Scope of Work and Terms of Reference for a Third-Party Firm to Undertake Fiscal Management of MoH-CDC Cooperative Agreement:
A: Introduction
The MoH-CDC Cooperative Agreement (CoAg) is a strategic mechanism through which US Government (USG) through its Centers for Disease Control and Prevention (CDC) supports the Uganda Ministry of Health (MoH) to implement activities in line with its mandate in support of the public health response to HIV/AIDS and other Health Systems. This mechanism is currently supporting a 5-year programme entitled “Supporting the Uganda Ministry of Health to address the HIV/AIDS Response Through Strengthening Health Systems”. This third 5-year phase of support started in October 2012 and slated to end March 2018. Funds are allocated to the Ministry through annual Notices of Award (NoA) based on successful annual continuation applications. For this current third budget, about US$ 3.57 million is available for priority activities under this assistance for the fiscal period April 2015-March 2016
A project management team for the mechanism reports toMoH Top Management where the Permanent Secretary is the Accounting Officer, and the Director General of Health Servicesis the Project Director / Principal Investigator.
The CoAg currently uses financial management and procurement mechanisms of the Ministry in line with the Public Finance and Accountability Act, and the Procurement and Disposal of Public Assets Act. However, these business processes have often been slow and inefficient, and constrain the performance of this mechanism. The weaknesses along with weak internal controls were prominently cited in a recent Audit conducted by CDC for the period 2007-14. Among the recommendations from the Audit was for the Ministry to urgently outsource fiscal management of the CoAg to a competent third party financial management firm that has adequate internal controls and qualified staff.
The Ministry now wishes to outsource the business processes (fiscal management functions) of this mechanism to a competent and reputable firm inthe short-to-medium term while at the same time strengthening internal mechanisms to which the CoAgmay revert in the future.
B: Scope of Work of the Third Party Financial Management Firm:
General Scope of Work
A competent firm is required to provide third-party fiscal management services for theCoAg. itmust have competent and qualified professional staff to execute this function efficiently and transparently in line with GoU and US Federal Government fiscal management guidelinesand regulations, and Generally Accepted Accounting Principles (GAAP). The scope of work will range from general accounting, disbursement of funds, receipt and filing of accountabilities, operating a dedicated project bank account, keeping books of accounts and ledgers, conducting regular bank reconciliation, payroll management, preparation of financial reports and financial statements, facilitating external audit of the CoAg,resolving audit queries, in consultation with MoH staff conduct procurement of goods and services, and all other financial and budget management functions.The scope of work may evolve and in future may include sub-granting to local governments, human resource management, etc. The firm will work under supervision of MoH Finance and Administration Department (Accounts,PDU, and Internal Audit, HR), and will report to the PS and to the PI/PD through the officer designated to manage the mechanism.
Specific Functional Responsibilities:
The successful firm will undertake the following business processes for MoH-CDC CoAg.
1. Book keeping and general maintenance of general and subsidiary ledgers, cash books and other accounting records for the CoAg in line with Generally Accepted Accounting Principles and all relevant laws and regulations including the relevant US Codes of Federal Regulations (CFRs), Grants Policy Statement, and AAGAM
2. Operating dedicated bank account for funds received and disbursed through CoAg
3. Preparation of monthly expenditure report against the approved workplan
4. Disbursement of funds to MoHofficials and third-parties to pay for goods and services as authorized by line approving officers in MoHwithin 48 hours of such approval
5. Management of the pay roll for staff supported under this mechanism and timely remittance of funds to beneficiaries
6. Work with the CoAgmanagement and technical staff of the ministry toconduct procurement of goods and services under the Cooperative Agreement
7. Ensure that all expenses are within the provisions on the CoAgWork plan and Budget, the Notice of Award (NoA), and that they are allowable, allocable and reasonable
8. Conduct regular bank reconciliation and prepare reconciliation reports to share with MoH and maintain the same on file, copy to Financial Management Office U.S. CDC -Uganda
9. Receipt of accountability of funds disbursed, check their accuracy and keeping on file
10. Maintain paper filing system that mirrors electronic accounting software
11. Preparation and submission of monthly expenditure, quarterly and end of year financial reports in collaboration with CoAgmanagement to meet requirements of MoH and CDC
12. Preparation of annual financial accounts statements and facilitate external audit conducted by auditors appointed by the client, and to clarify and resolve any audit queries
13. Provide input during planning and budgeting of the CoAg activities to ensure that all activities are appropriately catered for, and costs are allowable, allocable and reasonable.
14. Any other task assigned by the Ministry in relation to this function.
15. Establish coding and sub-accounts, as required, for monitoring expenditures/generating reports on non-PEPFAR funding received through the Cooperative Agreement, in consultation with the MoHCoAg Management and relevant U.S. CDC officers
C: Method of Work:
The firm shall provide such financial management and procurement services to the Ministry as outlined above and as modified from time to time by the client’s authorized officials. In performance of its work, the third-party firm will work closely with the management of the CoAg and technical, Finance and Administration staff of MoH. As such the firm is expected to:
1. Establish internal policies and procedures for effective management of the fiscal functions:
a. Designate staff for the various roles to enable MoH staff working on CoAg-related activities to obtain the necessary resources timely in order to work effectively, efficiently and comfortably. In addition, CoAg Management, and theAccounting Officer will be appropriately briefed and kept up to date on all financial transactions.
b. Develop and obtain MoH concurrence, and implement effective financial policies and procedures for the CoAg that comply with GAAP principals, and all relevant GoU and US Federal Government laws and regulations and award terms and conditions;
c. Accounting software – procure and implement accounting software that links all aspects of fiscal management, generates reports, and linked to MoH management.
2. Operate a dedicatedoperational bank account for CoAg resources ensuring that:
a. The Account is in a bank approved by the MoH Accounting Officer
b. Designate signatories for the account who should be of high professional integrity and standing,andreadily available to disburse resources timely and at short notice
c. Provide account details to MoHin order to sign it up with the payment management system (PMS) for electronic transfer of funds that MoHwill regularly initiate
d. Regularly advise the MoH on account balances, provide statements, and requests for replenishment of funds to the account
e. Provide CoAg Manager, Principal Investigatorand Accounting Officer electronic viewer access to the account for instant review of accounts transactions and balances
3. Establish in consultation with MoHmechanisms for disbursement accountability for funds
a. Approval and authorization of activities in the work planis the responsibility of MoH in line with current approval procedures and internal controls. The firm will be advised of the identity and signatures of officers authorizing release of funds.
b. An accountant in CoAg team will raise serialized vouchersthat incorporate security features to be authorized by approving officials designated by the Accounting Officer
c. The firm will release funds to identified payees in the most convenient form within 48 hours (2 working days) of receipt of the authorized request for funds
d. Advise MoH within 24 hours if the request cannot be paid and the reasons for that decision and remedial measures necessary to disburse the funds
e. Receive accountability for funds after activity implementation or delivery of goods, review and file the accountability after retiring the advance
f. Advise CoAg management on over-due accountability or accountability gaps in submitted accountabilities when such cases arise
g. Advise the client on available budget balances
h. Advise on other internal controls necessary to safeguard CoAg resources and assets
4. Undertake short and long-term financial and management reporting;
a. Develop, and implement plans for control, monitoring and reporting of all financial operations;
b. Undertake regular analysis of accounts and finance data and proactively prepare reports facilitating CoAg management in day-to-day decision making
c. Consolidate monthly financial reports to provide timely reports on receipts/expenditure, expense report, budget variance reports, among others;
d. Prepare regular monthly, quarterly and end of year financial reports in formats required by the client and the donor
5. Perform regular internal finance, accounting and systems audits including:
a. Monthly reviews of financial transactions to check for appropriate documentation, correct account assignment and approvals;
b. Conduct monthly bank reconciliations against cash book and prepare and share reconciliation reports with the Ministry and Management of the CoAg
c. Ensure that financial information and accounting procedures effectively respond to the reporting expectations of CoAg managementand its donors
d. Advise management to ensure maintenance of accounting standards, transparent procedures, and donor compliance;
6. Procurement of Goods and Services
a. Establishprocurement and contracting procedures that meet USG and GoU regulations and obtain concurrence of the MoH Accounting Officer
b. Receive and process authorized procurement requests
c. In consultation with CoAg and MoH designated team, discuss procurement procedures and methodsand solicit for quotes or bids,
d. In consultation with CoAg management and technical units, evaluate bids and make contract awards
e. Execute procurement of goods and services through.
f. Monitor the execution of contract agreements from a financial and legal stand-point
g. Seek approval for payment after delivery of goods and services have been certified by MoH internal audit, and effect payment for goods and services
h. Document all procurement procedures and keep all files up-to date
i. Prepare regular procurement reports and share with MoH and CoAg management
7. Payroll Management
a. Actively manage payroll and all tax related matters including remittance of PAYE tax, NSSF contribution, etc.
b. Establish mechanisms for timely remittance of payments and documentation of Level of Effort of staff
8. Facilitateexternal audits,
a. Prepare the CoAg’s annual financial report;
b. Prepare and avail all appropriate documentationrequired for audit
c. Respond to requests for clarification and take corrective action;
9. Advise the CoAgmanagement during business and strategic planning meetings.
a. Participate in development of workplans, continuation application and project proposals in close coordination with other units;
b. Conduct periodic assessments and forecasts of financial performance against budget, financial and operational goals.
10. Perform Other Functions requested by the Ministry
a. Provide capacity building accounting staff and management on all financial matters;
b. Advise on all of the above to staff and CoAg management as and when required;
D: Qualifications and Competencies
This task requires a reputable firm that must possess the following competencies and qualifications
1. A reputable firm that is registered with Institute of Certified Public Accountants of Uganda (ICPAU), and must have qualified Chartered Accountants with key staff having at least 5 years post-qualification experience and registered with ICPAU. Key staff must possess hands-on extensive financial management experience at a senior level.
2. The firm must have demonstrated commitment to high professional and ethical standards.
3. Must have relevant hands-on extensive experience in financial management of US Federal Government Foreign Assistance funds for relevant public institutions in the health sector executing relevant programs, with full understanding of US Federal Government and GoUfiscal management and procurement regulations and procedures. Letters of recommendations from public institutions in the health sector that they previously served will be a requirement.
4. Ability to deliver under tight deadlines. The firm must demonstrate ability to disburse funds for implementation of activities within 48 hours of receipt of approved request.
5. Experience with procurement and contracting for public institutions in the health sector: must have established transparent procedures for procurement of goods and services.
6. Possession of, and experience with accounting and financial management software especially Navision will be an added advantage
7. Ability to carry out required tasks and responsibilities diligently, with minimum guidelines and instructions, and to manage competing priorities and coping with challenging work routines is a requirement
8. Demonstrated commitment and ability for capacity building of staff in financial and project management will be a major advantage
9. Ability to expand the scope of work to support management of sub-grants to districts otother entities and tracking utilization of the resources, management of technical human resources, etc, will be an added advantage
E: Reporting:
In executing the functions, the firm will work under the supervision of the MoH Accounting Officer through relevant department (Accounts, Procurement, Internal audit, etc) and report directly to PSand PIthrough the Officer designated to manage the CoAg.MoH Accounts,
E: Audit:
The books of accounts will be audited or reviewed from time to time by auditors appointed by the client who will include Internal Audit and Accounts Department of MoH. In line with Audit requirements for GoU, the Auditor General will perform annual or other audits of the accounts, and may appoint other auditors acceptable to the donors to perform the function on his behalf.
F: Contracting:
The successful firm will be contracted on one-year renewable contracts. Contracts will be renewed subject to satisfactory performance and availability of funds appropriated to the CoAg.
G: Deliverables:
Key deliverables will comprise of:
· Monthly: Monthly expense reports with analysis of expenditure against workplan, monthly bank reconciliation reports, budget variance reports, pipeline analysis, cash flow projections and others required by the client
· Quarterly: Quarterly financial reports in line with GoU and CDC requirements, pipeline analysis, cash flow projections, and others requested by the client