INDIA: Integrated Coastal Zone Management Project

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Annex 5 Financial Management Systems and Performance 1. FM ISR rating: Based on the discussions during the mission and review of the financial management systems across the project, the rating on financial management is pegged as Moderately Satisfactory. While NPMU, Gujarat and Odisha have carried out most of the agreed actions during preparation, West Bengal is in the process of completion of the agreed actions and it is expected that before the next mission most of the agreed actions would be completed. Except for Gujarat and West Bengal, where there is a partial compliance to the legal covenant related to budget release, other financial covenants have been met by the project. The agreed actions for the project are summarized in the FM annex. 2. The following are the summary of FM discussions across NPMU and the SPMUs. Budget: 3. SICOM: For the last FY, GOI provided a budget of Rs.1494.0 million which has been transferred to the NPMU bank account. During the last financial year, Rs.1350.9 million was transferred to the States and other National level PEAs. The expenditure incurred in the national component during the last year is Rs. 27.5 million. For this financial year, GOI has provided a budget of Rs.2676.0 million, but will release the amount once the utilization certificate is provided by SICOM. 4. Gujarat: The State provided a budget allocation of Rs. 20 million for FY10-11, and this amount was transferred to the SPMU bank account. NPMU had transferred an amount of Rs.429.2 million during the last financial year. Out of this amount Rs. 100.8 million has been spent as on 31-03-2011. For the current financial year, the State has provided Rs. 50 million budget which is yet to be transferred to the SPMU and needs to be completed before 31 August 2011 (this issue is related to compliance to legal covenants). 5. Odisha: The State provided a budget allocation of Rs.46.6 million for FY 10-11, and this amount was transferred to the SPMU bank account. NPMU had transferred an amount of Rs.359.8 million during the last financial year. Out of this amount Rs.20.7 million has been spent as on 31-03-2011. For the current financial year, the State has provided Rs.45.6 million budget, and has released Rs.6.015 million as the first installment. 6. West Bengal: The State provided a budget allocation of Rs. 44.8 million for FY10-11, and this amount was transferred to the SPMU bank account. NPMU had transferred an amount of Rs.322.7 million during the last financial year. Out of this amount Rs.29.2 million has been spent as on 31-03-2011. For the current financial year, the State has provided Rs.12.4 million budget (against a request of Rs.87.6 million), and the funds are expected to be released before 31 August 2011 (this issue is related to compliance to legal covenants). The issue in case of West Bengal is that the balance of Rs.75.2 million as per the action plan needs to be allocated, and as such needs to be requested as part of next revision of the State budget. Disbursements: 7. The disbursement as per the system is XDR 7.94 million including DA. The overall disbursement percentage is 5.4% (including DA) while the claim for March 2011 to the tune of XDR 0.7 million has been submitted by the project. Disbursements are on the slower side as (compared to expectations, although it is in line with the projections) and are expected to pick up during this financial year, as the contracts for most of the works would be in place.
INDIA Integrated Coastal Zone Management Project (P007985) First Implementation Support Mission, June 2011 Component Allocated (million SDR) Disbursed (million SDR) Balance (million SDR) Disbursement (%) A 44.14 0.17 43.97 0.4% B 38.125 0.64 37.48 1.7% C 25.355 0.11 25.25 0.4% D 38.55 0.07 38.48 0.2% PPF advance 0.73 0.65 0.08 89.0% DA 6.30 -6.30 Total 146.90 7.94 138.96 5.41% Accounting system: 8. SICOM (or NPMU): The NPMU has installed and operationalized Tally accounting system. The financial reports are being generated based on Tally records. The accounting records are up to date at NPMU. SOI (one of the national level PEA) has initiated implementation of Tally accounting system and has achieved good progress. However it would require guidance from NPMU on streamlining the chart of accounts and accounting entries to be captured. NPMU had provided training for the accounting staff and refresher training is expected to be provided before 31 July 2011. The SOI books of account in Tally are expected to be up to date by 31 August 2011. Further, due to the government style accounting legacy, SOI has treated some of the advances as expenditure and has claimed the same from the World Bank. This needs to be corrected in the next IUFR. 9. Gujarat: SPMU and all PEAs have installed and opertaionalized the Tally accounting system. Financial reports are being generated based on Tally records. The accounting records are up to date at SPMU. 10. Odisha: Tally has been installed in SPMU and all PEAs. However, Tally is functioning in 5 PEAs and in other PEAs it is expected to be made functional by 31st August 2011. The project accounts have been updated until 31 March 2011. 11. West Bengal: SPMU has installed Tally accounting system while none of the PEAs has installed the software. SPMU will initiate the Tally installation within two months, followed by training support to the PEAs. SPMU will operationalize Tally at PEAs before 30 September 2011. The project accounts have been updated until 31st March 2011. Project-specific bank accounts set up 12. The SICOM and all SPMU’s have setup the bank accounts and banking arrangements as agreed with the World Bank. The following are the details state wise: a. Gujarat: The bank accounts have been created for the SPMU and all PEAs in Corporation Bank. b. Odisha: The bank accounts have been created for the SPMU and PEAs in State Bank of India. In case of OSDMA, the bank account has been opened with Allahabad Bank for operational ease. c. West Bengal: The bank accounts have been created for the SPMU and 9 PEAs in United Bank of India. For Public health engineering department the PEA bank accounts are yet to be opened and this needs to be completed by 31st July 2011. 65
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