First Revision (November2014) GOVERNMENT OF KARNATAKA … · 2019. 12. 13. · technical feasibility and its administrative capability. ... This is the first revision of the manual

SUJALA III FINANCIAL MANAGEMENT MANUAL

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First Revision (November2014)

GOVERNMENT OF KARNATAKA WATERSHED DEVELOPMENT DEPARTMENT

FINANCIAL MANAGEMENT MANUAL

KARNATAKA WATERSHED DEVELOPMENT PROJECT-II (SUJALA-III)

(IDA Credit No.5087-IN)

November 2014


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Title

This document is the “Financial Management Manual” for the KWDD II Sujala-III, a separate manual exists for Procurement procedure and hence the same is not reproduced in this manual.

Objective

The success of the project to a great extent depends on the Financial Discipline apart from technical feasibility and its administrative capability. The responsibility of the Project is to ensure “effective utilization of available funds for the intended purpose and reporting of the same to the institutions and the stakeholders”.

The purpose of the manual is to provide assistance and guidance to the users and stake holders on the relevant accounting policies, budgeting financial management, accounting and reporting requirements.

Version

This is the first revision of the manual which was prepared by GOK and approved by the World Bank prior to Negotiations for the Project in 2012. This Manual would apply to both Watershed and Horticulture Departments.

Accounting Software The project would maintain accounts using appropriate accounting software if required with customized version & the operating guidelines will be given separately by the software agency to be shortlisted on modification of Software as per the requirement of the project.


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Contents

ACRONYMS v

1. Project Description 1

1.1 Project Back Ground 1 1.2 Project Development Objective (PDO) 1 1.4 Project Components 1

2. Project Stakeholders/Project Partners 2

3. Project Institutional and Implementation Arrangements 2

4. Project Cost 3 4.1 Project Financing 3

4.2 Project Cost by Financiers 3 5. Project Implementation Arrangement - KWDP II 5 6. Overall Project Financial Management & Implementation

Arrangements 6

7. Budgeting and Fund Flow 8

7.1 Budgeting 8 7.2 Fund Flow 8

8. Accounting System 10

8.1 Accounting functions 10 8.2 Accounting Centers 10 8.3 Reimbursement claims 11 8.4 Report based disbursement 11 8.5 Accounting Policies 11 8.6 Computerized Accounting System 12 8.7 Voucher Flow system 12 8.8 Other Accounting Procedure 13 8.9 Accounting Entries and Books to be maintained 13 8.10 Books of Accounts To be Maintained 14 8.11 List of Books and Records maintained 14 8.12 Chart of Accounts 14 8.13 Closing of Books of Accounts 15 8.14 Financial Discipline 15 8.15 Internal Control System 15

8.16 Settlement of Bills and Payments 16 9. Audit 16

9.1 External Audit 16 9.2 Internal Audit 17 9.3 Audit Review Committee 17

10. Finance Management Support and Staffing 17

11. Disbursement Arrangements 19

11.1 Disbursement processing procedure 19 11.2 Disbursement Category 19 11.3 Claim statements and IUFRs 20

Annexures Annexure -1 Fund flow and reimbursement system 21 Annexure - 2 (a) IUFR - 1 Details of Eligible expenditure, Reimbursement,

Balance to be reimbursable etc.

22

Annexure - 2 (b) IUFR - 1 A Details of Eligible expenditure, Reimbursement,

Balance to be reimbursable etc.

23

Annexure - 2 (c) IUFR - 2 Details of Total Source of fund & component wise

expenditure & next 6 months forecast details

24

Annexure - 2(d) IUFR - 3 Details of Component & sub- component wise 25


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expenditure details with cumulative expenditure

figures.

Annexure - 2(e) IUFR - 4 Details of District wise component wise expenditure

details with cumulative figures.

26

Annexure - 2(f) IUFR - 5 Details of District wise source of funds & component

wise expenditure details.

28

Annexure - 2(g) IUFR - 6 Details of Component wise expenditure for the year

& for the project period.

30

Annexure -2(h) IUFR - 7 SL.No. wise preferred & reimbursement received &

Balance receivable details.

31

Annexure - 2(i) IUFR - 8 Details of Payments made during Reporting Period

Against Contracts other than prior review

32

Annexure – 3 (a) Accounting entries at Head office (WDD) 34 Annexure – 3 (a) Accounting Entries at Head Office (DOH) 35 Annexure - 3 (a) Accounting entries at district level of both WDD and DOH 36 Annexure - 4 Chart of Accounts 37 Annexure – 5 TOR for Audit of Project statements by C & AG 42 Annexure – 6 Roles & responsibilities of Project Finance officer (CAO) 51

Annexure – 7 Roles and Responsibilities Finance Manager / Specialist

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Annexure – 8 Roles and Responsibilities of Account Assistants

53

Annexure – 9 TOR for Financial Management Technical Support (Accounting)

Consultants (FMTSC)

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Annexure – 10 TOR for the Financial Review (Internal Audit ) Consultant (FRC) 61 Annexure-11 Government of Karnataka Government Order No. AGD/164/AMI/2011

dated 21-8-2013. Giving the composition, functions, powers and responsibilities of PEC,

PPMU, PTC, REC.FMPC

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ACRONYMS

AAAP : Approved Annual Action Plan

A/S : Account Superintendent

AWP : Annual Work Plan

ACA : Additional Central Assistance

C & A G : Controller and Audit General

CAO : Chief Accounts Officer

CAAA : Controller Audit and Accounts

CBOs : Community Based Organization

DPR : Department of Panchayat Raj

DOC : Documents of Claims

DDO : Drawing and Disbursing Officer

DH : Directorate of Horticulture

DDH : Deputy Director of Horticulture

DWAP : District Wise Action Plan

DWDTs : District Water Development Teams

DWDO : District Watershed Development Officer

EAP : External Aided Project

ED : Executive Director

EMD : Earnest Money Deposit

F & A : Finance & Accounts

FMTSC : Financial Management and Technical Support Consultant

FMPC : Financial Management and Procurement Cell

GoI : Government of India

HO : Head Office

HD : Horiticulture Department

ICRISAT

IUFR

: International Crops Research Institute for the Semi –Arid-Tropics

nterim Un-Audited Financial Reports

IGA : Income Generating Activities

KFC : Karnataka Finance Code

KWDD : Karnataka Watershed Development Department

KWDP : Karnataka Watershed Development Project

KGS : Karnataka Government Secretariat

KSNDMC : Karnataka State Natural Disaster Monitoring Cell

KVK : Krishi Vignana Kendra


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MoAgr : Ministry of Agriculture

MoEA : Ministry of Economic Affair

MOU : Memorandum of Understanding

MOF : Ministry of Finance

M & E : Monitoring and Evaluation

MCE : Manual of Contingent Expenditure

MPIC : Monthly Programme Implementation Calendar

NBSSLUPP : National Bureau of Social Survey and Land Use Planning

NGO : Non Governmental Organization

MNREGS : Mahathama Gandhi National Rural Employment Guarantee Scheme

PAP : Project Action Plan

PAD

PD

:

;

Project Appraisal Documents

Project Director

PEC : Project Empowered Committee

PIA : Project Implementing Agency

PIP : Project Implementation Plan

PTC

PFS

:

;

Project Technical Cell

Project Financial Statement

PPMU : Project Planning and Management Unit

PMC : Project Monitoring Cell

PMRG

RBI

:

‘

Project Monitoring and Review Committee

Reserve Bank of India

RDPR : Rural Development and Panchayat Raj

REC : Research and Extension Cell

RSK : Raitha Samparka Kendra

SUJALA : Sujala Watershed Project

SLNA : State Level Nodal Agency

SOE : Statement of Expenditure

SDR : Special Drawing Rights

SHG

TNMC

:

;

Self Help Group

Treasury Network Management Centre

TOR : Terms of Reference

TSR : Treasury Reconciliation Statement

USD : United States Dollar

UC : Utilization Certificate

WB : World Bank

WDD : Watershed Development Department


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1 Project Description

1.1 Project Back Ground:

Government of Karnataka implemented during August 2001 to March 2009, the World Bank

Assisted First Karnataka Watershed Development Project (also called SUJALA) spread over

Kolar, Tumkur, Chikkaballapur, Chitradurga, Haveri and Dharwad districts. The Sujala project

was the recipient of five prestigious national awards and two major international awards. It

generated substantial positive lessons and best practices around integrated watershed

management, agricultural intensification, rural livelihoods, monitoring and evaluation, and

building resilience to climate change. These lessons have influenced other watershed

programs in Karnataka, as well as programs at the national level (particularly IWMP) and in

other global regions. Based on the encouraging results of the First Project, the State

Government proposed Second Karnataka Watershed Development Project for World Bank

Assistance. After discussions and negotiations Agreements have been concluded on

February 11, 2013 between Government of India/Karnataka and World Bank. The estimated

cost of the Project is Rs.4713 million, of which the Bank financing would be 39.6 million SDR

1..2 Project Development Objective (PDO):

The proposed Project Development Objective (PDO) is to demonstrate more effective

watershed management through greater integration of programs related to rainfed

agriculture, innovative and science based approaches, and strengthened institutions and

capacities.

1.3 Project Components: The project will be implemented through five components.

Component 1: Support for Improved Program Integration in Rain fed Areas (USD 22.1

million), would demonstrate the successful integration of programs in watershed

development, using a science –based approach in project areas;

Component 2: Research, Development and Innovation (USD 19.6 million), would establish a

coordinated research approach to provide practical knowledge and tools to support

integrated watershed management;

Component 3: Institutional Strengthening (USD 9.1 million), would strengthen the

institutions and human resources of key stake holders to improve effective delivery of

services for integrated watershed management;

Component 4: Strengthening Horticulture in Rain fed Areas (USD 27.6 million), would

strengthen the knowledge base regarding horticulture potential in rain fed areas, and

demonstrate and build the capacity of institutions and communities to improve production

and value addition of horticulture in project areas;

Component 5: Project Management and Coordination (USD 7.3 million), would ensure

effective and efficient management.

The Project is to be implemented over a period of six years (2012-13 to 2017-18) and will

close on December 31, 2018.


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2. Project Stakeholders/ Project Partners

• Watershed Development Department (WDD) under the Department of Agriculture. GOK • Directorate of Horticulture and its officers at the District Level;. • National Bureau of Soil Sciences and Land Use Planning (NBSS&LUP)and HHR; • University of Horticultural Sciences (UHS) in Bagalkot; • University of Agricultural Sciences (UAS) in Dharwad, Raichur and Bangalore; • Karnataka State Remote Sensing Applications Centre (KSRSAC), Bangalore • Karnataka State Natural Resource Disaster Monitoring Cell (KSNDMC), Bangalore • Bangalore University (BU); • Department of Mines and Geology GOK, Bangalore; • Indian Institute of Science,(IISC), Bangalore; • International Crops Research Institute for the Semi-Arid-Tropics (ICRISAT), Hyderabad • District and Taluk level Watershed Teams and Watershed Committees, and Community

Institutions such as, Farmer Groups Producers Groups,, HOPCOMS and Self-help Groups, FPO, FIG etc.

• Local Self Government Institutions like Gram Panchayaths and Zilla Panchayaths. • Raitha Samparka Kendra (RSKs) and Krishi Vignana Kendra (KVKs) NBSS&LUP, UHS, UASs, KSRSAC, KSDMA, BU, DOM&G are engaged with WDD through MOUs. IISC and ICRISAT are brought on board through contractual arrangement.

3. Project Institutional and Implementation Arrangements

3.1 The Watershed Development Department (WDD) and Directorate of Horticulture (DOH)

under the GoK would be the implementing agencies for the project and be responsible for

ensuring that the project development objectives are achieved The Commissioner - WDD in Bangalore will be the Project Director responsible for overall project implementation. For effective day-to-day coordination of project implementation, the Commissioner will be assisted by a full-time Executive Project Director. In the Directorate of Horticulture, The Joint Director of Horticulture in Bangalore will be the Project Co-ordinator responsible for implementation of Horticulture Component under the overall supervision of the Director of Horticulture. The PMC (Horticulture) will be assisted by Project Technical Committee(PTC)

Oversight would be provided by the Project Empowered Committee (PEC) at State Level

Committee under the Chairmanship of Additional Chief Secretary and Development Commissioner

to oversee the policy, planning and macro issues relating to the Project.

Project Management- Watershed and Horticulture Activities: A Project Planning and Management

Unit (PPMU) has been set up which shall take lead role in:

(i) Planning, implementation, quality control and audit;

(ii) Monitor Project performance in line with the project implementation schedule;

(iii) Responsible for inter institutional co-ordination; and


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(iv)) Technical support to the Project district, watershed and Horticulture institutions and

consortium partners.

The PPMU is headed by Principal Secretary to the Agriculture Department with

Commissioner of WDD being the Member Secretary who is assisted by a fulltime Executive

Director assigned from the WDD, supported by (i) a Project Technical Cell (PTC) (ii) a

Research and Extension Cell (REC) and (iii) a Financial Management and Procurement Cell

(FMPC). It has representatives from Horticulture Department. The PMC (Hort) is closely

associated with REC for research aspects of Horticulture Component.

The composition, functions, powers and responsibilities of PEC, PPMU, PTC, REC, have been

issued Government of Karnataka vide Government Order No. AGD/164/AMI/2011 dated 21-

8-2013. (copy given in the Annexure) and The Commissioner Watershed Development

Department in Bangalore would be the Project Director responsible for overall project

implementation, who will be assisted by the Executive Project Director, designated by WDD.

The “State Level Nodal Agency (SLNA) which is already in place at the apex level to guide,

monitor and supervise the implementation of ongoing IWMP will also guide and monitor

this project.

3.2 The Horticulture component would be coordinated and monitored by a dedicated Project

Monitoring Cell (PMC) at the Directorate of Horticulture in Bangalore and project offices at

district levels to function as extended arm for implementation and monitoring of

component activities.

3.3 The District and Taluk levels the project would provide incremental support staff, training

and equipment to build capacity and strengthen the arrangements already in place, mainly

the existing DWDTs and Taluk level Watershed Development Teams (WDT) and agriculture

extension units, especially farmer contact centres (also known as RSKs) so that the local

units can access and use a greater range of information products, decision tools and

manage field demonstrations..


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4. Project Cost

4.1 Project Financing

Total Estimated cost of the project is at Rs 471.30 Crores (85.69 US$ Millions). The details of component wise outlays are as under:

4.2 Project Cost by Financiers

Project Components

(INR Crore) (US$ Million) % of

project

Cost GoI Bank Total GoI Bank Total

A. Improved Program Integration in Rain-fed Areas 36.5 85.1 121.6 6.6 15.5 22.1 25.8

B. Research, Development and Innovation 32.4 75.4 107.8 5.9 13.74 19.6 22.9

C. Institutional Strengthening 15.0 35.1 50.1 2.7 6.4 9.1 10.6

D. Horticulture 45.5 106.2 151.7 8.3 19.3 27.6 32.2

E. Project Management and Coordination 12.0 28.1 40.1 2.2 5.1 7.3 8.5

Total Project Costs 141.4 329.9 471.3 25.7 60.0 85.7 100.0


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5. Project Implementation Arrangement – KWPP - II

WDD

FMPC

REC

PTC

PMSC

Component 2

Research,

Development

and

Innovation

Component 1

Improved

Programme

Integration in

Rain fed Areas

Component 3

Institutional

Strengthening

Component 4

Strengthening

Horticulture in

Rain fed Areas

Component 5

Project

Management

and

Coordination

IWMP and NREGS:

• DWDT: WDT / Local NGOs

• GPs, Watershed Committees

• User Groups

Local Extension Systems:

• Dist. Training Centers

• RSKs, KVKs & SHGs

• Farmer Facilitators and Farmer groups, Sanghas, Producer Company. SHGs, User Group

DH Hort.

PMC (HORTI) PPMU

PEC

Project Management at District Level


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6. Overall Project Financial Management and Implementation arrangements

6.1 The Finance Department GOK will provide budget grants to the Implementing Agencies (WDD and HD), under respective heads of accounts annually based on the approval of yearly annual Plans prepared by each of the Departments duly scrutinized and recommended by PPMU and approved by PEC. Both the Departments have a Chief Accounts Officers of the State Accounts Department. They will assist the Project Director WDD and DOH in all matters relating to Financial Management. With the assistance of Accounts staff, WDD proposes to recruit some additional staff to better organize financial management. 6.2 The Project Director WDD shall hire the services of Financial Management and Technical Support Consultant (FMTSC) (who will be common for both WDD and DOH ) to provide the necessary operational and technical support to the project financial staff to ensure that the project objectives are achieved. The terms of Reference would be got approved by the Bank. The Consultants will be responsible for working in close collaboration with the staff of the Project implementing offices and will be responsible to ensure that the overall operation of the project financial management system in the Head offices of WDD and DOH and district are satisfactory, including providing assistance for training of project staff, accounting, reporting and audit compliance.

6.3 At District and Taluk levels, the project would provide incremental Finance support staff and additionally also train to build capacity and strengthen the Finance management arrangements already in place, in the existing District Watershed Development Teams (DWDTs) and Taluk-level Watershed Development Teams (WDT) as well as District Horticulture offices.

6.4 A Chattered Accountancy (CA) Firm would be hired by WDD as a Financial Review Consultant (FRC) which will carry out the internal audit of both WDD and DOH and would cover review of aspects covering internal controls and contract management as per Terms of Reference approved by the Bank. The half yearly audit reports along with the compliance would be shared with the bank. Also the project would constitute an audit committee at the head office of WDD and DOH to review all the audit reports and follow up on the action taken. 6.5 Project Director WDD will periodically submit consolidated reimbursement claims (both of WDD and DOH) to the Bank and the eligible expenditure is reimbursed on Quarterly basis.


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6.6 Organogram - Overall Financial Management and Implementation

PIA - Commissioner & Project

Director (WDD) Sujala III

Executive Director PTC, FMPC &

REC

Finance Department (FD)

Horticulture

Directorate

DWDOs of 11

districts

PPMU

Project Watershed Areas

PMC

Horticulture

POs of 11

districts


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7 Budgeting & Fund Flow

7.1 Budgeting

On the basis of the approved PAD and Cost Tables, and keeping in view the program of implementation, the Budget estimates of the KWDP-II Sujala-III, (covering both WDD and DOH) will be prepared incorporating the action plan of 7 Project districts plus 4 CGIAR districts (total 11 districts) annually. The time schedule for preparation and submission of Budget estimates is given below. The annual Budget proposals reflect the Annual Action Plan. The Budget proposals will be submitted to the GoK with due approval of the PPMU. Before submitting Budget proposals to GoK the same will be placed before the PEC and deliberated.

Time schedule for preparation and submission of Budget estimates

The Finance Department GoK will allot the Budget Grants to WDD under Head of Account 2402-00-102-0-28 (139- Major Works) Sujala Watershed project III – EAP and to DOH under Head of Account 2401-00-8002-80 .The Budget grants are allotted by end of March of the previous financial year. The Financial year begins from 01st April ending 31st March. The Finance department publishes the Budget Book (Detailed Estimates of Expenditure for the year 20--) indicating Head wise Budget allocation. Generally Volume VI of the Budget Book contains particulars regarding WDD and DOH

Programme Implementation Calendar (MPIC)

After the receipt of Budget allocation the WDD and DOH will prepare the Monthly Programme Implementation Calendar (MPIC) indicating activities proposed to be implemented month wise both Physical and financial targets. The MPIC will be prepared Project district wise and same are consolidated into State level MPIC. The MPIC becomes the basis for progress review and monitoring. MPIC will be placed before the PPMU for approval. In respect f Horticulture Department MPIC at DH is approved by the Director of Hortculture.

Annual Action plan

WDD will also prepare Annual Action and place before PPMU for approval during April every year. In respect of Horticulture, the Annual Action Plan is prepared by the PMC and the same will be approved by the Director of Horticulture.

Action Budget proposals to be submitted to

Time frame Time frame for revision if any

Submission of Budget estimates by DWDOs and Horticulture Officers - 7 Project districts plus 4 CGIAR districts

HO, WDD/HO DOH By 15th October By 10th November

Consolidation of Budget estimates at HO, WDD and HO of DOH

Govt. of Karnataka (Finance Dept./ Agriculture Dept/ Horticulture Dept.)

By 30th October By 15th December


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7.2 Fund flow

The Funds are operated through the Karnataka State Treasury. The Karnataka Treasury Department regulates the Funds flow though the centrally managed Treasury Network Management Centre (TNMC). According to the TNMC requirements both the Commissioner WDD and Director of Horticulture (DOH) and all the Seven Project districts plus four CGIAR district DWDOs and Pos(Hort) are assigned with unique DDO codes separately. The GoK will release the Budget Grants to WDD under the Head of Account 2402-00-102-0-28 Sujala Watershed project III - EAP through the TNMC to the unique DDO code held by the Commissioner. The Commissioner Watershed Development Department is authorized to operate the Funds at the State level. The Commissioner, WDD shall release the funds to the Project partners as per MOU executed with them. Similarly GoK will relese the budget Grants to DOH under the Head of Account 2401-00-800-2-80 Sujala III through the TNMC to the unique DDO code held by the Director of Horticulture. The Director of Horticulture is authorized to operate the Funds at the State level. The Director of Horticulture shall release the funds to the PMC at State level and Pos at the district level. The Commissioner Watershed Development Department and Director Horticulture Department will release the received Funds to the respective Project districts under the Head of Account 2402-00-102-0-28 Sujala Watershed project III – EAP and 2401-00-800-02-80. The Funds are released to the district treasuries through the TNMC using the unique DDO codes assigned to respective DWDOs/ POs of the project districts. The DWDOs and POs will operate these Funds through the respective district Treasuries. Both at HO WDD /DOH and districts exclusive Project Cash Book will be maintained by the FM Staff. The State Treasury at Bangalore will maintain details of Month wise expenditure incurred at the State level by the Commissioner and Director Horticulture who are the Project implementing agencies. Similarly the respective district Treasuries will maintain details of Month wise expenditure incurred at the district level by the DWDOs and POs The Treasury Department both at Bangalore and the respective districts will separately draw the particulars of Month wise expenditure incurred under the above Heads of Accounts in Karnataka Finance Code (KFC) format 62B and render the same to the Accountant General (AG) Karnataka. The 62B is also provided to the department for reconciliation of expenditure with departmental expenditure particulars as maintained in Cash Book. The Project shall submit reimbursement claims to the Bank on a quarterly basis within 45 days from the end of the quarter seeking reimbursement in the prescribed IUFR formats. Particulars of Fund Flow and reimbursement is shown in Annexure 1.


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Fund Flow Chart

8 Accounting System

8.1 Accounting system will be in accordance with Karnataka Finance Code 1958/ MCE 1958 and treasury code.

The functions of accounting system are:

i. Provide for full accountability for project funds including funds provided in the project appraisal document.

ii. Result in adequate Financial Statement disclosures including a clear statement of the accounting policies adopted;

iii. Ensure fair presentation of project financial position & expenditure through project financial statements.

iv. Provide timely financial information to project management for effective decision making.

v. Be acceptable to the auditors. vi. Be amenable to preparation of IUFRS and other project related reports.

The project funds would be accounted for separately both at HO and districts. Separate cashbook and ledger accounts would be maintained for the IDA funds to record utilization of funds.. The details of the expenditure would be maintained by the HOs and the districts. All the accounting locations would be having separate cashbook to record the project expenditure. The accounting would be carried out using a common chart of accounts. The project accounts would initially start with maintaining a manual cashbook and the need for computerized accounting will be assessed at the end of six months. If necessitated, TALLY software for project accounting will be rolled out as a pilot in HOs and thereafter at other reporting/accounting centers at DWDOs and POs

Govt. of Karnataka, Finance Department

WDD/DOH KWDP II Sujala-III

Commissioner WDD / Director of Horticulture (PIAs)

2402-00-102-0-28 and 2401-00-800-2-80-Sujala Watershed project III - EAP

Commissioner WDD and Director of Horticulture (PIAs) will upload Funds through TNMC to the following Head

of account 2402-00-102-0-28 and 2401-00-800-2-80 Sujala Watershed project III – EAP to respective project

districts through unique DDO codes


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The State Treasury at Bangalore will maintain details of Month wise expenditure incurred at the State level by the Commissioner of WDD and Director of Horticulture the PIAs. Similarly the respective district Treasuries will maintain details of Month wise expenditure incurred at the district level by the DWDOs and the POs. The Treasury Department both at Bangalore and the respective districts will separately draw the particulars of Month wise expenditure incurred under the above Heads of Accounts in Karnataka Financial Code (K.F.C) format 62B and render the same to the Accountant General (AG) Karnataka. The 62B is also provided to the department for reconciliation of expenditure with departmental expenditure particulars as maintained in Cash Book.

8.2 Accounting Centers

Accounting Centers are the offices/locations where, the accounting of the transactions shall takes place. The accounting centers are responsible for accounting, preparation and compilation of accounts. The accounting centers under the project would maintain detailed accounting records on in-flow & out-flow of funds.

There would be thirteen accounting centers under the project- Two at HOs of WDD and DOH, 11 at Project Districts and ten Project partners

Accounting Centre Accounting Consolidation Reporting Report to Periodicity

HO, WDD and HO DOH

� � � WDD/HD Monthly

DWDOs and POs � � HO WDD and HO DOH

Monthly

Project Partners � � � HOWDD Quarterly

8.3 Reimbursement claims

All the expenditure incurred under the project components and sub components on the planning process support, R&D, Technology Transfer, Horticulture, Institutional Strengthening and Capacity Building, Project Management including the requisite Equipments, Goods, Services, Consultancies, Software and creation of assets in the project are eligible for reimbursement from WB.

The reimbursement claims shall be prepared and submitted in IUFRs formats 1 to 8. In

addition to this, the standard reports shall also be generated in the Accounting Systems. The IUFR Formats are given in Annexure-2. Only amounts that are actually expended are eligible for bank financing & accordingly the reimbursement claims shall be preferred through IUFRs which will be prepared on cash basis.

All the Accounting centres will generate Interim Unaudited Financial Reports (IUFRs) from the 2nd Quarter and submit to HO within a week. This will be facilitated with the appropriate accounting software.


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8.4 Report based disbursement

IUFR based disbursement would be followed for the project. IUFR in the agreed format would also be used for reporting and financial monitoring and shall be submitted to the Bank on a quarterly basis within 45 days from the end of the quarter. The IUFRs would disclose receipt and utilization of project funds (both Bank share and counterpart contribution). The IUFRs would be based on project accounts and would be reconciled with the project accounts prior to submission. In addition, the IUFRs would provide contract wise payments. In terms of disbursement, WDD and DOH would first spend from the budget and then claim reimbursement from the Bank. All expenditures reported in the IUFRs would be subject to annual project audit.

8.5 Accounting Policies

• KWDP II Sujala III will be a separate section both at the Head Offices of WDD and DOH and district level.

• The project fund follows on Cash basis accounting system. Expenditure is recognized only on actual expenditure incurred for the project.

• All the Accounting centers will maintain books of accounts like cash book, component wise ledger, general ledger, asset register and other relevant works ledger.

• The Project Accounts would initially start with maintaining manual cash book and implement Computerized Accounting Software if necessary.

• The Head office and Project districts will reconcile the Accounts on monthly basis with Treasury and AG Accounts.

• All the expenditure incurred under the project components and sub components on the planning process support, R&D, Technology Transfer, Horticulture, Institutional Strengthening and Capacity Building, Project Management including the requisite Equipments, Goods, Services, Consultancies, Software and creation of assets in the project are eligible for reimbursement from WB.

� All financial controls applicable to routine GOK expenditure would also apply to the expenditure under the project.

� All payments would be approved/ vetted in accordance with the schedule of financial powers.

� Any advances paid would be treated as advance and would be claimed from the Bank after the corresponding expenditure is completed.

� The details of work programmes taken up under the project shall be supported by costing details & it should be provided to the sanctioning authority before taking up the works/programmes.

� All the Accounting centers will generate Interim Unaudited Financial Reports (IUFRs) from the 2nd Quarter and submit to HO within a week. This will be facilitated with the appropriate accounting software.

� All assets created under the project would be charged off as expenditure & added for reimbursement claims as & when expenditure is incurred.


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8.6 Computerized Accounting System

Computerized accounting system shall be followed by the project to ensure speedy accounting using appropriate Accounting Software with suitable customization/modification to suit the project requirements. The requirement for such system would be assessed after the first six months of the project launch. Similarly Accounting Software may be used and PMC(DOH) for consolidation of expenditures of PMC and Pos.

8.7 Voucher flow system

The Vouchers of the 10 Project Partners shall be with the Project Partners only and only the IUFR statements will be furnished by them on a quarterly basis. to WDD HO.

8.8 Other Accounting Procedure

Verification of Assets: All fixed assets created/ procured are to be physically verified and tallied with asset register at least once a year with reference to MB Book /Asset register/ Stock register.

Annual Expenditure statements shall be finalized by May 30th of the following financial year and be submitted to C & AG. As a practice, of GOK accounting system expenditure statements and Treasury Reconciliation statement (TRS) shall be submitted to HO WDD.

WDD, DWDOs and District Project Officers (Hort) shall prepare contract monitoring statement and identify the committed value of contract for works, goods and equipments and services on a monthly basis. This will facilitate the project to prepare budget, better monitoring of progress of work/activities undertaken by NGOs/ Specialized institutions/ Consultants etc.

In addition to the above WDD and DOH shall maintain the following Control registers in appropriate accounting software.

Expenditure incurred at HO and eleven Project District Officers (DWDOs) and ten Project partners shall be consolidated at HO WDD; Expenditure incurred at HO and eleven POs shall be consolidated at HO of DOH and forwarded to WDD; WDD shall generate on monthly basis consolidated reports for both WDD and DOHs in IUFRs formats & forward he same to CAAA for reimbursement within due date;

WDD, Head office Expenditure incurred at HO through treasury, shall be accounted in appropriate Accounting Software at HO Sujala-III section & 11 DWDOs expenditure shall be consolidated.

11 District DWDOs and POs

Project expenditure incurred at DWDOs and DDHs shall be paid through treasury & it shall be accounted in appropriate Accounting Software at DWDOs and POs with a link to the Head Office WDD and DOH


14

a) Earnest Money Deposit Account (EMD): For every EMD collected, details such as amount

received, date of settlement/ repayment/ adjustment shall be maintained in a separate control register.

b) Bank Guarantee register: Bank Guarantee wise control register shall be maintained with

details such as covering date, Amount, Expiry date & date of renewal/surrender/encashment etc,.

c) Statutory deductions & its remittance Control/Accounts: The control accounts for each

statutory deduction such as Tax deducted at source, its remittance & adjustments shall be maintained on monthly basis.

d) All statutory payments shall be made within the due date to the authorities. (Like TDS,

Income Tax Royalty, Service Tax, VAT, P.T etc,).

8.9 Accounting Entries and Books to be maintained

The accounting entries are made in the Appropriate Accounting Software hence the software generated formats of reports shall be used as standard books and accounts.

The essential Accounting entry particulars both at Head Office and district level are given in Annexure – 3 a & 3 b

8.10 Books of Accounts to be maintained

Table gives a list of books to be maintained by the project.

Books of accounts and records Head Offices

and district

offices

Cash Book as per prescribed in KFC 1958. √

Treasury Expenditure in form 62B as prescribed in the KFC & MCE 1958. √

Ledger A/c for each component, Advance/and its settlements. General Accounting records as prescribed in the Accounting standards (in Appropriate Accounting Software.)

√

Mandatory to Maintain following records (as prescribed in the KFC 1958 & MCE 1958 at HO, and District)

a. Finance records as prescribed in KFC 1958 & MCE 1958 shall be maintained at the Departmental level (WDD and DOH).

� Cash book, Remittance register, Grant register, DC bill register, AC bill register, , Bank guarantee register, encashment register, TA bill register, Salary Acquaintance register, work register etc.

b. Day book, Cash book, Bank book, General ledger, shall be maintained in Appropriate Accounting Software.


15

8.11 List of Books & records to be maintained

Books of account and records Head Offices and district offices

Treasury Cheque issue Register √ General Ledger √ Advance Register √ Fixed Assets Register √ Salary (Payroll) Register √ Transfer Entry Register (Journal) √ Components and Sub-components Activity Ledger accounts

√

Bank Guarantee register √

Treasury reconciliation statements (at both Head office and District Project Offices)

√

Stock & Issues registry √

8.12 Chart of Accounts

The Detailed Chart of Accounts for Booking of expenditure, component & sub-component wise expenditure head of Accounts are given in Annexure - 4

The same shall be reviewed while modifying the appropriate Accounting Software & loading the chart of Accounts in to appropriate Accounting Software.

8.13 Closing of Books of Accounts

The WDD, DOH, DWDOs and POs which needs to be updated on day to day basis and it shall be closed on monthly basis.

• The Cash Book shall be maintained on calendar month. • The monthly cutoff date for closing the accounting entries shall be 5th day from the

following month after which entries of prior month shall not be allowed. • Year End Closing Entries: WDD, DWDOs, and DOH and POs shall consolidate and close

the accounting entries by 30th April following the finance year after which no entries shall be allowed.

8.14 Financial Discipline

A. Transparency

• Publicity and Communication through electronic and print media and also ICT tools.

• All financial transactions are clearly recorded with supporting details and subjected to audit & scrutiny.

• The details of the project cost, funds received, expenditure incurred, Balance of funds & the balance project cost reports shall be prepared on yearly basis and it will be displayed in the departmental Website.

• All transactions are to be documented carefully with proper supports providing evidence while using sound accounting principles.

• Local communities will be part of community M&E process.


16

B. Prudence • Financial prudence must be exercised with utmost care while execution of works to

protect Interests of community and public property. • No relatives or allies of officers/office bearers involved in project work should directly

or indirectly get undue benefit from financial transactions in the Project. C. Accountability

• State and District level project authorities, shall play vital role in the implementation of project, hence they have to exercise the delegated financial powers with utmost care.

• All vital financial transaction are required to be properly documented and reported to competent authority.

• Periodical Internal Audits would be conducted by the Internal Auditors. • Final certification of expenditure shall be done by C&AG. • Periodical third party monitoring & evaluation by the M&E agency of the project.

8.15 Internal Control System

All financial controls applicable to routine GOK expenditures would also apply to the expenditures under the project. All payments would be approved/ vetted in accordance with the schedule of powers in place for WDD and DOH. All project related receipts and payments/ withdrawals would be reconciled with periodic Treasury Statements.

8.16 Settlement of bills and payments

� All Bills shall be prepared as per the provisions of Karnataka Financial Code 1958 (KFC) & Manual of Contingent Expenditure 1958 (MCE) formats & it shall be presented to treasury for payments.

� Payments would be made based on the certificate attested by the competent authority to the effect of satisfactory delivery of services goods/ Completion of work as per plan, physical and financial progress.

� Cashier shall maintain counter foils of the Paying-in-Cash/Cheque, and Demand draft being deposited into the Treasury account.

� Treasury Receipt Voucher shall be prepared on a daily basis and entered in the Cash Book and Appropriate accounting software.

� WDD, DWDOs, DOH and District Project Officers (Hort) shall prepare reconciliation statements reference to Treasury statements on monthly basis & also review the returned/stale cheques/treasury token and take necessary action by consulting the concerned Head of the Department/CAO at HO.

� Cash Book shall be printed and bounded regularly. � WDD, DWDOs, DOH, POs as well as Project Partners should ensure that all cash,

cheque, demand drafts collected during the day are promptly deposited on the same day or the next day after recording the same in the cashbook and subsidiary books.

� Expenditure incurred is Subject to utilization certificate and Audit of Expenditure by C & AG.

� No payments exceeding Rs. 5,000 would be made in cash by the implementing agencies at both HOs , District Officers as well as Project Partners.

� The implementing Progress Reports of each quarter to be sent GOI / GOK / WB regularly with in the due date specified/as agreed in the loan agreement.


17

� The implementing agency has to ensure the loan assistance being released shall be gainfully utilized in furtherance of the approved work programme and as far as practical without any time overrun under the project/scheme.

� The proposed programmes under this project should not over-lap with any other Central/State scheme and there should not be any duplication of central/external assistance.

� After completion of project period the implementation/ maintenance of Assets shall be the responsibility of GOK, WDD, DWDOs, DOH and POs

9 Audit

9. 1 External Audit

The annual audit of the Project Financial Statements (PFS) would be carried out by state office of the Comptroller and Auditor General of India (CAG). The PFS in an agreed format would be subject to audit by the CAG under terms of reference already agreed between the Bank and CAG. All supporting records and documents under the project would be subject to this audit. The PFS would summarize all receipts and expenditures reported in the IUFRs. The annual audit report would consist of i) annual audited project financial statements ii) audit opinion and iii) management letter highlighting weaknesses, if any, and identifying areas for improvement. The annual project audit report and accounts would be submitted to the Bank by September 30 each year. Any difference between the expenditure reported in the IUFRs and those reported in the annual project audit reports would be analyzed and those expenditures which are confirmed by the Bank as being not eligible for funding would be adjusted in the subsequent disbursements.

Expenditures reported during the year have to be reconciled with the figures of project financial statements and withdrawal of claims and the same shall be certified by the C & AG.

The detailed terms of reference (TOR) for C & AG Audit is in Annexure - 5.

9.2 Internal Audit

Internal audit would be an integral part of the project design and would cover all activities under project to be carried out by WDD (including Project Partners) and HD. The internal audit would be carried out by a Chartered Accountancy (CA) firm. The Terms of Reference (ToR) for the internal audit would cover review of aspects covering internal controls and contract management. The auditors would be appointed based on selection criteria agreed with the Bank, which would be finalized by negotiations. The auditor would be appointed within twelve months from effectiveness. The half yearly audit reports along with the compliance would be shared with the Bank. Also the project would constitute an audit committee at the HO level which would review all the audit reports and follow up on the action taken.

WDD would appoint a CA firm by observing procurement procedure of the World Bank. The auditor would be selected from the panel of empanelled CAs firms with the C & AG. The internal audit the terms of reference is given in Annexure-6. The auditors would audit the entire project expenditure at Head office level (WDD, Project partners and DOH) and also at district level, and the test checks will be decided by the auditor based on risk assessment. The selection criteria for selection of internal auditor is given in Annexure 11 and 12.


18

9.3 Audit Review Committee

WDD would constitute an Audit Review Committee for reviewing the internal and external audit reports and initiating special audits where there are indicative problems of financial issues.

The members of Audit Review Committee are

1) Commissioner & Project Director 2) Executive Director ; 3) Joint Director (Project Coordinator) Sujala III, Directorate of Horticulture 4) Chief Accounts Officers of WDD and DOH

10. Finance Management Support & Staffing

10.1 The Project will have dedicated finance Staff both at Head office level and District level. At the State level Chief Accounts Officers of WDD and DOH will lead the Finance and Accounts wing of the Project. A dedicated Finance Manager / Specialist will be positioned at the State level in WDD on outsourced basis. At the district level DWDO and District Project Officers (Hort) would be the Project Finance Officers and would be assisted by finance officials in each of the 11 districts.

The Finance and Accounting responsibility particulars of the project Finance Officer (CAOs) is elaborated in Annexure – 7. Similarly the responsibilities particulars of Finance Manager / Specialist is given in Annexure – 8 and Accounts Assistants in Annexure- 9

Services of Financial Management Technical Support Consultants (FMTSC) will be contracted to support for Accounting, Training and Capacity building on financial management areas as and when required in consultation with the Bank. The TOR of FMTSC is given in Annexure – 10


19

10.2 Financial Management - Staffing pattern at Head Office and District

11 Disbursement Arrangements:

11.1 Disbursement processing procedure:

• A Designated Account (DA) would be maintained in the RBI for the project and would be operated in accordance with the Bank’s operational policies. There would be a one-time fixed advance of USD XX million , which would be maintained throughout the project life and adjusted towards the end of the project. The project would submit withdrawal applications supported by IUFRs to the Controller Aid, Accounts and Audit (CAA&A) in Department of Economic Affairs, Government of India for onward submission to Bank for replenishment of the DA or reimbursement. The Bank would replenish DA equivalent to the amount claimed on eligible expenditure by the project and as reported in the IUFRs.

• Disbursements would be made based on quarterly Interim IUFR1 submitted by the project. These IUFRs would reflect the actual expenditure for the project components. Any advances given by the project would be separately shown in the IUFRs.

• All expenditures reported in the IUFRs would be subject to confirmation/certification by the annual audit reports. Any difference between the expenditure reported in the IUFRs and those reported in the annual audit reports would be analyzed and those expenditures

1 To be submitted within 45 days from end of quarter.

POs of 11 Districts

2 Accounts staff from KSAD

& 1 Finance Manager / Specialist

Chief Accounts Officer (CAO) /

Project Accounts officer of WDD and DOH

Commissioner, Project Director,

Executive Director WDD

DWDOs of 11 districts

F

M

T

S

C

C

o

n

s

u

l

t

a

n

c

y


20

which are confirmed by the Bank as being not eligible for funding (refundable to IDA), would be adjusted in the subsequent disbursements.

• Any discrepancies between the expenditure reported in the annual IUFRs and those reported in the annual audit reports will be adjusted in subsequent disbursements.

• Retroactive financing: The project has executed certain contracts under retroactive financing. Following are the Bank rules for retroactive financing: o the activities financed are included in the project description; o the payments are for items procured in accordance with applicable Bank

procurement procedures; o such payments do not exceed 20 percent of the loan amount; and o Payments were made by the borrower not more than 12 months before the

expected date of Loan Agreement signing. o Date after which payments may be made is agreed at appraisal, confirmed during

negotiations, and recorded in the Loan Agreement.

The format of IUFRs is outlined in the Financial Management Manual Annexure-2.

11.2 Disbursement Category

The disbursement category are as follows

Disbursement Category Percentage of Disbursement Component

1

2

3

4

5

Component Wise List

Improved Programme Integration in Rain-fed Areas

Research, Development and Innovation

Institutional Strengthening

Horticulture

Project Management and Co-ordination

70 % World Bank Loan

&

30 % GOK Share of Grant

11.3 Claim Statements and Interim Un-audited Financial Reports (IUFRs)

The HO, KWDP II (SUJALA-III) shall compile and prepare the Claim statements for the on-going project.

The formats of the Claim Statement and the Expenditure format of IUFR are given in Annexure-2.

The following World Bank prescribed formats shall be used for withdrawals/ submission of Reimbursement Claims.

a) IUFR-1: This represents the eligible expenditure, reimbursement, Balance to be

reimbursable etc. b) IUFR-2: This represents total source of fund & component wise expenditure & next

6 month’s forecast details.

c) IUFR-3: This represents the component & sub-component wise expenditure details

with cumulative expenditure figures.


21

e) IUFR-4: This represents the district wise component wise expenditure details with cumulative figures.

f) IUFR-5: This represents the district wise source of funds & component wise expenditure details.

g) IUFR-6: This represents component wise expenditure for the year & for the project

period. h) IUFR-7: This represents IUFR Sl. No. wise claims preferred, & reimbursement

received & Balance receivable details. i) IUFR-8: This represents the payments made during Reporting Period Against

Contacts other the prior review.


22

Annexure - 1

Funds flow & Reimbursement system

DWDOs , POs and

Project Partners

WDD shall consolidate all 11 districts+ HOs (WDD

and DOH) expenditure & prepare IUFRs & submit

to CAAA within 10th

of every month .

Govt. of

Karnataka

WDD and

DOH

On receipt of reimbursement from W.B.

CAAA shall pass the reimbursed amount to

GOK on Quarterly basis

CAAA will receive IUFRs expenditure details

& submits claims to WB.

Payments made to Suppliers/ Consultants/

Institutions, at DWDOs and POs level, shall be

accounted & IUFRs shall be forwarded to

WDD and DOH for consolidation.


23

Annexure – 2 (a)

KARNATAKA WATERSHED DEVELOPMENT PROJECT-II SUJALA-III

IUFR-1:

Application No. Interim Unaudited Financial Report for the quarter ended ________

Details of Eligible expenditure, Reimbursement, Balance to be reimbursable etc. (Rs. In Lakhs)

Particulars

Expenditure

Non claimable Eligible

Expenditure

Reimbursement

%

Reimbursable amount

To be reimburse

d from IDA

State share of Project

Current Qtr. Current Qtr.

1 2 (3) = (1) - (2) 4 5=3x4/100 6 7

Expenditure by Component: 0

A. Improved Program Integration in Rainfed Areas 70 0.00 0.00 0.00 B. Research, Development and Innovation 70 0.00 0.00 0.00 C. Institutional Strengthening 70 0.00 0.00 0.00 D. Horticulture 70 0.00 0.00 0.00

E. Project Management and Coordination 70 0.00 0.00 0.00 Government Staff Cost 0 0.00 0.00 0.00

TOTAL PROJECT EXPENDITURE 0.00 0.00 0.00 0.00 0.00

FINANCED BY: GOK 0.00 IDA-World Bank 0.00 TOTAL FINANCING 0.00

FA Project Director

Date: Date:

Notes:

1. This statement is prepared on a cash basis of accounting as per provisions of the Financial Manual for the project and is reconciled with Treasury. 2. The above figures will be based on monthly consolidation done by HO of the records maintained with the DWDOs and POs


24

Annexure - 2 (b)


IUFR-1A:

Application No. Interim Unaudited Financial Report for the quarter ended ________

Details of Eligible expenditure, Reimbursement, Balance to be reimbursable etc. (Rs. In Lakhs)

Particulars Expenditure Non claimable Eligible

Expenditure Reimburse

ment % Reimbursabl

e amount

To be reimbursed

from IDA

State share of Project

Cummulative Cummulative

1 2 (3) = (1) - (2) 4 5=3x4/100 6 7

Expenditure by Component: 0 A. Improved Program Integration in Rainfed Areas 70 0.00 0.00 0.00 B. Research, Development and Innovation 70 0.00 0.00 0.00 C. Institutional Strengthening 70 0.00 0.00 0.00 D. Horticulture 70 0.00 0.00 0.00 E. Project Management and Coordination 70 0.00 0.00 0.00 Government Staff Cost 0

TOTAL PROJECT EXPENDITURE 0.00 0.00 0.00 0.00 0.00

FINANCED BY:

GOK 0.00

IDA-World Bank 0.00

TOTAL FINANCING 0.00

FA Project Director

Date: Date:

Notes:

1. This statement is prepared on a cash basis of accounting as per provisions of the Financial Manual for the project and is reconciled with Treasury. 2. The above figures will be based on monthly consolidation done by HO of the records maintained with the DWDOs and POs.


25

Annexure – 2 ( c )


Interim Unaudited Financial Report for the quarter ended ___________

IUFR-2 (Rs. In Lakhs)

Details of Total Source of fund & component wise expenditure & next 6 months forecast details.

Particulars For the Quarter

Cumulative Forecast for first three

months

Forecast for next three

months

Forecast for next six months Year till date

Project till date

1 2 3 4 5 6 7=5+6

Total Receipts

State Government 0.00 0.00 0.00 0

World Bank funds 0.00 0.00 0.00 0

Others (if any)

Total 0.00 0.00 0.00 0 0 0

Expenditure Component Wise A. Improved Program Integration in Rainfed Areas 0.00 0.00 0.00 0.00 0.00 0.00

B. Research, Development and Innovation 0.00 0.00 0.00 0.00 0.00 0.00 C. Institutional Strengthening 0.00 0.00 0.00 0.00 0.00 0.00

D. Horticulture 0.00 0.00 0.00 0.00 0.00 0.00

E. Project Management and Coordination 0.00 0.00 0.00 0.00 0.00 0.00

Government Staff Cost 0.00 0.00 0.00 0.00 0.00 0.00

Advances paid/adjusted 0.00 0.00 0.00

Total 0.00 0.00 0.00 0.00 0.00 0.00

FA Project Director

Date: Date:

Notes:

1. This statement is prepared on a cash basis of accounting as per provisions of the Financial Manual for the project

2. The above figures will be based on monthly consolidation done by HO of the records maintained with the DWDOs and POs


26

Annexure – 2 (d)


Interim Unaudited Financial Report for the quarter ended _____________

IUFR-3 Details of Component & sub- component wise expenditure details with cumulative expenditure figures.

(Rs. In Lakhs)

Particulars

Expenditure

Current Qurter

Year to date

Cumulative to date

Expenditure by Component: A. Improved Program Integration in Rainfed Areas A.1.Development of Decision support systems (DSS) 0.00 0.00 0.00 A.2.Development & Maintenance of a Digital Library 0.00 0.00 0.00 A.3.Integrated Sub-watershed Assessment & Planning 0.00 0.00 0.00 A.4.Participatory Micro-watershed Master Planning 0.00 0.00 0.00 A.5.Intensive Monitoring & Documentation at local level 0.00 0.00 0.00

SUB TOTAL (A) 0.00 0.00 0.00 B. Research, Development and Innovation B.1.Integrated Landscape Mgmt. & Agric.Intensification 0.00 0.00 0.00 B.2.Inetragated Hydrological Assessment and Monitoring 0.00 0.00 0.00 B.3.Technology Transfer 0.00 0.00 0.00 B.4.Strengthening Research Management 0.00 0.00 0.00

SUB TOTAL (B) 0.00 0.00 0.00 C. Institutional Strengthening C.1.Training & Capacity Building 0.00 0.00 0.00 C.2.Infrastructure Improvement 0.00 0.00 0.00

SUB TOTAL (C) 0.00 0.00 0.00 D. Horticulture

D.1 Extension and Demos for Productivity Improvement 0.00 0.00 0.00

D.2.Famer Horticulture Soil & Crop Monitoring 0.00 0.00 0.00

D.3.Horticulture Post Harvest Mgmt. & Value Chain 0.00 0.00 0.00

D.4 Horticultural Services Support 0.00 0.00 0.00

D.5 Horticultural Proposed investment 0.00 0.00 0.00

SUB TOTAL (D) 0.00 0.00 0.00 E. Project Management and Coordination

E.1.Project Management & Coordination 0.00 0.00 0.00

E.2.Financial Management & Procurement 0.00 0.00 0.00

E.3.Project Monitoring and Evaluation 0.00 0.00 0.00

SUB TOTAL (E) 0.00 0.00 0.00

GRAND TOTAL (F)=(A+B+C+D+E) 0.00 0.00 0.00

FA Project Director Date Date


27

Annexure - 2 (e) KARNATAKA WATERSHED DEVELOPMENT PROJECT-II SUJALA-III

Interim Unaudited Financial Report for the quarter ended ______________ IUFR-4 Details of District wise component wise expenditure details with cumulative figures. (Rs. In Lakhs)

KWDO-II Sujala-III Locations

Improved Program Integration in Rainfed Areas

Research, Development and Innovation

Institutional Strengthening

Horticulture Project Management & Coordination

Government Staff cost

Sub Total Other Advances Grand Total

For the

CTD For the

CTD

For the

CTD

For the

CTD For the

CTD For the

CTD For the

CTD For the

CTD For the CT

D

Quarter

Quarter Quart

er Quarte

r Quarte

r Quarter Quarter Quarter Quarter

Gulbarga

Bidar

Yadagiri

Gadag

Koppal

Davanagere

Chamarajanagar

Raichur

Bijapur

Chikkamagaluru

Tumkur

H.O (WDD)

HO (DOH)

TOTAL

FA Project Director

Date : Date : Note: CTD- Cummulative to Date


28

Annexure – 2(f)

Interim Unaudited Financial Report for the Quarter ending…………………….

IUFR-5

Details of District wise source of funds and component wise expenditure details.

Particulars D

WD

O a

nd

DD

H

Gu

lbar

ga

DW

DO

an

d D

DH

Bid

ar

DW

DO

an

d D

DH

Yad

gir

i

DW

DO

an

d D

DH

Gad

ag

DW

DO

an

d D

DH

Ko

pp

al

DW

DO

an

d D

DH

Dav

anag

ere

DW

DO

an

d D

DH

Ch

amar

ajan

agar

DW

DO

an

d D

DH

Rai

chu

r

DW

DO

an

d D

DH

Bij

apu

r

DW

DO

an

d D

DH

Ch

ikk

amag

alu

ru

DW

DO

an

d D

DH

Tu

mk

uru

Hea

d O

ffic

e

(WD

D)

Hea

d O

ffic

e

(DO

H)

Tot

al

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Money received from Government

Transferred to DWDOs and DDHs

Total Receipts (A)

Component wise expenditure

A. Improved program integration in rainfed areas

B. Research, Development and Innovation


29

C. Institutional Strengthening

D. Horticulture

E. Project Management and Coordination

F. Government Staff cost

Total Payments (B)

F.A. Project Director

Date: Date:


30

Annexure-2 ( g )


Interim Unaudited Financial Report for the quarter ended ______________

IUFR-6

Details of Component wise expenditure for the year & for the project period.

(Rs. In Lakhs)

SL. No. Particulars/Budget Head ACTUAL for the quarter Cumulative

expenditure for the year

Cumulative expenditure

till date

Expenditure Advance Total

1 2 3 4 5 6 7

1 Improved Program Integration in Rainfed Areas 0.00 0.00 0.00

2 Research, Development and Innovation 0 0.00 0.00 3 Institutional Strengthening 0 0.00 0.00 4 Horticulture 0 0.00 0.00 5 Project Management and Coordination 0 0.00 0.00

GRAND TOTAL 0.00 0.00 0.00 0.00 0.00

FA Project Director Date: Date:


31

Annexure - 2 (h)


Interim Unaudited Financial Report for the quarter ended

IUFR-7

IUFR SL.No. wise preferred & reimbursement received & Balance receivable details.

Date Period IUFR No. Expenditure

Reported Claims

Requested Claims

Reimbursed RF/WF No.

FA Project Director

Date: Date:


32

Annexure-2 ( I )


IUFR 8

Interim Unaudited Financial Report for the quarter ended

Details of Payments made during reporting period against contracts other than prior review

Contract Number/

Work order no.

Supplier Contract

Date

Original Contract Amount

Revised contract amount

Payment in this quarter

Total amount paid till date

Payment vs. contract percentage

WDD- - - - - - -

- - - - - - -

DOH

FA Project Director


33


34

Annexure – 3 (a)

Accounting entries at HO (WDD)– When double entry accounting is used.

SL

No.

Activity Accounting Entry When entry has to be passed

1 Funds received from

GOK to WDD

Dr. Treasury A/c

Cr. To Grant from Govt. Of Karnataka A/c

When funds are transferred from GOK to

WDD (through release order)

2 Expenditure Booked at

HO

Dr. Component wise Expenditure A/c

Cr. Service Provider/ Supplier A/c

Cr. Statutory deduction A/c

When bills are booked as expenditure

through party A/c & Statutory deduction

are made. This entry will be passed on

the day the payment is passed by

treasury. Both entry 2 and 3 should be

passed on the same day.

3 When Making Payment

to Suppliers/ Service

providers.

Dr. Service Providers/Suppliers A/c

Cr. To Treasury A/c

When actual payment made to Suppliers/

Service providers.

4 While Making TDS

payment to authorities.

Dr. Statutory deduction A/c

Cr. to Treasury A/c

When the Statutory deduction are paid to

authorities.

5 On advance Payment Dr. Advance payment A/c

Cr. Treasury A/c

Cr. Statutory deduction Account.

When advance payment made to

suppliers & TDS made on advance.

6 On payment of Statutory

deduction


Cr. Treasury A/c

When making payment of statutory

deduction

7

Receipt of cash (If cash received from any other source) Dr.

Cash A/c

Cr. Other Source A/c

If it is cash Drawn for office expenditure

Dr. Cash A/c

Cr. Treasury A/c

On receipt of cash from treasury for petty

cash expenditure or on sale of scrap/ sale

of tender documents etc.

Receipt of

Reimbursement from

WB

Dr. Grant from Govt. Of Karnataka A/c

Cr. To IDA funds - World Bank A/c

On receipt of reimbursement from WB to

GOK

8 Petty cash payments Dr. Expenditure A/c

Cr. Cash A/c

On incurring expenditure through cash

payments

9 Stale (reversal) Cheques Dr. Treasury remittance head of A/c

Cr. Supplier/ service provider A/c

On reversal of Un en-cashed (stale)

cheques after 6 months

10 Transfer of grants from

HO to DWDOs

Dr. DWDO___ Control A/c

Cr. To Treasury Control A/c

On allocation of funds by HO to DWDOs

11 Surrender of grants /

grants lapsing at year

end

Dr. GOK A/c

Cr. To Treasury A/c

On surrender of grants to Govt. only

yearend entries.


35

Annexure – 3 (a)

Accounting entries at HO (DOH)– When double entry accounting is used.

SL

No.

Activity Accounting Entry When entry has to be passed

1 Funds received from

GOK to DOH

Dr. Treasury A/c

Cr. To Grant from Govt. Of Karnataka A/c

When funds are transferred from GOK to

DOH(through release order)


HO



Cr. Statutory deduction A/c



are made. This entry will be passed on

the day the payment is passed by

treasury. Both entry 2 and 3 should be

passed on the same day.



providers.


Cr. To Treasury A/c

When actual payment made to Suppliers/

Service providers.

4 While Making TDS



Cr. to Treasury A/c


authorities.


Cr. Treasury A/c

Cr. Statutory deduction Account.

When advance payment made to

suppliers & TDS made on advance.

6 On payment of Statutory

deduction


Cr. Treasury A/c


deduction

7

Receipt of cash (If cash received from any other source) Dr.

Cash A/c



Dr. Cash A/c

Cr. Treasury A/c


cash expenditure or on sale of scrap/ sale

of tender documents etc.

Receipt of

Reimbursement from

WB

Dr. Grant from Govt. Of Karnataka A/c

Cr. To IDA funds - World Bank A/c

On receipt of reimbursement from WB to

GOK

8 Petty cash payments Dr. Expenditure A/c

Cr. Cash A/c

On incurring expenditure through cash

payments

9 Stale (reversal) Cheques Dr. Treasury remittance head of A/c


On reversal of Un en-cashed (stale)

cheques after 6 months

10 Transfer of grants from

HO to DDHs

Dr. DDH___ Control A/c

Cr. To Treasury Control A/c

On allocation of funds by HO to DDHs

11 Surrender of grants /

grants lapsing at year

end

Dr. GOK A/c

Cr. To Treasury A/c

On surrender of grants to Govt. only

yearend entries.


36

Annexure – 3 (b) Accounting entries at District level of both DWDO and PO

SL

No.

Activity Accounting Entry When entry is passed

1 Receipt of grants from

DWDOs/DDHs

Dr. To District Treasury A/c (DWDO/DDH code___)

Cr. KWDD control A/c

While receipt of release order/ grants from

KWDD to DWDOs and DOH to DDHs


DWDO



Cr. Statutory deductions A/c



are made. This entry will be passed on the

day the payment is passed by treasury

.Both entry 2 and 3 should be passed on the

same day.



providers.


Cr. Treasury A/c

When actual payments made to Suppliers/

Service providers.

4 While Making TDS



Cr. Treasury A/c


authorities.


Cr. Treasury A/c

Cr. Statutory deductions Account.

When advance payment made to suppliers

& TDS deducted on advances.

6 On payment of

Statutory deductions

Dr. Statutory deductions A/c

Cr. Treasury A/c


deductions to authorities

7 Receipt of cash Dr. Cash A/c



Dr. Cash A/c

Cr. Treasury A/c


cash expenditure or on sale of scrap/ sale of

tender documents etc.

8

Petty expenditure

payments through cash

Dr. Expenditure A/c

Cr. Cash A/c

On incurring expenditure

through cash payment

9 Stale (reversal) of

Cheques

Dr. District Treasury A/c


Un en-cashed (stale) cheques reversal after

6 months

10 Surrender of Grants at

Year end

Dr. To KWDD, HO Control A/c

Cr. District Treasury A/c

Surrender of grants to Govt. only year end

entries


37

Annexure – 4

Chart of Account

Karnataka Watershed Development Project-II Sujala-III

General Ledger Code

General Ledger Name GL Type GL Nature Freeze A/c Link Activity GL Description

Authorised Records

1101 Government of Karnataka Others Sources No No Funds from Government of Karnataka

1102 World Bank Others Sources No No Funds Received from World Bank

1104 Other Sources Others Sources No No Funds from Various other Organisations

1201 Sale of Bid/Tender Documents Others Income No No Sale of Tender/Bid Documents

1202 Interest Received Others Income No No Interest Earned on Bank Deposits

1203 Miscellaneous Income Others Income No No Other Income Received

A. Improved Program Integration in Rainfed Areas

A.1 Development of Decision Support Systems (DSS)

Expenditure Application of New Tools for Site Section

A.2 Development & Maintenance of a Digital Library

Expenditure Development & Maintenance of a Digital Library

A.3 Integrated Sub-watershed Assessment & Planning

Expenditure Integrated Sub-watershed Assessment & Planning

A.4 Participatory Micro-watershed Master Planning

Expenditure Participatory Micro-watershed Master Planning

A.5 Intensive Monitoring & Documentation at local level

Expenditure Intensive Monitoring & Documentation at local level

B. Research, Development and Innovation

B.1 Research for Integrated Landscape Mgmt. & Agric. Intensification

Expenditure Integrated Landscape Mgmt. & Agric.Intensification

B.2 Integrated Hydrological Assessment and Monitoring

Expenditure Hyrological Assessment and Monitoring

B.3 Technology Transfer Expenditure Technology Transfer

B.4 Strengthening Research Management

Expenditure Strengthening Research Management


38

General Ledger Code


C. Institutional Strengthening

C.1 Training & Capacity Building Expenditure Training & Capacity Building

C.2 Infrastructure Improvement Expenditure Infrastructure Improvement

D. Horticulture

D.1 Extension and demos for productivity improvement

Expenditure Promotion of Nutrition Gardens

D.2 Famer Horticulture Soil & Crop Monitoring

Expenditure Famer Horticulture Soil & Crop Monitoring

D.3 Horticulture Post Harvest Mgmt. & value chain

Expenditure Horticulture Post Harvest Mgmt. & value chain

D.4 Horticultural services support Expenditure Horticultural services support

D.5 Horticultural proposed investment

Expenditure Horticultural proposed investment

E. Project Management and Coordination

E.1 Project Management & Coordination

Expenditure Project Management & Coordination

E.2 Financial Management & Procurement

Expenditure Financial Management & Procurement

E.3 Project Monitoring and Evaluation

Expenditure Project Monitoring and Evaluation

2101 Salaries to Staff Others Expenditure No Yes Salaries paid to Additional Staff

2102 Allowance to Staff Others Expenditure No Yes Allowances to Additional Staff

2103 Travelling & Conveyance Others Expenditure No Yes Travelling and Conveyance Expenses

2104 Rent Others Expenditure No Yes Rent paid for Premises

2105 Rates & Taxes Others Expenditure No Yes Rates & Taxes apart from Government Levies

2106 Office Expenses Others Expenditure No Yes Office Maintainance Expenses

2107 Postage & Telephone Expenses Others Expenditure No Yes Postage, Telephone, Telegrams, Fax & Courier

2108 Training & Workshop Expenses Others Expenditure No Yes Training & Workshop

2109 NGO Services Others Expenditure No Yes Fee Paid to NGO's

2110 Professional & Consultancy Services

Others Expenditure No Yes Professional & Consultant Fee

2111 Monitoring & Evaluation Fee Others Expenditure No Yes Monitoring & Evaluation Fee

2112 Advertisement Others Expenditure No Yes Advertisement Expenses Paid


39

General Ledger Code


2113 Research & Development Others Expenditure No Yes Research and Development Expenses

2114 Fuel and Oil Others Expenditure No Yes Fuel and oil Expenses

2117 Sundry Materials Others Expenditure No Yes Purchase of Sundry Materials

2118 Equipment Maintenance Others Expenditure No Yes Equipment Maintainance Expenditure

2119 Building Maintainance Others Expenditure No Yes Building Maintainance Expenses

2120 Vehicle Maintainance Others Expenditure No Yes Vehicle Maintainance Expenditure

2121 Taxes Others Expenditure No No Income Tax, Sales Tax & Excise Duty (Non Reimbursible)

2122 Miscellaneous Expenses Others Expenditure No Yes Miscellaneous Expenses

2123 Boarding and Loadging charges Others Expenditure No Yes Boarding and Loadging charges

2124 Printing and Stationery Others Expenditure No Yes Priniting and Stationery

2125 Bank Commission Others Expenditure No Yes Bank Commission

2203 Furniture and Fixtures Others Fixed Assets No Yes Furniture and Other Supplies

2204 Office Equipments Others Fixed Assets No Yes Office Equipments

2205 Other Equipments Others Fixed Assets No Yes Local Expenditure for other Items

2206 Vehicles Others Fixed Assets No Yes Vehicles

2208 Miscellaneous Assets Others Fixed Assets No No Miscellaneous Assets

2302 Other Ineligible Expenses Others Expenditure No Yes Other Ineligible Expenses

3101 Cash in Hand Cash Current Asset

No No Cash in Hand

3102 Treasury Account at HO Bank Current Asset

No No Treasury Account at HO

3103 Balance with Bank Bank Current Asset

No No Balance with Bank

3104 Treasury Account at Districts Bank Current Asset

No No Treasury Account at Districts

3105 District Treasury - Chamaraja Nagar

Bank Current Asset

No No District Treasury - Chamaraja Nagar

3106 District Treasury - Davanagere Bank Current Asset

No No District Treasury - Davanagere

3107 District Treasury - Gadag Bank Current Asset

No No District Treasury - Gadag

3108 District Treasury - Koppal Bank Current Asset

No No District Treasury - Koppal

3109 District Treasury - Gulbarga Bank Current Asset

No No District Treasury - Gulbarga


40

General Ledger Code


3110 District Teasury-Bidar Bank Current Asset

No No District Teasury-Bidar

Dtstrict Treasury, Raichur Bank Current Asset

No No District Treasury, Raichur

District Treasury, Bijapur Bank Current Asset

No No District Treasury, Bijapur

District Treasury, Chikkamagaluru

Bank Current Asset

No No District Treasury, Chikkamagaluru

District Treasury, Tumkur Bank Current Asset

No No District Treasury. Tumkur

3201 Advance to Consultants Others Advances No Yes Advance paid to Consultants

3202 Advance to Suppliers - agst BG Others Advances No No Advance to Material Suppliers

3203 Advance to NGO'S- agst BG Others Advances No Yes Advance paid to NGO'S

3205 Advance to Contractors- agst BGs

Others Advances No No Advance paid to Contractors

3206 Staff Advance Others Advances No No Advance paid to Staff

3207 Deposits with Govt / Statutory Authorities

Others Current Asset

No Yes Deposits with Govt / Statutory Authorities

4101 EMD Others Liabilities No No EMD Received from Contractors and Suppliers

4102 Security Deposit Others Liabilities No No Security Deposit Received

4103 TDS - Contractors Others Liabilities No No TDS on Payments to Contractors

4104 TDS - Professionals Others Liabilities No No TDS on Payments to Professionals

4105 TDS - Salaries Others Liabilities No No TDS on Payments to Staff

4106 TDS - Others Others Liabilities No No TDS on Other Payments

4107 Stale Cheques Others Liabilities No No Cheques Issued not presented for Payment

4113 Profession Tax Payable Others Liabilities No No Professional Tax Payable

4114 Retention Money Others Liabilities No No Retention Money

4115 Royalty Deducted Others Liabilities No No

5102 Head Office Contra A/c Others Inter Unit Transfer

No No Head Office Contra A/c

5201 Grant in Aid from ZP Others Inter Unit Transfer

No No Funds from ZP


41


42

Annexure - 5

TERMS OF REFERENCE FOR THE AUDIT OF PROJECT FINANCIAL STATEMENTS by C & AG

Background

A credit from International Development Association (IDA) has been received by Government of India (GOI)

towards the cost of the Karnataka Watershed Development Project (KWDP- II) Sujala III to be implemented by

Government of Karnataka (GOK).

Objective

The essence of the World Bank2 audit policy is to ensure that the Bank receives adequate independent,

professional audit assurance that the proceeds of World Bank loans3 were used for the purposes intended,

4 that

the annual project financial statements are free from material misstatement, and that the terms of the loan

agreement were complied with in all material respects.

The objective of the audit of the Project Financial Statement (PFS) is to enable the auditor to express a

professional opinion as to whether (1) the PFS present fairly, in all material respects, the sources and applications

of project funds for the period under audit examination, (2) the funds were utilized for the purposes for which

they were provided, and (3) expenditures shown in the PFS are eligible for financing under the relevant loan or

credit agreement. In addition, the auditor will express a professional opinion as to whether the Interim

Unaudited Financial Reports (IUFR) submitted by project management may be relied upon to support any

applications for withdrawal and whether the adequate supporting documentation has been maintained to

support claims made by the project management for reimbursement of expenditures incurred under the IUFR

method of reimbursement.

The books of account that provide the basis for preparation of the PFS are established to reflect the financial

transactions of the project and are maintained by the project implementation agencies (PIA) (WDD and DOH) at

the head office and the respective district offices.

Standards

The audit will be carried out in accordance with the Auditing Standards promulgated by the Comptroller and

Auditor General of India. The auditor should accordingly consider materiality when planning and performing the

audit to reduce audit risk to an acceptable level that is consistent with the objective of the audit. Although the

2 “World Bank” includes the International Development Agency and the International Bank for Reconstruction and Development.

3 “Loans” includes credits and grants to which the TORs would apply; and “borrower” includes recipients of such loans.

4 The Bank’s charter [Article III Section V(b) of IBRD’s Articles of Agreement and Article V Section 1(g) of IDA’s Articles of Agreement]

specify that: “The Bank shall make arrangements to ensure that the proceeds of any loan are used only for the purposes for which the

loan was granted, with due attention to considerations of economy and efficiency and without regard to political or other non-economic

influences or considerations.”


43

responsibility for preventing irregularity, fraud, or the use of loan proceeds for purposes other than as defined in the

legal agreement remains with the borrower, the audit should be planned so as to have a reasonable expectation of

detecting material misstatements in the project financial statements.

Scope

In conducting the audit, special attention should be paid to the following:

(a) All external funds have been used in accordance with the conditions of the relevant legal

agreements and only for the purposes for which the financing was provided. Relevant legal

agreements include the Financing Agreement, the Project Agreement, and the Minutes of

Negotiations;

(b) Counterpart funds have been provided and used in accordance with the relevant legal agreements

and only for the purposes for which they were provided;

(c) All necessary supporting documents, records, and accounts have been kept in respect of all project

transactions including expenditures reported via IUFRs where applicable. Clear linkages should exist

between the books of account and reports presented to the Bank; and

(d) The project accounts have been prepared in accordance with consistently applied Government

Accounting Standards5 and present fairly, in all material respects, the financial situation of the

project at the year end and of resources and expenditures for the year ended on that date.

5 Until such time as the pronouncements of the Government Accounting Standards Advisory Board are accepted and prescribed by the

Ministry of Finance, the accounting standards followed by the Government of India will be defined by the General Financial Rules, PWD

codes, Treasury codes and similar financial rules and codes as are in effect and applicable to the operations of the project.


44

Project Financial Statements

The Project Financial Statements should include-

A. Statement of Sources and Applications of Funds: The formats of PFS are set out in Form A.

B. Reconciliation of Claims to Total Applications of Funds. The formats are outline in Form B.

C. A statement showing appropriate major heads of expenditure. (Project Component/Sub-components)

D. Management Assertion: Management should sign the project financial statements and provide a

written acknowledgement of its responsibility for the preparation and fair presentation of the

financial statements and an assertion that project funds have been expended in accordance with the

intended purposes as reflected in the financial statements. An example of a Management Assertion

Letter is shown at Form C.

IUFR

In addition to the audit of the PFS, the auditor is required to audit IUFR for withdrawal applications made during

the period under audit examination. The auditor should apply such tests as the auditor considers necessary

under the circumstances to satisfy the audit objective. In particular, these expenditures should be carefully

examined for project eligibility by reference to the relevant financing agreements. Where ineligible expenditures

are identified as having been included in withdrawal applications and reimbursed against, these should be

separately noted and qualified by the auditor.

Audit Report

An audit report on the Project Financial Statements should be prepared in accordance with the Auditing

Standards promulgated by the Comptroller and Auditor General of India. Those standards require an audit

opinion to be rendered related to the financial statements taken as a whole, indicating “unambiguously whether

it is unqualified or qualified and, if the latter, whether it is qualified in certain respects or is adverse or a

disclaimer of opinion.” In addition, the audit opinion paragraph will specify whether, in the auditor’s opinion, (a)

with respect to SOE s/FMR/IUFR, adequate supporting documentation has been maintained to support claims to

the World Bank for reimbursements of expenditures incurred; and (b) except for ineligible expenditures as

detailed in the audit observations, if any, appended to the audit report6, expenditures are eligible for financing

under the relevant financing Agreement. A sample audit report wording for an unqualified audit opinion is shown

at Form D

The project financial statements and the audit report should be received by the Bank not later than 6 months

after the end of the fiscal year. The auditor should also submit two copies of the audited accounts and audit

report to the Implementing Agency.

6 A sample audit report wording for an unqualified audit opinion is shown at Annexure D.


45

The audit report is issued without prejudice to CAG’s right to incorporate the audit observations in the Report of

CAG of India for being laid before Parliament/State or UT Legislature.

Management Letter

In addition to the audit report on the project financial statements, the auditor may prepare a management letter

containing suggestions for improvement in internal control and other matters coming to the attention of the

auditor during the audit examination.

Where a management letter is prepared by the auditor, a copy of the same will be supplied to the Bank and copy

provided to PIA. Else, a written advice may be made that no management letter was prepared together with the

audit report on the project financial statements.

General

The auditor should be given access to any information relevant for the purposes of conducting the audit. This

would normally include all legal documents, correspondence, and any other information associated with the

project and deemed necessary by the auditor. The information made available to the auditor should include, but

not be limited to, copies of the Bank’s Project Appraisal Document, the relevant Legal Agreements, a copy of

these Guidelines, and a copy of the Bank’s Financial Management Assessment of the project entity. It is highly

desirable that the auditor become familiar with other Bank policy documents, such as OP/BP 10.02, the Bank's

internal guidelines on Financial Management that include financial reporting and auditing requirements for

projects financed by the World Bank. The auditor should also be familiar with the Bank's Disbursement Manual.

Both documents will be provided by the Project staff to the auditor.


46

Annexure 5 - Form A

Statement of Sources and Application of Funds Financial Statement

IDA No.

Project Name

Financial Statements as on ___________________

Particulars Current year Last year Cumulative for

the project

Source of funds

World Bank funds (A)

Government funds (B)

Total sources (A+B)

Application of funds

Improved Program Integration in

Rainfed Areas

(C)

Research, Development and

Innovation

(D)

Institutional Strengthening (E)

Horticulture (F)

Project Management and

Coordination

(G)

Government staff cost (H)

Total expenditure (I)=Sum(C to

H)

Advances (J)

Total uses (I+J)

Notes:

1. This financial statement is prepared on a cash basis of accounting as per provisions of the Financial

Rules and codes applicable.

2. The above figures will be based on monthly/quarterly abstract accounts prepared by the accounts

compiling officers, duly reconciled by the respective DWDOs, with details of un-reconciled amounts to

be furnished.

3. Names of accounting units whose financial statements are aggregated to prepare the consolidated

accounts.

4. Any other project specific Note.


47

Annexure 5 - Form B

Reconciliation of Claims to Total Applications of Funds

Name of the Project Loan / Credit / Grant No.

Report for the year ended

Sched

ules

Amt (Rs. '000)

Current Year Previous Year Project to

date

Bank Funds claimed (A) I

Withdrawal Claims for 1st

IUFR

Withdrawal Claims for 2nd

IUFR

Withdrawal Claims for 3rd

IUFR

Withdrawal Claims for 4th

IUFR

Total bank funds claimed

Total Expenditure made during the year (B)

Expenditure as per books of account

Less: Outstanding advances (C) II

Ineligible expenditures (D) III

Expenditures not claimed (E) IV

Total Eligible Expenditures Claimed (F)=(B)-(C)-(D)-(E)

World Bank Share @100% of (F) above (G)

Claims in excess of expenditure (A-G)

CAO Project Director

Date Date

Notes:

1. Total expenditure made during the year (B above) must be the same as the Total Expenditures shown

on the Statement of Sources and Applications of Funds

2. Outstanding Advances (C above) reflect funds drawn but not settled by the end of the year (i.e.

unsettled advances).

3. Expenditures not claimed (E above) may reflect timing differences for eligible expenditures incurred

during the year but claimed after the year end.

4. Advances given in Govt. Department/NGOs/Consultants/Service Providers would not be treated as

expenditure.


48

Annexure 5 - Form C

Reconciliation of Claims Component wise

Name of the Project Loan / Credit / Grant No.

Report for the year ended

Audited

Expenditure

for Current FY

Audited

Expenditure

Cumulative

till date

Claim

percentage

Claims made

during

current FY

Claims

eligible

Cumulative

claims made

Cumulative

claims eligible

Improved

Program

Integration in

Rainfed Areas

70%

Research,

Development

and Innovation

70%

Institutional

Strengthening

70%

Horticulture

70%

Project

Management

and

Coordination

70%

Government

staff cost 0%

Total


49

Annexure 5 - Form D

Example of a Management Assertion Letter7

(Project Letterhead)

(To Auditor) (Date)

This assertion letter is provided in connection with your audit of the financial statements of the

______________ Project for the year ended ___________. We acknowledge our responsibility for the

fair presentation of the financial statements in accordance with the cash basis of accounting followed by

the Government of India, and we confirm, to the best of our knowledge and belief, the following

representations made to you during your audit:

• ....................................................................................................................... The project financial

statements are free of material misstatements, including omissions.

• ....................................................................................................................... Project funds have

been used for the purposes for which they were provided.

• ....................................................................................................................... Project expenditures

are eligible for financing under the Loan/Credit agreement.

• ....................................................................................................................... There have been no

irregularities involving management or employees who have a significant role in internal control or

that could have a material effect on the project financial statements.

• ....................................................................................................................... We have made

available to you all books of account and supporting documentation relating to the project.

• ....................................................................................................................... The project has

complied with the conditions of all relevant legal agreements, including the Financing Agreement, the

Project Agreement, the Project Appraisal Document, the Minutes of Negotiations, and the Borrower’s

Project Implementation Plan.

____________________________________________

(Project Director)

________________________________________

(Chief Account Officer)

7 This sample management assertion letter is based on ISA 580, “Management Representations,” Handbook of International Auditing,

Assurance and Ethics Pronouncements, International Federation of Accountants, 2007


50

Annexure 5 - Form E

Sample Audit Report—Unqualified Opinion8

Report of the Comptroller and Auditor General of India

Addressee9

Report on the Project Financial Statements

We have audited the accompanying financial statements of the _______ Project financed under World Bank

Credit No._____, which comprise the Statement of Sources and Applications of Funds and the Reconciliation

of Claims to Total Applications of Funds10

for the year ended ______, these statements are the responsibility

of the Project’s management. Our responsibility is to express an opinion on the accompanying financial

statements based on our audit.

We conducted our audit in accordance with the Auditing Standards promulgated by the Comptroller and

Auditor General of India. Those Standards require that we plan and perform the audit to obtain reasonable

assurance about whether the financial statements are free of material misstatement. Our audit examines, on

a test basis, evidence supporting the amounts and disclosures in the financial statements. It also includes

assessing the accounting principles used and significant estimates made by management, as well as

evaluating the overall statement presentation. We believe that our audit provides a reasonable basis for our

opinion.

In our opinion, the financial statements present fairly, in all material respects, the sources and applications of

funds of ________ Project for the year ended __________ in accordance with Government of India

accounting standards.11

In addition, in our opinion, (a) with respect to FMRs, adequate supporting documentation has been maintained

to support claims to the World Bank for reimbursements of expenditures incurred; and (b) except for ineligible

expenditures as detailed in the audit observations, if any, appended to this audit report, expenditures are

eligible for financing under the Loan/Credit Agreement. During the course of the audit, FMRs (each

application no. and amount to be indicated) and the connected documents were examined and these can be

relied upon to support reimbursement under the Loan/Credit Agreement.

This report is issued without prejudice to CAG’s right to incorporate the audit observations in the Report of

CAG of India for being laid before Parliament/State or UT Legislature.

[Auditor’s Signature]

[Auditor’s Address]

8 See relevant portions of Auditing Standards of the Comptroller and Auditor General of India as applicable from time to time for

conditions where unqualified, qualified, adverse or disclaimers of opinion may appropriately be rendered. 9 The auditor’s report should be addressed to the person stipulated in the underlying loan agreement as responsible for providing audited

project financial statements. 10 Insert titles of other required statements and schedules included in or annexed to the project financial statements, if any.

11

Until the Ministry of Finance prescribes adoption of the accounting standards pronounced by GASAB or other body such as IPSAS, the

accounting standards followed by the Government of India shall be the cash basis of accounting applied with due regard to the General

Financial Rules, PWD codes, Treasury codes and similar financial rules and codes as are in effect and applicable to the operations of the

project.


51

Annexure - 6

Roles and Responsibilities of Project Finance Officer (Chief Accounts Officer) To assist the Project Director / Executive Director in the following areas

� Overall In charge of all financial functions, Budgeting, Funds Management, Auditing � Processing release of Funds proposals to districts � Ensuring timely disbursement and release of grants � Monitoring and Analysis of Financial progress vis-à-vis Budgets, Targets etc and

Physical Progress � Processing proposals to accord approval of bills as to its eligibility with reference to

contract terms � Preparing Financial Progress Reports and putting up the same to the Project Director/

Executive Director � Monitoring of submission of reports as required by World bank/Government of

Karnataka/GOI � Compliance with Audit Requirements & Review of internal audit reports � Issue circulars and guidelines for accounting and reporting & reference to FM Manuals

at both District & HO level � Undertake periodical review meeting and field visits with the concurrence of Project

Director � Assist and provide the World Bank Review Mission with latest progress statements and

other required information � Prepare quarterly targets/ bench marks in consultation with technical team � Review of TOR pertaining to all major contracts � Issue opinion on financial matters and advice the Project Director / Executive Director

with respect to Budget, Accounts & financial matters


52

Annexure - 7

Roles and Responsibilities Finance Manager / Specialist

Duties and Responsibilities

To assist the project finance officer / CAO in the following areas � To work in close co-ordination with the Project Finance officer / CAO in Financial matters � Assess the capacity of the implementing agencies of the project at each stage of implementation

including financial staffing. Working with each Project district offices to identify gaps and building their capacity to manage the prescribed Financial Management System for the Bank project

� Develop strategy for Training the Finance Staff of the project at all levels on Finance, Accounting and Record keeping, Procedures & Reporting systems

� Building capacity to manage the project at HO and districts � Review of accounting software, internal controls in consultation with the HO, district office and

the Bank � Co-ordination for all matters pertaining to Accounts, Financial and Budgetary Management and

Auditing of the Project Expenditure/Accounts, Preparation of reimbursement claims of expenditure incurred by project at Head office and District level

� Preparation of Financial Management reports relating to the project and submission of disbursement claims regularly to WB/CAAA/GOI

� Co-ordination for audit at Head office & district level and reporting and ensuring the audit requirements are complied with

� Periodical updation of Finance Manual. This manual inter-alia would cover the flow of funds, Budgeting procedures, Financial and Accounting Policies, Staffing of Finance Section, Accounting systems including internal controls, Financial Reporting systems & Audit arrangements etc.,

� Work relating to budget provisions for Head office and districts of the Project and monitoring Fund releases, Expenditure, Future requirement of funds & follow up on reimbursements

� Preparing reports for submission to Government/WB on the budget and accounts as and when required

� Any other work as assigned by the Commissioner & Project Director

Qualifications � The candidate should have either CA or ICWA qualification or 10 years experience in banking

sector in senior position with good exposure to accounting and auditing work areas. � The Candidate should possess 10 years working experience in Finance sector/ Banking /

Accounts /Audit. � Prior experience in development of Financial Management System, Financial Manual, and

working on Bank projects will be an asset. � Should possess good working knowledge of computers and appropriate software in the external

aided project environment. � The Candidate should have a proven ability and good track record in the field of Accounting,

Financial / Budgetary Management. � Candidate should have strong Accounting skills in computerized as well as Manual Accounting

System. � The Candidates should be proficient in Kannada and English language and should have good

communication skills.


53

Annexure – 8

Roles and Responsibilities of Account Assistants

Duties & Responsibilities

To assist the project finance officer / CAO and district Project Officer and his Accounts staff in the following areas � Implement Accounting system & maintain project accounts as per project FM Manual. � in Preparation and review of budget, expenses and invoices and other accounting documents. � Maintain Appropriate Book of Accounts, Accounting Software, Financial Data Bases Systems. � Presentation of Accounts, handling of Statutory Tax matters, Sanction letters, Release of grants,

Preparation of IUFRs, Utilization Certificates and Submission to Govt. of Karnataka as per KFC and related correspondence.

� Interact with internal and external auditors for conduct of audits & certification of accounts of the project.

� Any Other duties as assigned by PD/ED which are required for smooth functioning of Financial Management system in the project.

� Eligibility criteria

• Should possess commerce graduation degree • Should possess good working knowledge of computers, and have expert

knowledge. • Candidates with least 2-5 years of experience in handling externally aided Project

Accounts. � Previous experience with Government Departments / Financial institutions / Banks

is desirable; � Candidate should have good accounting skills in computerized as well as manual

accounting. � The candidate should be proficient in Kannada and English language and should have

good communication skills


54

Annexure - 9

TOR for

Financial Management Technical Support (Accounting) Consultants (FMTSC)

1. Background Information

1.1 Introduction

A credit from International Development Association (IDA) has been received by Government of

India (GOI) towards the cost of the KWDP-II Sujala-III, Karnataka Watershed Development

Department (KWDD) to be implemented by Government of Karnataka (GOK).

1.2 Project Objectives

The project’s main development objective is sustainable alleviation of poverty in predominantly

rainfed areas of Karnataka by improving the productive potential of selected watersheds,

enhancing production and livelihood systems and strengthening community and institutional

arrangements for natural resource management. Associated objectives are to strengthen the

capacity of communities in the project districts for participatory involvement in local level

development programs and to have the implementing department operating in a more socially

inclusive manner, within the framework of a convergent watershed development plan. This will

be achieved through the project’s collaborative approach and capacity building initiatives, and

policy agreements with Government of Karnataka.

1.3 The Project Components

Component 1: Improved program integration in rain-fed areas;

Component 2: Research, development & innovations;

Component 3: Institutional strengthening

Component 4: Horticulture in rain-fed area

Component 5: Project management & Co-ordination

1.4 Project Implementation

A broad implementation set-up envisaged for the project is described below:

♦ At the State level, the project would be implemented by the Watershed Development

Department (WDD ) and Department of Horticulture (DoH) and the project partners: namely

National Bureau of Soil Sciences and Land Use Planning, University of Agriculture,

Bangalore, Dharwad, Raichur, University of Horticulture Sciences, Bagalkot, Karnataka State

Remote Sensing Application Centre, Bangalore, Karnataka Drought Management Institution,

Bangalore, Bangalore University, Department of Mines and Geology, Indian Institute of

Horticulture Research (IIHR) and University of Horticulture Sciences (UHS) with whom

MoU’s have been signed will provide overall guidance and direction for project planning and

implementation. Indian Institute of Science and ICRISAT are major Consultants to help in

implementing the project.

♦ The Commissioner WDD is the Project Director who will be assisted by a whole time

Executive Director, WDD. The Horticulture component would be implemented by Director of

Horticulture under the overall guidance and supervision of of Additional Director (F&N) and

Executive Director (KSHDA). He will be assisted by PTC (Project Technical Cell), REC

(Research and Extension cell) and Financial Management and Procurement cell (FMPC). The

oversight for the project implementation will be Project Empowering Committee (PEC)


55

chaired by Addl. Chief Secretary & Development Committee which will be assisted by Project

Planning & Monitoring Unit (PPMU) chaired by Principal Secretary (Agriculture).

♦ At districts level (11 Districts & Head Office i.e. Bidar, Yadgir, Gulbarga, Koppal,

Gadag, Davanagere, Chamrajnagar, (Raichur, Bijapur, Chikkamagalurand Tumkur

(CGIAR districts)) + HO) implementation of the project will be carried out through the

District Project Offices (DPO), WDD and District Horticulture Officers.

1.5 Accounting System

A common financial management system for the whole project (both for WDD & DopH) has

been designed and a computerized financial management system has been developed for the

Project in appropriate Modified versions. The financial management system is documented in a

Project Financial Management Manual. The Financial Management Manual inter-alia covers

flow of funds, financial and accounting policies, accounting systems including internal controls,

planning and budgeting system, financial forecasting system, procurement and contract

administration monitoring system and financial reporting system. The computerized financial

management would be operated at the office of KWDD, the Department of Horticulture (DoH)

and the DWDOs and DHOs would have facility to produce the various financial books and

records, financial reports; and to consolidate the records and reports for the project as a whole.

1.6 Need for consultants

The need for the FMTSC arises from the absence of qualified financial staff with adequate

training and experience in the operation of computerized financial management systems in the

project. The consultants would fill this gap by providing support of qualified professional staff to

support the operation of the financial management system, and to train the project staff both for

WDD & DoH.

2. The Specific objectives of the Consultancy

To maintain FM system in HO of WDD (including Project Partners) & DoH and Project District Offices

of WDD & DoH and ensure that all financial management aspects (including necessary financial and

accounting aspects) of the project in the district are satisfactorily handled. The consultants would

provide the required technical support to project financial staff, to ensure that the service standards for

financial management activities indicated in the Project Financial Management Manual are met

Training: To provide training to project financial staff in improved financial management practices; and

develop their skills for operating the improved computerized project financial management system.

3. Outline of the tasks to be performed by the Consultant

3.1 The main focus of the services would be to provide the necessary operational and technical

support of the project financial staff to ensure that the above objectives are achieved. The

scope of services to achieve these objectives and the required outputs are given below. (It is

expected that the FMTSC would, work in close collaboration with the staff of the project

implementing offices and be responsible to ensure the following).

i) That the overall operation of the project financial management system in the HO/district

(WDD & DoH) are satisfactory. This shall include (a) A satisfactory unified financial and

accounting system is installed and operational; (b) the services standards, for financial


56

management aspects indicated in the Project Financial Management Manual are met.

Accounting books and records are up-to date and satisfactorily maintained; (c) flow of

funds to the various offices at the district level is smooth; (d) financial policies and

procedures outlined in the Project Financial Management Manual are adhered to: (e)

internal control system, including aspects such as internal checks, reconciliation,

verification of assets, etc, is satisfactory and commensurate with the size and scope of the

project; (f) the budgeting system and forecasting system, is satisfactory, (g) budgets, work

plans and short term forecasts are prepared satisfactorily.

ii) That the monthly & quarterly Project Financial Reports as outlined in the time schedule

are prepared on a timely Basis and submitted to the client and disseminated to the various

project stakeholders.

iii) That Annual Project Financial Statements (for the HO/district) both for WDD(including

Project Partners) & DoH are prepared in a timely manner as per the time schedule

indicated.

3.2 FMTSC shall assist the project in liaisioning with and providing necessary information to the

internal and external auditors. The Consultants would assist the project in follow up and take

necessary action based on the audit reports, review reports and Management letter.

3.3 FMTSC shall make Recommendations for continuous improvements and updates to the

financial management system, outlined in the Project Financial Management Manual based on

implementation experience to enable the updating of the Manual as required.

3.4 FMTSC shall ensure that the financial management system is operated satisfactorily as to

enable generation of financial monitoring reports (IUFR's) as per the formats approved by the

World Bank in FM Manual.

3.5 FMTSC shall develop capabilities of project staff at the district level (both of WDD & DoH) on

project financial management aspects by providing continuous training and technical support

to project financial staff.

3.6 FMTSC shall reconcile the Accounts of District Project Offices ( both of WDD & DoH) with

Appropriate accounting package report and treasury report every month and make available

the same every month.

3.7 FMTSC shall compile the Accounts as received from all the locations, Project Partners and

also complete Activity/ component wise expenditure and consolidate the same at the Head

office and submit (to whom ?) consolidated IUFRs on or before 9th

of the subsequent month

3.8 FMTSC shall :

• Streamline the Financial Management System w.r.t the Financial Management Manual.

• Make necessary arrangements for storage of appropriate accounting software data at

district level pertaining to the respective districts and at HO level in the form of CD,

external Hard Disk.

3.9 The scope of services could be modified based on mutual agreement between the client and

the consultants with a view to better achieve the overall objectives.


57

4. Schedule for the Completion of the tasks

The assignment would be for the period from one month after the commencement of the project upto

project closing date, December 31, 2018 .However the performance of the Consultant would be reviewed

for each Financial year and in case of unsatisfactory performance appropriate action would be taken as

per provided in the contract agreement. The schedule for providing the service shall be as follows:

Sl.

No.

Output Measured based on timely

completion/submission.

1 IUFRs Within 9th

of every month.

2 Quarterly IUFRs Within 30 days of close of each quarter.

3 Annual Reports Within 6 months of end of each fiscal year.

4 Compliance on Audit Report Within 30 days from the date of receipt of report.

5 Reconciliation of Districts

Accounts with treasury.

By 25th of subsequent month.

6 Identification of Software

programme problem & reporting

to Project Director

To identify with in 30 days from contract

effective date

7 FM Training to HO & Project

District finance staff covering.

1.FM Manual of the project

2.FM Management system in

the Project

3.FM & accounting system (in

Software)

4. FM & Accounts reporting

system at HO & Districts level

project.

Any other relevant department

One day each

8

Recommendations on

continuous improvement in

Financial Management.

1st level: before release of funds to Districts

2nd level: after 30 days from the date of 1st level

of training

3rd level: after 60 days from the date of 2nd

level training.

After that one training in every quarter.

Quarterly Briefing meeting with project

authority.

9 Reconciliation of Accounts with

Treasury by the District Project

Offices.

End of subsequent month.

5. Data Series and Facilities To Be Provided By The Client

5.1 The consultant would be given access to all documents, correspondence, and any other

information relating to the project and deemed necessary by the Consultant. The Consultant

should become familiar with and stay updated on the project, and with the relevant policies

and guidelines of the State Government and the World Bank (including those relating to

disbursements, procurement and financial management and reporting). The Consultant

would be provided copies of the Project Implementation Plan; Project Appraisal Document


58

(PAD) of the World Bank; Development Credit Agreement, Loan Agreement and Project

Agreement with IDA (including agreed minutes of negotiations), guidelines, policies and

procedures issued by project management and implementing agencies; and relevant World

Bank policies and guidelines (such as Disbursements Handbook, Project Financial

Management Manual, Procurement Guidelines, and other such guidelines or policy

documents).

5.2 The facilities to be provided by the client

(i) Installation of Appropriate Accounting software at all project accounting centers’ (i.e.

11 Districts + Head Office) of both WDD & DoH as per requirements of the project.

(ii) Vouchers and other accounting documents to be provided to the consultants by the

project in a timely manner at HO & Districts (of both WDD & DoH).

(iii) Providing policy level clarification to the FMTSC as and when required by them at

both Head office and District headquarters (of both WDD & DoH).

(iv) Providing required IT Hardware at Head Office and 11 Districts (of both WDD &

DoH).

(v) Office space at each district head quarters (of both WDD & DoH).

(vi) Printer with consumables & required infrastructure to print all reports & statements

etc., & Books of account as indented by dept / C&AG.

(vii) Installation of Appropriate Accounting software at all project accounting centers’ (i.e.

HO & 11 Project Districts of both WDD & DoH) as per requirements of the project.

6. Outputs and Deliverables to be furnished by the consultant.

(i) Soft copy of the accounts in Compact Disk to head office at the end of the every accounting

year.

(ii) One set of final printout will have to be provided at each District Project office and a

consolidated hard copy of FM reports to be provided at HO.

(iii) Consolidated IUFRs at HO level (including those of Project Partners)

(iv) District wise IUFRs

(v) Project Financial Management reports at district level

(vi) Annual Project Financial statements (HO & districts)

7. Review Committee and Review Procedure

The following Committee shall review the performance of the consultant on a Quarterly basis.

1. Executive Director, WDD.

2. Add Director (Admin), WDD

3. Joint Director (DoH), Sujala-III

4. CAO of WDD & DoH


59

8. Key Personnel to be deployed whose CV would be evaluated

The list of key personnel, their minimum qualifications and experience shall be as under:

Post Qualification Number

of persons

required

Total Man

Months per

year

Team Leader

(Part Time)

CA with 10 years experience

including good working

knowledge of installation of

accounting package setting up

internal controls and accounting

systems with good exposure to

externally aided projects

One 4

Accountant – HO CA inter/M.Com with 5 years

relevant experience and

proficiency in computers and

Appropriate accounting

Two 24

Accountants-Districts CA inter/M.Com/ B.Com with

5 year relevant experience and

proficiency in computers and

Appropriate accounting

Eleven 132

The deployed CA’s and Accountants should have sound knowledge of Government Budgeting,

accounting and treasury procedures, Financial Management as per the externally assisted projects and

audit by CAG and available for full duration of time.

Time schedule for preparing PFS

The consultant shall prepare the following reports provided that the required information is forth coming by the cutoff date mentioned in respect of each such report. The transactions shall be closed by end of every month. Therefore all required input shall have to be made available to FMTSC on or before 2nd of subsequent month.

Sl.

No.

Description of the report and Contents Frequency No. of copies

Target date of submission

1 IUFRS

(Consolidated at HO)

Monthly 4 By 9th of every month. (Cut of date to close the transactions by the end of every month)

1a. IUFRs at

(District wise)

Monthly 4 By 4th of every month.

2

Project financial management reports at district level with analysis and summaries of various report to facilitate decision


60

making by Project management. The reports should include information on sources and application of funds, classified by project components and expenditure types and should show comparison of physical outputs and financial figures comparison with budget and variance analysis, information on procurement and contract administration financial forecasting etc.,

Quarterly

3

Within 45 days of close of each quarter

3 Annual project financial statements (for the H O & districts)

Annual 3 Within 3 months of the end of each fiscal year and presented for audit.


61

Annexure-10

Terms of reference for the Financial Review (Internal Audit) Consultant (FRC)

1. Background Information

1.1 Introduction

A credit from International Development Association (IDA) has been received by Government of

India (GOI) towards the cost of the Karnataka Watershed Development Project (KWDP-II,

Sujala-III) to be implemented by Government of Karnataka (GOK).

1.2 Project Objectives

The project’s main development objective is sustainable alleviation of poverty in predominantly

rainfed areas of Karnataka by improving the productive potential of selected watersheds,

enhancing production and livelihood systems and strengthening community and institutional

arrangements for natural resource management. Associated objectives are to strengthen the

capacity of communities in the project districts for participatory involvement in local level

development programs and to have the implementing department operating in a more socially

inclusive manner, within the framework of a convergent watershed development plan. This will

be achieved through the project’s collaborative approach and capacity building initiatives, and

policy agreements with Government of Karnataka.

1.3 The Project Components

Component 1: Improved program integration in rain-fed areas;

Component 2: Research, development & innovations;

Component 3: Institutional strengthening

Component 4: Horticulture in rain-fed area

Component 5: Project management & Co-ordination

1.4 Project Implementation

A broad implementation set-up envisaged for the project is described below:

♦ At the State level, the project would be implemented by the Watershed Development

Department (WDD ) and Department of Horticulture (DoH) and the project partners: namely

National Bureau of Soil Sciences and Land Use Planning, University of Agriculture,

Bangalore, Dharwad, Raichur, University of Horticulture Sciences, Bagalkot, Karnataka State

Remote Sensing Application Centre, Bangalore, Karnataka Drought Management Institution,

Bangalore, Bangalore University, Department of Mines and Geology Indian Institute of

Horticulture Research (IIHR) and University of Horticulture Sciences (UHS) with whom

MoU’s have been signed will provide overall guidance and direction for project planning and

implementation. Indian Institute of Science and ICRISAT are major Consultants to help in

implementing the project.

♦ The Commissioner WDD is the Project Director who will be assisted by a whole time

Executive Director, WDD. The Horticulture component would be implemented by Director of

Horticulture under the overall guidance and supervision of of Additional Director (F&N) and

Executive Director (KSHDA). He will be assisted by PTC (Project Technical Cell), REC

(Research and Extension cell) and Financial Management and Procurement cell (FMPC). The

oversight for the project implementation will be Project Empowering Committee (PEC)


62

chaired by Addl. Chief Secretary & Development Committee which will be assisted by Project

Planning & Monitoring Unit (PPMU) chaired by Principal Secretary (Agriculture).

♦ At districts level (11 Districts & Head Office i.e. Bidar, Yadgir, Gulbarga, Koppal,

Gadag, Davanagere, Chamrajnagar,(Raichur, Bijapur, Chikkamagalur and Tumkur

(CGIAR districts)) + HO) implementation of the project will be carried out through the

District Project Offices (DPO), WDD & District Horticulture officers.

1.5 Accounting System

A common financial management system for the whole project ( both for WDD & DoH) has been

designed and a computerized financial management system has been developed for the Project in

appropriate Modified versions. The financial management system is documented in a Project

Financial Management Manual. The Financial Management Manual inter-alia covers flow of

funds, financial and accounting policies, accounting systems including internal controls, planning

and budgeting system, financial forecasting system, procurement and contract administration

monitoring system and financial reporting system. The computerized financial management

would be operated at the office of KWDD, Department of Horticulture and the DWDOs and the

DHOs would have facility to produce the various financial books and records, financial reports;

and to consolidate the records and reports for the project as a whole

1.6 Need for consultants

The need for the Consultancy arises to have a send check of the Financial Accounting System to

ensure that the Financial transactions pertaining to the project conforms to the relevant Provisions

of Financial Management and Procurement Manual.

2. The Specific objectives of the Consultancy

• The overall objectives of the audit is : (a) to audit the internal control framework working within

the project through internal audit of the offices at HO of WDD & DoH & Districts, as well as the

project partners (b) audit the implementing agencies of WDD, DoH & project partners in the field

covering the entire transaction cycle.

• The objectives of the internal audit are to: (i) enable the auditor to express a professional opinion

on the effectiveness of the overall financial management, accounting system and procurement

arrangements; (ii) whether the overall financial management and arrangements including the

system of internal controls as documented in the PAD, Operational Manual, Procurement Manual

& Financial Management Manual are in practice, effective and adequate, commensurate to the

nature of the operations, and (iii) provide project management with timely information on

financial management aspects of the project, including internal controls and compliance with

financing agreements, to enable follow-up action.

3. Outline of the tasks to be performed by the Consultant

3.1 The project financial management systems would include methods and records to identify,

assemble, analyze, classify, record and report on transactions and to maintain accountability for

the assets and liabilities these would be determined with reference to consistent practices and

internal policies and with reference to documents such as the IDA Development Credit Agreement

and Project Agreement, Project Implementation Plan and IDA Project Appraisal Document.

3.2 The audit would cover the entire project i.e., covering all sources and application of funds by Head

Offices (WDD & DoH) and District offices (WDD & DoH) and Support Organizations (i.e. Project

NGOs, Consultants, Institutions, Universities & other Partner agencies) as considered necessary for


63

the audit. The audit would also cover all consultancies or other contracts including NGO

outsourced that may be entered into by the implementing agencies. The internal audit should be

carried out in accordance with the Auditing Standards prescribed by the Institute of Chartered

Accountants of India and will include such tests and controls, as the auditor considers necessary

under the circumstances.

3.3 The audit plan for each quarter would be worked out with the PIA. The audit should be planned in

such a way that all the offices involved in the project are covered by the auditor at least once in a

year. The auditor will ensure minimum of 2 Districts are audited in each Quarter covering

transaction of preceding one year period from that quarter.

3.4 Specific areas of coverage of the audit will include the following:

a) An assessment of the adequacy of the project financial management systems, including internal

controls. This would include aspects such as adequacy and effectiveness of accounting,

financial and operational controls, and any needs for revision; level of compliance with

established policies, plans and procedures; reliability of accounting systems, books of accounts,

data and financial reports; methods of remedying weak controls or creating controls in areas

where they are lacking and verification of assets and liabilities.

b) Efficiency and timeliness of the funds flow mechanism at the Head Offices and District offices.

c) Whether the project is monitoring the receipt of periodic reports (including financial reports),

IUFRs and other documentary evidences against payments.

d) Whether the accounts of the project are compiled in a timely manner at Head Office (WDD &

DoH) and District level(WDD & DoH).

e) An assessment of compliance with provisions of financing agreements (IDA Financing

Agreement and Project Agreement), especially those relating to procurement, accounting and

financial matters.

f) Adherence to Government orders, project principles and procedures prescribed in the Project

Appraisal Document, Operation Manual, Procurement manual & Financial Management

Manual for the Project and the administrative rules and regulations made under the project

from time to time.

g) All external funds received under the project have been used in accordance with the financing

agreements, with due attention to economy, efficiency and effectiveness, and only for the

purposes for which the financing was provided;

h) Expenditures charged to the project are eligible expenditures and have been correctly classified.

This would also include ensuring accuracy of summary statement of expenditures/Trial

Balances/Financial Reports & IUFRs submitted by Districts/Head Office.

i) Goods, works and services financed have been procured in accordance with the World Bank

procurement guidelines, procurement manual of the project and financing agreements;

j) That all necessary supporting documents and records have been maintained with respect to the

Project expenditure and that the expenditures are reflected in the accounts of the HO / Districts

in accordance with the accounting rules in place.

k) Adequate records are maintained regarding the assets created and assets acquired by the project,

including details of cost, identification and location of assets and ensuring that there is a system

of physical verifications of assets

l) The auditor is expected to obtain and satisfactorily document sufficient audit evidence to

support audit conclusions.


64

m) All necessary supporting documents, records, and accounts have been kept in respect of all

project activities and that clear linkages exist between accounting records, accounts books and

the periodic financial reports (IUFR)

n) Checking of all IUFRs prepared by Head Office and district offices confirming that the same

have been made on a realistic basis and based on books of Accounts.

o) Checking of IUFR accurately reflect expenditures and activities on the Project.

p) In respect of review of IUFR, the auditor should also verify the eligibility of expenditures for

IUFR disbursement and separately report upon ineligible expenditure, if any.

q) That the requirements set out in the fiduciary framework, which sets out the controls on project

grants and directives with respect to their usage, are appropriately applied. This would include

ascertaining that there is a

(i) Annual Action Plans have been approved by the competent authority.

(ii) Procedures ensuring that the proposed Action Plans have been drawn up.

(iii) Review mechanism of operations of the NGOs /Consultants/Institutions etc,

r) That there are no cases of misappropriations or frauds, if it is detected it is properly reported

and appropriate action is taken.

s) The auditor would verify NGOs /Consultant service providers payments at Districts and at HO

and comment on delayed/ pending payments due to NGO’s/Consultants / Service Providers,

etc.

t) Physical verification of Assets is required to be carried out by the auditor and the scope will be

mutually decided between WDD, DoH and the auditor.

4. Schedule for the Completion of the tasks

4.1 The Internal Audit will be for the period from 1th

of April to31st March, i.e. the financial year

for the FY’s 2014-15 to FY 2018-19 (Five Years)

4.2 The audit would be carried out on a concurrent basis in each Project District of the project & at

HO (WDD & DoH).

5. Data Series and Facilities To Be Provided By The Client

The Internal auditors shall be given access to all documents, correspondence, and any other

information relating to the project. The auditors shall be provided with the relevant policies and

guidelines of the State Government relating to procurement which is relevant to the State Project

Office, District Project Offices, and Project Appraisal Document (PAD) of the World Bank and other

relevant documents like subject files of the project etc.

All infrastructures like computers, printers, stationary, telephone, office furniture etc., required for the

audit & reporting should be provided by the internal auditors. All out of pocket expenses like travel,

local conveyance, food expenses, halting expenses etc., to be incurred for conducting the Audit shall

be borne by the auditors for visits given to project Districts of SUJALA-III districts and the CGIAR

districts.

6. Outputs and Deliverables to be furnished by the consultant.

6.1 The auditors would submit quarterly reports and an annual report to the Project Director.

a) Quarterly Reporting: The Auditors will provide a quarterly report for the units audited

during the quarter containing findings and recommendations to enable the Project

Management to take timely action. The Report shall contain the records verified,


65

deviations, if any, the adequacy of internal controls and the adherence to Government

orders, and rules and regulations made from time to time under the project. The report

should be discussed and agreed with the auditee and should be structured in a manner

giving the observations, the implications of the observations, the suggested

recommendation and the management comments/ agreed actions. In addition the internal

auditor should provide an Executive Summary highlighting the critical issues which require

the attention of the PIA and the status of actions on the previous recommendations. The

audit observations should be supported by instances and quantified, as far as practicable.

b) The quarterly audit reports should be submitted within 3 weeks from the end of the

quarter with a management letter, executive summary and the detailed report. The reports

will be submitted to the Project Director.

6.2 The auditor will also provide a report to Project Management highlighting findings during the

period under review. This will be in the form of a Management Letter which will inter-alia

include:

a) Comments and observations on the financial management records, systems and controls that

were examined during the course of the review.

b) Deficiencies and areas of weaknesses in systems and controls and recommendation for their

improvement.

c) Compliance with covenants in the financing agreement and comments, if any, on internal

and external matters affecting such compliance.

d) Matters that have come to attention during the review and might have a significant impact

on the implementation of the Project.

e) Any special review procedures required of a compliance nature (for example, compliance of

the procurement procedures, procedure for selection of consultants etc. recommended by the

World Bank).

f) Any other matters that the auditor considers pertinent.

6.3 The Executive Summary should normally cover the following items

a) Objectives of the audit

b) Methodology of the audit

c) The status of implementation of the financial management system

d) The status of compliance of the previous audit reports, including major audit observations

pending compliance

e) The key areas of weaknesses that need improvement; classified into following areas

• Procedural Lapse

• Accounting Lapse

• Accounting books & records not maintained.

• Difference between funds released and expenditure reported.

• Ineligible expenditure as per bank rules

f) Recommendations for improvements.

6.4 The annual review (at the end of the fiscal year) would include, in addition, the review of

project financial statements for the year.

7. Review Committee and Review Procedure

The Internal Audit Reports would be submitted on a quarterly basis to the project. The Audit Report

will be reviewed by the Audit committee / FRC comprising of the Executive Director,WDD,

Joint Director, DoH, Chief Accounts Officers of WDD & DoH, the committee may take the

assistance of FMTSC. The audit committee would meet on a quarterly basis to review the audit


66

reports, findings and issues and take corrective action on the same. Any long pending issues will be

required to be brought to the notice of the Project Director for necessary resolution.

8. Key Personnel to be deployed whose CV would be evaluated

The list of key personnel, their minimum qualifications and experience shall be as under:

Sl.No. Key

Professionals

Description of

Services to be

provided

Experience No. of

persons

Total Man

months per

year

1 Partner/ Audit

Manager

(Part time)

Overall

coordination, &

planning, team

leadership,

reporting, liaison

with client

Qualified Chartered

Accountant with at least

10 years experience as a

partner with expertise in

the area of internal audit

planning, execution and

reporting.

1 1

2 Team Leader Responsibility to

lead the audit

teams in the field,

planning and

execution of the

audits, discussion

with State Project

Monitoring Unit

(SPMU)/SLNA

and report writing

and finalization.

Qualified Chartered

Accountants with at least

5 years experience in

internal audit with ability

to lead and team and

interact with senior level

govt officials

1 3


67

Annexure – 11

Government Order regarding Formation of PEC, PPMU, PTC, REC and FMPC

PROCEEDINGS OF THE GOVERNMENT OF KARATAKA Sub: Implementation of the World Bank Assisted Karnataka Watershed Development

Project- II (Sujala III) – reg

Government Order No. AGD/164/AML/2011, Bangalore

Dated 21-8-2013

Ref:- 1. Commissioner, Watershed Development Department, Bangalore Lettr No.WDD/SUJALA III (EAP)/W-BANK/ACS/2011-12 dated 22-1-2013

2. G.O. No. AD/164/AML/2011, Bangalore dated 5-7-2012 3. Addendum No.AHD 164 AML 2011 dated 12-7-2013

Preamble: The State Government has accorded approval for the implementation of Karnataka Watershed Development Project – II (Sujala III) in seven districts of the State viz. Bidar, Gulbarga, Yadgir, Koppal, Gadag, Davanagere and Chamarajanagar vide G.O. No.AD/164/AML/2011, Bangalore dated 5-7-2012 and Addendum No. AHD 164 AML 2011 dated 12-7-2012. The total approved project outlay is Rs.471.3 crores (85.69 US Million Dollars) under the assistance of International Development Association (IDA) of World Bank with a 30% State share contribution. The Project will be implemented from 2012-13 to 2017-18 in two phases. The second phase of implementation will be taken up after the review of outcomes of the first phase. The Government vide addendum above has directed that a Project Empowered Committee (PEC) at the state level headed by Additional Chief Secretary and Development Commissioner will monitor the Project implementation. The Horticulture project proposal of Rs.151.73 crores (27.59 US Million Dollars) will be implemented by the Directorate of Horticulture. Subsequently the Project has been negotiated between the DEA GOI, GOK and World bank on 16-7-2012 and the same approved by the World bank Board (Cr.5087-IN) during September 2012. Further the Finance Department vide No.FD/PS(B&R)/140/2013 dated 15-1-2013 has advised the Department of Agriculture to sign the Loan Agreement. Accordingly the loan agreement has been signed on 11-2-20113 with the World Bank at New Delhi as guided by the DEA, GOT. Subsequently the Advocate General, GOK has given legal opinion vide DO.No.2/AGP/2013-14 dated 20-4-2013 and the project has become effective on 23-4-2013. According to the PAD, this is not a stand alone Project and where as it will provide Technical Assistance to the IWMP implementation. The WDD and DOH under the GOK would be implementing agencies for Project and be responsible for ensuring that the Project Development objectives are met. The PEC would closely work with the SLNA which monitors the implementation of IWMP. For effective implementation a Project Planning and Management Unit (PPMU) would be set up within WDD, which would assume direct responsibility for day to day project management, coordination and implementation at Department level. The PPMU would be led by a full time Project Director assigned from the WDD supported by:

(i) Project Technical Cell (PTC); (ii) Research and Extension Cell (REC); (iii) Financial Management and Procurement Cell (FMPC);


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The Commissioner, Watershed Development Department in his letter (1) above has proposed to constitute a Project Empowered Committee (PEC) at State Level and Project Planning and Management Unit (PPMU) at the department level.

The Commissioner, Watershed Development Department in his letter has also requested the State Government to authorize him to constitute (i) Project Technical Cell (PTC); (ii) Research and Extension Cell (REC) and (iii) Financial Management and Procurement Cell (FMPC).

The Commissioner, WDD in his letter has also requested the State Government to authorize him to enroll the services of Technical and supporting manpower as per the project requirement, from the outsourced placement agencies at Head Office, District and Taluk levels and also for the consortium partners in concurrence with the World Bank.

Further the Commissioner, WDD has also requested the Government, A and H Department and vest him with the powers which are vested to Secretaries to Government.

Considering the request of the Commissioner, WDD and also keeping the PAD as basis, further it is decided to constitute:

1. Project Empowered Committee (PEC) under the chairmanship of Additional Chief Secretary and Development Commissioner to oversee the implementation of the project at State level;

2. Project Planning and Management Unit (PPMU) for day to day project management, coordination and implementation at Department level under the chairmanship of Commissioner, WDD;

3. Project Technical Cell (PTC), Research and Extension Cell (REC) and Financial Management and Procurement Cell (FMPC) to assist the PPMU and the Project Director in respective areas of project implementation

Further it is also decided to nominate the Commissioner, WDD as the Project Director

Further it is also decided to authorize him to enroll the services of technical and supporting manpower as per the project requirement, from the outsourced placement agencies or on deputation basis from various line departments of GOK and GOK undertakings etc.

Further keeping in view the speedy/timely implementation of various activities envisaged in the project it has been decided to designate the Commissioner, WDD as Commissioner WDD& Ex-officio Secretary to Government, Agriculture and Horticulture department only in respect of implementation of this project. Hence this order:

ORDER

Sanction is hereby accorded for the following:

(a) To implement the project in accordance with the Project Agreement/PAD/Development Credit Agreement and other terms and conditions stipulated therein;

(b) To constitute PEC at State level under the chairmanship of ACS&DC to oversee the policy, planning and macro issues relating to the project. The composition and powers of the committee are indicated in Annexure-1

(c) To constitute a PPMU under the chairmanship of Principal Secretary(PS) to Government, AD to facilitate the speedy/timely implementation of various activities of the project. The composition and powers of PPMU are indicated in Annexure –II;


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(d) To constitute a PTC under the chairmanship of Commissioner, WDD. This cell would assist the WDD and PPMU in dealing with the day to day technical aspects of project implementation. The composition of the PTC is indicated in Annexure –III;

(e) To constitute a REC under the chairmanship Director, WDD. This cell would assist the PTC in coordinating with the various researchers related issues of the project implementation. The composition of REC is indicated in Annexure –IV;

(f) To constitute a FMPC under the chairmanship of ED and CCF, WDD. This cell would assist the WDD and PPMU in dealing with the day to day financial and procurement aspects of project implementation. The composition of FMPC is indicated in Annexure –V;

(g) To designate the Commissioner, WDD as Commissioner &Ex-officio Secretary to the Government, A&H only in respect implementation of the World Bank assisted KWDP-II in the State.

The Commissioner, WDD will be the Project Director and shall ensurethat necessary re-imbursement claims are preferred regularly and sent to GOI/WB for reimbursement. Further the CCF, WDD will be the Executive Director assisting the PD and Commissioner, WDD in smooth implementation of the Project. Further PD and Commissioner, WDD is authorized to enroll the services of technical and supporting manpower as per the project requirement, from the outsourced placement agencies or on deputation basis from various line departments of GOK and GOK undertakings etc. after getting approval of PEC and with FD concurrence. The expenditure pertaining to 2012-13 to 2017-18 shall be met under the budget provision made in the Head of Account 2402-00-102-0-28 and Head of Account 2401-00-800-2-80 of WDD and HD respectively. This order issues with the concurrence of FD vide its note no. FD/220/EXP-4/2013 dated 29-7-2013

By order and in the Name of the Governor of Karnataka Sd/-

(J.R. Vishwanathachar) Under Secretary to Government

Agriculture Department (Planning) TO: 1. The CS GOK 2. The Country Director WB, New Delhi 3. The ACS GOK 4. The ACS&DC, GOK 5. JS(MI) DEA, GOI 6. ACS GOK(FD) 7. PS GOK (FD) 8. PS GOK (AD) 9. PS GOK (Planning, Program Monitoring and Statistics Dept) 10. PD and Commissioner , WDD 11. Director Horticulture 12. Director, Directorate of Treasuries 13. ED, KWDP-II 14. Controller (Accounts Management) PMU FD 15. Under Secretary, FD (Expn 4&5) 16. Spare copies/SGF, Bangalore


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Annexure –I to GO No.AGD/164/AMI/2011, Bangalore, dated 21-8-2013

Composition and powers of PEC

1 Additional Chief Secretary and Development Commissioner Chairman

2 Principal Secretary to Government , Agriculture Department Member

3 Principal Secretary to Government, Horticulture Department Member

4 Principal Secretary to Government RD&PR Department Member

5 Principal Secretary to Government Animal Husbandry and Fisheries Department

Member

6 Principal Secretary to Government IT, BT and S&T Department Member

7 Principal Secretary to Government, Planning, Program, Monitoring and Statistics

Member

8 Secretary to Government (B&R) Finance Department Member

9 Secretary to Government (FR) Finance Department Member

10 Additional PCCF (Development) Member

11 Deputy Director General Natural Resource Management, ICAR/Director NBSSLUP

Member

12 Vice Chancellor, UAS Raichur Member

13 Representative of MYRADA/BAIF Member

14 Commissioner, WDD Member Secretary

Special Invitees:

1. Principal Secretary to Government, DPAR 2. Secretary to Government, Law Department

PEC shall be vested with the following powers: 1. The PEC shall provide overall guidance on: Policy relating to Watershed Development; Integration of programs of various departments; Involving Panchayaath Raj Institutions; 2. Shall review and guide the project integration and convergence with MNREGS and programs of Agriculture, Horticulture and Animal Husbandry departments as well as Ground Water developments in watersheds; 3. Shall review and guide the overall implementation plan, budgets, disbursements and inter-alia review the overall project implementation progress, supervise nid-course correction and issue guidelines for smooth implementation of the project;


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4. Shall approve creation of posts for the duration of the project in accordance with the project requirement in concurrence with the FD; 5. Shall approve procurement of Project goods and other supplies upto/exceeding INR 10 million (US$217,400) and Project works/civil works and consultancy services upto/exceeding INR 1 million (US$21,739); 6. Shall approve creation of posts for the duration of the project in accordance with the project requirements in concurrence with FD; 7. Shall approve procurement of project vehicles; 8. Whenever the empowered committee decides a matter over ruling/disagreeing with the opinion of the FD, the same shall be highlighted in the statement of decisions to be placed before the Cabinet; 9. The statement of decisions taken by the empowered committee on matters which would ordinarily have required Cabinet approval shall be placed before the Cabinet by the Chair person of the committee; 10. Powers of the PEC cannot be delegated to any other committee or authority except with the prior approval of the Cabinet; 11. The committee shall meet on a quarterly basis.


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Annexure –II to GO No. AGD/164/AML/2011, Bangalore

Dated 21-8-2013

Composition and powers of PPMU 1 PS to Govt. Agriculture Department Chairman

2 Director, NBSS&LUP/Head NBSS&LUP regional centre, Bangalore Member

3 Director Watershed Member

4 Director Agriculture Member

5 Director Mines and Geology Member

6 Director Horticulture Member

7 Director NREGS Member

8 Director of Research, UAS Bangalore Member

9 Expert on Ground Water as nominated by CGWB Member

10 Joint Director (PMU) FD Member

11 Deputy Secretary (EAP-PMU) FD Member

12 Director PF Division Planning Department Member

13 CAO WDD Member

14 ED and CCF WDD Member

15 Commissioner WDD Member Secretary

Special Invitee: PS to Govt. Horticulture Department.


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PPMU shall be vested with the following powers

1. Shall take the lead role in:

• Planning, implementation, quality control and audit; • Monitor project performance in line with the project implementation schedule; • Responsible for inter institutional co-ordination; • Technical support to project districts, Watershed institutions and Consortium Partners

2. Shall review the annual plan and budgets before it is placed for approval of PEC; 3. Shall prepare annual procurement plans and procurement packages and ensure procurement following

due process within the delegation as provided; 4. Shall oversee the implementation of program convergence with MNRGES and programs of Agriculture,

Horticulture and Animal Husbandry Departments as well as Ground Water Development programs and IWMP integration in watersheds;

5. Shall periodically monitor the performance and progress of consortium partners and that of consultancy providers including services of accounting firms, auditing firms, monitoring and evaluation agencies, GIS agencies, documentation and publicity agencies, training institutions and NGO services if any;

6. Shall periodically monitor and review the activities of various project cells (PTC,REC and FMPC); 7. Review the micro-watershed master plans and DPR before implementation; 8. Shall periodically review and scrutinize the midcourse corrections suggested by PTC and place its

recommendations before the PEC for approval seeking issue of directions relating to mid-course correction on the implementation of the project;

9. Shall oversee the manpower requirement for the project as identified and recommend to PEC for approval;

10. Shall approve the project TORs and project bid documents on the recommendations of PTC; 11. Shall approve various workshops and seminars and sponsor exposure visits in India and in case of

abroad, with the approval of PEC under the extant Guidelines in the matter; 12. Shall constitute various committees/sub-committees as and when required to oversee the Project

implementation; 13. The committee shall meet at least once in three months; 14. Should place the minutes of the meetings before PEC for its information/approval wherever needed;


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Annexure III to Go No: AGD/164/AML/2011, Bangalore Dated 21-8-2013

Composition of PTC

1 Commissioner, WDD Chairman 2 Head/Lead Scientist NBSS &LUP, regional centre,

Bangalore Member

3 Associate Professor, Dept of Civil Engineering IISC, Bangalore

Member

4 Director, KSRSAC Member 5 Director. Karnataka State Disaster Management cell Member 6 ISRO-ANTRIX Nominee Member 7 Nodal Scientist, UAS Bangalore Member 8 Nodal Scientist, UAS Dharwad Member 9 Nodal Scientist, UAS Raichur Member

10 Nodal Scientist, UHS Bagalkot Member 11 Expert in Watershed Management Member 12 HOD, Soil Science, UAS Bangalore/Dharwad Member 13 Head CSWRTI (ICAR), Bellary Member 14 Joint Director, Soil Conservation, WDD, Bangalore Member 15 ED&CCF WDD Member Secretary


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PTC shall be vested with the following powers

1. Shall assist the WDD/PPMU in the day to day technical aspects of project implementation; 2. Shall develop a road map for project implementation and the PERT cart of activities; 3. Shall work closely with the REC for integration of research and development products into the

IWMP planning processes and technology transfer; 4. Shall establish working linkages between the various consortium partners, NGOs, RSKs, KVKs

and WDTs including watershed committees and Panchayat Raj Institutions for effective Project implementation;

5. Shall scrutinize annual work programs and budgets of various project districts and its compilation;

6. Shall prepare project district wise state level annual work plans/programs and place it before PPMU;

7. Shall scrutinize and guide project districts in preparation of program convergence plans of MNREGS and preparation of Agriculture, Horticulture and Animal Husbandry departments as well as ground water development and its integration with IWMP;

8. Shall review and oversee the implementation and progress of various tasks by the consortium partners on the work plan/work schedule and report generation, TOR implementation from time to time;

9. Shall monitor and guide the working of REC and FMPC and report to PPMU on project implementation;

10. Shall monitor, guide and review the performance of various consultants engaged; 11. Shall monitor the project M&E and reporting; 12. Shall periodically monitor the project progress and suggest midcourse corrections; 13. Shall evaluate the requirements of manpower, materials, equipments, goods, hardware, software

of the consortium partners, project head quarters, and project districts; 14. Shall assess the suitability of identified manpower personnel/ staff outsourced/on deputation; 15. Prepare and scrutinize annual procurement plans and procurement packages to be placed

before PPMU for approval; 16. Shall scrutinize and place its recommendations before the PPMU on the project TORs and various

project bid documents; 17. Shall approve various formats, data authentication, data storage and sharing, digital library, DSS

and land resource portal etc.; 18. Shall organize, co-ordinate and supervise and monitor various workshops, seminars, trainings,

exposure visits in India and abroad; 19. Shall be responsible for various issues related to publicity, campaign, and stake holder

consultation including documentation and publications, ICE etc.; 20. Shall meet at least once in a month.


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Annexure –IV to G.O No. AGD/164/AML/2011. Bangalore

Dated: 21-8-2013

Composition of REC

1 Director, WDD Chairman

2 Director of Research, UASB Member

3 Director of Research, UASD Member

4 Additional Director, Agriculture, AD Member

5 Additional Director, Horticulture Dept Member

6 Director of Extension, UAS Raichur Member

7 Director of Extension, University of Veterinary Sciences, Bidar

Member

8 Principal Scientist NBSS&LUP Member

9 Nominee from ICRISAT Member

10 Nominee from ISEC Member

11 Principal Training Institute, WDD, Bijapur Member

12 Project Co-ordinator, AICRP on Dry land farming Member

13 Representative of OUTREACH Member

14 Joint Director, Agronomy, WDD Member Secretary


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REC shall be vested with the following powers

1. Shall coordinate all aspects of Project research and extension and assist PTC in implementation of R&D component of the Project and identify/short list the researchable issues;

2. Shall establish working linkages with the research prioritization process of Department of Agriculture involving the Universities, ICAR institutions and other national and international institutions, KVKs, and ATMA process to organize and deliver the R&D related to watershed;

3. Shall facilitate coordination and partnerships with research agencies, universities and government departments, NGOs and private sector for delivering research outputs, technology transfer and strengthening local institutions;

4. Shall initiate the process for enlisting the agencies to undertake competitive research process and approve the methodology and time frame and recommend to PPMU for approval;

5. it shall consider and recommend to the PPMU the research outcomes, lead farmer innovations and short list best practices for technology transfer by networking and strengthening/facilitating RSKs and KVKs;

6. It shall periodically review, monitor and suggest mid-course correction of the research programs undertaken;

7. Shall plan, oversee and monitor the various activities related to technology transfer include demonstrations, farmer field schools, integrated farming systems/production systems and related training and exposure visits etc.;

8. it shall consider and recommend to the PPMU the research outcomes, lead farmer innovations and short list best practices for technology transfer by networking and strengthening/facilitating RSKs and KVKs;

9. It shall plan, oversee and monitor the comprehensive needs identification, training and exposure program for the project stakeholders, both for State, district and field level.


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Annexure –V to G.O.No: AGD/164/AML/2011, Bangalore

Dated 21-8-2013

Composition of FMPC

1 ED &CCF, WDD Chairman

2 JD Administration WDD Member

3 Full time qualified Financial Manger at State level

Member

4 DWDO Bidar Member

5 DWDO Gadag Member

6 DWDO Chamarajanagar Member

7 Representative/Lead Scientist UASB Member

8 Representative /Lead Scientist UASD Member

9 Representative / Lead Scientist UASR Member

10 Representative/Lead Scientist UHS Bagalkot Member

11 e-governance/Procurement nominee Member

12 Director of Horticulture Nominee Member

13 CAO WDD Member Secreatary


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FMPC shall be vested with the following powers

1. Shall work in close co-ordination with PTc and assist in establishing and monitoring the Finance Management Systems. Accounting policies, financial discipline and internal control systems;

2. Shall assist in budgeting and fund flow, monthly program implementation calendar (MPIC) annual action plan etc;

3. Shall assist in computerized accounting /software installation; 4. Shall assist in processes for handling finance; 5. Shall assist in disbursement arrangements and IUFR compilation and reporting; 6. Shall assist in preparing procurement packages from time to time and RFQ, RFP, EOI,

and related TORs etc. under the various project components; 7. Shall assist in accounting systems like reimbursement claims, report based

disbursement, voucher flow system, other accounting procedures, acconting entries and books of accounts to be maintained, closing of books of accounts, settlement of bills and payments etc;

8. Shall assist in audit both external and internal audit. Sd/- (J.R. Vishwanathachar) Under Secretary to Government Agriculture Department (Planning)