Government of Pakistan Earthquake Reconstruction and

Government of Pakistan

Earthquake Reconstruction and Rehabilitation Authority

OPERATIONAL MANUAL

September 2006

Earthquake Reconstruction and Rehabilitation Authority: Operational Manual – 2006

i

TABLE OF CONTENTS

Serial CONTENTS PAGE

1.

Functions and management of the earthquake reconstruction and rehabilitation authority

01

2.

Project Planning and implementation rules

37

3.

Procedure of NOC

61

4.

SOPs for procurement of goods & services and payment of bills

64


ii

List of Abbreviations and Acronyms

AJ&K Azad Jammu and Kashmir

AGP Auditor-General of Pakistan

CGA Controller General of Accounts

EAD Economic Affairs Division

ERRA Earthquake Reconstruction and Rehabilitation Authority

FHA Frontier Highway Authority

IESCO Islamabad Electric Supply Company

LOI Letter of Intent

MoF Ministry of Finance

NBP National Bank of Pakistan

NHA National Highway Authority

NWFP North West Frontier Province

PESCO Peshawar Electric Supply Company

PTCL Pakistan Telecommunication Company Limited

RFP Request for Proposal

SBP State Bank of Pakistan

SCO Special Communication Organization

WAPDA Water and Power Development Authority


iii

Foreword

The Operational Manual is an effort to compile & consolidate different

rules to be followed in the planning, designing and implementation of

reconstruction and rehabilitation projects. The processes in these rules have

basically been borrowed from the prevalent government instructions, so that

these are easily understood by the various government tiers and officers

striving for reconstruction and rehabilitation. A few variations from

government procedures have been made for enhancing the pace of

reconstruction activity. However, at the same time, effort has been made

that transparency and efficiency are not compromised in implementing ERRA

projects.

ERRA has been burdened with the responsibilities never before

handled by an organisation in this country. While treading this unknown path

ERRA will be facing new challenges each day. The operational manual,

therefore, has to be a dynamic document. We are willing to learn, and make

any mid-course corrections.


1

PART-I

CHAPTER - 1

FUNCTIONS AND MANAGEMENT OF THE EARTHQUAKE RECONSTRUCTION AND REHABILITATION AUTHORITY

Background

1.1 Government of Pakistan has established Earthquake Reconstruction

and Rehabilitation Authority (ERRA), as an autonomous organization, for

post-disaster damage assessment, reconstruction and rehabilitation of the

areas affected by the earthquake of 8 October 2005. The Authority shall be

part of the Prime Minister’s Secretariat with its headquarters at Islamabad.

The Authority may establish its temporary sub-offices at such other places in

the earthquake affected areas as it may consider appropriate to expedite the

recovery, reconstruction, rehabilitation and development work.

Area of Operation

1.2 The Authority shall undertake its operations in the affected areas of:

(a) Pakistan;

(b) the Azad Jammu and Kashmir in consultation with its government.

Functions of the Authority

1.3 The Authority is responsible for reconstruction and re-development of

earthquake affected areas and rehabilitation of affected population and

towards this end, its functions and duties are as follows:-

a) Surveys to assess damage and needs in the Affected Areas.

b) Formulation of a comprehensive umbrella development programme

to provide for

(i) planned settlements, housing, government buildings and

offices, utilities and services, infrastructure, health and

education facilities, irrigation and agriculture facilities;


2

(ii) environmental rebuilding, including cleaning of watersheds,

reforestation programmes and other environmental

interventions to restore the ecosystems.

c) Preparation of resettlement plan for the affected population in

consultation with local communities, ensuring an appropriate

mechanism for the resolution of land titles and land tenure issues.

d) Getting general approval of its comprehensive development

programme from the Council of ERRA.

e) Identification, preparation, approval and execution of projects.

f) Steps and measures to ensure execution of the approved projects

and development programmes in accordance with the time schedule

approved by the Council.

g) Prescribing cost-effective technology, building codes, architectural

designs, specifications, and construction materials for housing and

other buildings in earthquake prone areas to safeguard against

future seismic activity.

h) Review the building codes of the various urban development

authorities and recommending for appropriate changes to ensure

quality construction and to maintain building standards in the

country.

i) Facilitating the setting of reconstruction related industry in the

affected zones.

j) Performing any other function assigned to it by the federal

government that is incidental to any of the aforesaid functions.

Powers of the Authority

1.4 The Authority may:-

(a) undertake any work , incur any expenditure, procure plants,

machinery, equipments, vehicles for field duties and stores as


3

needed for the implementation of approved development

programmes and projects;

(b) dispose of such plants, machinery, equipments, vehicles and stores

as are no longer required;

(c) employee such staff and officers as may be required for the

functioning of the Authority;

(d) engage such experts, consultants, advisors, contractors and

suppliers as may be considered necessary for preparing and

executing the development programmes;

(e) seek or call for any information required by it for carrying out its

purposes from any person, or any institution or any agency;

(f) seek and obtain from any agency of the federal government,

provincial governments, and Government of Azad Jammu and

Kashmir or any local authority, advice and assistance to discharge

its functions and execute its programmes and projects;

(g) approve individual projects, within the scope of the approved

umbrella programmes, upto a cost determined by the Federal

Government;

(h) transfer any project on completion to any agency of the federal

government, the provincial governments, and the Government of

Azad Jammu and Kashmir with the approval of the Council;

(i) approve the budget of the Authority; and

(j) reappropriate funds from one head of account to another account

within the approved budget.

Council of the Earthquake Reconstruction and Rehabilitation

Authority

1.5 The general direction, all matters of policy and administration of the

Authority and its affairs shall vest in a Council which may exercise all

powers, perform all functions and do all acts and things which may be


4

exercised, performed or done by the Authority. The Council shall be apex

body and shall consist of the following members:

(i) Prime Minister of Pakistan Chairman

(ii) Prime Minister of Azad Jammu and Kashmir Member

(iii) Chief Minister of NWFP Member

(iv) Minister for Kashmir Affairs and Northern Areas Member

(v) Advisor to the Prime Minister on Finance Member

(vi) Deputy Chairman, Planning Commission Member

(vii) Chairman, ERRA Member

(viii) Deputy Chairman, ERRA Member/Secretary

1.6 The Council may co-opt such members as may be deemed necessary

by it for the conduct of its business. The Government may, by notification in

the official gazette, increase or decrease the number of members of the

Council from time to time or substitute any member as and when required.

The ERRA Board

1.7 There shall also be a Board which shall be responsible for the

implementation of the approved programmes, projects and policy decisions

of the Council as well as for the day to day operational matters and shall

have such administrative and financial powers as may be delegated to it by

the Council. The Board shall comprise the following:

(i) Chairman ERRA Chairman

(ii) Deputy Chairman, ERRA Member/Secretary

(iii) Additional Finance Secretary (Expenditure) Member

(iv) Additional Secretary, Defence Member

(v) Additional Secretary, Planning Division Member

(vi) Additional Secretary, EAD Member

(vii) Chief Secretary, NWFP Member

(viii) Chief Secretary, AJ&K Member

(ix) Four representative of civil society to Member


5

be nominated by the Federal Government

(x) A representative of civil society to be Member

nominated by Government of NWFP

(xi) A representative of civil society to be Member

Nominated by the Government of an affected area

1.8 The Board may co-opt such other members as deemed necessary by it

for the conduct of its business. The Government may, by notification in the

official gazette, increase or decrease the number of members of the Board

from time to time. The Board shall submit reports to the Council in respect

of all its activities on quarterly basis.

Meetings of the ERRA Council and Board

1.9 The meetings of the Council and the Board shall be held at such times,

places and in such manner as may be specified. The Council shall meet at

least once in three months or as often as the Chairman desires. The Board

shall meet as often as is expedient to discharge its responsibilities and shall

prescribe procedures for regulating its proceedings. The decisions of the

Council and the Board shall be taken by the majority of its members present

and, in case of a tie, the Chairman shall have a casting vote.

Chairman, ERRA

1.10 The Federal Government shall appoint a Chairman of the Authority

who shall be responsible for the policy matters for such period and on such

terms and conditions as it may determine.

1.11 The Chairman shall perform such functions and carry out such

responsibilities as may be delegated to him by the Council or the Board.

Deputy Chairman, ERRA

1.12 The Federal Government shall appoint a Deputy Chairman for such

period and on such terms and conditions as the Federal Government may

prescribe.


6

1.13 The Deputy Chairman shall be responsible for the day to day

administration of the Authority and may exercise such administrative and

financial powers as are delegated to him by the Council or the Board.

Implementation Arrangements

1.14 The Council shall provide policy guidelines and approve the policies,

plans, programs, projects and schemes, submitted by the Chairman or the

Board.

1.15 The Board shall exercise such powers and perform such functions as

the Council may assign to it.

1.16 Subject to the provisions of para 1.15 and subject to the overall

supervision and control of the Council, the Board shall perform the following

functions, namely:

• Approve projects up to sanctioning limits of CDWP. Any project

beyond that limit would be submitted to ECNEC for approval;

• Approve the budget and accounts;

• Consider the quarterly and annual reports of the Authority for making

recommendations to the Council;

• Appoint advisors and consultants and determine their conditions of

appointment;

• Constitute such committees as it may consider appropriate.

1.17 The Governments of NWFP and AJ&K shall establish Steering

Committees and one Reconstruction Agency (RA) each for the

reconstruction and rehabilitation work. The steering committees shall be

headed by the Chief Secretaries / Additional Chief Secretaries and shall

include the representatives of respective departments and ERRA. The

Steering Committees shall be responsible for:

• Approval of annual reconstruction plans;

• Over-viewing the Reconstruction Agencies; and

• Reporting to ERRA.


7

1.18 The Reconstruction Agencies of NWFP and AJ&K shall be autonomous

in status and shall be responsible for:

• Preparing annual work programmes;

• Implementation of contracts in coordination with line agencies;

• Monitoring of regional and district programmes and projects; and

• Reporting to the Steering Committees and the ERRA.

1.19 The District Reconstruction Units shall be responsible for:

• Preparing district reconstruction plans;

• Implementation of small contracts in coordination with District

Governments / District level line agencies;

• Reporting to their respective Governments; and

• Coordinating / partnering with partner organizations.

1.20 Some of the reconstruction and rehabilitation work shall be

undertaken by the national and provincial Government organizations like

National Highway Authority, Water and Power Development Authority,

Pakistan Telecommunication Company Ltd; Frontier Highway Authority and

Sarhad Hydel Development Organization. The implementation arrangements

and reporting mechanism is shown in Figure-1.


8

PROPOSED FUNDS FLOW AND PROJECT IMPLEMENTATION ARRANGEMENT

World Bank

Other Donors

SERRA, AJK Muzaffarabad

PERRA, NWFP Peshawar

Budget Counterpart Fund

ERRA / NBP

Account

SHYDO

FHA

District Reconstruction

Units

MOF / SBP

Consolidated Fund

ADB

Peshawar Electric Supply Company

Islamabad Electric Supply Company

Provincial Line

Departments

Public Works Department

Electricity Department

Education Department

Local Govt.& Rural Dev. Department

Health Department


Units

ADB = Asian Development Bank, ERRA = Earthquake Reconstruction and Rehabilitation Authority, FHA = Frontier Highway Authority, MOF = Ministry of Finance, NBP = National Bank of Pakistan, NWFP = North-West Frontier Province, PERRA = Provincial Earthquake Reconstruction and Rehabilitation Authority, SBP = State Bank of Pakistan , SERRA = State Earthquake Reconstruction and Rehabilitation Authority, SHYDO = Sarhad Hydal Development Organization,

Fig 1


9

CHAPTER - 2

APPROVAL OF PROJECTS AND PROGRAMMES

Umbrella Development Programme

2.1 ERRA shall formulate a comprehensive umbrella development

programme to provide for

(i) planned settlements, housing, government buildings and

offices, utilities and services, infrastructure, health and

education facilities, irrigation and agriculture activities;

(ii) environmental rebuilding including cleaning of watersheds,

reforestation programmes and other environmental

interventions to restore the ecosystems

which shall be approved by the Council of Earthquake Reconstruction and

Rehabilitation Authority.

Development of Programmes / Projects

2.2 Individual programmes, projects, schemes etc., within the umbrella

development programme, shall be identified by the ERRA, Reconstruction

Agencies and District Reconstruction Units of NWFP and AJ&K and all other

executing agencies in consultation with local communities. The programmes,

projects, schemes etc., shall be formulated by the concerned agencies in

accordance with the guidelines issued by the ERRA and shall be got

approved by them from the appropriate forum after due project appraisal.

Programmes, projects, schemes etc., falling outside the purview of any

approving authority e.g. DDWP, PDWP shall be approved by the Council of

the ERRA. The approved programmes, projects, schemes etc., shall be

submitted to the ERRA for review and funding. ERRA shall be responsible for

overall co-ordination with the Governments and Reconstruction Agencies of

NWFP and AJ&K and other executing and implementing agencies with


10

respect to various programmes, projects, schemes etc. to be undertaken in

the earthquake affected areas. ERRA shall also be responsible for monitoring

and evaluation of all activities undertaken by the reconstruction agencies

and all other executing and implementing agencies financed through ERRA

funds.

Project Appraisal

2.3 While undertaking appraisal of various programmes, projects, schemes

etc., the relevant appraisal agencies / authorities shall take into account the

following factors:

• Desirability of the programme, project, scheme etc., in terms of

location, number and type of beneficiaries and impact on the

economy and environment.

• Capacity of the executing / implementing agency or NGO / PO to

undertake the programme, project, scheme etc. within the

stipulated time and cost.

• Arrangements for the running and maintenance of the programme,

project, scheme etc. after completion including staffing

arrangements, where required e.g. health and education

establishments, and payment of user charges, if any.

• Economic and / or social benefits to the community in quantifiable

terms.

• Participation of the community in the programme, project, scheme

etc.

• Financial Management arrangements for the programme, project,

scheme etc.

Provision of Funds

2.4 Before any programme, project, scheme etc., proposed by the

Reconstruction Agencies of NWFP and AJ&K or by any other executing and

implementing agency is prioritized and finally cleared by the ERRA, the


11

Authority shall ensure the availability of funds for its implementation. The

programmes, projects, schemes etc. finally cleared by the ERRA shall only

be undertaken after funds have been released by the ERRA. The funds shall

be released according to financial phasing and / or the provisions of the

contracts and release of further funds shall be subject to rendition of

monthly expenditure statements and financial and physical progress reports

or any other information as may be required by the ERRA. Funds allocated /

released for a particular programme, project, scheme etc., shall not be used

for another programme, project or scheme without the prior approval of

ERRA.

Technical Approval

2.5 The respective agencies shall prepare detailed technical proposals and

shall be competent to accord technical sanctions to such programmes,

projects, schemes etc. which conform to the guidelines provided by the

ERRA provided that according of technical approval falls within their

competence.

Notice of Approval

2.6 The ERRA shall notify in writing about the approval or rejection of the

programme, project, scheme etc. to the concerned Government /

Reconstruction Agency or executing and implementing agencies. In case of

non-approval, the reasons shall be communicated.

Procurement of Materials

2.7 ERRA shall facilitate adequate availability of different construction

materials in the affected areas and for this purpose approach concerned

government agencies / organizations and various trade bodies for taking

necessary steps. However, procurement of materials for various

programmes, projects, schemes etc. from various sources shall be the

responsibility of the concerned executing and implementing agencies. The


12

owners of private houses shall procure the required construction materials

themselves.

Right of Information

2.8 The ERRA can require the Governments of NWFP and AJ&K, the

concerned Reconstruction Agencies and District Reconstruction Units of

NWFP and AJ&K and all other executing and implementing agencies dealing

with ERRA funds to submit specific information or any other supplementary

information or clarification at any time and set a deadline for such

information to be supplied. Failure on the part of any Reconstruction Agency

or any other executing or implementing agency to provide any information

or clarification by the fixed deadline may result in stoppage of funding by the

ERRA for any or all programmes, projects, schemes etc. being implemented

by the concerned agency.


13

CHAPTER - 3

MANAGEMENT OF FUNDS

Introductory

3.1 There shall be a fund to be known as the Earthquake Reconstruction

and Rehabilitation Authority Fund which shall vest in the Authority and shall

be utilized by the Authority to meet the charges in connection with its

functions. The Fund shall consist of

(a) such sums as the Federal Government may, from time to time,

allocate to it in the annual budget;

(b) grants;

(c) all other sums or properties which may in any manner become

payable to, or vest in, the Authority.

Inflow and Outflow of Funds

3.2 All moneys consisting of loans, credits, grants and donations received

by the Government and contributions of the Government meant for

reconstruction and rehabilitation activity in the earthquake affected areas

shall be deposited in the Federal Consolidated Fund with the State Bank of

Pakistan (SBP). The Ministry of Finance shall allocate funds to the Authority

out of the above said resources. The Government shall release these funds

to the assignment account of ERRA which shall be maintained with National

Bank of Pakistan. The Reconstruction Agencies and District Reconstruction

Units of NWFP and AJ&K and other executing and implementing agencies

shall open dedicated bank accounts to be maintained with National Bank of

Pakistan to receive funding for the programmes, projects, schemes etc. to

be implemented by them. The ERRA funds shall remain federal funds at all

levels and shall be kept separately in the dedicated bank accounts to avoid

mixing of these funds with other funds.


14

Disbursements from the Fund

3.3 Funds for different programmes, projects, schemes etc., approved by

various authorities including the ERRA Council shall remain federal funds at

all levels and shall be utilized in the following manner:

a. For programmes, projects, schemes etc., which may be executed /

implemented by Government organizations like National Highway

Authority (NHA), Frontier Works Organization (FWO), Water and Power

Development Authority (WAPDA) – Islamabad Electricity Supply

Company (IESCO), Peshawar Electric Supply Company (PESCO),

Pakistan Telecommunication Company Ltd; (PTCL), Special

Communication Organization (SCO), Frontier Highway Authority (FHA),

Sarhad Hydel Development Organization (SHYDO) etc., the funds shall

be transferred by the ERRA directly to the dedicated bank accounts of

the respective organizations to be opened with National Bank of

Pakistan. The disbursements shall be made as per the financial

phasing of various programmes, projects, schemes etc., and the

stipulations of the agreements entered into with such organizations, if

any. The ERRA funds shall only be utilized by these organizations for

the eligible expenditures pertaining to the projects entrusted to them

by the ERRA. The moneys shall be disbursed from the dedicated bank

account(s) in accordance with the provisions of General Financial Rules

(GFR) and Federal Treasury Rules (FTR) or the relevant financial rules

of the concerned autonomous bodies duly approved by the competent

forum as per their governing statutes. The respective organizations

shall be responsible for the preparation of the accounts, on monthly

basis, in respect of the projects entrusted to them, in such form /

format as may be required by the ERRA. The accounts shall be

submitted to ERRA on such dates as may be fixed by the ERRA. In

cases where the funds are released to the national and provincial


15

organizations directly by the Government of Pakistan / donors, they

shall be required to follow the guidelines issued by the Government /

donors. In such cases, ERRA shall not be responsible for the

maintenance of the accounts and monitoring, evaluation and internal

audit of the funds so released by the donors / Government of Pakistan.

b. For the programmes, projects, schemes etc., that shall be

implemented through the Reconstruction Agencies of the Governments

of NWFP and AJ&K or through the line departments of the two

Governments or by the District authorities viz. District Coordination

Officers (DCO) / Deputy Commissioners (DC), District Reconstruction

Units (DRU) etc., the funds shall be released to the dedicated bank

accounts of the respective reconstruction agencies to be opened with

National Bank of Pakistan. The Reconstruction Agencies may make

further disbursements to the District Reconstruction Units through a

dedicated imprest account which shall be maintained with National

Bank of Pakistan. The disbursements shall be made as per the financial

phasing of various programmes, projects, schemes etc., and the

stipulations of the agreements, if any, entered into by ERRA with such

organizations. The ERRA funds shall only be utilized by these

organizations for the eligible expenditures pertaining to the projects

entrusted to them by the ERRA. The moneys shall be disbursed from

the dedicated bank account(s) in accordance with the provisions of

GFR and FTR. The respective organizations shall be responsible for the

preparation of accounts in respect of the programmes, projects,

schemes etc., entrusted to them, on a monthly basis, in such form /

format as may be required by ERRA. The Reconstruction Agencies shall

obtain the accounts from all the Implementing Agencies / District

Reconstruction Units to whom the funds are released by them, verify

the correctness of those accounts and submit the same along with


16

their own accounts to ERRA on such dates as may be fixed by the

ERRA. For the purpose of making the payments:

(i) The respective executing agencies shall prepare the bill in the

prescribed format and as per rules and regulations on the

subject;

(ii) The bill so prepared shall be duly supported by the relevant

documents and should tally with the subsidiary record;

(iii) The bill shall be pre-audited and passed for payment by an

Accounts Officer posted in the Reconstruction Agencies or the

District Reconstruction Unit, as the case may be, by the

respective Governments and authorized to pre-audit and pass

the bills;

(iv) The Accounts Officer shall make sure that the claim has been

submitted by the authorized officer / Drawing and Disbursing

Officer and has been properly classified as per Chart of

Accounts; scrutinize the claim for availability of budget and

funds for the programme, project, scheme etc., against which

the bill has been preferred; eligibility of expenditure; correctness

of the calculations and completeness of the claim; genuineness

of the claim; affixation of a certificate on the claim regarding

receipt of goods / materials or utilization of services; compliance

with rules and regulations; recoveries and deductions at source

etc.,

(v) In case of correctness of the claim in all respects the “pay order”

shall be recorded on the face of the bill under the signature and

stamp of the Accounts Officer authorized for the purpose;

(vi) After the bill has been passed, a cheque shall be prepared for

the amount for which the “pay order” has been recorded on the

bill; the cheque so prepared shall be marked as “Payee’s A/c


17

Only” and shall be signed by two officers authorized by the

respective government in this behalf;

(vii) In case the bill submitted by an executing agency is in excess of

the amount of Rs. 1.0 million or in case of any doubt about the

genuineness of the claim, the Accounts Officer shall recheck with

the respective authorized officer / Drawing and Disbursing

Officer of the concerned implementing agency that the bill has

been duly submitted by him for that specific amount;

(viii) All cheques shall be collected by the authorized representatives

of the concerned implementing agencies or shall be dispatched

by registered post / courier service;

(ix) The implementing agencies shall reconcile their monthly

expenditure with the respective Accounts Officer by 5th of the

following month;

(x) The Accounts Officers posted in the District Reconstruction Units

or in the Reconstruction Agencies shall prepare the monthly

accounts, in such form / format as may be required by ERRA by

7th of the following month and submit the same to ERRA through

Reconstruction Agencies;

(xi) The Accounts Officers shall be responsible for the safe custody of

all accounts record;

(xii) The Accounts Officers shall also reconcile the expenditure / total

number of cheques issued during the month with the respective

banks on a monthly basis.

(xiii) The Governments of NWFP and AJ&K may post more than one

Accounts Officer in the Reconstruction Agencies or District

Reconstruction Units depending upon the load of work;

(xiv) ERRA may, subject to availability, also provide the services of

professional financial management staff to the Reconstruction


18

Agencies and District Reconstruction Units of the Governments of

NWFP and AJ&K who will be borne on the strength of

Reconstruction Agencies or District Reconstruction Units and

shall be paid their remuneration, as fixed by ERRA, from the

capacity building funds available with the RAs and DRUs.

(xv) The professional financial management staff will help the

managements of RAs and DRUs and the Accounts Officers posted

in the RAs and DRUs in tracking the sources and uses of funds

from various funding agencies and preparation of various

accounts reports as required by the respective managements

and ERRA.

c. For the programmes, projects, schemes etc., that shall be directly

undertaken by ERRA, and for all other payments relating to the

development budget, ERRA shall make the payments from the

account(s) maintained for the purpose and prepare detailed accounts

by the dates and in the form / format as prescribed.

3.4 A flowchart showing the sources and outflow of funds has been shown

as Figure-2. A flowchart showing the flow of accounting data and physical

progress reports is at Figure-3. Ulization of the resources allocated to ERRA

shall be for the performance of functions and achieving the objectives of

ERRA.


19

ORGANIZATION Professional Staffing TOR

Council / Board Major Policy Decision Approval of Overall Plan and Annual Work Plan Guidance to ERRA

ERRA

Policy Formulation & Overall Coordination Overall Planning & Approval of Major Project Approval of Annual Work Plan Implementation of Selective Projects Program Monitoring and Setting Standards and Indicators Financial Management of ERRA Funding Donor Coordination and Sponsorship Programs

Reporting to ERRA Board and Council

Steering Committee CS/ACS Chairs Department &

Approve Annual Reconstruction Plans Reporting to ERRA Over-viewing Reconstruction Agency

NWFP / AJK Reconstruction Agency

Autonomous Body Reporting to Steering Committee and ERRA Preparing Annual Work Program Implementation of Contracts in coordination with Line Agencies Monitoring Regional and District Programs and Projects

NWFP / AJK Reconstruction Offices

Masters Planning of Muzaffarabad and Balakot & Implementation of Infrastructure Service

Implementation of Provincial / District Hospitals, Universities, Medical Colleges, Federal Roads, Sui Gas Electricity and Communications

25

40 Each

15 Each

10 Each

Total: 215

Preparing District Reconstruction Plans Implementing Small Contracts in Coordination with Districts

Governments/District Level Line Agencies Reporting to Province / State

Coordinating / Partnering with Partners Organizations


Units

Fig 2


20

Observance of Rules and Regulations

3.5 In so far as spending from the ERRA funds, the ERRA, all concerned

Executing Agencies (EA) and all concerned Implementing Agencies (IA) shall

observe the provisions of GFR and FTR of the Government of Pakistan and

the Public Procurement Rules, 2004. Various autonomous bodies dealing

with ERRA funds shall have the option to follow their own procurement and

financial rules in place of GFR and FTR if the same have been approved by

the competent forum specified in their governing statutes. In each case,

where a specific rule is to be relaxed for whatever reason and in whatever

manner, the relaxation shall be obtained from the concerned authorities. In

the case of donor funds (both grants and loans) donor guidelines for

procurement of goods, works, consultant services, individual consultants,

incremental staff etc., shall be followed. These guidelines shall take

precedence over the rules of Government of Pakistan and procurement rules

of the respective autonomous bodies.


21

CHAPTER – 4

ACCOUNTING

General

4.1 The present day requirements obviously necessitate a comprehensive

system of accounts, which apart from meeting the basic requirements of

book keeping and accounting, takes into consideration the requirements of

controls and procedures.

4.2 The policies, procedures and methods for discharging the accounting

functions have been described in this chapter so as to ensure that the:

• Accounting functions are performed correctly and efficiently;

• Systems are effective and procedures are uniform;

• Forms and Records are standardized;

• Responsibilities of Accounts Personnel are specific;

• Transactions are recorded and accounts are finalized in a timely

manner;

• Statutory and other requirements are complied with; and

• New recruits are assisted in familiarizing themselves with the

established systems and procedures.

4.3 It is envisaged that all accounting personnel will be conversant with

the provisions of this Operations Manual.

Considerations involved in selection of accounting policies

4.4 The primary consideration in the selection of accounting policies by an

entity is that the financial statements prepared and presented on the basis

of such accounting policies should represent a true and fair view of the state

of affairs of the entity at the end of accounting period. For this purpose, the

major considerations governing the selection and application of accounting

policies are:


22

i) PRUDENCE: In view of the uncertainty attached to future events,

inflow is not anticipated but recognized only when realized.

Provision is made for all known liabilities and losses even though

the amount cannot be determined with certainty and represents

only a best estimate in the light of available information.

ii) SUBSTANCE OVER FORM: The accounting treatment and

presentation in financial statements of transactions and events

should be governed by their substance and not merely by their

legal form.

iii) MATERIALITY: Financial statements should disclose all “material”

items, i.e. items the knowledge of which might influence the

decision of the user of the financial statements.

4.5 In addition to above, the accounts shall be prepared on the following

basis:

i) A going concern concept.

ii) Cash basis of accounts

iii) Consistency Concept

iv) True & Fair Presentation

v) Historical Cost Conventions

Accounting Policies

4.6 The accounts of ERRA both for its Development (Reconstruction and

Rehabilitation) and Non-Development Budget shall be maintained on cash

basis of accounts.

Books of Accounts

4.7 For proper account keeping, ERRA shall maintain the following books

of accounts. The Reconstruction Agencies and District Reconstruction Units

of the Governments of NWFP and AJ&K and all other executing agencies

shall also maintain these books of accounts.

i) Cash Book


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ii) Cheque Book Register

iii) Cheque Register

iv) Stock Register, Dead Stock Register and Register of

Contracts

v) Register of Assets (separate for development/non-

development budget)

vi) Budget Control Register / Statement of Releases

vii) Disbursement Register

viii) Project-wise Statements of Expenditure

ix) Register of Advances (Advance Payments)

x) Record of reconciliation with the bank and treasury

xi) Transfer Entry Order Register

Preparation of Financial Statements

4.8 On the basis of expenditure and financial data provided by the

Reconstruction Agencies of the Governments of NWFP and AJ&K and various

autonomous bodies involved in the reconstruction and rehabilitation work

and on the basis of data generated by ERRA itself, the ERRA shall prepare

the monthly accounts as well as the following financial statements on annual

basis.

i) Appropriation Accounts

ii) Statement of Assets and Liabilities

iii) Statement of Sources and Uses of Funds

Maintenance of Accounts by Executing Agencies / Implementing

Agencies

4.9 The accounts relating to the projects, programmes, schemes etc.

financed through ERRA funds shall be maintained by the Reconstruction

Agencies, District Reconstruction Units and all other Executing and

Implementing Agencies separately and shall be preserved for audit. On

completion of the reconstruction and rehabilitation activity and winding up of


24

ERRA all record including the accounting record relating to the ERRA funds

shall be handed over by the reconstruction agencies and the implementing

and executing agencies to the respective governments.

4.10 Each executing agency / implementing agency shall maintain records

in accordance with the form required by ERRA. The ERRA while releasing the

funds shall elaborate clearly the conditions for utilization of funds. Neither

the accounts nor the expenditure made out of ERRA Fund shall be mixed-up

with funds received under the normal budget or funds received from other

sources.

4.11 Any request for payment including advances to be paid to contractors

for any work shall be accompanied by the relevant documents required in

support of the payment. All accounts, vouchers and documents relating to

tenders and quotations shall also be preserved by the concerned executing /

implementing agency.

Structure of Accounts

4.12 ERRA and all other Executing Agencies (EAs) dealing with ERRA funds

shall follow the accounting policies and the Chart of Accounts prescribed by

the Federal Government in so far as the use of ERRA funds is concerned.

Expenditure of ERRA out of the non-development budget shall be booked

under the Expenditure sub-element of Object Element of the Chart of

Accounts prescribed by the Government. In so far as the expenditure out of

development (reconstruction and rehabilitation) budget is concerned, the

ERRA, the Reconstruction Agencies and all executing and implementing

agencies shall book the expenditure under the following heads:

Housing

Education Buildings including furniture and equipment

Health Buildings including furniture and equipment

Roads, Highways and Bridges (Transport Sector)

Telecommunication Buildings including furniture and equipment


25

Energy, Fuel and Electricity (Power) Works including Buildings

Water Supply, Sanitation and Drainage Works

Irrigation Works

Governance and Other Government Buildings and Structures

Agriculture and Livestock

Tourism and Industry

Other Expenditure

Capacity Building

Consultant Services (institutional)

Imports / Quick Disbursements

Livelihood (Cash Grants) / Social Protection

Environment

Payments and Accounting Records

4.13 Before a cheque is prepared for making the payment, a payment

voucher shall be prepared by the concerned staff for submission to the

officer authorized to approve the payment. Care shall be taken to adjust the

required advances while preparing the payment voucher. The concerned

Accounts Officer shall be responsible to check the payment voucher for:

• Submission of the claim by the authorized officer / Drawing and

Disbursing Officer

• Availability of funds against the relevant project

• Annotation of the relevant classification codes on the claim

• Arithmetical calculations

• Certificate of accountal of goods and materials and / or utilization of

services

• Completeness of the claim

• Supporting documentary evidence

• All deductions required to be made at source


26

4.14 After the payment has been authorized under the signature of the

authorized officer, particulars of the payment shall be recorded in the

appropriate register/s. Thereafter, the cheque shall be prepared. While

preparing the cheques, it shall be ensured that:

• The cheque is stamped as “Payee’s A/c Only”

• Cheque Number is marked on the payment voucher, and

• Complete particulars of the cheque are recorded in the Cheque

Register

• Appropriate record of delivery of cheque is maintained.

4.15 The payment vouchers complete in all respects shall be presented to

the authorized cheque signatories in the cheque book. Before signing the

cheque and affixing their signatures on the payment voucher, the authorized

signatories shall ensure that:

• Bill has been passed for payment by the authorized officer and is

duly pre-audited.

• Particulars of the cheque have been marked on the paid voucher.

• The voucher and all the supporting documents have been marked

as “Paid”.

4.16 In respect of every payment made out of ERRA funds, proper receipt

shall be obtained from the person to whom the payment is made.

Reconciliation

4.17 All those who are responsible for payments out of ERRA funds shall be

required to obtain the bank statements from the respective banks on a daily

basis and reconcile the issued / paid cheques with the banks at frequent

intervals. They shall also be responsible for carrying out reconciliation with

the respective treasuries on a monthly basis or earlier, if so required.

Necessary adjustments / entries pursuant to reconciliation shall be made

immediately under the authority of accounts officer so deputed.


27

4.18 It shall be the responsibility of the concerned management dealing

with ERRA funds to obtain confirmation of year-end balances from the

bankers for all accounts and intimate those to the ERRA headquarters

immediately.

Compilation of Accounts

4.19 The ERRA, the Reconstruction Agencies, District Reconstruction Units

and all the executing and implementing agencies shall prepare monthly

accounts for all the transactions pertaining to ERRA funds. The accounts

shall be prepared in the form / format required by ERRA and shall be

submitted by such dates as may be prescribed by ERRA. Failure to submit

the accounts in the prescribed format and by the due dates may result in

stoppage of funds. The accounts shall give a true and fair view of each

project, programme, scheme etc. and shall include such information as

approved cost, funds released, expenditure during the month, cumulative

expenditure, balance at the close of month etc.

Responsibilities

4.21 All executing agencies and implementing agencies shall be responsible

for preparation of the accounts for the projects, programmes, schemes etc.

being implemented by them. The line departments and / or the district

authorities of the Governments of NWFP and AJ&K responsible for executing

and implementing various projects, programmes, schemes etc., shall

prepare the accounts and submit to the Reconstruction Agency of their

Government. The Reconstruction Agencies shall scrutinize / review the

accounts so received and submit the same to ERRA along with their own

accounts. All other executing and implementing agencies shall submit their

accounts to the ERRA directly. The ERRA will consolidate the accounts for

submission to various donors by the agreed dates.


28

Disclosure

4.22 The accounts shall be prepared under different heads prescribed for

various activities. The expenditure shall also be reported according to

various formats as are required by the ERRA to meet the reporting

requirements of donors.


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CHAPTER - 5

AUDIT

Objectives of Audit

5.1 The objective of financial audit of the Earthquake Reconstruction and

Rehabilitation Authority, the Reconstruction Agencies and District

Reconstruction Units of NWFP and AJ&K, and all other executing and

implementing agencies, in so far as they relate to the ERRA funds, is to

provide an opinion:

a) with regard to true and fair picture of the financial position of

audited entities;

b) about preparation of the financial statements in accordance with

the relevant accounting standards; and

c) on the eligibility of the expenditure incurred by the audited

entities.

Scope of Audit

5.2 The financial audit of the ERRA funds shall be undertaken to cover all

areas of activity to ensure that:

(a) transactions are properly authorized.

(b) expenditure has been incurred according to the canons of

financial propriety.

(c) transactions have been recorded under proper heads of

accounts.

(d) funds have been utilized for the purposes for which they were

made available.

(e) counterpart funds have been utilized for the purposes for which

they were provided.

(f) goods and services have been procured in accordance with the

Public Procurement Rules, 2004 or the procurement guidelines of


30

donors or their own procurement rules duly approved by the

competent forum as per their governing statutes.

(g) transactions are duly supported by relevant documents.

(h) there is a linkage between the books of accounts and the reports

presented to stakeholders.

(i) donor guidelines, where applicable, and financial procedures

agreed with the donors have been followed.

Internal Audit

5.3 An internal audit unit shall be set up within the ERRA for audit of all

ERRA funds dished out to the Reconstruction Agencies and District

Reconstruction Units of NWFP and AJ&K and all other executing and

implementing agencies including NGOs and POs. The accounts of ERRA shall

also be subjected to internal audit. The internal audit unit will be headed by

a Director who shall directly report to the Deputy Chairman, ERRA. The

internal audit teams will operate in the earthquake affected areas of NWFP

and AJ&K and shall carry out audit of all projects, programmes, schemes etc.

implemented by various executing / implementing agencies through ERRA

funds. Internal audit reports shall be issued within 15 days of the completion

of the audit of an entity.

External Audit

5.4 External audit of all ERRA funds shall be conducted by the Auditor-

General of Pakistan on an annual basis. For this purpose audit teams of the

Department of the Auditor-General of Pakistan shall conduct audit of all

projects, programmes, schemes etc. financed from ERRA funds and executed

by ERRA, the Reconstruction Agencies, District Reconstruction Units and all

other executing and implementing agencies.

Third Party Validation

5.5 Third party validation of various projects and programmes undertaken

by ERRA, the Reconstruction Agencies and District Reconstruction Units of


31

NWFP and AJ&K and all other executing and implementing agencies shall

also be arranged as per the specified Terms of Reference.

Compliance

5.6 Finance Wing of the Earthquake Reconstruction and Rehabilitation

Authority shall coordinate with the respective reconstruction agencies and all

other executing and implementing agencies with regard to the issues raised

by the auditors for compliance within a reasonable time frame. All those

issues on which the compliance is reported shall be dropped from the audit

report. The outstanding issues of the internal and external audit reports shall

be placed before the Board and Council of the ERRA.

5.7 The unresolved issues of external audit shall be reported in the Audit

Report of the Auditor-General of Pakistan. However, these issues shall be

reported separately for the ERRA and all other executing and implementing

agencies in different chapters within the audit report on the accounts of

ERRA. The respective Principal Accounting Officers shall explain their position

with respect to these issues before the Public Accounts Committee of the

National Assembly.

5.8 Certification Audit Reports of the Auditor-General and third party

validation reports shall be submitted to the donors within the timeframe

agreed with them.


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CHAPTER - 6

ADHERENCE TO CERTAIN PRINCIPLES

Staff members of the ERRA and those of Reconstruction Agencies and

District Reconstruction Units of NWFP and AJ&K and all other executing and

implementing agencies including Non-governmental Organizations (NGOs)

and Partner Organizations (POs) are jointly and severally required to

exercise their discretion with reference to the following principles.

IMPARTIALITY: They may not practice any form of discrimination or

preferential treatment in their relations with third parties, be they employees

of ERRA or persons or institutions involved in any way in the activities

financed by ERRA or the results of those activities. The ERRA shall

exclusively apply the procedures described in this manual.

COST-EFFECTIVENESS: Maximum cost-effectiveness, in relation to the

activities financed by ERRA, should always be ensured in decision making at

all levels within the ERRA, by Reconstruction Agencies and District

Reconstruction Units of NWFP and AJ&K and by all other executing and

implementing agencies including NGOs and POs, and in the practical

application of its procedures.

CODE OF PUBLIC BEHAVIOR TO BE OBSERVED BY STAFF: The staffs of

ERRA, the Reconstruction Agencies of NWFP and AJ&K, and all executing and

implementing agencies including NGOs and POs, are required to perform a

public service. They are, accordingly, under an obligation to observe

confidentiality, impartiality and discipline similar to that required of

Government employees. They may not, in the performance of their

functions, engage in political or religious propaganda. They are expected to

accord equal treatment to the beneficiaries of ERRA funds.


33

Administrative and Financial Powers Delegated to ERRA Board, as approved in the 2ndmeeting of the ERRA council

SR. NO.

DESCRIPTION POWERS DELEGATED TO ERRA BOARD

1 Framing of Rules and Regulations, not-inconsistent with the government statutes of the Authority

Full Powers

2 Creation of Temporary posts. Up to BPS-19 3 Write off of irrecoverable value of stores or

public money due to losses on account of deficiencies on account of breakage, shortage in transit, wastage, spoilage, dryness in storage, depreciation on account of wear and tear, fluctuation in market prices and obsolescence.

Full Powers.

4 Award of contracts on cost plus basis as per prescribed procedure.

Full Powers. Subject to transparent procedure.

5 Powers to approve development schemes, projects, programs etc.

The Board will approve all projects that fall within the powers of CDWP but which are beyond the sanctioning power of the Chairman, ERRA.

6 Rent of Non-Residential Buildings up to Rs.80 per SFT, covered area.

Full Powers.

7 Fixing of scales and ceiling for entertainment. Full Powers. 8 Honorarium / Efficiency Honorarium up to 6

months once in a financial year. Full Powers.

9 Re-appropriation of funds from one project to another subject to prescribed conditions.

Full Powers.

10 Appointing of firms of chartered accountants for third party validation and impact assessment with the approval Auditor-General of Pakistan.

Full Powers.

11 Approval of contracts with respect to the projects which are approved by the Board for implementation by ERRA.

Full Powers.

12 Determination of the strength of vehicles for the Authority.

Full Powers.

13 Purchase of Vehicles and fixing of POL limits Full Powers.


34

for various officers 14 Fixing of amount of monthly mobile phone

subsidy for various officers/officials. Full Powers

15 Fees to Law Officers. Full Powers.


35

Administrative and Financial Powers Delegated to the Deputy Chairman ERRA as approved in the 5th meeting of the ERRA

council SR. NO. DESCRIPTION POWERS DELEGATED TO

THE DEPUTY CHAIRMAN 1 Powers to sell surplus or

unserviceable stores and stock at a reserve price to another Government Department/Agency.

Full Powers.

2 Extend mobile phone facility any officer/official of ERRA.

Full Powers

3 Award consultancies for preparation of PC-I, designing of buildings and structures, supervision of projects or any other work deemed necessary in the interest of the Authority.

Full Powers

4 Powers to approve development projects, programs, schemes etc. costing up to Rs.100 million.

Full Powers.

5 Repair and maintenance of transport. Full Powers 6 Repair to hired and requisitioned non-

residential buildings. Full Powers. Note:- The powers shall be restricted to the extent covered by landlord’s liability.

7 Grant of the facility of residential telephone to officers in BPS-17 and above.

Full Powers

8 Rent of Non-residential Buildings up to Rs.35 per SFT of covered area.

Full Powers.

9 Rent of Residential Buildings. Chairman may hire a house for officers up to rental ceiling of Rs.30,000/- per month

10 Expenditure on account of Entertainment

Chairman shall continue to exercise the powers of Principle accounting officer on account o entertainment expenditure. Members shall have the power to incur expenditure up to


36

Rs.25 per head on light refreshments during official meetings.

11 Law charges Full Powers subject to the policies and guidelines issued by the Law Division on the subject.

12 Other expenditure on Commodities and Services.

Full Powers

13 Authorization of final payment of the fund dues of a deceased Government servant to the members of his family dispensing with production of succession certificate and guardianship certificate in the case of minor heirs.

Up to Rs.50,000/-

14 Appointment of Consultants / Advisors at a consolidated pay less than the initial consolidated pay of MP-II Scale.

Full powers subject to observance of a transparent procedure.

15 Compensation for acquisition of Land. Full powers, subject to acquisition of land through Land Acquisition Collector of the respective District.

16 Technical sanction of works, projects, programs, schemes etc.

Full Powers

17 Approval of contracts with respect to the projects which are approved by the Chairman for implementation by ERRA itself.

Full Powers.


37

PART-II

PROJECT PLANNING AND IMPLEMENTATION RULES

INSTITUTIONS AND ORGANISATION

1. District Reconstruction Unit (DRU): A District Reconstruction Unit

shall be established in each district affected by the earthquake.

2. The DRU shall comprise of such members as may be notified by the

Government of the NWFP and the Government of Azad Jammu and Kashmir.

3. The DRU shall have the following duties and responsibilities:

a) Consolidate Annual Work Plans for reconstruction and

rehabilitation activities in the district and submit them for

approval;

b) Act as the secretariat for the District Reconstruction Advisory

Committee (DRAC);

c) Coordinate and facilitate planning and execution of all

reconstruction and rehabilitation projects in the district;

d) Monitor execution of each project in the district;

e) Submit monthly and quarterly reports to PERRA/SERRA;

f) Disburse funds against the work done under a project; and

g) Any other function assigned to it by ERRA.

4. District Reconstruction Advisory Committee (DRAC):

A District Reconstruction Advisory Committee shall have the following

members:

(2) In case of North West Frontier Province:

a) District Nazim Chairman

b) District Coordination Officer

c) Program Manager DRU Secretary


38

d) Tehsil Nazims concerned

e) A representative of Planning Wing of ERRA Member

f) EDO Finance and Planning Member

g) EDO Works Member

h) EDO of the line department proposing to Member

undertake the project.

i) The District Reconstruction Advisory Committee may co-opt any

additional members depending upon need and relevance.

(3) In case of State of Azad Jammu and Kashmir:

a) Deputy Commissioner Chairman

b) Program Manager DRU Secretary

c) A representative of Planning Wing of ERRA. Member

d) A representative of the State Finance Department Member

e) A representative of the State Planning Department Member

f) District Officer of the line department proposing Member

to under take the project

g) Executive Engineer of the concerned Member

engineering department

h) The District Reconstruction Advisory Committee may co-opt any

additional members depending upon need and relevance.

(5) The Governments of Azad Jammu and Kashmir and the NWFP may

include any other members in the District Reconstruction Advisory

committee in consultation with ERRA.

(4) Powers and functions of DRAC:

The District Reconstruction Advisory Committee shall:

a) Approve the Annual Work Plans prepared by the DRU and

forward the same to PERRA/SERRA;

b) Approve reconstruction and rehabilitation projects costing below

Rs.100 million;


39

c) Scrutinize and clear all projects costing more than Rs.100 million

before their submission to PERRA/SERRA;

d) Hold quarterly meetings to review on going projects;

e) Ensure full cooperation and support from all concerned

departments in the planning and implementation of projects;

and

f) Perform any other duties assigned to it by ERRA.

3. Composition of Provincial/State Steering Committee: A

Provincial/State Steering Committee shall have the following

members:

a) Chief Secretary or Additional Chief Chairman

Secretary Development

b) Director General PERRA/SERRA Secretary

c) A representative of Planning Wing of ERRA Member

d) Secretary Finance Department Member

e) Secretary of the Line Department executing Member

the project

f) Chief Engineer of the concerned Member

Engineering Department

g) Deputy Commissioner/DCO of the concerned district Member

h) Program Manager of the respective DRU Member

i) The Steering Committee may co-opt any additional members

depending upon need and relevance.

4. Powers and functions of the State/Provincial Steering

Committee:

The State/Provincial Steering Committee shall:


40

a) Approve the Annual Work Plans forwarded by the District

Reconstruction Advisory Committee and forward the same to

ERRA;

b) Approve reconstruction and rehabilitation projects costing up to

Rs.250 million;

c) Scrutinize and clear all projects costing more than Rs.250

million before their submission to ERRA;

d) Hold quarterly meetings to review on going projects;

e) Ensure full cooperation and support from all concerned

departments in the planning and implementation of projects;

f) Assign projects to various implementing agencies and districts

after careful assessment of capacity, and where such capacities

are not available, decide on alternative means of

implementation;

g) Ensure implementation of all reconstruction and rehabilitation

projects in accordance with the standards set by ERRA; and

h) Perform any other duty assigned to it by ERRA.

5. State Earthquake Reconstruction and Rehabilitation Agency

(SERRA): In the State of Azad Jammu and Kashmir, a State

Earthquake Reconstruction and Rehabilitation Agency (SERRA) shall be

established by the Government of Azad Jammu and Kashmir.

(2) It shall act as Secretariat for the State Steering

Committee.

(3) It shall have such duties and powers as may be

determined.

6. Provincial Earthquake Reconstruction and Rehabilitation

Agency (PERRA): In the NWFP, a Provincial Earthquake

Reconstruction and Rehabilitation Agency (PERRA) shall be established

by the Government of NWFP.


41

(2) It shall act as Secretariat for the Provincial Steering Committee.

(3) It shall have such duties and powers as may be determined.

STRATEGY PAPER

7. ERRA headquarters shall prepare, in consultation with the NWFP

Provincial Government and the Government of Azad Jammu and

Kashmir, a strategy paper for each sector for which reconstruction and

rehabilitation it proposes to undertake.

(2) The strategy paper shall include the following:

a) Assessment of the damage due to earthquake.

b) Targets to be achieved by way of reconstruction and

rehabilitation.

c) Broad outline of the strategy for reconstruction and

rehabilitation.

d) Minimum standards for the facilities/buildings to be

created/constructed.

(3) The Strategy Paper for each sector shall be approved by ERRA

council and shall be notified.

ANNUAL WORK PLAN

8. Preparation of Annual Work Plan: In line with the Strategy Paper,

each District Reconstruction Unit, in consultation with the respective

line departments, shall prepare an Annual Work Plan for each sector to

be known as the District Work Plan for the respective sector.

(2) The District Annual Work Plan for a sector shall be prepared on

the format provided at Appendix A and shall include name, scope,

estimated cost, funding source and gestation period of each project

that the District Reconstruction Unit plans to undertake in the

respective sector during a year.

(3) A project spread over more than one year shall also be

mentioned in the Annual Work Plan along with annual phasing.


42

9. Approval of the Annual Work Plan: The DRU shall submit the

District Annual Work Plan for each sector to the DRAC for approval

along with suggestions/comments, if any.

(1) The District Annual Work Plans approved by the DRAC shall be

submitted by the DRAC to PERRA/SERRA.

(2) PERRA/SERRA shall compile all District Annual Work Plans in a

single document to be known as Provincial/State Annual Work

Plan for the respective sector and shall lay it before the

Provincial/State Steering Committee, along with any

suggestions/comments.

(3) Provincial/State Annual Work Plan approved by the

Provincial/State Steering Committee shall be submitted by

PERRA/SERRA to ERRA which shall compile the Annual Work

Plans of the NWFP and AJK into a single document to be known

as Annual Work Plan for the respective Sector, and lay it before

ERRA Board for approval, along with any comments suggestions.

(4) While approving the Annual Work Plan, ERRA Board shall also

indicate the total amounts required for funding the execution of

the plan.

(5) Once approved by ERRA Board the Annual Work Plan for a sector

shall be notified.

PROJECT PREPARATION

10. Project PC-I: For each project included in the Annual Work Plan, the

line department or the agency planning to execute the project, shall,

in consultation with the concerned engineering department and DRU,

prepare a Project on ERRA PC-I according to Appendix B.

(1) The Project shall include the following:

a) The Project PC-I as at appendix B.


43

b) Schedule of Running Expenditure, i.e., the details of

manpower, equipment, and other requirements along with

costs of running the facility proposed to be created through

the project.

(2) ERRA may specify a separate format for the Schedule of Running

Expenditure for each sector.

(3) A DRU or the engineering department with prior permission of

ERRA, may hire or arrange a consultant to facilitate the

preparation of a project.

PROJECT APPRAISAL

11. While undertaking appraisal of a project, the relevant agencies shall

take into account the following factors:

i) Capacity of the implementing/executing agency.

ii) Arrangements and costs for running and maintenance of the

project or a facility created there under.

iii) Participation of the community in the project

iv) Financial management arrangements of a project.

v) Any concerns of the foreign/international/national donors.

PROJECT APPROVAL

12. Submission of PC-I to the District Reconstruction Advisory

Committee: Each Project shall be submitted to the District

Reconstruction Advisory Committee for approval.

(1) The District Reconstruction Advisory Committee may approve

a project with such amendments/modifications as it may

deem proper.


44

(3) A Project costing up to Rs.100 million, if approved by the

District Reconstruction Advisory Committee shall require no further

approval.

13. Submission of PC-I to State/Provincial Steering Committee: A

Project costing more than Rs.100 million, after its clearance by the

District Advisory Committee, shall be sent to PERRA/SERRA, who shall

lay it before the Provincial/State Steering Committee for approval,

along with any observations, comments and suggestions.

(1) The Provincial/State Steering Committee may approve a

project with such amendments/modifications as it may

deem proper.

(2) A Project costing up to Rs.250 million if approved by the

Provincial/State Steering Committee shall require no

further approval.

14. Submission of Projects to ERRA Board and ERRA Council:

(1) A project costing more than Rs.250 million, after its clearance by

the Provincial/State Steering Committee, shall be sent to ERRA,

who shall lay it before the ERRA Board.

(2) The Board may approve a project costing up to Rs.500 million. If

the cost of the project is more than Rs. 500 million, the Board

may recommend it to ECNEC for approval.

(3) A Project costing up to Rs.500 million, approved by ERRA Board,

shall require no further approval.

(4) A project costing more than Rs.500 million will require approval

of the ECNEC

15. Administrative Approval: Administrative approval of a project will

be issued by DG PERRA/SERRA after approval of the PC-I by relevant

fora.


45

16. Technical Sanction: The approval or clearance of a project by the

District Reconstruction Advisory Committee, State/Provincial Steering

Committee shall not automatically mean the technical sanction of the

project.

(2) The technical sanction of a project shall be issued by the concerned

Engineering Department of the State/Provincial Government in

consultation with the concerned line department and the District

Reconstruction Unit, in accordance with the design and construction

standards approved by ERRA.

RELEASE AND DISBURSEMENTS OF FUNDS

17. Release of Funds for Annual Work Plan: Upon approval of the

Annual Work/Cash Plan by ERRA Board, ERRA shall release and

transfer the amounts required for execution of the plan to

PERRA/SERRA in such installments as deemed appropriate.

18. Release of Supplementary Grants: The Deputy Chairman shall have

the power to allocate any additional funds as supplementary to the

Annual Work Plan during the course of a year.

19. Release of Funds for projects: Each DRU shall formally request

PERRA/SERRA for release of funds after the issuance of the

Administrative Approval of a Project.

(1) PERRA/SERRA shall release the funds required for the project to

the concerned DRU and send a copy of the release advice to the

line department implementing the project.

(2) Upon release of funds, the DRU shall request the concerned

engineering department to start execution of the project.


46

20. Power to Re-appropriate funds: a) The Deputy Chairman, ERRA

shall have the power to re-appropriate funds from a sector to another

or from one project to another.

a) Any re-appropriation of funds within a project up to Rs.1.000

million may be allowed by the respective DRU.

b) Any re-appropriation of funds within a project up to Rs.5.000

million may be allowed by PERRA/SERRA.

c) Any re appropriation of funds within a project beyond Rs.5.000

million may be allowed by Deputy Chairman.

21. Funds to remain with the DRUs: The funds required for execution

of a project shall remain with the District Reconstruction Unit and shall

in no case be transferred to any other account except in a manner

hereinafter provided.

22. Disbursal of Project Funds: The District Reconstruction Unit shall

disburse funds to the contractors, vendors, consultants or employees

engaged for a project directly according to the schedule provided in

the bidding document, purchase order or agreement made for

execution of a project.

(1) Funds for a construction contract shall only be disbursed after

the line department and the concerned Engineering Department

communicate in writing that the funds required to be disbursed

are in line with the contract and that the contractor has done all

that was required of him under the contract for the work.

(2) No funds shall be disbursed to a vendor without a certificate in

writing from the line department that the goods purchased are

according to the technical specifications required under the

purchase order/agreement.

(3) No funds shall be disbursed to any consultants or employees

employed under the project without a certificate in writing by the


47

concerned line department indicating satisfactory performance of

the consultant/employee.

23. Cost overruns: Any cost overrun beyond 15 per cent of the total cost

of a project shall require approval of the forum by which the project

was initially approved, provided that the revised total cost of the

project still falls within the sanctioning power of that forum.

(2) This allowance of 15% is not available for a revised project.

24. Books of Accounts: Each DRU shall separately maintain accounts for

each project on a format notified by ERRA and shall render all accounts

for inspection/audit as and when so required either by ERRA or

PERRA/SERRA.

(2) While making any payments or disbursing any amounts the DRU

shall also send a copy of the release order as well as of the receipt to

the concerned line department and the concerned engineering

department.

25. Audit: All projects shall be subject to such internal and external audit

as may be specified by ERRA.

BIDDING DOCUMENTS

26. Preparation of bidding documents: All bidding and contract

documents related shall be prepared by the respective Engineering

Department or consultants, if appointed for the purpose.

27. Approval of bidding documents: All bidding documents shall follow

the standards, as closely as possible, of the Pakistan Engineering

Council.

(2) All biding documents shall be approved by the Tender Evaluation

Committee to be chaired by the concerned Chief Engineer and

comprising representatives of PERRA/SERRA and the line

department at the Provincial/State level.


48

(3) At the district level, it will be chaired by the EDO Works and

Services department (in NWFP) or Executive Engineer, PWD (in

AJK), with representatives from DRU and line departments.

(4) A representative of consultants appointed by ERRA for this

purpose shall also be included in the committee.

28. Advertisement, tender evaluation and work orders:

(1) All tenders will be floated by the Tender Evaluation Committee.

(2) All bids shall be evaluated by the Tender Evaluation Committee.

(3) All work orders shall be prepared and issued by the concerned

engineering department in accordance with the decision of the

Tender evaluation Committee.

(4) If there is an ambiguity in a tender document or any difference

of opinion as to any provision, the decision from ERRA will be the

final word.

PROCUREMENTS

29. All procurements to be made under rules notified by ERRA: All

procurements to be made for the projects related to reconstruction

and rehabilitation shall be made in accordance with rules notified by

ERRA.

MISCELLANEOUS

30. Reference to the Planning Commission Procedures: For things

not provided for in these Rules, the planning procedures laid down by

the Planning Commission shall be followed.


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APPENDIX A ANNUAL WORK PLAN

Sector District Reconstruction Unit: Reconstruction:

Estimated Cost Allocation for 2006-07 Ser i. Name of the Project ii. Location

Approved by DRAC/PSC/SSC ERRA Board ERRA Council (Dates of Approval & Completion

Total Foreign Aid

(FEC)

Actual Expenditure upto June,

2006 Total(F.Aid)

Rupee Foreign Exchange

Total

1 2 3 4 5 6 7 8 9 A. ON-GOING PROJECTS _____________________________________________________ Sub-total (On-going) _____________________________________________________ B. NEW APPROVED PROJECTS Sub-total (Approved) _____________________________________________________ _____________________________________________________ C. UN-APPROVED PROJECTS _____________________________________________________ Sub-total: (Un-approved) _____________________________________________________ Total: (A+B+C) _____________________________________________________

Appendix-B Sector: ………….………………………….

ERRA PC-I FORM DISTRICT/TEHSIL:__________________

NAME OF SCHEME/PROJECT ………………………………………………………………………………………………

Date of preparation: …………….…………………………. DOCUMENT CONTROL Document I D No.


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Project digest

1. Name of scheme/project:

2. Location of scheme/project:

3. Authorities responsible for:

i. Sponsoring:

ii. Execution:

iii. Post-completion Operation and Maintenance:

4. Facilities which existed prior to earthquake: This is just to get an idea

of how much “better” is being reconstructed:

5. Relation of the project with the umbrella project/program:

6. If the project is a part of a group of projects, indicate the larger

program or project.

7. Period of implementation:

8. SUMMARY AND SCOPE OF THE PROJECT

9. Funding Plan & Mode Of Financing

Funding source

Counterpart funds if any (mention the source, amount and percentage of the

total cost to be financed through the counterpart funds.

Cost of the project (Rs. In million)

i. Local:

ii. Foreign Exchange component:

iii, Total

10. PROJECT DESCRIPTION:

10.1 Project Objectives:

10.2 Indicate the quantified contribution (financial, economic & social with

indicators) of the project, if possible, to the target area & population.


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10.3 Environmental Considerations and Inclusions: (This should

include any environmental hazard feared and any steps taken to avoid

such hazards mitigate the damage or replenish the environment)

11. MANPOWER REQUIREMENTS:

12. PROJECT COST BREAKUP ____________________________________________________________ ITEM QUANTITY UNIT COST TOTAL COST COMMODITIES & SERVICES

Civil works:

Plant, equipment etc:

Furniture & Fixture:

Office Stationery:

Design cost:

Advertisement (if separate):

Staff Training:

Technical Assistance, Consulting services:

Capacity Building:

Vehicles/transport

Human Resource requirements (salaries etc.)

Contingencies:

Other charges:

Total

13. FINANCIAL PHASING:

Item Year 1 Year 2 Year 3 Total


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14. PROPOSED ACTIVITIES WITH TIMELINES

Timeline (dates) Sr. No Activity

starting ending

1.

2.

3.

15. PERFORMANCE INDICATORS (Verifiable indicators for

monitoring and evaluation during implementation and post

completion).

CERTIFICATE

Certified that the project has been prepared keeping in view the instructions

issued by ERRA on preparation of PC-I for infrastructure sector projects.

PREPARED BY:

(Name, designation & phone #) CHECKED BY:

(Name, designation & phone #) APPROVED BY:

(Name, designation & phone #)


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Annex-1

Cost of Establishment

(Million Rs.)

Name of Post BS No. of Posts

1st Year

2nd Year

3rd Year Total

Annex-II

Cost of Civil Works

(Million Rs.)

i) Give detailed cost estimates prepared by a cosulting

firm/Engineering Department.

ii) Line plan

iii) Unit cost

Annex-III


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Equipment

(Million Rs.)

Name of Equipment Quantity

Unit Cost

1st Year

2nd Year

3rd Year Total

Annex-IV

Vehicles

(Million

Rs.)

Make & Model Quantity

Unit Cost

1st Year

2nd Year

3rd Year Total


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Annex-V

Training

(Million Rs.)

No. of Persons Duration

Unit Cost

1st Year

2nd Year

3rd Year Total

Local Training

Foreign Training


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Annexure to PC-I.

(This part should be filled up only for revised scheme)

1. Comparative cost estimate of last sanctioned and Revised Schemes: --------------------------------------------------------------------------------------- Item Last sanctioned Project Revised Local Foreign Total Local Foreign Total (Rupees) (Rupees) (Rupees) (Rupees) (Rupees) (Rupees) -------------------------------------------------------------------------------------- a) b) c) d) e) f) 2. Give reasons for the revision in cost estimate. ------------------------------------------------------------------------------------ Item Reasons for the Revision ------------------------------------------------------------------------------------ a) b) c) d) e) f) 3. Total expenditure incurred so far: ---------------------------------------------------------------------------------- Item Expenditure Local Foreign Total (Rupees) (Rupees) (Rupees) ---------------------------------------------------------------------------------- a) b) c) d) e) f)


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Instructions to fill the Project PC-I

PROJECT DIGEST

1.Name of the Project:

• Indicate name of the project.

2.Location:

• Provide name of District/Union Council.

3. Authorities Responsible for:

iv. Sponsoring

v. Executing

vi. Post-completion Operation and Maintenance (the

department or agency which run the facility after its

completion)

4. Facilities which existed prior to earthquake: This is just to get an

idea of how much “better” is being reconstructed:

• Effort is to be made that only the facilities existing prior to the

earthquake are reconstructed. However, any improvements may

be allowed.

5. Relation of the project with the umbrella program project/

program:

• A reconstruction and rehabilitation project must be in line with the

over all policy framed and approved under the umbrella

document. It should be clearly indicated as to how the project is

linked to the overall policy given in the umbrella plan.


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6. If the project is a part of a group of projects, indicate the larger

program or project:

• For instance construction of a school may be a part of a bigger

project of building says 10 schools in a union council.

7. Period of implementation:

• Time taken for the completion of the project and of the facilities

created there under. Period of implementation of a project shall start

from the date of administrative approval and end upon handing over

the facility to the department/agency responsible for

running/maintaining the facility created under the project.

8. Summary and Scope of the Project:

• Scope of project may include construction, training, capacity building,

provision of facilities etc.

9. FUNDING PLAN AND MODE OF FINANCING:

• Funding source would in most cases mean funds that flow from

ERRA fund. However, elaboration may be required in case some

counterpart funding is expected from some other source for

example contributions from local or provincial governments. If

known the donor from whom the funds are flowing may also be

mentioned.

• Total capital of the project

Foreign exchange component, if any, has to be mentioned

separately.

10. PROJECT DESCRIPTION:

10.1 Project objectives:

• The project should conform to objectives of the umbrella plan for

the sector/sub sector.


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10.2. Indicate the quantified contribution (financial, economic & social with

indicators) of the project, if possible, to the target area & population

10.3 Environmental Considerations and Inclusions:

• This should include any environmental hazard feared and any

steps taken to avoid such hazards mitigate the damage or

replenish the environment.

11. MANPOWER REQUIREMENTS

• A construction project which is to be contracted/out sourced may

not require any manpower within the government. However,

manpower may be required for capacity building, planning,

execution, and operation etc. of a service delivery facility or

institution by way of full time/contractual employment or by way

of consultancy.

• Manpower requirements would also include any manpower that be

required for intimate supervision of construction or project

execution.

12. PROJECT COST BREAK UP

7.1.2 Basis of costing on which the technical sanction is to be sought

(Market rates, scheduled rates or any other basis may be mentioned)

• The basis of costing may be a schedule of rates or market rates etc

as may be required by ERRA.

• The costing shall not include the costs required for running a

facility upon its completion given in the Schedule of Running

Expenditure. In cases where the facility created under the project

is to be run for some time by the executing

department/agency/NGO such costs as may be required to run the

facility for the specified period of time may be included in the

project costing.


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13. FINANCIAL PHASING

• Required amounts are to be mentioned under the years in which

they would be required. ‘Year’ means a financial year.

14. PROPOSED ACTIVITIES WITH TIMELINES

• Items to be procured or activities to be performed are to be

mentioned. This table is a replacement of the erstwhile table in a

traditional PC-I whereby physical targets were filled in. It has been

made changed to accommodate all activities so as to make it more

comprehensive, and to make a project easier to implement and

monitor. Thus activities like tendering, purchase orders are now to

be mentioned along with the traditional ‘physical targets.’

15. PERFORMANCE INDICATORS

• This would be a set of criteria against which a project would be

evaluated after completion. The set would include design and

engineering targets in case of construction project and would also

accommodate service delivery targets like for instance, the number

of patients each day say in a hospital.

CERTIFICATE

• The name, designation and phone # of the person/officer

responsible for, preparing and checking be provided. It may also

be confirmed that Project Request has been prepared as per

instructions relevant to the sector.


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PART-III

PROCEDURE OF NOC for NGOs

1. Documents required by ERRA for issuance of NoC / Project Clearance:

a. Profile of the Organization;

b. Registration number (For INGOs by EAD; for other NGOs by Provincial

Authorities)

c. Proposed projects details with specific geographical location where the

I/NGO shall operate

2. These documents MUST be submitted to Donors and Sponsors

Coordination Cell (D&SCC) , ERRA, for Issuance of NoCs/ Project Clearance;

3. D&SCC will issue “Acceptance letter” within 3 days of the receipt;

provided all documents are deposited. Scrutiny by respective sector within 3

days;

4. For “Hard ware” projects i.e. construction of permanent structures;

a. Submission of construction structural designs by NGOs to NESPAK with

information to ERRA within 6 weeks of issuance of Acceptance letter

(NESPAK is establishing a facilitation desk in this regard).

b. NESPAK (under intimation to ERRA) will endorse the same or otherwise

within a period of 2 weeks of the submission;

c. The NoC would be issued after getting clearance of designs from the

NESPAK;


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d. The NGO will submit an implementation plan for commencement and

completion of the project to ERRA within one weeks of issuance of NOC;

e. MoU shall be signed on receipt of the project implementation plan with

time lines;

5. For “Soft Ware” Projects i.e. temporary shelters, livelihood programs (not

involving permanent structures) etc, the Project Managers shall scrutinize

the program within one week and forward it to D&SC Cell for issue of the

NOC;

6. The NGO will ensure that the facilities allocated to them are fully

rehabilitated and reconstructed in line with ERRA’s Sectoral strategy as well

as ERRA’s overall strategy of building back better;

7. The NGO will accept and facilitate monitoring of the rehabilitation and

reconstruction work by DRUs, line agencies, PERRA/SERRA and ERRA and

take appropriate remedial measures in light of the feedback;

8. The NGO will submit a brief report to respective DRU on monthly basis. A

comprehensive report will also be submitted on completion of scheme or on

annual basis to ERRA;

9. The NGO, after successful completion of rehabilitation and reconstruction

work and commissioning of project, will obtain “work completion certificate”

from the line agency and DRU for onward submission to

PERRA/SERRA/ERRA;

10. The facility will be handed over to the line agency or community

organizations, whichever the case may be, after completion of work and

commissioning;


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11. Individual facility may be named after the sponsor if so desired.

12. Ownership of the Sponsored facilities shall rest with the respective

Government;

13. Sponsors will be encouraged to manage / operate the facilities for one

year until the capacity of the respective government can be enhanced to

manage the reconstructed facilities;

14. Sponsors are advised to arrange Fire Fighting Equipments in all the

Hospital and Schools;

15. Sponsors are expected to provide for the equipment and furniture in the

sponsored facility.


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Part-IV

SOPs FOR PROCUREMENT OF GOODS & SERVICES AND PAYMENT OF

BILLS

Following Standard Operating Procedures will be followed for

procurement of goods and services and payment of bills in the ERRA:-

Demands for goods (by various Wings) in respect of ERRA (H.Q) will

be addressed to Admn Wing i.e. Director (Admn), whereas the

demands related to various programs/strategies will be addressed to

the Director (Procurement).

Director (Admn) will forward the procurement demand, other than

petty purchases, to the Procurement Wing in a consolidated form for

procurement.

The Procurement Wing will obtain the administrative approval of the

Competent Authority and initiate the procurement process.

On receipt of bids/quotations, the case will be put up to the Purchase

Committee.

On finalization of procurement process and receipt of bills, expenditure

sanction will be issued with the approval of Competent Authority.

The concerned section of the Procurement Wing will certify that:-

i). the quotations/tenders were called and procedure was followed

under the relevant procurement rules;

ii). the goods were received as per specifications; in quantity

mentioned in the bills and taken on charge.

In case of procurement of services/consultants the concerned

Program Manager/Director will initiate the proposal duly approved by

the D.G. Concerned and forward the same to Procurement Wing.


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The Procurement Wing will prepare the case to seek recommendations

of the Procurement Evaluation Committee.

On the basis of the recommendations of the Procurement Evaluation

Committee the agreement will be signed with the approval of the

Competent Authority.

The Program Manager will ensure that the bills are generated by the

suppliers/ consultants in the form and as per time schedule given in

the contract.

The Program Manager will verify the bills/deliverables and pass on the

same to procurement Wing certifying that the goods and services have

been received as per contract and its specifications duly supported

with the GST invoice where required.

The Procurement Wing will examine the case and issue expenditure

sanction after approval by the Competent Authority.

The DDO will examine the claim and prepare the bills within specified

time line.

While forwarding the bill to the Finance Wing, the D.D.O. will certify

that:-

i). Rates and calculations of the bills have been checked and found

in order;

ii). Budget line is available for payment of the bill.

iii). Income Tax has been deducted at source at the prescribed rate.

iv). All the relevant documents have been attached with the bill.

The Finance Wing will pre-audit the bill and issue cheque within

specified time.

In case, the Finance Wing has any objection/observation, the same will

be conveyed to the D.D.O. in writing, supported with relevant rules

etc.

To avoid delay, the observations shall not be conveyed in piecemeal.


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THE TIME LINES FOR PROCESSING OF BILLS

The time lines for processing the bills by various Wings/Offices will be as

follows:-

Wing/Office Time Line

• Program Manager 5 days

• Procurement Wing 3 days

• D.D.O. 2 days

• Finance Wing 3 days.

In case of any point of difference between any two Wings, the matter

will be brought to the notice of respective D.G. for its resolution.

Weekly update of the bills will be submitted to the Deputy Chairman

by the respective Wings.

All the procurements shall be received and stored in a central place in

the ERRA (H.Q) before issuance.

The stores so received shall be inspected by a Committee comprising

the following:-

i). D.G. (T.R.C).

ii). Director (Internal Audit).

iii). Deputy Director (Procurement).

iv). A technical expert can be co-opted by the Chairman of the

Committee, if so required.