68305 Operational Risk Assessment (ORA) for Local Government Engineering Department (LGED) in Bangladesh Final Implementation Plan October 2009 Acronyms AASHTO American Association of State Highway and Transportation Officials ACC Anti-Corruption Commission NCB National Competitive Bidding ACE Additional Chief Engineer NGO Non Governmental Organization ACR Annual Confidential Report NRP National Resettlement Policy ADB Asian Development Bank OP Operational Policy ADP Annual Development Program ORA Operational Risk Assessment AE Assistant Engineer PD Project Director AEE Assistant Executive Engineer PEFA Public Expenditure and ASTM American Society for Testing and Materials BBA Bangladesh Bridge Authority Financial Accountability BoQ Bill of Quantities PHED Public Health Engineering BWDB Bangladesh Water Development Board Department CE Chief Engineer PIC Project Implementation C&AG Comptroller and Auditor General CGAD Controller General of Accounts Committee Department PMS Progress Monitoring System CMS Central Monitoring System PMU Procurement Monitoring Unit CPTU Central Procurement Technical Unit PPR Public Procurement Regulation CUL Compensation Under Law PRMF Procurement Risk Mitigation DBST Double Bituminous Surface Treatment Framework DC Deputy Commissioner PROMIS Procurement Management Information System PSC Public Service Commission DFID U.K. Department For International PWD Public Works Department Development QC Quality Control DPHE Department of Public Health Engineering RAP Resettlement Action Plan DSM Design, Supervision and Monitoring RIMMU Rural Infrastructure FORMIP Fiduciary and Operational Risk Maintenance Management Unit Management Improvement Plan RPM Regional Procurement Manager GCM Growth Center Markets RRSU Regional Road Safety Unit GIS Geographical Information System RRMIMP Rural Roads and Markets GOB Government Of Bangladesh Improvement and Maintenance HDM Highway Development Model Project HQ Head Quarters RTIP Rural Transport Improvement HR Human Resources Project IBAS Integrated Budgeting And Accounting SAE Sub Assistant Engineer System SBST Single Bituminous Surface ICT Information And Communication Treatment Technology SE Superintending Engineer IDSS Information Decision Support System SBD Standard Bidding Document IPR Independent Procurement Review SSR Standard Schedule of Rates ISAP Institutional Strengthening Assessment SUR Structures in Rural Roads Program Tk Taka ISO Industrial Standards Organization TNA Training Needs Assessment JV Joint Verification TPS Transactions Processing System LAN Local Area Network TSA Transport Safety Assessment LG Local Government UE Upazila Engineer LGD Local Government Division, Ministry Of UNO Upazila Nirbai Officer (Admin Local Government, Rural Head) Development And Cooperatives UP Union Parishad (Council) LGEB Local Government Engineering Bureau UPO Upazila Office LGED Local Government Engineering UPC Union Parishad Complex Department UZR Improvement of Upazila Roads M&E Monitoring and Evaluation WB World Bank MANCAPS Management Capability Strengthening WPW Works Program Wing Project XEN Executive Engineer MoE Ministry of Establishment MoF Ministry of Finance MIS Management Information System MS Microsoft MSP Municipal Support Project INTRODUCTION 1. In April, 2008 the World Bank and the Local Government Engineering Department (LGED) commenced a study with the following objectives: (i) to assess fiduciary and operational risks in Local Government Engineering Department (LGED)'s management of projects, assets and other resources, and in the Local Government Division, Ministry Of Local Government, Rural Development and Cooperatives’ (LGD’s) oversight function; (ii) to evaluate the efficacy of external review of decision- making by LGED and the LGD; and (iii) to identify options for future monitoring of operational risks in LGED and the LGD, and (iv) to prioritize options which are realistic and available to effectively minimize (and where possible, eliminate) the major operational risks identified;. 2. This report addresses the last of these objectives. It is based on discussions in Dhaka 14-20 March with senior LGED staff the ORA team leader, and follow-up work by LGED staff through March 30. The report identifies and categorizes three different types of risks. The first type includes risks that LGED has the authority to take the necessary actions to address, with support from development partners and routine budgetary spending and staffing authorizations needed from other agencies. The second type includes risks that can only be addressed by LGED in partnership with one or more other organizations. In other words, it can initiate some parts, but will also need key partners to make necessary decisions to carry out the recommended actions. Although initial work on these can begin right away, successful implementation is expected to take longer than addressing the first type of risks. The third type includes risks that stem from the external environment in which LGED operates. LGED cannot take any direct action to address them. Yet, based on a full understanding of the nature of the risk, LGED may be able to take indirect actions to mitigate the relevant operational and fiduciary risks to LGED’s operations and reputation. These are more complex than the first two types, and may take more time to address. 3. Once finalized, the report will be presented and discussed at the ORA Dissemination Workshop tentatively scheduled for July, 2009, with participants from Government, civil society, and international partner organizations. Following approval by the Local Government Division, Ministry Of Local Government, Rural Development and Cooperatives, LGED will begin implementing the risk mitigating measures according to the attached schedule. Page 2 Implementation Plan, Internal Organization (Type 1) FINDING AND RISKS RISK MITIGATION MEASURES WHO IN LGED OTHER MILESTONES DATES REQUIRED RESPONSIBLE AGENCIES RESOURCES LGED’s structure, whilst Adopt a matrix structure with 7 new Addl. CE (Admin LGD, MOE, Finalization and April, 2010 - promoting effective internal Divisions to include 5 Line and 2 & Finance) MOF submission of revised command and control for line Staff Divisions as well as additional SE (Admin) organogram implementation, is less units with the newly proposed effective in providing inter- Maintenance Division, Planning and organizational support designing and Administration and functions across line Finance departments. Lack of adequate line Detailed analysis of staff skills, Addl. CE (Admin LGD, MOE,  Analysis completed December, - management positions, powers workload, and the level of & Finance) MOF 2009 and responsibilities at SE willingness of field staff to take SE (Admin)  Vesting line power Regional level due to shortage responsibility for decision making to the regions April, 2010 - of line staff rather than simply passing on the responsibility to higher tiers of - management.  Creation of post July, 2013 Ensure all SE Region posts are  Recruitment July, 2014 vested with line powers and allocate 2 EE posts and 2 AE posts to SE Region Office. Dependence on development Implement ISAP recommendations, SE (Training)/ SE Career  Allocation of higher partners for funding training; including allocating a higher % of (Admin) Planning and annual training improvements needed in some revenue budget for in service Training budget & TNA to be course material, training training, and specifying key training Wing, MOE conducted every selection and follow up. requirements for each category of five years. post. Establish data base of training needs  Establishing June, 2011 and attendance, and link selection database Every year and use of course materials to requirements.  Updating database Page 3 Not enough mechanisms Introduce an internal staff CE/ Addl. CE MOE  Review of internal June, 2010 & - available to LGED to reward assessment process, separate from (All)/ SE(All) staff assessment every year high performance amongst the routine ACR, which would process onwards staff or to penalize poor enable the organization to better performance. target non monetary incentives to  reward good performance, including employee recognition, team awards, and access to training and staff - development opportunities. Enforce sanctions for poor performance. Page 4 Implementation Plan, Internal Organization (Type 2) FINDING AND RISKS RISK MITIGATION MEASURES WHO IN LGED OTHER MILESTONES DATES REQUIRED RESPONSIBLE AGENCIES RESOURCES The lack of a clearly Strengthen existing initiatives to SE (Admin) LGD, MOE  LGED to follow up June, 2010 - articulated vision undermines formulate Vision Statement to ensure the approval process the quality of strategic it clearly defines the future direction of the vision planning. and shape of LGED as a complement statement to the ISAP. previously sent to LGD  Supplementing the December, - present vision 2010 statement Lack of sanctioned posts at Increase number of senior staff to SE (Admin) LGD, MOF,  Finalization and April, 2010 - senior and middle management enable new organizational structure MOE, PSC submission of level hampers alignment of with additional 3 ACEs HQ, 20 EEs revised organogram staff and workloads. and 20 AE at Regional level. Longer term increases of 50 XENs) and 250  Post creation July, 2015 - AEs to improve alignment of staff and workloads.  Recruitment July, 2016 - Majority of staff in the Establish systematic approach to SE (Admin) LGD, MOE,  Sending recruitment From April, - technical grades are over 40 succession planning as a part of HR PSC proposal to the 2010 and years of age. function to highlight age imbalances GOB every year onwards and report to LGD and MOE.  Establishing December, - database 2010 Not enough routine succession Undertake bi-annual staffing reports SE (Admin)/ SE LGD, MOE, Establish database and April, 2010 - planning within the showing critical vacancies and (Trg) MOF, PSC submit bi-annual and onwards organization, contributing to requirements against workloads. report bi-annually the need for regular ad hoc Such reports to be forwarded to recruitment to address critical MOE with intent to integrate this vacancies. into GOB wider project for strengthening HR Planning (funded by DFID). Page 5 Implementation Plan, Internal Organization (Type 3) FINDING AND RISKS RISK MITIGATION MEASURES WHO IN LGED OTHER MILESTONES DATES REQUIRED RESPONSIBLE AGENCIES RESOURCES Compensation rates too low Overall need to increase pay by None LGD, MOE, Difficult to set - Not known for staff, and compression ratio around 40%. Compression ratio MOF does not adequately reflect the increased from 10 to 20 to provide difference between jobs and adequate differentials between responsibilities. classes, grades and responsibilities. Pay scales for many grades to be shortened. Recruitment process doesn’t Recruitment process to be None LGD, MOE, Difficult to set - - put enough emphasis on undertaken by the professional PSC experience, attitude and examination board to scrutinise character vis a vis academic applications, set and mark papers and qualifications and examination. screen applicants for interview board Insufficient promotion led by PSC. Expand promotion opportunities mean that many opportunities by expanding number staff at XEN and SE level are of senior posts, improving promotion forced to make do with pro- assessment procedures, and forma promotions where they introducing effective succession occupy more senior posts for planning (cf. type 2 action above) which they are not compensated. Page 6 Implementation Plan, Information and Communication Technology-ICT (Type 1) FINDING AND RISKS RISK MITIGATION WHO IN LGED OTHER MILESTONES DATES REQUIRED MEASURES RESPONSIBLE AGENCIES RESOURCES Multiple disparate systems, Develop long term ICT and MIS Addl. CE (Planning LGD Preparation of ICT June, 2010 BDT 6.0 million which sometimes duplicate or blueprint, including short-, & Design)/SE/PD in development plan overlap with each other, medium- and long-term Charge of GIS/MIS prevent LGED from getting a implementation plans for e- holistic organisation-wide governance. picture, making value for money type reviews difficult. Limited use of ICT for core  Develop/procure an integrated, SE/ PD in Charge of LGD, CPTU,  Development of June, 2011 BDT 200.00 functions (such as financial comprehensive, enterprise-wide, GIS/ MIS IMED, C&AG, procurement management, million management, procurement, workflow-based, decision- MOF financial management, HRD human resource support system (IDSS) which is software management, etc.). both modular and scalable, and Almost all the software based on web technologies.  Preparation of conversion of being used by LGED is  Replace/transition to web based all client-server based to based upon older client- solutions. web-based software done. server technology. GIS data are not fully utilized Spatially reference databases (like Addl. CE (Planning LGD, Planning  Preparation of Policy December, BDT 80.00 million for infrastructure planning infrastructure, agriculture, & Design) in Commission framework 2009 and design. environment, land rights, socio- Charge of GIS/MIS economic data, etc.) as different  Development of March, 2010 thematic layers of a GIS solution Implementation guideline based on a common Base Map.  Re-structuring of GIS December, Also, make GIS available both at database done 2010 HQ and in all the regional field offices.  Acquisition and validation of July, 2011 additional data done The security protocols and Either implement an IDSS or get MOSICT, LGD  Setting of Data Security December, BDT 6.0 million systems currently in vogue at an Information Systems and Protocol 2009 LGED are fairly basic leaving Security Audit done. key systems vulnerable to  Preparation of June, 2010 security breaches. Implementation Guidelines and conducting of training Implementation of this plan is contingent upon availability of requisite resources. Page 7 Implementation Plan, Information and Communication Technology-ICT (Type 2) FINDING AND RISKS RISK MITIGATION WHO IN LGED OTHER MILESTONES DATES REQUIRED MEASURES RESPONSIBLE AGENCIES RESOURCES Almost the entire ICT staff LGED establish a permanent MIS Addl. CE (Planning LGD, MOE,  Submission of proposal for April, 2010 - available with LGED is / ICT Unit with regular, annual & Design)/ SE/ PD MOF, PSC, revised organogram temporary and paid through funding from the revenue budget, in Charge of GIS/ development partner funded and not dependent exclusively on MIS  Approval of Organogram by As and when - projects, and ICT systems development partner funding / the Govt. done have limited documentation. projects, staffed by competitively SE (Admin) paid employees and contractors.  Recruitment of staff done by As and when - PSC done Although considerable data Implement, as part of a web based Addl. CE (Planning LGD, CPTU  Policy frame work as and As and when - are available within the IDSS, a centralized contracts & Design)/ SE/ PD when agreed by CPTU agreed by LGED systems, they are database (covering all past and in Charge of GIS/ CPTU invariably not accessible current LGED contracts) and a MIS freely or easily. contractors database (covering all  Implementation Plan As and when contractors who have or are Procurement Unit developed and data are agreed by - executing any project for LGED) available online CPTU to facilitate contracts and contractors’ performance evaluation, benchmarking and monitoring, and complaints resolution. Page 8 Implementation Plan, Information and Communication Technology-ICT (Type 3) FINDING AND RISKS RISK MITIGATION WHO IN LGED OTHER AGENCIES MILESTONES DATES REQUIRED MEASURES RESPONSIBLE RESOURCES ICT improvements will not be Power sector reforms, national - Bangladesh Power Power and internet Connection WIMAX Each PC fully available to LGED’s rollout of WIMAX, and Development Board, available in all field level selectively connection for field offices because of connectivity to Finance Rural Electrification offices. available in WIMAX: 3,000- limited access to power and Division network Board, Independent second half, 5,000 taka, plus Internet connectivity Power Producers and 2009, unknown monthly other private sector Finance charge. Up to 1200 companies, Division computers would BTRC, LGD, network is need to be WIMAX operators, currently in connected. Finance Division operation Page 9 Implementation Plan, Quality Control (Type 1) FINDING AND RISK MITIGATION WHO IN LGED OTHER MILESTONES DATES REQUIRED RISKS MEASURES RESPONSIBLE AGENCIES RESOURCES Approval of work not Strengthen the district, Additional CE, LGD, Control of Laboratories: meeting approved regional and central Admin & Finance Consultants specification laboratories with XEN, Quality All laboratories of LGED are now working - - requirements due to equipment and skilled Control, Central under the direction of the central insufficient quality manpower. Operate all Quality Control laboratory at Dhaka. assurance and non laboratories under the Unit enforcement of direction of the central International certification: penalty laboratory at Dhaka with international certification,  Government policy decision June, 2010 - and quality control audits to be carried out at least  Appointment of ISO consultant and its June, 2011 BDT 0.50 million every 2 years to ensure recommendation sustainability of invested assets  Government approval for improved December, - management in the laboratories 2011  Providing any physical support for the June, 2012 Not known laboratories to meet the ISO requirements, if any  Applying for ISO certification September, - 2012 Implementation of this plan is contingent upon availability of requisite resources. Page 10 Implementation Plan, Quality Control (Type 1) FINDING AND RISK MITIGATION WHO IN LGED OTHER MILESTONES DATES REQUIRED RISKS MEASURES RESPONSIBLE AGENCIES RESOURCES Quality Control Auditing:  Government policy decision December, - 2009  Appointment of consultant March, 2010 -  Developing Methodology September, BDT 1.20 million 2010  Formation of Technical Audit Team October, - 2010  Training of Personnel January, BDT 0.50 million 2011  Office support, Equipment and June, 2011 BDT 5.00 million Establishment  Test Auditing and seminar on findings December, BDT 1.00 million 2011  Review of methodology and finalization March, 2012 BDT 0.10 million  Technical auditing regularly at every 2 July, 2012 - years (Start) Implementation of this plan is contingent upon availability of requisite resources. Page 11 Implementation Plan, Engineering Design, Cost of Contracts (Type 1) FINDING AND RISKS RISK MITIGATION MEASURES WHO IN LGED OTHER MILESTONES DATES REQUIRED RESPONSIBLE AGENCIES RESOURCES GOB-funded schemes are Strengthen HQ design capability for SE, Design, - Establish ICT systems June, 2010 BDT 5.50 million designed with the same monitoring quality of designs; LGED to support, AutoCAD standard and codes as the introduce ICT systems to support in selected 10 districts schemes funded by AutoCAD in selected 10 districts. and procurement of development partners but the Hardware and information and survey data Software along with collection and their Training representation from the field level may put quality of design at risk. LGED's practices for Encourage department heads to CE, LGED - As and when appeared - - estimating cost and price approve invoking price adjustment appropriate adjustment can put quality at clause for contracts of over one year risk. duration, as allowed by PPR-2008 in "exception cases" for contracts that don't exceed 18 months. Implementation of this plan is contingent upon availability of requisite resources. Page 12 Implementation Plan, Maintenance and Asset Management (Type 1) FINDING AND RISKS RISK MITIGATION WHO IN LGED OTHER MILESTONES DATES REQUIRED MEASURES RESPONSIBLE AGENCIES RESOURCES Collection of data and Fully implement RIMMU, GIS, -  Policy decisions for full implementation July, 2010 - monitoring by Executive comprehensive M&E. of system based road maintenance Engineer at district level framework of policy, planning and management. and Superintending process and resources Engineer at Regional for system based road  Prioritization of core road network July, 2011 BDT 7.00 million level does not always maintenance planning (CRN) of LGED in all districts. ensure the accuracy of and management, with program outputs for support from TA  Procurement of survey equipment and July, 2012 BDT 150.00 optimum use of available project recommended in imparting training to respective million resources. Also, M&E ISAP. Engineers of LGED, Survey data Unit and RIMMU do not collection and input in the LGED’s ensure proper maintenance software (RSDMS) coordination. including Local Reference Point (LRP).  Maintenance software upgradation for July, 2012 BDT 5.00 million multiyear forward programming and establishing dynamic linkage of Road Database with GIS maps through customized computer software.  Performance based contracting for July, 2014 BDT 100.00 maintaining CRN (piloting) of LGED million and traditional output based contracting for other roads.  Establishment of effective monitoring July, 2014 BDT 50.00 million system, ensuring parallel information collection through non-formal channel. Implementation of this plan is contingent upon availability of requisite resources. Page 13 Implementation Plan, Road Safety (Type 1) FINDING AND RISKS RISK MITIGATION WHO IN LGED OTHER MILESTONES DATES REQUIRED MEASURES RESPONSIBLE AGENCIES RESOURCES The safety risks LGED efforts to Addl. CE, RHD, BRTA, Developing Training Manuals and December, BDT 3.00 million identified by LGED on prepare guidelines on Maintenance & Road ARI, LGIs Training of Staff of CRSU and 2009 rural roads are mainly TSA, and training Safety RRSU related to: safety manuals, should be SE (Maintenance) engineering, traffic signs, expanded to establish Relevant Project Training of remaining key personnel July, 2013 BDT 50.00 million enforcement, road users’ coordination between Directors of LGED (XENs, AEs, SAEs) education and behavior, various road safety XEN (Road Safety) and road environment. committees, and to Replication of results of the Pilot July, 2010 BDT 50.00 million provide training as onwards appropriate to RRSU and district staff. Undertaking Road Safety Schemes July, 2010 BDT 300.00 million onwards Implementation of this plan is contingent upon availability of requisite resources. Page 14 Implementation Plan, Land Use and Resettlement (Type 2) FINDING AND RISKS RISK MITIGATION MEASURES WHO IN LGED OTHER MILESTONES DATES REQUIRED RESPONSIBLE AGENCIES RESOURCES Deliberate escalation of To minimize fraudulent assessment: resettlement costs by  During Joint Verification (JV), Sr. AE (LGED) at  Assignment of Next project - using/misinterpreting assign higher level staff, and ensure the district level. official with land ambiguities in the acquisition accountability.  Issuance of acquisition ordinance and producing instructions fraudulent assessments,  In addition to acquisition official’s A group comprising - which undermines integrity records, LGED staff participating in officials of one Sr. LGD, District  Preparation of records and effectiveness of the JV prepares separate records of Assistant Engineer & Disional resettlement program. affected lands and other assets, by (LGED) and Committees,  Making spot checks - using the same formats used by the Representatives of other JV at random acquisition officials. the consultants (if partners any) -  Further to random spot-checks during JV, the XEN compares the XEN (or a Sr. Verification of records prepared by the acquisition Official assigned by assessments - official and the LGED staff. He/she XEN, but not the undertakes spot-checks of random one participated in samples of those cases which (i) do JV) Next project not or minimally differ; and (ii) differ with land substantially. acquisition  Project Director/Managers may verify the assessments prepared by Project Manager, - both LGED staff and acquisition PMU (assigned by officials, depending on the amount of Project Director) compensation funds requested by DCs, which have been reviewed and Next project approved by LGED local office. with land acquisition Persistent delays in land Schedule the civil works taking into PDs, XENs, AEs, LGD Scheduling the civil Next project - acquisition and RAP consideration the time required to District Sociologist, works with land implementation give rise to complete the land acquisition and RAP Consultants acquisition the risks of non-compliance implementation process. with social safeguard policy and delays in civil works implementation. Page 15 FINDING AND RISKS RISK MITIGATION MEASURES WHO IN LGED OTHER MILESTONES DATES REQUIRED RESPONSIBLE AGENCIES RESOURCES The most appropriate overall remedy Addl. CE RHD, BWDB,  Govt. approval of Next - is to adopt a ‘National Resettlement (respective line BBA and other NRP project.with Policy (NRP)’ with amendments to the division), PDs GOB agencies land present land acquisition ordinance that that need land  Adopting the NRP acquisition will satisfy the requirements of OP acquisition 4.12. Land Ministry is preparing such a policy with the support of ADB. LGED should seek authority from CE, PDs LGD and Land LGED to seek authority December, - LGD to purchase lands directly from Ministry from LGD to purchase 2009 the private owners, on willing buyer- lands directly from the seller basis; propose ways and means private owners. to ensure full transparency of these purchases. Page 16 FINDING AND RISKS RISK MITIGATION MEASURES WHO IN LGED OTHER MILESTONES DATES REQUIRED RESPONSIBLE AGENCIES RESOURCES Ambiguities in Acquisition LGED should seek Land Ministry’s Addl. CE LGD & Land LGED to follow up on December, - Ordinance clarifications on the following (respective line Ministry clarification request sent 2009 provisions that are misinterpreted by division), PD earlier for a formal the acquisition officials: (respective project) response from the Land Ministry  Why compensate for entire house/structure where a small portion is affected, and the rest is still structurally perfectly safe and usable?  Why pay for the costs of equipments in a partially or fully acquired structure, even though they are not affected and can be dismantled and moved intact?  Where only a narrow slice of a pond is acquired, why pay for the land, digging cost and fish stock of the entire pond? Under what conditions the assessed compensation should be increased by 50%, as provided in the law? What is the basis for a 50% increase in the compensation for house, machinery and pond, which seems unrealistic? Page 17 FINDING AND RISKS RISK MITIGATION MEASURES WHO IN LGED OTHER MILESTONES DATES REQUIRED RESPONSIBLE AGENCIES RESOURCES Not enough capacity to deal  Appoint qualified social scientists CE, SE (Training), MOE, LGD  Starting process for July, 2009 with resettlement issues and and form a core group with intensive PDs appointment of onwards manage information. training in social issues, including qualified social staff. resettlement, that are addressed in development partner-supported  Appointment of projects. Based on the volume of land Social Scientist of acquisition and resettlement, distribute required number and them in the project districts, with a engage them in the minimum of two in each. project districts depending on the workload of a particular district. Train the XENs and other technical  Starting training December, staff who are likely to be involved in program on 2010 JV. Give them a thorough resettlement issues for understanding of the resettlement the concerned XENs policies, measures and application and other staff of guidelines adopted. LGED including Community Organizers.  Develop an information management system in view of the adverse impacts that are to be  Developing 2011 mitigated according to adopted Information guidelines and the progress made at Management System any point in time. The system should be able to track irregularities and explain them. Page 18 Implementation Plan, Financial Management (Type 1) FINDING AND RISKS RISK MITIGATION MEASURES WHO IN LGED OTHER MILESTONES DATES REQUIRED RESPONSIBLE AGENCIES RESOURCES Internal controls don’t always Communicate to staff the importance Addl. CE (Admin & MOE, LGD,  Preparation of June, 2011 BDT 2.00 ensure properly record of internal controls and the intention to Finance) MOF, CGAD, guidelines of internal million transactions, nor properly increase emphasis on good financial SE (Admin.) C&AG control and account for and control management systems and procedures. SE (Training) distribution of the assets, nor focus on the Further, require that all projects in XEN (Audit) guideline at districts highest priority projects. LGED use the standard Financial and projects offices. Accounts Manual and Project Accounting Manual. Strengthen compliance systems in  Review and revision June, 2011 - areas such as segregation of duties, of charter of duties. change payment procedures, and use of pre-numbered and controlled cash  Introduction of pre- December, - receipts books. numbered cash- 2010 receipt books. There is a proliferation of Complete the review of the technical Addl. CE (Admin & LGD, MOF  Reviewing of the June, 2011 BDT 3.00 development partner driven specifications of the UFMS to ensure Finance) technical million systems to manage and that it meets minimum technical SE (Admin.) specifications of account for the various requirements, and use this system or SE (Training) UFMS and arranging projects being implemented its replacement for all revenue and workshops. by LGED. This could be development projects. avoided if LGED had a  Customization of June, 2012 BDT 4.00 uniform project accounting Roll the final system out to all projects UFMS with all million system. at both the HQ and district levels, revenue and according to 5 year timetable proposed development projects. by ISAP  Rolling out of UFMS June, 2015 BDT 50.00 to all projects and million district level. Implementation of this plan is contingent upon availability of requisite resources. Page 19 FINDING AND RISKS RISK MITIGATION MEASURES WHO IN LGED OTHER MILESTONES DATES REQUIRED RESPONSIBLE AGENCIES RESOURCES More than 95% of project Increase training of staff based on Addl. CE (Admin & LGD, MOF,  Review and revision June, 2010 - funds are disbursed at the individual training needs assessments, Finance) CGAD, C&AG of annual training district or upazila levels and raise technical qualifications for SE (Admin.) programs. where the capacity of the all new staff. SE (Training) accounting staff is the lowest.  Conducting training July, 2010 BDT 20.00 Strengthen compliance system as courses on Financial Onward million mentioned earlier. Management.  Review of the July, 2013 - minimum qualifications of accounts staff for new recruitment. Control and accountability of Registers should be established and SE (Admin.) LGD, MOF,  Updating of existing December, - contracts and agency fixed maintained to control contracts, fixed CGAD registers (contract 2010 assets would improve with a assets, and commercial bank accounts registers, fixed assets contract register and fixed to increase the level of control by register and assets register. senior management. commercial bank accounts register) and Registers should be included in the making it operational. UFMS or its successor.  Inclusion of registers June, 2015 - in the UFMS or its successor. Deviations in the Review the complex procedures SE (Admin.) LGD, MOF, Review the petty cash June, 2011 - procurement procedures for required to establish and use petty CGAD funds procedures and supplies and small purchases cash funds, and encourage the use of encourage the use of could be reduced if petty cash these funds. petty cash funds. funds were used. Implementation of this plan is contingent upon availability of requisite resources. Page 20 Implementation Plan, Financial Management (Type 2) FINDING AND RISKS RISK MITIGATION MEASURES WHO IN LGED OTHER MILESTONES DATES REQUIRED RESPONSIBLE AGENCIES RESOURCES The internal audit unit Place qualified accountants as the Addl. CE (Admin & PSC, MOE,  Preparation of revised December, - concentrates the majority of Head of Financial Management, and Finance) LGD, MOF, organogram 2010 its work at the transaction as the Head of Internal Audit. SE (Admin) C&AG level rather than reviewing Adjust annual work programs to XEN (Audit)  Post creation and June, 2013 - control systems and provide more emphasis on recruitment. procedures. strengthening the control environment rather than mainly verifying the  Modification and June, 2011 - accuracy of payments. updating of annual work programs of internal audit. Accounting staff in LGED Establish a central accounting and SE (Admin) PSC, MOE,  Preparation of revised December, - lack sufficient qualifications finance unit, staffed with qualified LGD, MOF, organogram 2010 to properly manage internal accountants. C&AG controls.  Post creation and June, 2013 - recruitment. The lack of development Government and management of Addl. CE (Admin & GOB, Establishment of June, 2015 Not known partner and GOB LGED should establish effective Finance) Development effective accounting and harmonization in the accounting and management Addl. CE (Planning partners Management management of the various information systems and with these & Design) Information Systems. projects makes it difficult to systems promote greater use of these evaluate results of the systems by development partners in projects and to control order to promote more effective performance. development partner harmonization. Implementation of this plan is contingent upon availability of requisite resources. Page 21 Implementation Plan, Procurement (Type 1) FINDING AND RISKS RISK MITIGATION MEASURES WHO IN LGED OTHER MILESTONES DATES REQUIRED RESPONSIBLE AGENCIES RESOURCES LGED has experience in Apply PROMIS to every project; PMU of LGED CPTU, Local Installation of software June, 2010 Every year an PRMF but the reporting, negotiate specific actions for every Government amount of follow up and review of the project, evaluate progress quarterly Institutions BDT 4.75 PRMF hasn’t yet been fully and assess progress yearly million will be realized. required to maintain the PMU enters into similar agreements system. with key districts To cover the key July, 2013 BDT 5.00 districts million Give responsibility and control of the PMU to take the July, 2014 BDT 10.00 PROMIS to PMU responsibility of million PROMIS, and to issue biannual reports Given the large number of Full implementation of the PMU of LGED CPTU Installation of software July, 2013 - contracts procured by LGED procurement management information onwards and the de-centralized nature system being introduced by the PMU; of the procurement as part of this, look at implementing implementation, the lack of an e-procurement and tendering an integrated information system which will facilitate a system is a risk. centralized database of all contracts, encourage more small and medium contractors to bid for projects and improve overall transparency and accountability in LGED works. Information on contract Closer supervision should be adopted PMU & PM&E of MOE, PSC, Delegation of authority December, - management is limited to by HQs of contract management for LGED HQ MOF 2009 physical and financial all complex contracts; delegate percentages authority to Regional SE’s to monitor complex contracts Implementation of this plan is contingent upon availability of requisite resources. Small contractors use the Carry out a study demonstrating the Central MOF, CPTU Conducting Study July, 2010 US$10,000- post qualifications and performance under different set of Procurement Unit, - credentials of larger rules RTIP contractors, thus Page 22 FINDING AND RISKS RISK MITIGATION MEASURES WHO IN LGED OTHER MILESTONES DATES REQUIRED RESPONSIBLE AGENCIES RESOURCES misrepresenting their own Adopt a system that would establish capabilities and risking the post qualification criteria on the Adoption of Systems on December, - delays and low quality work. basis of the review of the performance the basis of study results 2010 of the contractors of the last 18 onwards months. This system may include ADB PMU becomes an regional or district differences when LGED unit, financed properly justified and approved by the from the Revenue PMU and the higher management. The Budget system to be adjusted periodically after careful analysis of the performance data collected by the procurement unit Advertisement of Define a strategy for more PMU, all PE MOF, CPTU Issuance of Instruction December, - procurement opportunities systematically advertising tender 2009 may not be targeting the right opportunities. Among the options segment of the market at the considered could be selecting district level newspapers for advertisement of the procurement opportunities in Bangla language on the basis of high circulation and posting the procurement notices to all notice boards and LGED websites. Small contractors may rely Expand training for small contractors PMU, Training Unit Training of small December, BDT 8.00 on LGED staff to provide in bid preparation, and encourage contractors 2009 and million necessary training on bid them to seek assistance from onwards preparation; independent specialists Implementation of this plan is contingent upon availability of requisite resources. Page 23 Implementation Plan, Procurement (Type 2) FINDING AND RISKS RISK MITIGATION MEASURES WHO IN LGED OTHER MILESTONES DATES REQUIRED RESPONSIBLE AGENCIES RESOURCES LGED has experience in PMU enters into agreements on PMU District Make agreements July, 2010 - using its Procurement Risk PROMIS with districts committed to authorities between PMU and Mitigation Framework following proper procurement district offices (PRMF) but the reporting, practices follow up and review of the PRMF has not yet been fully realized. Allowing multiple dropping Although single dropping should be PMU District Issuance of Instructions December, - of bids presents risk of the preferred option for government authorities, highlighting maintaining 2009 manipulation of bids after procurement, LGED to retain multiple police of controlled conditions reception during the delivery places for dropping tenders under the of the sealed bids to the following controlled conditions: opening office. LGED would urge civil authorities to take care of providing security at LGED facilities and proximities, and to prosecute offenders that are caught. Supervision of procurement Adopt a combination of ex-post and PMU CPTU Delegation of authority December, - processing and ex-post ex- ante reviews focusing on the 2009 reviews by XENs isn’t strong former in the short term, and the latter enough to ensure quality and in the long term; responsibility will be cost-effectiveness. delegated to regional SE’s. (Progress indicator: Instructions on Ex ante and ex post reviews issued by CE) Perform at least five IPRs annually on Performing of IPRs on July, 2010 US$20,000- a project basis project basis. Perform IPRs in at least 3 – 5 district Performing of 3-5 IPRs July, 2012 -US$10,000- units every year per year - Page 24 FINDING AND RISKS RISK MITIGATION MEASURES WHO IN LGED OTHER MILESTONES DATES REQUIRED RESPONSIBLE AGENCIES RESOURCES Bidding documents issued Publish the bidding documents in the PMU CPTU LGED to coordinate As and when - only in English may induce Bangla language. Although many with CPTU. required. small local contractors to technical terms are not available in the seek external support or national language, these may be larger contractors to convey retained in English. LGED should their proposals increasing the coordinate with CPTU the issuance of risk of collusion such documents Complaint resolution The complaints resolution mechanism PMU CPTU Organizing workshops December, BDT 5.00 mechanism: the resolution of should be further developed to serve in the regions. 2009 million disputes and complaints at smaller contractors A tracking system LGED could be improved. needs to be developed. The Tracking system June 2010 The CPTU mechanism does Procurement Unit should be developed not appear to draw the responsible for finding ways of confidence of smaller attracting the confidence of the smaller Tracking system rolled December contractors. At the project contractors in an environment that is out 2010 level (RTIP is an example) not conducive of transparency or there are complaint boxes provide adequate reassurance to the available for bidders to bidders; organize regional workshop deposit their complaints to inform bidders regarding the safely. Moreover, bidders are complaint mechanisms. advised about the mechanisms for filing complaints but there is not enough confidence in the system available to ensure transparency and accountability Implementation of this plan is contingent upon availability of requisite resources. Page 25