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Government of the Punjab

Finance Department
Provincial Program Support Office, DSP

TIP Summary Sheet

Number: Theme: This TIP is covered under the thematic


area 1 of TA1 – Local Government Performance
Enhancement.
Title: Capacity Building of Local Fund Audit Department (Punjab) to Conduct Audit at Tehsil / Town
and Union Levels
Client: Finance Department Punjab
Cost: Rs. 6.180 million
Location: Local Fund Audit Department, Punjab – The TIP will cover the following staff of LFA:
Divisional Directors, Assistant Directors, Audit Officers, and Auditors.
Duration: Nine months
Expected date of commencement: April 2005
Objective:
Overall Broad Objective:
Effective and efficient functioning of Local Fund Audit Department Punjab in accordance with new audit
paradigm and international best practice.

Specific Objectives
ƒ Provide support to Finance Department in developing systems and capacity of LFA department to
enable it to perform functions as per PLGO 2001
ƒ Orient LFA department to the new audit paradigm and provide necessary support for changing
over to the new regime.
ƒ Suggest options for short, medium and long-term capacity development of LFA department
Key Deliverables:
ƒ Institutional Situation Analysis Report
ƒ Training Needs Assessment Report
ƒ Draft module
ƒ Report of pre-testing workshop
ƒ Finalized module
ƒ Reports of training workshop

Detailed deliverables of consultants are given separately.

Capacity Building Beneficiaries:


ƒ Divisional Directors, Assistant Directors, Audit Officers, and Auditors of LFA Department
ƒ Officers / officials of Finance Department

Proposed Consultant Selection Method:


QCBS QBS Direct Individual PSO

Selection Consultant Implement
TIP PSO Focal Person: Deputy Directors Program in the respective PPSOs

AWP 2005 1
Government of the Punjab
Finance Department
Provincial Program Support Office, DSP

TIP Terms of Reference

A. Project Information

1 Overview
(2 pages) Provide situation analysis (background), justification and broad scope of the TIP

Background

Under the provisions of Government of India Act 1935 and rules made there under, the audit of
accounts of local funds and public and quasi public bodies were devolved upon the provincial
governments. Since the provincial governments had no audit agency of there own at that time,
the audit of the accounts of local bodies was entrusted by the provincial governments to the
Auditor General of India on consent basis. In 1944, however, the entire control of the Local Fund
Audit Department was transferred back to the provincial governments. Audit fees were recovered
from the auditees and credited into the provincial exchequer. On the dissolution of one unit in
1970, the Department of Local Fund Audit (Punjab) was established under the administrative
control of the Finance Department of the Provincial Government of Punjab.

As per the Government of the Punjab Rules of Business, 1974, Local Fund Audit (LFA)
Department is an Attached Department of the Finance Department, Punjab, which conducts
various kinds of audit i.e. pre-audit, post-audit and special audit of local councils, provincial
autonomous bodies, educational institutions, universities and miscellaneous funds in accordance
with the specific provisions of various enactments and provisions of the local government
ordinance and other laws for the time being in force in the Punjab and reports to the government
with reference to the auditee departments’ financial control, management and disciplines. Under
the Punjab Local Government Ordinance 2001 LFA continues to conduct pre and post audit of
the TMAs and Unions.

Following the promulgation of PLGO 2001, this Department has posted Resident Auditors in the
Tehsil/Town Municipal Administrations throughout the province. Circle audit parties are also
constituted for annual audit of those auditees having small volumes of budget.

Justification
The principles laid down in the Punjab Local Councils (Audit) Rules 1981 saved under Section
196 of Local Government Ordinance 2001 provide guidelines, object and purpose of audit of
Town/Tehsil Municipal Administration and Union Administration and initiation of action on the
findings and recommendations of audit carried out by the staff of Local Fund Audit Department.

Given the existing situation and need for higher level of skills in LFA to provide audit assurance
not only for TMAs but other provincial bodies, an institutional assessment of the Local Fund Audit
department needs to be undertaken to study the role played by them at the Tehsil and Town
Municipal Administration and Union Administration level and to determine how well they have
delivered. Additionally, to determine that how can their working and performance be improved.
Reasons for inefficiency and ineffectiveness (if any) of the audit function need to be determined
and addressed. At the same time it is important to see if there are any capacity gaps that should
be filled. For example, are accounts being kept properly at these levels? How many TMAs are
being audited annually? Is independence of the audit function being observed? Is audit effective?

AWP 2005 2
Government of the Punjab
Finance Department
Provincial Program Support Office, DSP

Whom should audit be accountable to? Is the cadre of auditors professional compared with other
audit cadres? What is the role of the Accounts Committees in the changed scenario? Are they
functional? Do provinces provide local audit reports to the local councils in accordance with
PLGO 2001? How aware are the local citizens about the issues addressed in audit reports? The
institutional assessment will provide insights into the role of LFA with regard to access to
information.

Broad Scope of the Proposal

The proposed TIP falls under DSP thematic area “Audit”. Options need to be studied over the
short, medium, and long term scenarios. This is specially so because their requirements over the
short term seem to be pegged in the legacy system already working there. Over the short term
therefore, it is envisaged that the TIP will assess and augment the existing capacities and system
in vogue in the Tehsil/Town and Union levels. However, the medium term period will be the
transition phase whereby LFA will be, in a phased way shifting towards the new audit paradigm.
In the long term their user requirements will be as per the holistic integrated budget and financial
accounting model and its auditing which might evolve in accordance with international practice
and learning. Their capacity needs will likewise be assessed vis-à-vis the timeframe under
consideration. Short and Long-term benefits would have a bearing on improvement in service
delivery.

Proposed Intervention:

With the implementation of decentralization through the promulgation of PLGO, 2001 a paradigm
shift has taken place in the way local governments have been organized in this country. The
functioning and organization of LFA Department has not yet been rationalized to meet the new
demands and challenges. The capacity of LFA department to carry out their function effectively in
the new system needs to be addressed. Additionally, to help them align their audit methodology
to match the changing paradigms accepted and practiced in the world and increasingly being
adopted by the Auditor General of Pakistan is the need of the hour. Their working need to be
upgraded and updated to help them transform to effectively adapt to the changing scenario, and
be able to perform a useful role under the new system whereby modified cash accounting and
computer assisted auditing techniques are being introduced.

2 Objective, Outcomes & key Deliverables


Objective statement
Overall Broad Objective:
Effective and efficient functioning of Local Fund Audit Department Punjab in accordance with new
audit paradigm and international best practice.

Specific Objectives
ƒ Provide support to Finance Department in developing systems and capacity of LFA
department to enable it to perform functions as per PLGO 2001
ƒ Orient LFA department to the new audit paradigm and provide necessary support for
changing over to the new regime.
ƒ Suggest options for short, medium and long-term capacity development of LFA department

Outcomes:

AWP 2005 3
Government of the Punjab
Finance Department
Provincial Program Support Office, DSP

ƒ Improved auditing function at TMA/Union level in accordance with the new audit paradigm
and international best practices
ƒ LFA fully capacitated to conduct effective audit at TMA and union levels
ƒ Enhanced accountability and transparency at local level
ƒ Improved service delivery at TMA and union level

Deliverables
ƒ Institutional Situation Analysis Report
ƒ Training Needs Assessment Report
ƒ Draft module
ƒ Report of pre-testing workshop
ƒ Finalized module
ƒ Reports of training workshop

Detailed deliverables for consultants are attached separately.

(1 page – table)

3 Beneficiaries
(0.5 page) Describe who and how many will be involved:
Total number:

The institutional analysis will be done by involving officers of Finance and LFA Departments. The
capacity building of LFA will target the following officers:

Designation Number
Divisional Directors 10
Assistant Directors 31
Auditors 190
Audit Officers 69
Total 300

4 Implementation Methodology
(2 pages) Describe how the outcomes/deliverables will be achieved focusing on a clear
description of the key activities and the features of implementation without providing fine detail of
every step. Leave room for the consultant firm to formulate.

Institutional Situation Analysis

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Government of the Punjab
Finance Department
Provincial Program Support Office, DSP

As per directions of NPSC the office of the Accountant General will be associated in the
implementation of this TIP. An individual consultant will be hired to carry out the situation
analysis, which will include but not limited to the following:

ƒ Existing structure and working mechanisms of Local Fund Audit Department


ƒ Audit Methodologies used by the department and segments covered
ƒ Capacity of personnel
ƒ The logistics available with the department
ƒ Legal cover and reporting accountabilities
ƒ Actual reach, effectiveness and efficiency of LFA
ƒ Budget allocations of the Department

The analysis may include focus group discussions, personal interviews, sample surveys,
meetings etc. The consultant will finalize the methodology in consultation with the PSO. The
report of the consultant will give an assessment of the situation as it exists on the ground, and
provide recommendations for improving the working and functioning of LFA Department under
the PLGO, 2001.

Training Needs Analysis


Based on the Situation Analysis Report training needs of the target population will be determined
over the short, medium and long terms by a Capacity Development Specialist to be hired as
individual consultant.

The Training Needs Assessment report will form the basis for development of training modules’
for the select target audience. A training methodology will be firmed up along with a training
monitoring mechanism. For the purpose of costing 20 participants have been considered.

Training Module
The training module will be developed by a team of experts on public sector auditing and capacity
development specialists in consultation with the Provincial DG (Local Audit). The areas to be
covered in the module will be identified on the basis of TNA. However, some of the indicative
areas are given below:

1. LG System as it exists under PLGO, 2001 with special focus on TMAs and UAs
2. LG Accounting System with special reference to PIFRA, NAM and new CoA
3. Treasury and Sub-Treasury Rules
4. Budget Rules 2003
5. PFR Vol.–I
6. Purchase Manual
7. Works Rules
8. DFR (Dept. Financial Rules)
9. Accounts Code Vol. – III
10. Pay and Pension Rules
Team Leader will submit an indicative list of subjects to the PSO for approval. The module will be
designed keeping in view the international best practices of experiential learning and principles of
androgogy. The focus of the module must be on case studies, practical exercises, group work
and discussions and less emphasis on lecturing, so that the participants are able to assimilate
better, and can put the knowledge gained to practice in their places of work. The staff of LFA will
not only be trained in the areas for which modules’ have been developed, but also in on-job
learning techniques.

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Government of the Punjab
Finance Department
Provincial Program Support Office, DSP

The Capacity Development Specialist will prepare and add trainers’ notes to the module to assist
trainers in conducting their trainings.

Services of resource persons may be hired for the development of this module as it involves a
highly technical subject.

Pretesting of Module
The training modules will be pre-tested by the Consultant on a sample population. The pretesting
will also involve officers from Finance and LFA departments. For costing of activities 15 officers
will be invited to the workshop. The consultant will suggest alternate methodologies for pre-
testing of module to the PSO.

Finalization of Module
The module will be finalized by the consultants on the basis of feedback from the pretesting
workshop and hard and soft copies will be submitted to PSO.

Printing of Module
The printing of module will be carried out by the PSO through a separate contract. The PSO will
provide detailed specification of the printing job. A total of 500 copies of modules will be printed.
Separate cost provision has been made for the purpose.

Roll out of Training


The consultants will hire the services of an additional Trainer to conduct 12 six-day workshops at
ex-divisional headquarters. This means that two teams each consisting of a Subject Specialist
and a Trainer will conduct the training workshops. The arrangement for venues for trainings will
be made by the PPSO (Punjab) or TL on their behalf. They will also provide all necessary
logistical support to the trainers and trainees.

5 Monitoring & Evaluation


(1 page) Describe monitoring & evaluation arrangements by consultant firm and
client/DSP

Monitoring Mechanism
A monitoring framework for TIP will also be prepared and submitted to the PSO for approval. This
format will be used by the PSO / ADTA for monitoring different activities of the TIP. Monitoring
will be done by M&E staff of PSO and Effectiveness Evaluation Assistants of ADTA.

A Training Specialist may be hired separately as a Resource Person from the market to monitor
the quality of training being imparted keeping in line with the monitoring mechanism developed.
Cost for the purpose has been provided in the TIP.

Pre-Post Evaluation Forms


The consultants will prepare pre and post evaluation training formats for the trainings. The
formats will be approved by the M&E staff of PSO and the ADTA.

Performance Indicators Provide indicators by Outcome only (not activity)

AWP 2005 6
Government of the Punjab
Finance Department
Provincial Program Support Office, DSP

(1 page – table)
Outcomes

ƒ Improved auditing function at TMA/Union level in accordance with the new audit paradigm
and international best practices
ƒ LFA fully capacitated to conduct effective audit at TMA and Union levels
ƒ Enhanced accountability and transparency at local level
ƒ Improved service delivery at TMA and union level

Indicator

ƒ Quality of Audit Reports


ƒ No backlog of audit at TMA and union levels
ƒ Reports regularly presented to respective councils and Accounts Committee
ƒ Public hearing of audit reports
ƒ Reduction in the number of audit paras
ƒ Reduced complaints related to service deliver
ƒ Reduction in the number of complaints with LGC
6 Duration (months)
(0.25 pages) Nine months
7 Institutional Arrangements
(0.5 page) Describe role of client, other agencies and PSO

The detailed implementation arrangement is provided under item 4 above. The following
additional points are given below.

ƒ The hiring of consultants will be done by the PSO.


ƒ The PSO will provide necessary support to the consultants in coordinating different
activities.
ƒ The PSO will retain the amount of honoraria for Trainees provided in the TIP for making
direct payment.
ƒ All consultants will be reporting to PSO Punjab in accordance with the responsibilities
provided in their TORs.
ƒ The consultants will get separate approval of each deliverable from the PSO. In case of
rejection of a deliverable by the PSO, the improvement in quality will be done by the
consultants at their own expense.
ƒ The Consultants will be responsible for ensuring quality of various outputs under the TIP.

8 TOR for experts


(1-2 pages depending on number of experts) Brief outline of key tasks for each expert
including individual deliverables and proposed duration of expert input.

Following individual consultants will be engaged for undertaking the project:

1. Subject Specialist 1 / Team Leader 9 person months


2. Subject Specialist 2 9 person months

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Government of the Punjab
Finance Department
Provincial Program Support Office, DSP

3. Capacity Development Specialist 6.75 person months


4. Trainer 3.25 person months

Detailed TORs for these consultants are as follows.

Subject Specialist 1 / Team Leader (9 person months)

ƒ Supervise a Team of consultants comprising a Subject Specialist and a Capacity Development


Specialist and a Trainer
ƒ Suggest a methodology for conducting Institutional Situation Analysis of Local Fund Audit
Department
ƒ Conduct focus group discussions, personal interviews, sample surveys, meetings for undertaking a
situation analysis, which will include but not limited to the following:
ƒ Existing structure and working mechanisms of Local Fund Audit Department
ƒ Audit Methodologies used by the department and segments covered
ƒ Capacity of personnel
ƒ The logistics available with the department
ƒ Legal cover and reporting accountabilities
ƒ Actual reach, effectiveness and efficiency of LFA
ƒ Budget/allocations of the Department

ƒ Coordinate with PPSO, Finance and LFA departments during the implementation of the TIP.
ƒ Supervise and guide the capacity development specialist in conducting the TNA based on institutional
situation analysis
ƒ Undertake the development of Training Module with the assistance of other consultants
ƒ Supervise the pretesting of the module
ƒ Supervise and conduct the 12 Training Workshops of LFA department in accordance with a schedule
finalized in consultation with PSO and LFA department
ƒ Any other related task assigned by the PSO

Deliverables

i. Inception Report
ii. Draft Report on Institutional Analysis of LFA department
iii. Final Report on Institutional Analysis of LFA department
iv. Training Need Assessment Report
v. Draft Module for Training of LFA officers
vi. Report of Pre-testing of Module Workshop
vii. Finalized module
viii. Schedule of Training Workshops for LFA Department
ix. M&E framework for monitoring the trainings
x. Report of Training Workshops
xi. End of Project Report

Requirements
i. At least a Master degree holder in social sciences or MBA / MPA degree holder.
ii. At least 8 years experience of conducting similar activities.
iii. Good knowledge of public sector organizations in Pakistan preferably Local Fund Audit Department
iv. Strong demonstrable organization, management and conflict resolution skills.
v. Excellent communication skills.

Subject Specialist 2 (9 person months)

AWP 2005 8
Government of the Punjab
Finance Department
Provincial Program Support Office, DSP

ƒ Assist the Team Leader in undertaking the project


ƒ Assist the Team Leader in formulating a methodology for conducting Institutional Situation Analysis of
Local Fund Audit Department
ƒ Conduct focus group discussions, personal interviews, sample surveys, meetings for undertaking a
situation analysis, which will include but not limited to the following:
ƒ Existing structure and working mechanisms of Local Fund Audit Department
ƒ Audit Methodologies used by the department and segments covered
ƒ Capacity of personnel
ƒ The logistics available with the department
ƒ Legal cover and reporting accountabilities
ƒ Actual reach, effectiveness and efficiency of LFA
ƒ Budget/allocations of the Department

ƒ Assist the capacity development specialist in conducting the TNA based on institutional situation
analysis
ƒ Develop Training Module with the assistance of Capacity Development Specialist
ƒ Pre-test the Training Module on a sample of officers
ƒ Submit finalized module on CD Rom to PSO
ƒ Conduct 12 Training Workshops of LFA department with the assistance of Capacity Development
Specialist
ƒ Any other related task assigned by the PSO

Deliverables
i. Inception Report
ii. Draft Report on Institutional Analysis of LFA department
iii. Draft Module for Training of LFA officers
iv. Finalized module
v. M&E framework for monitoring the trainings
vi. Report of Training Workshops

Requirements
i. At least a Master degree holder in social sciences or MBA / MPA degree holder.
ii. At least 5 years experience of conducting similar activities.
iii. Good knowledge of public sector organizations in Pakistan preferably Local Fund Audit Department
iv. Strong demonstrable organization, management and conflict resolution skills.
v. Excellent communication skills.

Capacity Development Specialist (6.75 person months)

Responsibilities

i. Assist the Team Leader in undertaking the assignment, and ensuring that the deliverables are of
specified quality.
ii. Suggest a methodology for conducting TNA
iii. Conduct Training Needs Assessment on the basis of Institutional Assessment of LFA department.
iv. Prepare a list of topics / areas for inclusion in the training module
v. Suggest different training methodologies for conducting trainings of LFA department officers
vi. Develop Training Module for LFA department officers
vii. Pre-test the Training Module on a sample of officers from LFA department
viii. Finalize the training module based on the input received from the pre-testing
ix. Train the Trainer on Training module
x. Conduct Trainings of LFA officers with the assistance of other consultants
xi. Prepare report of each workshop
xii. Develop an M&E framework for training workshops

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Government of the Punjab
Finance Department
Provincial Program Support Office, DSP

xiii. Any other task assigned by the PSO for meeting the objectives of this assignment

Deliverables
i. Report on methodology of conducting TNA of LFA department
ii. Training Need Assessment Report
iii. Outline of Training Module
iv. Draft Training Module
v. Report of Pretesting workshop
vi. Finalized module
vii. Workshop reports
viii. M&E framework for monitoring workshops

Requirements
i. At least a Master degree holder in social sciences or MBA / MPA degree holder.
ii. At least 6 years experience of organizing similar activities, and 5 years experience of working on
similar tasks such as module development.
iii. Strong demonstrable organization, management and conflict resolution skills.
iv. Excellent communication skills.

Trainer (3.25 person months)

i. Assist the Team Leader in undertaking the assignment, and ensuring that the deliverables are of
specified quality.
ii. Conduct Trainings of LFA officers with the assistance of other consultants
iii. Prepare report of each workshop
iv. Assist the CD Specialist in development of an M&E framework for training workshops
v. Any other task assigned by the PSO for meeting the objectives of this assignment

Deliverables

i. Workshop reports
ii. M&E framework for monitoring workshops

Requirements
i. At least a Master degree holder in social sciences or MBA / MPA degree holder.
ii. At least 5 years experience of conducting trainings.
iii. Strong demonstrable organization, management and conflict resolution skills.
iv. Excellent communication skills.

AWP 2005 10
Government of the Punjab
Finance Department
Provincial Program Support Office, DSP

9 Inputs
(0.5 page) Brief description of the inputs including personnel (number, specialties),
materials, and other relevant inputs

Individual Consultants

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Government of the Punjab
Finance Department
Provincial Program Support Office, DSP

Four individual consultants will be hired. These include Subject Specialists (2) Capacity
Development Specialist and a Trainer. The PSO may also hire Resource Persons for designing
and implementing the intervention.

Training venue
The consultants will be required to arrange venues for holding workshops

Material
These include stationery and other material for the workshops

Equipment
The equipment required is as follows:
ƒ Multimedia
ƒ Computer
ƒ Overhead projector
ƒ Printer

Printing and Composing facilities


This will be required for printing the module

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