loan/grant administration
DESCRIPTION
Loan/Grant Administration. Types of Financing. Highly concessional Hardened terms Intermediate terms Ordinary terms. Description of lending terms. Highly concessional – no interest, service charge of 0.75%, repayment in 40 years including 10 years grace period - PowerPoint PPT PresentationTRANSCRIPT
Loan/Grant Administration
Types of Financing
• Highly concessional• Hardened terms• Intermediate terms• Ordinary terms
Description of lending terms
• Highly concessional – no interest, service charge of 0.75%, repayment in 40 years including 10 years grace period
• Hardened terms – no interest, service charge 0.75%, repayment in 20 years including 10 years grace period
• Intermediate terms – interest @ 0.5% of IFAD Reference rate, maturity period 20 years including 5 years grace period
• Ordinary terms – interest on par with IFAD Reference rate, maturity period 15-18 years including 3 years grace period
Basic documents
• Financing Agreement• Letter to the Borrower• Loan Disbursement Handbook• AWPB• Procurement Plan
Standard Procedures
• Replenishment to Special Account/Designated Account
• Reimbursement• Direct Payment• Special Commitment
Special Account/Designated Account• Provides a mechanism, somewhat
like an imprest account• Borrower should have sufficient
control and financial systems• Should be in a currency and bank
acceptable to IFAD
Special Account/Designated Account
• Initial deposit will be determined by the Borrower
• Administered by CAA&A• Audit of Special Account done by
the office of C&AG• Ceiling of Authorised Allocation
Replenishment
• Should be in USD• Atleast or equal to 20% of the
advance
Reimbursement
• Outside Designated Account• For Government pre-financed
expenditure• Could be in any currency
requested by the borrower• Will not flow to Designated
Account• Should not be later than 3 months
Direct Payment
• IFAD directly pays third party• Project instructs IFAD to pay directly• In-country banking regulations are
stringent• For above USD 20,000• Documentation should show evidence of
amount due
Direct Payment
• For above USD 20,000• Documentation should show
evidence of amount due• Progress or due payments• Only to party in the contract• Payment instructions should be
clear
Recovery of Initial Deposit
• Balance in the Loan Account minus committed expenditures equals to twice the authorised allocation
• 6 months before Project Completion
• Balance in SA/DA to be refunded
Basic formats for Withdrawal Applications
• Form 100 – to be filled by CAA&A• Application Summary Sheet
(supported by documentation)• Statement of Expenditure• Special Account Reconciliation
Statement
Statement of Expenditure (SoE)
• Normally used where it is impractical or unduly burdensome to provide documentation
• No documentation required• Threshold in the LTB• Separate forms for each category• Breakdown of expenditure
Statement of Expenditure (SoE)
• IFAD to be satisfied about the Borrower’s/LPA’s accounting standards, internal control, auditing capabilities are sound and adequate
• SoE method could be for threshold value of expenditure or for a particular category
• Threshold could be revised either way, if situation warrants.
What a SoE should contain?
• Form 100• Special Account statement• Abstract of summary sheets• SoE – signed by PD and Borrower
– for each category• Breakdown of expenditure
Breakup of Expenditure
• Reasonable disclosure of expenditure within the category
• PMU/District units-wise• Activities• Why the breakup is required?
Documentation required - Overall
• The signed contract or confirmed purchase order– showing the specified amount that is due to be paid;
• The bank guarantee for advance payment, as specified in the contract documents;
• The bank guarantee for performance, as specified in the contract documents;
• Copies of communications sent by the IFAD country programme manager to the lead project agency providing the ‘no objection’ (whether post or prior) to the contract award; and
• Evidence of payment.
Documentation required (contd)
In additional to overall requirements, for goods:
• Supplier’s invoice, duly certified for payment specifying the goods, their quantities, and prices;
• Bills of lading or similar documents; and• As appropriate, the certificate of
delivery (to include condition of goods on delivery).
Documentation required
In addition to overall requirements, for Consultancy payments:
• The supplier’s or consultant’s claim, duly certified for payment and showing sufficient detail; and
• As appropriate, a certificate of delivery of satisfactory services.
Documentation required
For progress and retention payment of civil works:• The claim of the contractor, including a
financial progress report, stating the work performed and the amount due;
• A certificate – signed by the project consultants or owner’s representative, if any, or by
• the borrower’s chief engineering officer to the effect that the work performed is satisfactory and the payment claimed is due in accordance with the terms of the contract; and
• A copy of the contract payment monitoring form signed in original by the certifying officer.
Wtihdrawal of Loan resources
• Expenditure to cover reasonable cost of goods and services required for the project
• Establishing the trail of the expenditure to the AWPB
• Within the programme implementation period• Category ceilings are not exceeded• Establish the recommendations of the JRM
are complied with• Status of audit reports• Compliance of reporting
Rejection of WAs
• IFAD may reject the WA either fully or partially
• Requested information is not provided within the timeline (7 days)
• Project to resubmit the WA in full or part
Why IFAD rejects the WA
• No trail available to AWPB• Procurement not as per the
approved Procurement Plan• Wrong Categories• Incorrect eligible percentages• No breakup available for review
Measures that could be adopted
• Refer the Cost Tables or Costab files for correct category
• Financing Agreement provisions• Expenditure as per the AWPB• Respond within the timeline• Use checklist
Adobe Acrobat Document
Reconciliation of Disbursement
• IFAD sends copy of Disbursement Advice
• Historic transaction• Status of Funds by Category• PMU to reconcile
Adobe Acrobat Document
Register of Contracts
• List all contracts with relevant details
• Form C10 from LDH• Contract Monitoring Form C11
from LDH • Certified copies of contracts (prior
review procurement and above SoE threshold) to be sent to IFAD