FBR projects under TARP: World Bank gives ''satisfactory rating''

The World Bank Review Mission has given ''satisfactory rating'' to the Financial Management Arrangements of the Federal Board of Revenue (FBR) for the several projects executed under the Tax Administration Reform Project (TARP) being concluded on December 2011.
Sources told Business Recorder here on Sunday that the WB review mission has submitted a report to the FBR on the ''Financial Management Arrangements Review'' under the TARP. According to the report, the TARP project is scheduled to close on December 31, 2011 and, to avoid any issues in financial closing, the mission recommends that the project should carry out a staffing analysis for financial management staff that will be required after project closing on December 31, 2011 for payments and reporting. The FBR should also prepare a detailed schedule of all running contracts with estimated date of completion and estimated date of payments to be made against these contracts. The project should review all running contracts to ensure that these are completed before December 31, 2011 and there are no payments that would be due after Jun 30, 2012.
The WB review mission further said that the Financial Management arrangements for the project are rated ''Satisfactory''. The WB appreciates that actions agreed during the last mission have been satisfactorily completed. The financial management staffing at the project is appropriate. Budget turnover for the financial year 2010-11 remained 89 percent. For the financial year 2011-12, there is a shortfall of about Rs 590 million in the budget allocation against project disbursement estimates and the project may require supplementary grant. Peachtree software has been implemented over Local Area Network with access to five users, and is used for accounting and financial reporting.
The WB said that there are some outstanding audit observations for which project has provided necessary documents to the Auditors and is awaiting verification report. The management should follow up with the auditors for early resolutions of the audit observations. The project is scheduled to close on December 31, 2011 and the mission recommends that project management should review FM staff requirements after close of project for financial closing, prepare a detail of ongoing contracts and commitments and share it with Bank, and follow up for early initiation of internal audit for the remaining years.
The WB observed that the financial management aspects of the Tax Administration Reform Project (TARP) were reviewed as part of the project implementation (PI) review. The mission reviewed the processes in place, financial transactions on sample basis, and progress against agreed actions. The financial management arrangements at TARP are appropriate to provide reasonable assurance that funds have been spent for the intended purposes. Therefore, the project has been rated ''Satisfactory'' for financial management purposes.
The WB further said but the verification report has not yet been issued. A departmental accounts committee meeting will be convened after the receipt of verification report for resolution of the outstanding audit observations. The mission recommends that the project should take up the issue of delay in issuance of verification report with the audit authorities and a DAC meeting should be convened at the earliest.
The WB pointed out that the Audited Financial Statements for the financial year 2010-11 will become due on December 31, 2011. The project should ensure that the Bank receives the audited financial statements before the due date. The department of the Auditor General of Pakistan has recently completed a performance audit of the project but the same has yet to be issued. The project is requested to share the report of performance audit with the Bank, once it is issued by the auditors, it added.