097 1268
D.T _
ra sei." _ 166W 14616 12117 5639 4352 0638 54646 0484 0429 0351 0169 0126 0004 1564
Sub INLA4361
S-_-^; 10.617 ISo 1.611 1613 - 20262 0123 0310 0048 0049 0(64 - 0646
F~,s 36.214 22.625 27.241 33016 7.305 7.105 132.5W3 061 0656 0.790 1102 0.214 0206 3643
6S1.217 43127 41.044 4535 11611 7.11 207.520 1.45 1.395 190 1320 0395 0.230 601S
"MV05V ias0 32 916 19567 1517 14757 1427 111318 0.523 094 0.566 056 0426 0244 3265
f gpUma
aa 11245 7m3 7.113 2e36 8765 6L27 6s.7s o32. 0227 0227 0.604 0263 0269 1.3B
PA D: - 4353 7962 67" 3447 5692 30.333 - 0.125 0232 0253 0274 01609 1053
111 24 35412
3451 49142 38W0 235S36 216.450 3 1.307
' 1 1424 os0s 0669 6274
F. 0 Po"p Supoad
Em p
Pokey_ _ 7.43 7436 7436 7436 7435 37.191 - 0216 0216 0216 0216 0216 1076
AssanceiPLwd Cumm - 22315 - - - 22.316 - 0647 - - - 0647
- 23.S9 7.43 1 .436 7.6T 7.439 56 - 9.662 0.216 0.216 0216 0216 1726
T ammcoiTS 11S47 221.Z 6 2m&Si 414135 1363B S7J4 I.t8t.346 1347 S,410 590 12.W9 4010 Z547 34242
P lC_6bV- 711 31Q 53 lil 1663 1354 32 US 0611 0.162 0.t 0.440 8103 00W GM3
Local4546 16204 3036 4S.6 32.04 27.316 15223 132 0530 OW 1322 09Q3 0792 4.516
F_mn 0614 4f45 4S91 63S9 1770 8673 210W2 &018 0123 0146 016S 010 002S O611
S _ _"MbdLibm S.1510 22733 3636I 51.9S5 35Q84 2Q1t3 179235 0150 0.65 1.S 1.507 1G3C DS17 SIW
owedrnm 2.21Z 11C3 1416 57= 143S 7.6 10.713 4.M 4317 4555 4.913 0696 4636 -3M20
PlwA C.gmacs 7.434 34.43 49.511 US3231 Se1 36.11 26705 8056G 0343 0470 05S4 0 343 0179 1.96S
Tmr.oSTSrcvsi 123121 25D952 25 SW 539.5t5 tSZO 127.303 .OSD524 1434 663 am 13063 i 457 2S23 37.11
TOWN 42 am 7.O0 51254 1.31 8613 724721 am 0213 0Ga 1241 1iLO4 a0 I.7
F _ebp g1S3 U 27.562 m5s4 266D GRAM 38743 _D 1.690 1.374 2515 7.23D 1.62 OLM 1III
IG
ANNEX I
age3ofr6
Pakistan-
Pro lot Iroving
Ior Fminaial Reporting and ALidting in Govefrmlent of Pakislat
Project Conipoiteitts by Year -- Tota ls
icluditig Contingencies
Totals Including Conlingencies IPRS Million) Totals Including Conxtingencies (USS Million)
-9617 97198 W99 S9/00 00101 01102 Total 96197 97199 OW19 991/00 00/01 01/02 Total
311196
Pagc4 of6
P60
Pfqed k. k h ft Fwa R _ MWAWn
dw _ d PA
_AWM
D _.df D
S"W- _ D _ Dev_ *Xu. P=f.we F-W -W3 V" Dw-6" C b.w TOWa fw -xn
L _b-_.k- C.M.s
H_n - ~~~
1 ~ ~ ~~~
" ~ ~~~~~~~
Geels ~~~~~02
a0273 Q Mz 0 144 100 007^
---- 2016
o -: 2§M-
1211 1211
C__el P-l
low 0_ _0130 __ m
S_|B.bk* 2016 _123
L Ila"
- @70
a ----- Iin
ITo.v" _- so
° 4 1.oe ° .3U0 2.100 2142 0715 .00 I X76 OU47 281S0 22 0417
T_uWAO. IDIR 103 4.2 u o4111 "
- - *1 30 7/2 GAS
A _SN. -am--
0 036 0253 3.151 10 0 9316
a _.NM 1.31 84f SA a777s oWX
rnse C__aw9x
. . :~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~iIA
ANNEXI
Pagc 5 of'
Tsies - 0775 - 0349 - 0128 0004 0264 0074 0025 0i86 - 1711
Fina. Gange 0300 7.406 2.074 161 o.on 0172 1032 0273 0a66 0662 0372 0611 0566 0.325 1i0o
31196
ANNE
Page6 of 6
3(2:96
43
ANNEJX
Page I of I
PAKISTAN
'GOVERNMENT OF PAKISTAN
1. As Pakistan proceeds to open up its economy and free it from regulatorycontrols, the
need for good governance and modem financial management becomes paramount. Insteadof direct
intervention, the Government has to design appropriate fiscal and monetary responsesto changing
conditions, while in the context of a global economy, issues of transparency and accountabilitv
have become even more important. In this environment,the synergy of greater public-privatesector
partnership has to be eXploitedto accelerateand enhance the development process.
3. As part of its vision the Governnent intends to separate its accounting and auditing
functions and re-engineer its economic and financial management function to include as key
elements of its strategy:
- a governance structure and legal framework consistent with international standards for an
independent comprehensive audit function which supports public accountability by timely
reporting to the legislaturefor effective and appropriateaction;
- increasing professionalizationof the elements of its civil services which deal wvithfinancialand
economic management, requiring key competencies in staff training and appropriatehuman
resource managementpolicies emphasizingperformnance,experience and knowledge:
- increasing partnership between the private and public sectors in their respective areas of
conmparaLtiveadvantage: and.
PAKISTAN
The project will finance consultancies. computer hardware, software and training
required for the preparationof revised accounting standards and reporting framework,and the
design, developmentand implementationof elected high priority financialapplication systems at
selected sites. These application systems include a Core Accountingand Reporting System, a
Payroll and Pension System and a Cash Forecasting System.
2. The first phase of the systems consultancy would thus be directed towards the
following objectives:
3. The scope of work for the remaining phases of the Information Systems
Consultantswould include:
a) Preparationof the detailed functional design for the specified svstems: This would
include:i) analysis of the functional processes includingadministrativeprocedures,
transactiondocuments. forms and informationflows, data flow statistics, related to the
accountingand reporting,payroll. pension and cash managementareas currently in use
and/orrecommended by the project consultancies; ii) developing and defining a new
set of functionalprocesses, informnationflows, procedures.transactiontypes and
associated documents and torms. and related structuresrequiredto set up the new
systemis:aLndiii) developing,a full ftrncLiotialdesign for the computer svstems required.
includingtlle specitication ot the outputs reports. the input formats.transaction
Llocurnents.processini ancdcontrols for the systems requiredat various nodes of the
intormatioiitlow network. the interfaces Lnd data flowsbetween these nodes and with
external svstems.
45
ANNEX'
Page 2 of 2
b) Specificationof the technologzyarchitecture required for the implementationof these
systems: Thlisactivitywould include the developmentof specificationsfor the H/W
and S/W to be installedat the various nodes and the mode of interconnectionof this
l-lardwareand Software.
This system would be the core financial management inforrnation svstem of the
Government of Pakistan. It will be used by: i) the Pakistan Audit Department(including
its subordinateunits) to perform the basic accounting functions: ii) the FederalMinistry of
Finance and the ProvincialFinance Departments to perform the processes associated with
budget execution, monitoring and control: iii) the Ministry of Finance to provide the
information it requires for cash management and to implement cash limits, as may be
required; and iv) the FederalPlanning Division and the Provincial PlanningDepartments to
obtain the statusof actualexpenditures on ongoing programs and projects.
The informationcontainedin the system data bases would providethe MOF and other core
financial agenciesa foundationfor a comprehensive managementinformationrelated to the
country's financial resources. The information contained in the data bases would be
available to other governmnent agencies on an as required/approvedbasis. In addition, the
system would provideuseful financial information to the ministries,spendingunits (in their
respective areas) to enable them to better manage their work programs. It will give these
departments the facilitiesto down load relevant and authorizeddata and perform required
analyses.
The System would have interfaces with external data sources on a periodic basis.
Establishing such an interfacewill ensure that financial data in the systemdata bases has the
coverage necessary to provide a comprehensive financial picture for the Government of
Pakistan. ,
b) Pavroll and Pension Svstems: The payroll of government employees constitutes a large
portion of the governmentexpenditures. The need for an automatedPayroll and Pension
System is evident in view of the increasing volume of transactions. The proposed payroll
and pension system will performthe full range of both the payroll and pension functions as
an integrated system and the payments processed will automaticallyupdate the accounting
data in the Core Accountingand Reporting System. The system will be designed to
incorporate governmentrules and regulations related to the payroll and pensionfunctions.
c) Cash Flow Forecasting and Financial Analysis System: One of the MOF's main
inforrnation needs is to establish a cash forecasting system for forecastinglikely flows of
expenditure and receipts and the consequent impact on cash balances and issue of debt
instruments. The Cash flow and Financial analysis system will be designed to provide
accurate cash balancesforthe MOF to perform its cash forecastingfunctions.
2. The technology architecture for the project specifies the nature size and
distribution of the computer processingfacilities and associated work stations; the nature of the
communications connections between the nodes of the network; and the nature and type of
application development. svstems software and Data Base Management Systems (DBMS), that
should be employed for the project. This architecture is determined by the characteristicsof the
application systems for governmentaccounting which may be summarizedas follows:
a) the application systems for government accounting wiil consist of several modules that need
t) exchanue data wx-ith
each ollher:
b) some mnodulesxxill need tv be implemente' at multiple levels e.g. the AGPR in Islamabad.
the l'rovincial AG officesand the District Accounts Ot'fices. Data will be generated.stored
and processed at each leveland will need to be transferred betweenLhevariouslevels: and
48
ANNEX4
Page 3 of 5
c) the data and transactionvolumeswill vary by province and district. For the CentralAGPR
site and for some AG officesand District .AccountsOffices they could be quitehigh.
Macro-Economic
Fraework
LimnAgency Oelencemallways Tax Cusioav 4
i'wes
l eid
Acl.ads
Bud. Prep. Prep.
ludet Planning I Pl n
_Boom _ ye Byaarra j ystem systam
Budget Preparation Feedback
BudgetGutn x |ul Guatbas I- I I born
System forBudgetl eu4r1wethe
Preparadon 4 Iddierttr
A 4_ _ wCx | C...,t Benuv Esi_s areas
iktorc £bd *
BItsuin Dala bAinm d eIon.n .-
x oiqs CapiJ. Cu.rent Fiaumncu
kawion Ar-ncYrograms;widIrojs
epproved L
Line agency Departonuinlaized Toa Cusioms t
- _ _- _ _ _ _ _kb_ _ _ _ _ ItudgelExecution Accounting Syslens
BudgetExecutmo"s ACirri"s= Adunm"=a O
, SystemNsto Budget lk.d AYrioi tEoreGovt. M-_ system..s RailwaysUdelsnce.sic.
Monitoring, Couiol Execution, Aonitoring
amniCou.irni
Fiscl Reporting
Etoaa
oaIioi-us
@
Fiscal Reporting
£ Tiaxnse
[xpen(iiUrs L Accounting
System
*A
surran
t 77
Pep4
naiizeti A c4rats R cap t1COding)
Rver
eDeU i il Sy for
m il i I C t P D tar Bert Remnncaion|
fjrsaBanknPmgrsss Paying
|! Pftoin9 X n r d rq1 1 1r xXPgWt|IW oank
I
|
ftmmnagwwt
D- slc xrsnm
F oG Iwo
De Sewvic CO
Pav.entsA.omn
roe"el II A
gBonetic~~~~~~~~~~~~~~~~~Pt Admne
fbbt nf Sy l IbA E|.
SPx?_oon
Petmoimme am I'ir VlS Sif
n IPe..rilonl|
_ _agmna hduordE.mirW.a L. . .. . t |.. .~j
Amr v v _ .yj y x-7xb_|
q lio
Aug Syatems
ker Vati Aron Auditing
ANNEX5
Page l of4
PAKISTAN
IMPROVEME
NT TO FINANCIAI,RFPORTINGAND AUDITINGPROJECT
STAFFAPPRAISALREPORT
TRAININGPLAN
S Iescipltis.il, of Target Group Criteria for Trainiing esponsibiity Expeclted Resuilts Airangenieits for
No. 'Ir;aining Selectioll of Motde for.Designinig etc. ratinces to Rle-cuter
- T._,
ruincecs j ________________ _______________r_ _e W orkplace
TIS- I (A): RCvised I. PADofficers& All slaff in B5 I . Slaff:
lField I. Respective Efficientamdeffective IIRM %s ing to issue
standaids anidprocedtires staff. above Office Accountanits implementationof revised policydirective
includinigcomnputeriied Training General standards& procedures
accountingprocedures 2. Staffand officersof Centers throughtrained staffand
theTreasuries
and officers.
the DAOs 2. °llicers:
AA1'l 2. AA'I'l
3. ManagerialslikiTol'
thi l'rovihcial
Govts. based in
Secrelarials(Secits)
2 TSI-B: Retaininig Staffof the Accounts All redundantstaff Field Office Respective Redundantstafftrainedin
redundantstalf oni Offices of the PAD. Training Centers Accountants new skills -do-
CompLuterization of General
accouLntillU prceS _ _ __ures
_
S
No.
.
I)escriptionofrr.aining TargetGroulp
1 SeIto of
Criteria for
5;clectionof
Mo.
Training
Motde
)gig1Tane
Responsibility
ror l)csigning
Expectedltesults
oR-ne
Arrangements ror
Traineesto Rc-ecnler
Io
S. D)escr-iptionof Targct Group Criteria for Training Responsibility ror ExpectedResults Arrangements for
Nio Tr aininig Selection of Mode D)esigningetc. Trainees to Re-enter
Trainees ___ _|_Workpbace
9. TS-3: TrrainingOf B-I8 officers of the B-I8 officers of AATI AATI and Prepareofficers for
B-18officers in Accotuts Group PADdue for PAD/HRMWing professional HRMWing to issue
preparationfor and tilosewho promotionlwithin. responsibilitiesin B-19 policy directive
promotion to A- 19 frulfillconditions one year
for promotion
10 TS-14: Professional Ofiicers likely to be Local AATI in Mid. Manageniienit No specific policy
Traininglor 13PS-
18to promotedto BPS- Consultationwith Professional requiredon posting
19 PromolionZone 19 in six months IIRM Wing DevelopmentCourse
Officers
It. I RNI stialegy Seniority-cum- Appropriale PAD/I IKM Wing Enable PAD/I ItM to I IRM Winlg to issue
Nklalnpk)%Cl-
4Ilai;IIIIIi. filness and aptilude local andi lauliCilMIS policy (lirective
Job Aiialylis I )Diabase for I IRM(I0 loreign developiient, and
Managemelitetc. officers) institution undertake preparation
of Job Descriptionsetc.
12. AuditStrategy Officersgiving Studytours PAD/AuditWing Acquaintofficers with IiRM Wing to issue
Traininig- IForeign options to serve in abroad to modem audit practices policy directive
Training AuditOffices (40 offices of in other SAls.
officers) cooperating
SAis
13. AudlitSiraiegy Officersconsidered Competitioni MBAprogram PAD/AuditWing Acquaintofficers with I IRM Wing to issue
I raiiiinig- F:oreigna lo liave senior finaincial
modlerin policy direclive
'Iraining management mnilagementpractices.
polenlial
S.; ] l)escriplion iif Target Croul) Criteria for Training Responisibility for| Expected Rtesults Arrangeymcntsfor
No
1I.
I ______
T rainllng
________ ______
Orienl.tlioll Programl
_ ________ _______
Senior to middle
Selection ofi
All
Trainces j
Motic
_ ___________
Local
Dcsigining ctc.
________rainces
16 TecchinologyRelieshier SystemsAnalysts, All Local MIS Wing and llpdate the knowledge
programi(II17-I ')) Programmersand PakislanComiiputier about tlhelatest trenids
OA Stall ol MIS 13Burcaui
(ICII) in thc lechinlologyand As above
Wilng Upgrade and reiniforce
skills in some areas
relevant to thisproject
17. Skills l)evlopmecnmt Operatorsand Data All Local Separate MIS Wing, PCB [)evelop skills required PAD staff would be
Prograii (1B16-17) Control staff of AG Modulesby Hardwarevendors for DP operationsand trained uniderthis
Offices and DAOs Job-type and consultants managementat each programiland PAD
and Computer Site (Implementation site would have to make
Managersof these Assistance) arrangementto retain
offices I I Iinte t MIS
Winig
55
ANNEX6
Page I of 8
PAKISTAN
IMPLEMFNTATIONPLAN
(a) the list of all key activities and milestones associatedwith each projectsub-
component,includingtechnical assistance and training, the dates of their start and
completion,and linkages with preceding and followingactivities;
3. PAD would keep the implementationplan up to date, and it would form the basisfor
periodic reportingto senior management,the Steering Committeeand IDA.
30 FunctionalSpecificationsCompleted
31
32
33
Searchsoftwarepackage(off the shelfl
SoftwareDevelopment& Customnization
HIW/SWfor SystemsDevelopnent lnstaled (see MIS Center)
V
34 Award SW/DevebprmentProcuremnentContract o
35 DevelopCoreAccounting& ReportingSystem .
3B DevelopPayrollSystem.|
37 DevelopPensionSystem.I
38 DevelopCash-FlowForecasting& FinancialAnalysis
39 Pilot Instalation
40 Core Accounting& Repoting Systemn
41 PayrollSystem I
42 PensionSyslem
43 Cash-FlowForecasting& FinancialAnalysis
44 PilotImplementtion
Conpleted(usingTAC ll HW)I
45 Hardware,Software,and Facilities I-j
1 AnnexB
ImplementationPlan
PAKISTAN Imnprovemenl
to Finandal Reporting and Auditing (PIFRA)Pr*oect
so Systems Rephcation
I1 CoreAccounting& Report Sysen'
22 Payrd Sytr
Is Phase I Systms Repicain o
6P.nio System
3 Cash-Fl Foreasing & Fnial Analysm
* ComlSeteSystemsReplaion
87 Cosuiancy: Imoptmmdlon Asabtan
U Local consulants - swurvor i _
113 SAIAttachrnenis
119 Privatesectorcooperation -
2 Annex 6
Inipleenlntion Plan
PAKISTAN:Improvementto FinancialReportingand Auditing (PIFRA)Ptf*
145 Physicalfacilities =
146 Implefmentation
147 Reviewand evaluation _ :
143 Humnan
ResourceManagement
149 OrganizationalDevelopment
150 Procurernentof Consultants
151 Finalizespedfications/TOR
162 Bidding I
174 DepanrtentalCadre
175 Eliminateunqualifedpromotion for new entrants
176 ReviveDired entry at B-16
177 SubstUuteSAS by AAT exam
173 Cadre
Inter Deparnmental
179 StartCPE program
180 Star 2 year probationerstraining
181 Exploreprofessionalcompetencescheme
182 CareerDevelopment -
3 Annex6
Implenentation Plan
PAKISTAN:tmprovenent to FinancialRepottingand Auditing(PIFRA) Project
4 Amu 6
ImplementationPlan
PAKISTAN:Improvementto FinancialReportingand Auditing (PIFRA) Project
255 Trainingmaterialdevelopment
256 Introducetrainingcourse
257 Trainingevaluationand correctiveactions |.
258 Sub-professional
Training
259 AccountingTechnicians
260 TNAhr revisedstandards
261 Coursedesign
262 Trainingmaterial development
263 Introducetrainingcourse
264 Trainingevaluationand correctiveactions
265 FOTCTrainingin RevisedProcedures
266 TNA for revisedstandards
267 Coursedesign
268 Trainingmalerial development
269 liitioxuce trainingcourse i. . o
292 AATI
293 Set-up/renovation of AATI Lahore
294 HW/SWfor library
295 lvW/SWfor MTI
5 Annex 6
Implementation
Plan
PAKISTAN:Improvementto FinancialReportingandAuditing(PIFRA)Project
309 Administration
310 MIS - SoftwareDevelopmentCenter
311 Civil Works r .-
312 Finalizedesign& specification
313 Bidding
321 Evaluation& Award
328 Construction/Delivery
329 Contractposts andstaffing(MIS)
330 ComputerHW/SW
331 Finalizedesign & specification
332 Bidding .
340 Evaluation& AwardX
348 Delivery. ,
349 Facilitiesand Sitel
350 SitepreparationsI
351 Physicalfacilities
352 HW/SWfor SystemsDevelopmentInstalled
353 ProjectManagement
354 Contractpostsand staffing(PMU)
355 Officefurniture& equipment
356 IlHardware/software i
358 Consultancy:Futureprojectpreparation
359 Advisorypanelof experts a a a a
6 Annex 6
ImplementationPlan
PAKISTAN:Improvementto FinancialReportingand Auditing(PIFRA)Project
_ T: 1997
~~~~~~~~~~~~~ 1 ~~1996
1998 1999 2000 1 2001 l
ID Task Name 02 03 04 | Q1 I Q2 I Q3 I Q4 | 1 02 | 1 Q4 I Q1 I Q2 I Q3 I Q4 | 1 02 03 04 | Ql I Q2 03 | Q4
367 PC - Establishmentof Nucleiand trainingof staff
368 PC - Construction of Models & Simulation and poverty analysis/monitor
369 PC - Strengtheningof PPMI
370 Separationof AuditingandAccountingFunctions
371 Bifurcation
372 Placementof HQofficers
381 ProvideSeparateOrganizationsOrder
382 Formalizedivisionof assetsbetweenAudit and AccountsOffices .
386 Reviewqualityassurancearrangements
387 Completebifurcation& separate1996/97budget |
388 Preparefor Separation !
389 Drafttermsof reference(TOR)for SeparationTask Force(TF)
390 Reviewand agreeTORfor TF
391 Set upTF i*:
392 PrepareSeparationStrategy
393 Amendregulations,setup new structure,transferstaff etc.
394 Arrangementsfor Separationof Audit andAccountsComplete
395 ProjectFinish
7 Annex6
ANNEX 7
Page 1 of 1
PAKISTAN
IMPROVEMENT TO FINANCIAL REPORTING AND AUDITING PROJECT
STAFF APPRAISAL REPORT
IDA Cumulative
Fiscal Year Semester Disbursement Disbursement Percent
Ending (US $ million) (US $ million) %
PAK ISTAN
ioeCIInIIentI i c\ Io - January
S.tting UI)6overnineil studyteamIIIs 1997 Repoltsonlreviewsol'i nanncial - Availability ol improvedlinancialreports
rules andregulationls
tinl.1.iiialIkLi 1lit
u ongoing alt pilot stageand
mieasuredby deinostrAItilliOll
regulationsand tlheimip)act iipleinenialion at completionol replication-
ol departilicnlli/alioll. Appointconsultants -
to reviewdcpartmentalizationl Reportonthe reviewof ilic impactof provinceandfor x% of
for the selected
January 1997 -January1998
departmentalization federaltransactions
I A providedtom of Accountinig
Appointimient andSystems
Standards Improvedaccountingstandards
andreporting Implementationiof systemsmeasured by;
mlevclopmentand September
Consultants- 1996 fraineworkcompletedandadopted- May 1997 Numbcr of districtssystemsautomated and
implementation of % of automated by valueshown
transactions
accounting siandanrd, f)cvelopment, andadoptionof improved
agreement Revisedbudgetstructureandchartof accounts in a schedulestaningfrom zeroandshowing
financial reporting andreportingframework- April
standards
accouinting conformingwith GFSclassificationmethodology a target% by year
frameworkanidinforiiiation 1997 adoptedandbudgetfor FY 1999prepared according
systems. to revisedstructure- July 1998 Cashflow forecasting andefficiencyof
of revisedchartof
D)evelopmentandimplementation borrowingmcasured of
by thcinitroduictioni
- July 1998
accounts cashilow forecasts,theiraccuracyandthe
extentto whicha rationalizedborrowing
Ilardware,systems D)evelopmentof functionaldesignof systems, Full functionaldesignof systems,
processesand strategyis adoptedb) Governrent
softwarcandapplication processesandproceduresandapplicationsoftwarc procedures for CoreAccounting,Payroll,Pensions
softwarerequiredfor tilC - November1997
specifications andCashForecasting completed- September 1997
implementation of core
Annex 8
Page 2 of 7
Objectives Develop and introduce improved auditing standardsand techniqtues,automatedtools for auditing, improved auditing capacity and increaseduseof privale sector
lirms
Input Indicators ProcessIndicators Outputl/mpact Indicators Performance Indicators
Output
IA ftianicedb) the project Appointment of Auditing Consultants- April 1997 Report on review of auditilng procedures Proportion of PAD's audits using amended
liurreview ol 'PA) audit, proccdures.
xworkload, Review of auditing systems,proce(lures- to bc Improved auditing guidelines, policies, procedurcs
communicationswithl completedby March 1998 and standardscompleted and adopted- August 1997 I'roportion of PAD's audits using improved
stakeholders;preparation onwards reporting formats
of guidelines, policies, and Developmentand agreementon revised guidelines,
processfor the introductioni policies, proceduresand standardsand preparation of Operating manualspreparedand completed - Proportion of PAD's audits subject to quality
of intemational auditing related operating manuals- to be completedby December 1997 to December 1998 assuranceprocedures.
standards; efficiency December1998
itproveteints. qualit lRevisedproceduresimpleiimieited- Scptember 1998 Improved timeliness of auditing rcports; ON
Issuratcc assi.tantccin ihc Itplemenitiiation of rcvised proccdilrcs and tlic onwards timittg of'Auditor Gcneral's suhittission ol'
useof autonmated tools aid evaliuiationi
- to comtinerceby October 1998 rcports to lPresidentand PAC; improvements
stl;dard audit progranis: Evaltiation completedof new systetnsand procedures to be assessedfrom current baseperiod of 9
developmentof revised - July 2000 inonths
I IRM proceduresand
training programsand lo Internal audit of systemsunder development Internal audit of systemsunder development Numbers of staff trained and in place
explore avenuesfor priva:e lo commence- May 1997 completed- December2000 measuredaccording to target schedule.
sectorcooperation
Developmentof training programsand Training programs implementedand completed;
implementation:a) MBA program for a) MBA program for auditors/accountantsand MIS
auditors/accountantsand MIS professionals- Start professionals- completed July 2000; b) Attachments
October 1996; b) attachmentswith other SAis - start with other SAls- completedJuly 2000
October 1996
'Trialpartnerships
extended
andprogramexpanded-
December 2000;
Annex 8
Page 4 of 7
I lards%are,
systemi Developmentof functional design of automated Functional design of automatedauditing systems. Implementation of audit systemsmeasuredby:
softlxare and applicatioui auditing systems,processesand proceduresand processesand proceduresand software specifications, number ol audit o'fices automaltedaccording
software for audit software specifications- July 1998 completed - July 1998 to target schedule
planning, sampling and
documentationand tor Acquisition and Installation of Hardware and Hardware and Software installed - Sept. 1999
audit of automatcd Software by September1999 Auditing Systems implemented- April 2000
systems.
Completion of Systemsimplementation - April 2000 Review of auditing systemscompleted- December
2000
Review and evaluation of new systems- December
2000 Impact
Comiponent Separation
of the Audit and Accounts Functions
Objectives Achieving better independenecof the auditing function by initiating a gradual transferof responsibility for accounting to the executive arm of Government.
Input Indicators ProcessIndicators Output/impact Indicators PerformanceIndicators
Output
Objectives Developing PAD's institutional capacity to sustain improvementsto financial managementsystemsby introduction of revised lIRM policies and the
strengtheningof financial managementtraining.
Input Indicators ProcessIndicators Output/lmpact Indicators PerformanceIndicators
Output
I'A tor managingprocess Appointment of Jobanalysis and change managemcint a) DepartmcntalCadre- less promotioniofunqualificdstafif: Itertoriinaoece
meastiied by progresson
of change,preparationof consultants- July 1997 direct entry at B316;and improved understandingofithe key milestones in the developmelit
Job descriptionsanid principles of accounting and(I auditing. amidimplemilentationof revised
performancestandardsand Implementation of HRM policy changesas follows: policies as shown in ilte
designing and installing a b) Inter- DepartmentalCadre-CPEprogram; 2 year implementation plan
MIS for llRM planning a) DepartmentalCadre- eliminate unqualified probationerstraining; professional certification schemiie
and monitoring proportion quota- December1996;revive direct entry Percentageof stalTrotated within 3
at llt6 grade- Decemiiber1997;substitute SAS by c) IIRM policies for: staff assignmentfor 3 years;careerpath years
AA'I' examination - September1996 for specialiststaff; stall' rotation policies liniked to career
dlvclopmnit: iicenfivesb)r prollssiomnail qodihications: sal;iry Numberol' stalli nicilde in rcvis.cd
C'adre- Start CI' plogilail -
l) Intcl-I)epaltilicnital sutpplenmenitslor specialists IIKl sysictm
July 1997; start 2 year probationerstraining -
Deceimiber1998;explore proflcssionalceritiication d) Employee Accountability- Job dcscriplions; lIercentageof staff covered by new
scheme- December 1998 performancestandards;manpower plan; trained IIRM job descriptions
specialists
c) Careerpolicies- assignstaff for 3 years - July 1996;
develop careerpath for spccialist staff- Dec. 1997; e) IIRM MIS Installed
rotate staff on structured path-Nov. 1998; rationalize
incentives for professionalqualifications - Dec. 1998; Impact
salary supplementsfor specialists- July 1999 Staff training more in line with requirementsof modern
financial proceduresand a systemof continuous professional
d) Employee Accountability- Define Job descriptions educationto keep staff skills up to date,leading to enhanced
- Dec. 1997;develop performancestandards-July staff competence.
1998;develop manpowerplan - December1997;
evaluatestaff according to standards- December Promotion and rewards policy basedon openand quantified
2000; train fIRM specialists- December1997 perfoniance standardsand a recognizedmerit system
Objectives Developing PAD's Institutional Capacity to sustain improvementsto financial managementsystemsby strengtheningof financial manaigementtraining.
Input Indicators ProcessIndicators Output/impact Indicators PerformanceIndicators
Output
iulids lor reluibhislijuicit Appointmenitof'l'raining consultants - December Trainiing needsanalysis completed
andcxteision ol existing 1996
training iacilitics; Training materials developcd Peiformancemiaesuredb)yipimemcienationi of
equipment; computer I l/W Completion of'l'raining needs analysis- February changes according to impleiiientation schedule
and S/W; 1997 2 years probationers program implemented
Number of trainee hours for PAD and
I'A to assist in training Development of training materials- April 1997 B 18-19 training program implemented provincial staff
needs assessment, course
design; materials D)esign and implementation of 2 years probationers Accounting ''echnicians training program Number trainec hours lor AAT Probationers
developmenit and(training program - May 1999 implemented and U 18 staff
ol trainers
IDcsigiland impleitentatio ol' BIIS 18-19 training - 1F01( training Prograin Implemented
Inlernationa:l scholarshipisp commencing ()cloher 1997 o
lor lacult) tiainicis and Foreign training and MBIA priograms iinplcmnented
lunds for semiinars Design and implementation of Accounting
T'echnicians [raining - June 1998 Links with other institutions and SAls established
Design and Implementation of FOTC training - July National and International seminars and conferences
1998 held
Implementation of MBA foreign training program for Training facilities renovated- SAS hostel, AATIs and
faculty - Commencing October 1996 FOTCs
National and International scminars and conferences - A system of continuiouis professional education
Commence - February 1997
Improved professional competence of staff
Renovation of training facilities SAS hostel, AATIs Department wide
and FOTCs - Compleled - July 1998
71
ANNEX9
Page 1 of 2
PAKISTAN
SUPERVISION PLAN
7 Assislallceto Plaonning EIconomicPolicy Analysis Dizaginostic 13 44 Stidies and action plans to inipiove managementof federal
Co'mimmiissioni Study. Specializedon-the -job training and provincial developmenitexpendiftirc; diagniosticstudy
Classifhication:
I olicy for
and action plan to streamlinieinstitutionialairanigemiients
Support macroeconomicpolicy making; increasedcapacity for
poverty analysisand monitoring
8. FutureProject Preparationof Future Project 10 30 Project feasibility report and detailed documents
Preparation
Classification:
Implementation
Assistance
76
ANNEX I I
Page 1 of I
PAK1ITAN
IMPROVEMENT
TO FINANCIALREPORTINGANDAUDITINGPROJECT
STAFFAPPRAISALREPORT
DOCUMENTSIN PROJECTFILE
1. Report on the effectiveness of the Pakistan Audit Department's component of the Third
Technical Assistance Project (Cr. 1755 - Pak). Pakistan Audit Department, December, 1994.
2. Pakistan: Improving the Fiscal Reporting System, William Allan and Michael Woolley,
Fiscal Affairs Department, IMF, August 27. 1990.
6. Terms of reference for consultancy services for the development of accounting principles and
standards, and the development and implementation of core financial systems for the
Government of Pakistan.
IBRD27293
60 65 70 /TAJIKISTAN75; /
J ' :t'CCHINA
PAKISTAN ov
IMPROVEMENTTO FINANCIALREPORTING
AND AUDITINGPROJECT _/
* AGPROFFICE v
3 AG OFFICES I ,....
19 PROVINCECAPITALS j
PROVINCEBOUNDARIES ! r
¶ _ . _ INTERNATIONAL
BOUNDARIES S ) A #
RIVERS Lahore® \
30 .1 A Quetta
Q 300
%_ INDIA
ISLAMIC \
REPUBLICOF I -
IRAN ' 0 100 200 300 Kilometers
Karachi .
JULY1996