FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA

Ministry of Urban Development &Construction

URBAN INSTITUTIONAL AND INFRASTRUCTURE DEVELOPMENT

PROGRAM
(UIIDP)
EFY 2012-2015
2019/20 to 2022/23

Annual Performance Assessment Guideline

Urban Revenue Enhancement, Fund Mobilization and

Finance Bureau,
P.O. Box 24134/1000 REVISED FINAL
Addis Ababa September 29, 2020
Section CONTENTS page

1 ABBREVIATIONS AND ACRONYMS.......................................5

2 Introduction......................................................................8
2.1 Background 8
2.2 The Purpose and Users of this Guideline 8

3 UIIDP Designand Framework............................................10

4 Disbursement Linked Indicators, Minimum Conditions,

Performance Measures and Verification Protocols............29

5 The UIIDP APA Process....................................................37

5.1 Guiding Principles 37
5.2 The Processes 37
5.3 The Assessment Process 39

6 DLI 1 Guideline – Minimum Conditions for ULGs................42

6.1 Introduction 42
6.2 Entry-level condition – Prior to release of funds for the year 42
6.3 DLI: Minimum Conditions Guideline 43

7 DLI 2 Guideline – ULG Institutional Performance...............50

7.1 Introduction 50
7.2 DLI 2, ULG Performance Measures, Institutional Performance 51

8 DLI 3 Guideline – ULG Infrastructure&Service Delivery

Performance...................................................................77
8.1 DLI 3 - ULG Performance Measures, Infrastructure &Service Delivery
Performance 78

9 DLI 4 Guideline – Local Economic Development, Urban

Resilience and Gender Mainstreaming..............................86

10 DLI # 5, 6, 7, 8 and 9 Guidelines – Regional Agencies

Performance...................................................................97
10.1 Introduction 97
10.2 DLIs 5, 6,7, 8 and 9: RIA Performance Measures, 98

11 Annexes........................................................................107
11.1 Annex 1: Procedure For Selection Of Sample Contracts and templates for
procurement assessment by the annual performance assessment consultant 107
11.2 Annex 2: APA Draft & Final Report Format 125
11.3 Annex 3: APA Standard Formats for CB Requirements & Complaints 132

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 11.4 . Annex 4: Disbursement Linked Indicator Matrix 137
11.5 . Annex 5: Verification Protocol Table and Bank Disbursement Table 142
11.6 Annex 6. Procurement Audit TOR 158

TABLES
Table 1. Program Financing (US$ million)............................................................................................
Table 2. Investment Menu for ULGs - Eligible Areas in Infrastructure & Services..............................
Table 3. Eligible Capacity Building Areas for ULGs and NRS.............................................................
Table 4. Program DLIs...........................................................................................................................
Table 5. Schedule for 3rd APA for 56 Cities..........................................................................................
Table 6. Schedule for 3rd APA for 61 Cities..........................................................................................
Table 7. Disbursement Linked Indicator Matrix..................................................................................137
Table 8. Disbursement Linked Indicator Verification Protocol...........................................................142
Table 9. Bank Disbursement Table.......................................................................................................146

FIGURES
Figure 1. PDO & Key Result Areas........................................................................................................
Figure 2. Cities Participating in UIIDP..................................................................................................
Figure 3. UIIDP Windows & Main Expenditure Items..........................................................................
Figure 4. ULG & Regional Contributions (Matching Funds) to UIIDP.................................................
Figure 5. Organizational Structure for Federal Level.............................................................................
Figure 6. Organizational Structure for Regional Level..........................................................................
Figure 7. Organizational Structure for ULG Level.................................................................................

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The UIIDP Program Operations Manual is made up of a number of documents including:
1. UIIDP Program Operations Manual Volume I: Main Text & Annexes
2. UIIDP Program Operations Manual Volume II: Additional Annexes
3. UIIDP Monitoring, Evaluation and Reporting System and Guidelines
a. Federal (Volume 1)
b. Regions (Volume 2)
c. ULGs (Volume 3)
4. UIIDP Environmental and Social Management System Guideline
5. UIIDP Resettlement System Guideline
6. Gender Mainstreaming Guideline
7. UIIDP Annual Performance Assessment Guideline
8. Capital Investment Plan Guide for Ethiopian Cities
9. Asset Management Plan Manual
10. Asset Management Model Plan
11. Revenue Enhancement Plan Manual

Exchange rates used (as at December 31, 2017)

Currency Unit = Ethiopian Birr (ETB)

ETB 27.40 = US$1
US$1.42413 = SDR 1
US$1.102 = Euro 1
Currency US$1

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 1 ABBREVIATIONS AND ACRONYMS

AFD Agence Française de Développement(French Development Agency)

AMP Asset Management Plan
APA Annual Performance Assessment
APACRC Annual Performance Assessment Complaints Resolution Committee
APAG Annual Performance Assessment Guidelines
ARAP Abbreviated Resettlement Action Plan
BoFED Bureau of Finance and Economic Development (Regional)
BoLSA Bureau of Labour& Social Affairs
BUDCo Bureau of Urban Development and Construction (part of regional
governments)
CBP Capacity Building Plan
CIP Capital Investment Plan
CPF Country Partnership Framework
CSA Central Statistics Agency
DRM Disaster risk management
EFY Ethiopia financial year
EMP Environmental Management Plan
EOI Expression of Interest
ECSPG Ethiopian Cities Sustainable Prosperity Goals
EFCCC Environment, Forest & Climate Change Commission
ESMF Environmental and Social Management Framework
ETB Ethiopian birr
FEACC Federal Ethics and Anti-Corruption Commission
FMT Federal Mobile Team
FSC Federal Steering Committee
FTC Federal Technical Committee
FPPPAA Federal Public Procurement and Property Administration Agency
FUJCFSA Federal Urban Job Creation & Food Security Agency
FY Financial Year
GC Gregorian Calendar
GoE Government of Ethiopia
GRS Grievance Redress Service

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GTP Growth and Transformation Plan
IBEX Integrated Budget and Expenditure
ICB International Competitive Bidding
IDA International Development Association
IDA SUF IDA Scale Up Facility
IPF Investment Project Financing
LED Local economic development
MoF Ministry of Finance
MoLSA Ministry of Labour& Social Affairs
MoR Ministry of Revenues
MoTI Ministry of Trade & Industry
MOWCY Ministry of Women, Children and Youth
MSE Micro and small Enterprise
MTR Midterm review
MUDCo Ministry of Urban Development and Construction
NBE National Bank of Ethiopia
NDRMC National Disaster Risk Management Commission
NUDSP National Urban Development Spatial Plan
O&M Operations and maintenance
OFAG Office of Federal Auditor General
OFED Office of Finance and Economic Development (city level)
ORAG Office of Regional Auditor General
PAP Program Action Plan
PDO Program Development Objective
PEFA Public Expenditure Financial Assessment
PforR Performance for Results
PM Performance Measure
POM Program Operational Manual
PPA Participation and Performance Agreement
PPD Policy & Planning Bureau in MUDCo
PPSD Project Procurement Strategy Document
PR & AB Policy, Research & Advisory Bureau
QCBS Quality and Cost Based Selection
RAP Resettlement Action Plan
REACC Regional Ethics and Anti-Corruption Commission

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REFCCC Regional Environmental, Forest and Climate Change Commission
REOI Request for Expressions of Interest
REP Revenue Enhancement Plan
RMT Regional Mobile Team
RRB Regional Revenue Bureau
RPF Resettlement Policy Framework
RSC Regional Steering Committee
RTC Regional Technical Committee
RUJCFSA Regional Urban Job Creation and Food Security Agency
SNNPRS Southern Nations, Nationalities, and People’s Regional State
SoE Statement of Expenditure
TA Technical Assistance
TAC Tender Award Committee
ToRs Terms of Reference
ToT Training of trainers
UDS Urban Development Sector
UGCBB Urban Governance and Capacity Building Bureau
UIIDP Urban Institutional and Infrastructure Development Program
ULG Urban Local Government
ULGDP Urban Local Government Development Project (or ULGDP I)
ULGDP II Second Urban Local Government Development Program
UREFMFB Urban Revenue, Fund Mobilization and Finance Bureau in MUDCo
WCO Women and Children Affairs Office
WMP Waste Management Plan
ZOFED Zonal Office of Finance and Economic Development

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 2 INTRODUCTION

2.1 BACKGROUND
The Government of Ethiopia (GoE) as part of its efforts to improve the performance of the
urban local governments (ULGs) in terms of efficiency, accountability and delivery of
urban infrastructure and services has introduced a performance grant system for capital
investments and capacity building. Under the system, the ULGs and regional implementing
agencies1 (RIAs) in the National Regional States (NRSs) are assessed on agreed
performance measures (PMs) indicators on a yearly basis using the Annual Performance
Assessment Guideline (APAG).
The ULGs and RIAs that perform well in the APA will receive transfers of funds from
Government of Ethiopia’s (GoE) each year as performance grants. The objectives of the
APA are to:
 Provide incentives for performance in terms of: a) GoE policies, strategies, laws,
regulations and procedures; and b) the objectives, and implementation framework
and procedures for the UIIDP – as described in the UIIDP Program Operations
Manual (POM);
 Identify performance capacity gaps of the ULGs; and
 Establish a link between performance assessments, investments in infrastructure
and services, and capacity building support.

2.2 THE PURPOSE AND USERS OF THIS

GUIDELINE
This APA Guideline seeks to ensure an efficient, consistent, objective and transparent
assessment of the performance of the ULGs and RIAs by providing operational guidance
for the management, implementation and administration of the APA. It outlines the
principles, processes and (disbursement linked) indicators of the assessment.
The target groups for this manual are:
 117 ULGs (including Dire Dawa City Administration) in all nine NRSs who will
receive transfers of funds for capital investments in infrastructure and services, and
for capacity building – see the table at the end of this section;
 6 regional implementing agencies (RIAs) (see footnote 1) in each of the 9 NRSs
who can receive funds for capacity building – of their own capacity to provide
services to ULGs and to help build the capacity of the 117 ULGs to carry out their
own mandates and meet regional and national legal and regulatory requirements;
and
 The Ministry of Urban Development & Construction who will receive transfers of
funds under the IPF Component of UIIDP for capacity building – of their own
capacity as a federal Ministry and to help build the capacity of the nine regions and
117 ULGs.
1
The Regional Bureaus of Urban Development and Construction (or NRS equivalent), Office of the Regional
Auditor General, Regional Environmental, Forest and Climate Change Commissions, Regional Revenue Authority,
Regional Public Procurement and Property Administration Agency and Regional Ethics and Anti-Corruption
Commission.

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 Staff of federal ministries and agencies involved with the management of the
UIIDP – MUDCo, Ministry of Finance (MoF), Ministry of Revenues (MoR),
Ministry of Peace (MoP), Ministry of Labour & Social Affairs (MoLSA), Ministry
of Women, Children and Youth (MOWCY), Ministry of Trade & Industry (MoTI),
Environment, Forest & Climate Change Commission (EFCCC), , Office of Federal
Auditor General(OFAG), Federal Ethics and Anti-Corruption
Commission(FEACC), Federal Public Procurement and Property Administration
Agency (FPPPAA), Federal Urban Job Creation & Food Security Agency
(FUJCFSA).
 Staff of the regional Bureaus of Urban Development & Construction involved with
the management of the UIIDP.
 Staff and consultants of the World Bank who are contributing to the UIIDP II
through an International Development Association (IDA) grant and credit.
 Staff and consultants of the Agence Francaise de Developpement (AFD) who are
contributing to the UIIDP II through a grant.
 Members of civil society and the general public interested in the performance of the
ULGs and regional/federal implementing agencies.
 Consultants contracted by MUDCo to carry out the APA of ULGs and RIAs.

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3 UIIDP DESIGNAND FRAMEWORK

The Ministry of Urban Development & Construction, Federal Democratic Republic of Ethiopia,
with support from the World Bank and the Agence Francaise de Developpement (AFD is
implementing the Urban Institutional and Infrastructure Development Program (UIIDP) during the
period from March 2018 to December 2023.

The UIIDP will provide Performance Grants (PGs) for investments in infrastructure and services
and in capacity building for 117 urban local governments (ULGs) and capacity building in all nine
Regional Governments (RGs), MUDCo and several federal Ministries/Agencies.

The UIIDP is being financed through World Bank & AFD Program-for-Results (PforR) financing
instrument at the regional and ULG levels and an Investment Project Financing (IPF) instrument at
the federal level. The regional governments and urban local governments are expected to provide
matching funds (counterpart contributions) as per the percentages agreed between MUDCo and the
World Bank which are stated in the IIDP Program Operations Manual.
Funding available under the UIIDP will depend on the performance of each city and Regional
Government assessed annually against verifiable results described in the Program Operations
Manual (POM) and in the Annual Performance Assessment Guideline (APAG) which is a
standalone Annex of the POM.

Program Development Objective

The Program Development Objective (PDO) of the UIIDP is to enhance the institutional
performance of participating urban local governments to develop and sustain urban
infrastructure, services, and local economic development.

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 Figure 1. PDO & Key Result Areas

KRA 1. Enhanced
citizen
participation and
engagement in
ULG planning and
budgeting
KRA 7. Strengthened ULG
resilience, improved local KRA 2. Increased
economic development own source
(LED) and enhanced gender revenue at the
equity in the ULG ULG level
operations

PDO
To enhance the
institutional performance
of participating urban local
governments to develop
KRA 6. and sustain urban
infrastructure, services, KRA3. Improved
Strengthened
and local economic infrastructure,
accountability
development. service delivery,
and oversight
O&M systems
systems

KRA 5. Improved KRA 4. Improved

environmental efficiency and
and social effectiveness in
management and fiduciary
safeguards management

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Key Result Areas
It is expected that the institutional performance improvements and the infrastructure delivered by
cities will result in: -
(a) enhanced citizen participation and engagement in ULG planning and budgeting;
(b) increased own source revenue at the ULG level;
(c) improved infrastructure, service delivery, O&M systems;
(d) improved efficiency and effectiveness in fiduciary management;
(e) Improved environmental and social management and safeguards; and
(f) strengthened accountability and oversight systems; and
(g) strengthened ULG resilience, improved local economic development (LED) and enhanced
gender equity in the ULG operations.
Key Result Indicators
The key results indicators are:
(a) People provided with improved urban living conditions under the UIIDP [corporate indicator].
(b) Cities with improved livability, sustainability, and management [corporate indicator].
(c) Composite institutional performance of participating ULGs, averaged across all cities.2
(d) Composite performance for achievement of urban infrastructure and service targets,
maintenance performance and value for money in investments by ULGs, averaged across all
cities.
(e) Composite performance for achievement of LED targets, averaged across all cities
The complete table on the results framework and monitoring is provided in the Annex 1.

Program Scope and Coverage of Urban Centres

The UIIDP will have an additional 73 cities to the existing 44 cities making a total of 117 cities that
will participate in the program. This substantial scale-up to 117 cities will bring about greater
impact in terms of population coverage and size of the Program (increasing beneficiaries from 4.36
million under UGLDP II to an estimated 6.62 million in UIIDP) and result in exponentially larger
positive impact for the country. The scale-up allows strengthening of the overall programmatic and
performance-based approach to support sustainable urban development and leverages on
economies of scale for program management and implementation. In addition, the scale-up is built
on the solid foundations and tried-and-tested overall successful experiences of ULGDP I and II.
Timely support to improve institutional performance in the planning, delivery, and sustained
provision of urban services and infrastructure by local governments is critical especially for these
rapidly growing cities.

2
In the core thematic areas of:Planning and budgeting, assets management, public financial management,
procurement, own source revenues, accountability and transparency, environment and social safeguards, land
management, and strategic urban planning.

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 Figure 2. Cities Participating in UIIDP

Amhara
32 Cities
BG
Gambella
Oromia
Harari
38 Cities
Dire Dawa
(1 city each)

Total
117
Afar cities SNNPRS
23 cities
4 cities

Tigray
Ethiopian Somali
12 cities
4 cities

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 Table 1. List of Participating Cities & Allocations

MINISTRY OF URBAN DEVELOPMENT &CONSTRUCTION

URBAN REVENUE ENHANCEMENT, FUND MOBILIZATION AND FINANCE BUREAU
LIST OF 117 UIIDP CITIES APPROVED BY H. E THE MINISTER ON SEPTEMBER 12,
2017 AS PER MINISTRY UIIDP POLICY PAPER

ULG Contributions Regional Contributions

Old 16 ULGDP I
ULGs in Major
regions 40% Harari Region 25%
New ULGs in non - Major
DRS regions 20% Regions 30%
New ULGs in DRS 10% DRS 20%
Dire Dawa 50%
Harar 25%

Total estimated
Total estimated
Population ULG Region UIIDP
IDA Allocation
CSA 2013 Contribution in Contribution in contribution to
for 4 financial
Estimates USD USD CIP for 4 years
years in USD
S/N Name of ULG in USD

AMHARA REGION
Previous ULGDP II Cities (10)

1 Bahir Dar 198,909 14,066,844 5,626,738 4,220,053 23,913,636

2 Dessie 153,691 10,869,028 4,347,611 3,260,708 18,477,347
3 Gondar 264,964 18,738,254 7,495,302 5,621,476 31,855,032
4 Kombolcha 75,078 5,309,516 2,123,806 1,592,855 9,026,177
5 Debre Brehan 83,479 5,903,635 1,180,727 1,771,090 8,855,452
6 Debre Markos 79,980 5,656,186 1,131,237 1,696,856 8,484,278
7 Debre Tabor 71,149 5,031,657 1,006,331 1,509,497 7,547,486
8 Finote Selam 33,162 2,345,217 469,043 703,565 3,517,825
9 Mota 33,500 2,369,120 473,824 710,736 3,553,680
10 Woldiya 59,046 4,175,733 835,147 1,252,720 6,263,600
New Cities (22)

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 1 Adet 24,532 1,451,558 290,312 435,468 2,177,338
2 Adis Zemen 20,620 1,220,085 244,017 366,026 1,830,128
3 Ayikel 21,105 1,248,783 249,757 374,635 1,873,174
4 Bati 21,385 1,265,350 253,070 379,605 1,898,026
5 Bichena 20,739 1,227,127 245,425 368,138 1,840,690
6 Buri 26,120 1,545,520 309,104 463,656 2,318,281
7 Chagni 29,731 1,759,183 351,837 527,755 2,638,775
8 Dangila 31,773 1,880,008 376,002 564,003 2,820,013
9 Debark 29,068 1,719,954 343,991 515,986 2,579,930
10 Dejen 27,682 1,637,944 327,589 491,383 2,456,916
11 Gendawuha 36,403 2,153,966 430,793 646,190 3,230,948
12 Hayik 49,389 2,922,347 584,469 876,704 4,383,521
13 Injebara 26,958 1,595,105 319,021 478,531 2,392,657
14 Kemise 24,852 1,470,493 294,099 441,148 2,205,739
15 Kobo 31,824 1,883,026 376,605 564,908 2,824,539
16 Lalibela 22,225 1,315,053 263,011 394,516 1,972,580
17 Merawi 23,909 1,414,696 282,939 424,409 2,122,043
18 Mersa 20,632 1,220,795 244,159 366,239 1,831,193
Nefas
25,108 1,485,640 297,128 445,692 2,228,461
19 Mewicha
20 Sekota 28,597 1,692,084 338,417 507,625 2,538,127
21 Shewa Robit 22,491 1,330,792 266,158 399,238 1,996,189
22 Wereta 27,159 1,606,998 321,400 482,099 2,410,497
Total Amhara (32
1,645,260 109,511,699 31,699,068 32,853,510 174,064,277
cities)
OROMIA REGION
Previous ULGDP II Cities (11)

1 Adama 282,974 20,011,921 8,004,769 6,003,576 34,020,266

2 Bishoftu 128,408 9,081,014 3,632,406 2,724,304 15,437,723
3 Jimma 155,434 10,992,292 4,396,917 3,297,688 18,686,897
4 Shashemane 129,084 9,128,820 3,651,528 2,738,646 15,518,995
5 Nekemte 96,657 6,835,583 1,367,117 2,050,675 10,253,375
6 Assela 86,441 6,113,108 1,222,622 1,833,932 9,169,661
7 Sebeta 63,391 4,483,012 896,602 1,344,903 6,724,517
8 Burayu 62,806 4,441,640 888,328 1,332,492 6,662,460
9 Ambo 61,900 4,377,568 875,514 1,313,270 6,566,352
10 Robe 57,031 4,033,232 806,646 1,209,970 6,049,848
11 Ziway/ Batu 56,104 3,967,675 793,535 1,190,302 5,951,512

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New Cities (27)

1 Adola 29,475 1,744,036 348,807 523,211 2,616,054

2 Agaro 32,714 1,935,687 387,137 580,706 2,903,531
3 ArsiNegele 60,770 3,595,761 719,152 1,078,728 5,393,641
4 Babile 22,760 1,346,709 269,342 404,013 2,020,064
5 Bedele 25,080 1,483,984 296,797 445,195 2,225,975
6 Bedesa 23,371 1,382,862 276,572 414,859 2,074,293
7 Bokoji 22,797 1,348,898 269,780 404,670 2,023,348
8 Chiro 43,266 2,560,049 512,010 768,015 3,840,074
9 DembiDolo 37,841 2,239,052 447,810 671,716 3,358,578
10 Dodola 26,766 1,583,744 316,749 475,123 2,375,616
11 Fiche 35,329 2,090,417 418,083 627,125 3,135,625
12 Gimbi 39,811 2,355,617 471,123 706,685 3,533,425
13 Ginir 21,976 1,300,320 260,064 390,096 1,950,480
14 Goba 41,152 2,434,964 486,993 730,489 3,652,446
Hagere
15 Mariyam 35,749 2,115,268 423,054 634,580 3,172,902
(Bule Hora)
16 Haromaya 39,486 2,336,387 467,277 700,916 3,504,580
17 Holeta 29,936 1,771,313 354,263 531,394 2,656,970
18 LagaTafo 20,284 1,200,204 240,041 360,061 1,800,306
19 Metu 36,985 2,188,402 437,680 656,521 3,282,604
20 Mojo 37,968 2,246,567 449,313 673,970 3,369,850
21 Negele 45,314 2,681,229 536,246 804,369 4,021,844
22 Nejo 24,412 1,444,458 288,892 433,337 2,166,687
23 Shakiso 29,466 1,743,503 348,701 523,051 2,615,255
24 Shambu 35,136 2,078,997 415,799 623,699 3,118,496
25 Suluita 37,492 2,218,402 443,680 665,520 3,327,602
26 Weliso 48,674 2,880,041 576,008 864,012 4,320,061
27 Yabelo 22,483 1,330,319 266,064 399,096 1,995,479
Total Oromia (38 cities) 2,086,723 137,103,056 37,263,421 41,130,917 215,497,394
SNNPRS
Previous ULGDP II Cities (9)

1 Hawassa 225,686 15,960,514 6,384,206 4,788,154 27,132,874

2 Arbaminch 107,542 7,605,370 3,042,148 2,281,611 12,929,129

3 Dilla 84,952 6,007,805 2,403,122 1,802,342 10,213,269

4 Sodo 109,225 7,724,392 3,089,757 2,317,318 13,131,466

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 5 Areka 45,109 3,190,108 638,022 957,033 4,785,163
6 Butajira 47,978 3,393,004 678,601 1,017,901 5,089,506
7 Hosaena 100,528 7,109,340 1,421,868 2,132,802 10,664,010
8 Mizanaman 48,946 3,461,461 692,292 1,038,438 5,192,192
9 Yirga Alem 43,586 3,082,402 616,480 924,721 4,623,603
New Cities (14)

1 Welkite 41,458 2,453,070 490,614 735,921 3,679,605

2 Durame 35,147 2,079,648 415,930 623,894 3,119,472
3 Aleta Wondo 31,730 1,877,464 375,493 563,239 2,816,196
4 Bodite 34,661 2,050,891 410,178 615,267 3,076,337
5 Jinka 29,108 1,722,320 344,464 516,696 2,583,481
6 Tapi 35,660 2,110,002 422,000 633,001 3,165,003
7 Bonga 29,956 1,772,497 354,499 531,749 2,658,745
8 Sawula 32,608 1,929,415 385,883 578,825 2,894,123
Halaba
9 38,587 2,283,193 456,639 684,958 3,424,789
(AlabaKulito)
10 Shone 22,428 1,327,065 265,413 398,119 1,990,597
11 ShinShicho 20,517 1,213,991 242,798 364,197 1,820,986
12 Hadero 25,609 1,515,285 303,057 454,585 2,272,927
13 YirgaChefe 21,713 1,284,758 256,952 385,427 1,927,137
14 Worabe 65,199 3,857,825 771,565 1,157,347 5,786,737
Total SNNPRS (23
1,277,933 85,011,821 24,461,981 25,503,546 134,977,348
cities)
TIGRAY REGION
Previous ULGDP II Cities (8)

1 Mekelle 286,624 20,270,049 8,108,020 6,081,015 34,459,084

2 Adigrat 76,447 5,406,332 2,162,533 1,621,900 9,190,764
3 Axum 59,269 4,191,504 1,676,601 1,257,451 7,125,556
Shire
62,769 4,439,024 1,775,609 1,331,707 7,546,340
4 Endaselassie
5 Adwa 53,763 3,802,119 760,424 1,140,636 5,703,179
6 Alamata 44,092 3,118,186 623,637 935,456 4,677,279
7 Humera 28,744 2,032,776 406,555 609,833 3,049,164
8 Wukro 40,103 2,836,084 567,217 850,825 4,254,126
New Cities (4)

1 AblylAdl 21,393 1,265,824 253,165 379,747 1,898,736

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 2 Korem 22,377 1,324,047 264,809 397,214 1,986,071
3 Maychew 31,088 1,839,477 367,895 551,843 2,759,215
4 Shiraro 23,013 1,361,679 272,336 408,504 2,042,519
Total Tigray (12 cities) 749,682 51,887,101 17,238,802 15,566,130 84,692,033
SOMALI REGION
Previous ULGDP II Cities (1)

1 Jijiga (Somali) 152,674 10,797,105 1,079,711 2,159,421 14,036,237

New Cities (3)

1 Degehabur 36,419 2,154,912 215,491 430,982 2,801,386

2 Kebridehar 35,466 2,098,523 209,852 419,705 2,728,080
3 Gode 52,438 3,102,756 310,276 620,551 4,033,583
Total Somali (4 cities) 276,997 18,153,297 1,815,330 3,630,659 23,599,286
AFAR REGION
Previous ULGDP II Cities (1)

Samera/
1 25,209 1,782,780 178,278 356,556 2,317,615
Logiya (Afar)
New Cities (3)

1 Dubti 22,263 1,317,302 131,730 263,460 1,712,492

2 Asayta 24,286 1,437,003 143,700 287,401 1,868,103
Awash Sebat
3 22,513 1,332,094 133,209 266,419 1,731,722
Kilo
Total Afar (4 cities) 94,271 5,869,179 586,918 1,173,836 7,629,933
Assosa (B.
40,686 2,877,314 287,731 575,463 3,740,508
1 Gumuz)
Gambella
64,499 4,561,369 456,137 912,274 5,929,780
2 (Gambella)
3 Harar (Harari) 112,781 7,975,872 1,993,968 1,993,968 11,963,808
4 Dire Dawa 269,134 19,033,156 9,516,578 28,549,735

Grand Total for 117 6,617,966.00 441,983,865.92 125,319,933.87 123,340,303.28 690,644,103.06

ULGs

P a g e 18 | 186
P a g e 19 | 186
Key Features and Financing Modalities
The total IDA funding envelope for the UIIDP is US$600 million (of which USS273 million is
from IDA Grant, US$127 million is from IDA Credit and US$200 million is from the IDA Scale-
Up Funding (SUF)). In addition, AFD will contribute co-financing of euro 9.8 million (US$10.8
million equivalent). The GoE (from regions and cities) will contribute around US$248.7 million. 3
This brings the total Operation Budget envelope to around US$859.5 million.

Table 1. Program Financing (US$ million)

Source Amount Percent of Total

Government4 US$248.7 29
International Development Association (IDA) US$400.0 47
IDA Scale Up Facility (IDA-SUF) US$200.0 23
Agence Française de Développement (AFD) US$10.8 1
Total Program Financing US$859.5 100

The main expenditure items are:

Window 1 for PforR:

 US$691.11 million (ULG level). Performance-based grants to 117 ULGs for

infrastructure investments as listed under the Program investment menu
(US$248.66 million from regions and ULGs; around US$433.65 million from
IDA; and around US$8.8 million from AFD).
 US$70.04 million (regional level). Support for regional government to strengthen
its capacity to support and guide the ULGs in core areas such as financial audit,
environmental audit, procurement audit, revenue enhancement, and others (IDA
funding)
 US$63.74 million (prior results). Allocation against prior results on institutional
performance, service delivery, maintenance, and job creation for 44 ULGs as
determined in the APA conducted in FY2017/18 for FY 2018/19 allocations(IDA
funding. This is to fill a financing gap under the ULGDP II that has arisen due to
overachievement of performance results during FY2018/19(IDA funding).

Window 2 for IPF:

 US$34.57 million (federal level).Enable MUDCo to support and guide the regions and
ULGs and also to administer and coordinate the Operation (US$32.57 from IDA; and
about US$2.0 million from AFD).

3
Regions and cities contribute to the performance based transfers in the following manner: Amhara, Oromiya,
SNNPR, and Tigray: 30 percent funding in addition to IDA funded grants; DRS regions: 20 percent; original 16 ULGDP
I ULGs: 40 percent; new cities under ULGDP II in the DRS regions 10 percent; and other new (ULGDPII) cities: 20
percent; Harar and DireDawa contribute 50 percent in addition to the IDA funded grants. The new 73 ULGs under UIIDP
will followthe same principles as the ULGDPII newcomers.
4
The regional government and ULGs will be making funding contributions at various levels, as detailed in the
Technical Assessment. The contribution from the ULGs constitutes one of the minimum conditions to be met for each
ULG to qualify to receive funding from the Program.

P a g e 20 | 186
 Figure 3. UIIDP Windows & Main Expenditure Items

Window 1. ULG level. Performance

Grants
$691.11m
(IDA $433.65m; AFD $8.8m;
Regions & ULGs $248.66m)

Window 1.
Window 1: Regional
Level. Support for Prior Results
(Financing Gap
RGs to strengthen
capacity to support UIDDP Total under ULGDP II due
Budget to overachievement
ULGs
$859.5m of performance
$70.04m results by ULGs)
(IDA) $63.74
(IDA)

Window 2. Federal Level. Investment

Project Financing (IPF)
Support for MUDCo to administer &
coordinate the UIIDP & to strengthen
capacity to guide regions & ULGs
$34.57m
(IDA $32.57m; AFD $2.0m)

UIIDP funding to ULGs will be allocated using a simple formula, based on population size and the
performance of the ULGs. An approximate US$16–18 per capita per year (with phasing in of the

P a g e 21 | 186
new ULGs in the first FY) has been assessed to be the optimal level of funding. 5 As a core
principle, the per capita amount would at least maintain the similar level as at the start of the
ULGDP II to ensure minimum level of incentives and meaningful infrastructure and services
investments. The size of this performance grant has been determined considering various factors
such as international good practice (from an expanding number of countries with performance-
based grant allocations), the costs of investments, expenditure needs and current level of
investments, as well as generation of sufficiently strong incentive to drive the performance. This
has been informed by a comprehensive review of ULG fiscal and revenue positions.

Figure 4. ULG & Regional Contributions (Matching Funds) to UIIDP

Old 16 ULGDP I
ULGs in Major
regions
40%

New ULGs in
Dire Dawa non - DRS
50% Regional regions
Contributions 20%
4 Major Regions:
30%
DRS: 20%
Harari: 25%

New ULGs in
Harar
DRS
25%
10%

Institutional Arrangements

5
In the first year, the simple average per capita for the new 73 ULGs and the ULGDP II 44 ULGs will be US$14.79 and
US$17.68 per capita respectively. From the second year, the per capita allocation uses an average figure similar for the
two groups, which is US$17.68.

P a g e 22 | 186
The MUDCo will be the lead implementing agency, with a Federal Mobile Team (FMT) in the
Urban Revenue Enhancement, Fund Mobilization and Finance Bureau (UREFMFB) responsible
for daily coordination of the Operation.
Federal Level

Figure 5. Organizational Structure for Federal Level

Federal Steering Committee (FSC)

MUDCo Minister (Chair), MUDCo State Minister
(UDS), MoF, MoR, EFCCC, MoLSA, MoTI, MoP,
MOWCY, FEACC, OFAG, MUDCo UREMFB Bureau
Head (Member/Secretary)
(the members from the other Ministries & Agencies are at
the level of minimum State Minister and no representatives
are allowed)

Federal Technical Committee (FTC)

MUDCo UREMFB Bureau Head (Chair), MUDCo
PR & A Bureau Head, MUDCo UGCBB Bureau
Head, MoF, MoR, EFCCC, MoLSA, MoTI, MoP,
MOWCY, FPPPA, FEACC, FUJCFSA, OFAG,
MUDCo UIIDP Coordinator (Member/Secretary)
(Members from other Ministries & Agencies are at the
level of minimum Director and no representatives are
allowed)

MUDCo
UREFMFB
Federal Mobile Team (FMT)
Overall management of the UIIDP

MOF
OFAG
Fund flow, disbursement,
reporting, and arranging Carrying out program audits
program auditing

P a g e 23 | 186
Regional Level
Figure 6. Organizational Structure for Regional Level

Regional Steering Committee (RSC)

BUDHo (Chair), BOFED, REFCCC, BoLSA, RUJCFSA,
RPPPAA, REACC, ORAG and RRA
(these should be Bureau Heads and not representatives. The
BUDHo Deputy Bureau Head assisted by the UIIDP
Regional Coordinator provide secretarial services )

Regional Technical Subcommittee (RTSC)

BUDHo Deputy Bureau Head (Chair),UIIDP
Regional Coordinator, BOFED, REFCCC,
BoLSA, RUJCFSA, RPPPAA, REACC,
ORAG and RRA
(Members are the technical focal persons from
the abovementioned Bureaus & Agencies)

BUDHo
Regional Mobile Team (RMT) or Overall
Coordinator in case of regions with more
than one RMT
Overall management of the UIIDP

BOFEC
Financial management
and reporting

RMT 1

RMT 2

RMT 3

P a g e 24 | 186
ULG Level
Figure 7. Organizational Structure for ULG Level

Mayor

City Manager

UIIDP
Coordination
Team
Eligible Investment and Capacity Building Areas

ULGs will use the Program funds to finance urban infrastructure works as well as capacity building
activities, in compliance with the Program’s investment menu and capacity building manual.
Eligible infrastructure investments fall under eight groups including: (a) urban roads, (b) integrated
infrastructure and land services, (c) sanitation (liquid waste), (d) solid waste management, (e)
urban drainage, (f) urban disaster risk management and urban resilience, (g) built facilities, and (h)
urban green infrastructure. Ineligible investments include any World Bank environment and social
impact assessment Category A projects. Compliance with the investment menu is a minimum
condition for receiving funds. In addition, ULGs will be required to prepare the project in a
participatory manner, and consider: (a) social inclusion requirements, including gender and
disability considerations; (b) climate change and disaster adaptation; and (c) contribution to LED
and long-term job creation.6 ULGs could also spend up to 5 percent of investment grants and
regional/city contributions on capacity building support. For regional government entities, the
grants will mainly be used for capacity building, operations and management expenses, subject to
the eligible capacity building areas, similar to the ULGs.

The following are the investment areas that ULGs may invest the IDA performance
grants:-

6
Details of and procedures for the use of investment project prioritization and selection criteria will be included in the
POM.

P a g e 25 | 186
 Table 2. Investment Menu for ULGs - Eligible Areas in Infrastructure & Services
Infrastructure/Service Type
Roads Expenditure group 1: Cobblestone, gravel, red ash and earthen roads.
(asphalt roads are not eligible)
Expenditure group 2: Rehabilitation of roads (except asphalt),
bridges, fords and culverts, pedestrian walkways or footpath, cycle
path, paved area, roundabout, street lighting, road signs and traffic
lights, bus terminals, bus stop/station.
Note: Note: Road works outside of existing rights-of-way or require
significant resettlement of people (more than 200 people, project-
specific) will not be eligible for funding under the UIIDP.
Integrated multiple infrastructure and Expenditure group 3: Servicing of land with utilities (water supply,
land services (residential, micro and small electricity, telecommunications, roads and drains (within planned
enterprises, industrial zones, tourism sites) right of way, as per the structural plan/local development plan)), solid
and liquid waste collection and disposal.
Sanitation (liquid waste) Expenditure group 4: Sewer reticulation systems (no large canals7),
wastewater treatment ponds/treatment plants, sludge ponds,
community soak away pit and septic tanks, public and communal
toilets, ventilated improved pit, Ecosan, biogas and vacuum trucks,
vacuum handcart. (in planning and implementation cities must follow
manual and standard from Urban Water Supply and Sanitation
Project.)
Solid waste management Expenditure group 5: Collection trucks and other collection tools,
collection bins, transfer stations, recycling center/sorting facilities,
collection points; skips and skip loaders, hand push carts, landfills8
(of the size of maximum 10 hectares and minimum design criteria as
per the solid waste management manual), biogas and composting
plants; and landfill site equipment including compaction vehicles,
garbage truck, grader, dozer, loader, dump truck and excavator
Urban drainage Expenditure group 6: Drainage systems (follow the guideline
developed by the MUDCo), flood control systems.
Urban disaster risk management and Expenditure group 7: Fire brigade equipment, trucks, facilities, fire
initiatives to enhance resilience9 stations, non-grid renewable energy supply (e.g. solar, wind),
landslide protection structures
Built facilities Expenditure group 8: Markets for small businesses not
exceedingground floor with associated services (water supply,
drainage, access roads, sanitation facilities), upgrading the existing
markets, one-stop shops, slaughter houses (abattoirs)10(not exceeding

7
Sewer reticulation systems canals (primary canals) shall not exceed in diameter 1,000 millimeters or 10 kilometers.
8
Landfills: To ensure that all landfills activities to be environment friendly and socially acceptable with no or
minimum impacts to the nearby environment, landfills construction and operation activities should not exceed 10 hectares
and with provisions as stated in MUDCo standard. These include, among others: all landfills should have 1. bottom lining
system with compact clay soil and covered by geo-membrane (synthetic linings) to separate the trash and subsequent
leachate from groundwater; 2. Leachate collection system to collect rain or other water percolated through landfill which
possibly contains contaminating substances (leachate); 3. Oxidation or other treatment ponds for further treatment of
leachate; 4. Methane collection system/gas management to collect methane gas that is formed during the breakdown of
trash; 5. Runoff water drainage system to prevent rain water flash from the nearby area; and 6. Composting yard and
other facilities within the landfill site and upstream collection and transportation area. Cities should comply with the
national standard and classification set by MUDCo. Also, cities must conduct landfill feasibility study, ESIA and RAP
for review and clearance. All landfills are subject to regional environmental and social performance review and annual
audits.
9
Only cities who have emergency response unit and emergency plan are eligible
10
Slaughterhouse/abattoir: Slaughterhouse construction should follow the MUDCo standards and classification for
environmentally safe implementation of the investment. Slaughterhouse under the program should not exceed 2ha (level
B, C, and D) of the MUDCo classification. The following provisions should be included in the design for construction
and operation phase. These are: 1. liquid waste treatment plant, which is sited at minimum distance of 50 meter from
slaughter house; 2. separate closed drainage line for collection of liquid wastes from slaughterhouse to the septic tank; 3.
septic tank bed level shall be below nearby ground water level; 4. slaughter house at metropolitan cities shall have
rendering plant with smell nuisance control; 5. Runoff water drainage system to prevent rain water flash from the nearby

P a g e 26 | 186
 Infrastructure/Service Type
size of 2 ha and the category of level B, C, and D) with by-products
and processing facilities, abattoir trucks, production and premises,
sales and display centers for MSEs, community center, youth center,
cultural centers
Urban green infrastructure Expenditure group 9: Urban parks, public spaces and greenery
development projects.
Consultancy services for design, studies Expenditure group 10: For studies relating to preliminary and
and contract management detailed design, contract documentation and supervision relating to
the above infrastructure and services.
Capacity Building Support Expenditure group 11: Up to 5 percent of investment grants and
regional/city contributions can be utilized on capacity building
support. It also includes some expenditures forconsultancies, studies,
and related operating costs managed by MUDCo limited to the
legacy activities carried over by ULGDP 2.See menu for capacity
building support below.

Notes for investments:

a) Current maintenance and operational costs, including salaries, should not be funded by the
UIIDP grant. Other ULG sources, including OSR should be used for these expenditures. The
performance system will promote planning and actual provision for this to ensure longer-term
sustainability.
b) The investment menu above explicitly excludes possible high-risk activities and Category “A”
types of activities. Investments, which according to the WB Operational Manual for Environmental
Assessment (OP 4.01) are classified in Category A are explicitly excluded from the Program. These
“…are projects which are likely to have significant adverse environmental impacts that are
sensitive, diverse, or unprecedented. These impacts may affect and area broader than the sites or
facilities subject to physical works”. Category A projects are not supported by PforR operations and
ULGs cannot use the UIIDP grants for these types investments.
c) While the scope and scale of works under the Program are not expected to cause significant
adverse environment and social impacts, the current EIA procedures in Ethiopia require that
all investments are screened for negative impacts that are sensitive, diverse, or unprecedented on
the environment and/or affected people.
d) Siting, design, construction and implementation of all physical infrastructure must consider
risk map/disaster risk management plan and integrate measures to make them resilient to
climate change and disaster impacts.
 Siting and construction: Steps should be taken screen location of physical infrastructure to
minimize exposure to disasters (flood, earthquake, drought, fire, landslides)
 Design and implementation: Design and operation of infrastructure and services need to
consider climate and disaster impacts. Additionally, sanitation and solid waste management
facility to consider waste segregation, treatment and reduce contamination of water sources in
the event of flooding or other disasters.
e) In addition to screening for significant negative impacts, the following works will be ineligible
for financing under the UIIDP:
 Road works outside of existing rights-of-way;
 Infrastructure works that require significant resettlement of people (more than 200 people,
project-specific)
 Activities that would significantly convert natural habitats or significantly alter potentially
important biodiversity and/or cultural resource areas.

the following works have conditions under the UIIDP:

area; and 6. Other facilities like guardhouse and water points. Cities should comply with the national standard and
classification set by MUDCo. Cities must conduct Slaughterhouse feasibility study, ESIA and RAP for review and
clearance. All slaughterhouses are subject to regional environmental and social performance review and annual audits

P a g e 27 | 186
  Canals (Sewer reticulation systems canals (primary canals)) should not exceed in diameter
1,000 millimetres or 10 kilometres
 All landfills should comply with minimum design criteria as per the solid waste management
manual, not exceeding 10ha. ULGs, in the design of sanitary landfills, will be required to
demonstrate a system of waste segregation, collection, transportation, treatment, and disposal of
leachates, before they start landfill constructions.
 Slaughter houses (abattoirs) should not exceed size of 2 ha, within the category of level B, C,
and D.
The following are the eligible capacity building areas in which the ULGs & Regions will
be able to use the IDA performance grants.
Table 3. Eligible Capacity Building Areas for ULGs and NRS
Capacity Building Area Capacity Building activity
Training, seminar, and 1. Short-term local training and related operating expenses
conferences 2. Selected short-term training/courses (up to three months’ duration)
3. Peer to peer support across ULGs
4. Study tours as planned by the ULGs, with clearly defined learning objectives and
follow-up action plan
(study tours by ULGs must be coordinated by the region/ MUDCo as part of the
planning process)
5. Seminars/conferences/workshops/meetings expenses
6. Training materials, trainers/resource person fees
7. Hire of venue /hotel accommodation
8. Refreshments
Organizational and System 9. Training needs assessment
Development 10. Assessment of IT system needs
11. Organizational culture change – one stop shop, client orientation, contracting out,
etc.
12. Social accountability and behavior change
13. Organizational structure
14. Filing and archive system
15. Land management and administration systems
16. Disaster detection, response and risk reduction systems
17. Financial systems (IBEX, etc.)
18. Management information and decision-making systems
19. Public consultation and engagement platforms
Technical assistance 20. Consultancy fees and related operating expenses (for studies related to ULG
service delivery operations, and institutional policies, laws, bye-laws, regulations,
procedures) and organizational development (see above). This includes technical
assistance, consultancies, training and related operating expenses procured by the
federal level (MUDCo) to support old (44) and new (73 )ULGs and regions
21. Printed material and stationery
Equipment Equipment related with the capacity building support (not buildings) including:
22. Motor bikes (up to 1 percent of investment grants and regional/city
contributions)11
23. Office and field equipment including surveying equipment procured by the
federal to support the regions and ULGs

11
Regions can procure vehicles only for RMTs (maximum 2 cars per team)

P a g e 28 | 186
4 DISBURSEMENT LINKED INDICATORS, MINIMUM
CONDITIONS, PERFORMANCE MEASURES AND
VERIFICATION PROTOCOLS

Almost 96 percent (or around US$576 million) of the Operation’s funds will be disbursed against
disbursement linked indicators (DLIs). The DLIs are structured to provide incentives to
participating ULGs and regional governments for improved management and development of
urban areas. (More details on the DLIs, MCs, PMs, performance assessments, verification
protocols and disbursement arrangements are provided in the UIIDP Annual Performance
Assessment Guideline (APAG) which is a part of this POM and is a standalone Annex of the POM

DLIs 1 to 4 focus on ULGs to strengthen ULG institutional roles in the delivery of

infrastructure and services, and enhance local economic development. Each of these DLIs is a
composite index of defined MCs and PMs.
The disbursement system for DLI 1, 2, 3, and 4 is scalable based on actual performance of
ULGs. It is particularly important to note that if the ULGs perform better (or poorer) than expected
(as set out in the disbursement related targets in the DLI matrix), disbursements will be adjusted
accordingly. This means that if ULGs perform higher than expected they will receive higher than
expected disbursements. If this continues throughout the Program, additional financing may be
needed.

DLIs 5 to 9 focus on regional government entities to enhance their abilities in fulfilling their
mandates to support ULGs. These DLIs will disburse based on results achieved by regional
government entities in providing support to ULGs (DLI 5) as well as focusing on their performance
in conducting essential audits for ULGs such as on fiduciary and environmental and social
management.

DLI 10 is a legacy DLI disbursing against prior results achieved under the ULGDP II that has
arisen due to overachievement of performance results. This DLI will be disbursed upon verification
in FY 2018/19, when the fifth APA of the ULGDP II has been completed in February 2018.

Collectively the DLIs address the PDO and key result areas. The DLIs are designed to address
the challenges of ULGs’ and regional governments’ institutional performance and, in turn, ULGs’
ability to deliver, operate, and manage infrastructure and services, and expand LED. They provide
incentives to address the core issues such as on timely audit, social and environmental
management, own-source revenue generation, and strengthen the system and procedures for
capacity building. In addition, there is enhanced focus to strengthen urban resilience, promote LED
and job creation, and enhance gender equality. The PMs have a direct link to the key result areas
and the GoE’s program intended outcomes.

P a g e 29 | 186
 Table 4. Program DLIs
Approximate Percent of
disbursement total IDA
Results area DLIs amount (PforR)
amount
(US$ million)

ULGs deliver DLI 1: Eligible ULGs have achieved Program MCs.12 109.33 18.97
infrastructure
and services
DLI 2: Eligible ULGs have strengthened institutional performance. 190.09 32.99

DLI 3: Eligible ULGs have implemented quality infrastructure and 90.09 15.63
maintenance activities and ensured value for money.

DLI 4: Eligible ULGs have strengthened performance on LED,

urban resilience and gender mainstreaming. 52.94 9.19

Regional DLI 5: Regional support teams have delivered effective capacity 27.88 4.84
government building services to Eligible ULGs in urban institutional and
entities infrastructure development.
support ULGs
to strengthen
institutions DLI 6: Regional Government Audit Agencies (ORAGs) have
and enable carried out timely audits of Eligible ULGs’ financial reports. 14.96 2.60
them to
deliver
infrastructure DLI 7: Regional Environment Protection, Forest and Climate
and services. Change Authorities (REFAs) have completed timely review of
Eligible ULGs’ environmental and social safeguards compliance. 13.12 2.28

DLI 8: Regional Revenue Authorities (RRAs) have supported

Eligible ULG revenue mobilization.

7.04 1.22
DLI 9: Regional Public Procurement & Property Administration
Agencies (RPPPAAs) conduct timely and quality procurement
audit of Eligible ULG’s accounts and performance.
7.04 1.22

Prior results: DLI 10: Strengthening institutional performance,infrastructure and 63.74 11.06
overachieveme service delivery, maintenance, and job creation for 44 ULGDP II
nt in ULGs.
performance.

Total 575.76 100.0

Verification Protocol for UIIDP – PforR Window

12
Eligible ULGs must comply with the MCs to get access to the allocations from DLIs 2, 3, and 4, as the MCs are the
basic safeguards for handling of larger discretionary funds.

P a g e 30 | 186
The DLIs related to performance of the ULGs and regions will be verified by an
independent firm which will be hired to conduct annual assessments of the performances
of ULGs using the verification protocol instrument this Guideline. In addition, the
verification will be reinforced by other technical assessment reports such as value for
money audit and regular WB supervision missions, reviews by the Technical Committee,
and finally the Steering Committee and the World Bank.

The verification Protocol for the UIIDP is based on the ULGDP II with a few
improvements in terms of the system of verification and clarification of the steps in the
process, timing and institutional arrangements.

The details of the Verification Protocol include three areas and are further elaborated
below:
1) Overview of schedule and timeframe for verification;
2) Narrative of the process and institutional arrangements.
3) Means of verification DLIs 1-10

A) Overview of the schedule and timeframe for verification

For DLIs 1-4, focusing on ULGs’ performance and for DLIs 5-9, focusing on regions’
performance, the system of verification will be conducted as described in the tables below.
For means of verification and actual calibration, please see the DLI Verification Protocol
Table.

Table 5. Schedule for 3rd APA for 56 Cities

P a g e 31 | 186
 Date Activity
(Gregorian
Calendar)
By October 20, 2020 Independent APA consultants engaged and onboard
November 9, 2020 APA commences – data collection in the field.
By January 15 Complete all field assessments, including minimum conditions and performance
measures (DLIs 1–4), The APA also assesses the result against DLI 5–9.
By January 31 APA consultant completes and submits first draft Preliminary APA reports and draft
Preliminary Synthesis Report (excluding the audit results for the ULGs) to MUDCo as
well as to the World Bank.
February 1, 2021- Conduct Quality Assurance Review (World Bank); Quality Assurance Review
February 28, 2021 comments and findings to inform APA ready by no later than February 28
February 28, 2021 Deadline date for approval by regions of revised CIPs for EFY 2013 (2020/21)
By March 15 APA team completes and submits second draft Preliminary APA reports and draft
preliminary synthesis report (including the audit results/scores) and share with MUDCo
and World Bank.
By March 29 Review by MUDCo and Bank, and APA team reconcile comments received, into the
third draft report produced by the APA team.
By March 30 MUDCo shares the third draft report with ULGs /Regions which have 14 days for
submitting complaints, if any
By April 13 ULGs/Regions submit their complaints
By April 27 Review by the APA Complaints Resolution Committee of ULG/Regions’ complaints
Reconciliation between complaints and APA findings (Complaints Committee)
Recommendations from the Complaints Committee to Chairman of the UIIDP Federal
Technical Committee (Bureau Head of Urban Revenue Enhancement, Fund
Mobilization and Finance Bureau) on determination of complaint cases and on changes
to be made.
Report on changes made and not made (with justification) by APA Consultants
By May 11 Final draft APA report for each ULG/region and the Final Draft Synthesis Report as
well as report on changes made and not made (with justification) by APA team,
submitted to World Bank and MUDCo
By May 27 Indicative allocations based on Final Draft communicated to regions and ULGs by
UIIDP Team
In May ULG budgeting process for EFY 2014 (2021/22) starts, based on indicative allocations
By May 31 Final Verification of the APA results by the UIIDP Federal Technical Committee
(FTC)
By June 7 Formal review and approval of results by the FSC; review and endorsement by
World Bank (for the coming FY’s allocations to ULGs)
By June 14 Final APA report for each ULG/region and the Final Draft Synthesis Report
incorporating changes and endorsement by the World Bank, submitted to World Bank
and MUDCo.
By June 21 Final Approved Allocations announced by the Bureau and workshop with regions and
ULGs held.
In June ULG budgeting process for EFY 2014 (2021/22) continues, based on actual allocations
By August 31 Submission of CIPs, REPs and AMPs by ULGs to regions for approval
By September 15 Approval of CIPs, REPs and AMPs by regions

P a g e 32 | 186
September 16 Start of implementation of CIPs by ULGs
By June 14 World Bank disburse to MoF the full amount
By September 30 50 percent of the allocations disbursed to Regions and ULGs
In January 2022 50 percent of annual allocation disbursed to Regions and ULGs
February 28, 2022 Deadline date for approval by regions of revised CIPs for EFY 2014 (2021/22)

P a g e 33 | 186
 Table 6. Schedule for 3rd APA for 61 Cities

Date Activity
(Gregorian
Calendar)
By November 25, Independent APA consultants engaged and onboard
2020
December 15, 2020 APA commences – data collection in the field.
By February 15 Complete all field assessments, including minimum conditions and performance
measures (DLIs 1–4), The APA also assesses the result against DLI 5–9.
By February 28 APA consultant completes and submits first draft Preliminary APA reports and draft
Preliminary Synthesis Report (excluding the audit results for the ULGs) to MUDCo as
well as to the World Bank.
March 1, 2021- Conduct Quality Assurance Review (World Bank); Quality Assurance Review
March 31, 2021 comments and findings to inform APA ready by no later than March 31
February 28, 2021 Deadline date for approval by regions of revised CIPs for EFY 2013 (2020/21)
By April 15 APA team completes and submits second draft Preliminary APA reports and draft
preliminary synthesis report (including the audit results/scores) and share with MUDCo
and World Bank.
By April 29 Review by MUDCo and Bank, and APA team reconcile comments received, into the
third draft report produced by the APA team.
By April 30 MUDCo shares the third draft report with ULGs /Regions which have 14 days for
submitting complaints, if any
By May 13 ULGs/Regions submit their complaints
By May 19 Review by the APA Complaints Resolution Committee of ULG/Regions’ complaints
Reconciliation between complaints and APA findings (Complaints Committee)
Recommendations from the Complaints Committee to Chairman of the UIIDP Federal
Technical Committee (Bureau Head of Urban Revenue Enhancement, Fund
Mobilization and Finance Bureau) on determination of complaint cases and on changes
to be made.
Report on changes made and not made (with justification) by APA Consultants
By May 26 Final draft APA report for each ULG/region and the Final Draft Synthesis Report as
well as report on changes made and not made (with justification) by APA team,
submitted to World Bank and MUDCo
By May 27 Indicative allocations based on Final Draft communicated to regions and ULGs by
UIIDP Team
In May ULG budgeting process for EFY 2014 (2021/22) starts, based on indicative allocations
By May 31 Final Verification of the APA results by the UIIDP Federal Technical Committee
(FTC)
By June 7 Formal review and approval of results by the FSC; review and endorsement by
World Bank (for the coming FY’s allocations to ULGs)
By June 14 Final APA report for each ULG/region and the Final Draft Synthesis Report
incorporating changes and endorsement by the World Bank.
By June 21 Final Approved Allocations announced by the Bureau and workshop with regions and
ULGs held.
In June ULG budgeting process for EFY 2014 (2021/22) continues, based on actual allocations

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By August 31 Submission of CIPs, REPs and AMPs by ULGs to regions for approval
By September 15 Approval of CIPs, REPs and AMPs by regions
September 16 Start of implementation of CIPs by ULGs
By June 14 World Bank disburse to MoF the full amount
By September 30 50 percent of the allocations disbursed to Regions and ULGs
In January 2022 50 percent of annual allocation disbursed to Regions and ULGs
February 28, 2022 Deadline date for approval by regions of revised CIPs for EFY 2014 (2021/22)

B) Verification Process and Institutional Framework

Below are further details on the verification process.

DLIs 1–4 – MCs and PMs

Future APAs
Submission of First Draft Preliminary APA reports (without audit results/scores)
Field visits and the APA assessment will start in October/November and all be completed
by January/February, the Consultant’s Team Leader will prepare and submit the first draft
Preliminary APA Report (without audit results/scores) for each ULG and the first draft
Preliminary Synthesis Report simultaneously to the World Bank and to MUDCo not later
than twelve weeks after commencement of the assignment, using the formats provided (in
the POM, APAG). The APA (preliminary/draft) Report Forms must be signed by the ULG
Mayor and City Manager and the Consultant’s Team Leader irrespective of the outcome of
the assessment. The Assessment Reports will include an explicit reference to the nature
and substance of any disagreement as per the format in this APAG.
Quality Assurance Review
The World Bank will carry out a Quality Assurance Review in February/March, based on
the first draft preliminary APA report, or once the report has been received, whichever is
earlier. The QAR will communicate its findings to MUDCo. MUDCo will communicate to
the Consultant the QAR findings.
Submission of Second Draft APA reports to MUDCo and World Bank
Based on the QAR (conducted in February/March), MUDCo and World Bank will provide
feedback on the first draft Preliminary APA reports. The consultants will address and
incorporate necessary amendments and will prepare and submit simultaneously to MUDCo
and World Bank the revised and high quality second draft individual city reports for all the
cities and the second draft synthesis report (all with audit results/scores). The Second Draft
Reports are then reviewed jointly by the World Bank and MUDCo to check whether all
comments have been incorporated. If not, additional comments will be sent to the APA
Consultant to be incorporated in the Final (3rd) Draft reports.
Complaints handling procedures

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The (third) draft final reports are also provided to ULGs and regions for review and, if
there are disagreement with the results, they may submit their complaints within 14 days of
the date of the letter from MUDCo. The TC will also consider recommendations from the
APA complaints resolution committee in regard to any complaints received from
cities/regions on the APA and review inconsistent findings (APA team may be asked to
provide further evidence for the conclusions reached as well as the complainants).
The ULGs/regions have 14 days for complaints which will be reviewed by the complaints
committee.
Based upon the report from the Complaints Resolution Committee provided to the APA
Consultants by the Chairperson of the Federal Technical Committee, the APA Consultants
will either incorporate changes which they are convinced are justified and provide reasons
on those changes they do not accept.
Submission of Final Draft APA reports to MUDCo and World Bank
The APA Consultants will submit simultaneously to MUDCo and World Bank, the Final
Draft Reports incorporating changes which they consider justified and provide a report on
changes made and not made (with justification).
Post-assessment activities
Verification of the assessment reports submitted by consultants conducted by the
Federal Technical Committee (FTC) and approval by Federal Steering Committee
(FSC) and confirmation by the World Bank.
The MUDCo and World Bank will review whether the Final APA report is complete and
consistent. The final reports are then submitted to the UIIDP FTC for verification of the
accuracy and consistency of the reports and scores on the indicators. The UIIDP FTC will
finally verify and then submit the agreed final revised reports and its summary of the
results of the APA and its recommendations on complaints and for allocation of UIIDP
DLI related funds for the forthcoming EFY to the UIIDP FSC (copy to the World Bank).
Following approval by FSC, the summary of results (and how the complaints have been
handled) and recommendations will be submitted to World Bank for formal confirmation
of results and fund allocations.
Notification of assessment score. Following World Bank confirmation in May/June,
MUDCo will provide official notification of assessment scores and allocations to all ULGs
and regions. A Workshop will be held in June with regions and ULGs to share results of
the APA and the allocations for the coming financial year. Each of the assessed ULGs will
also receive a copy of their city’s final assessment report – as approved by the UIIDPFSC
and World Bank.

Details on the processing of complaints from ULGs by the MUDCo

Where a ULG or Region is not satisfied with the outcome of the assessment, a complaint
should be submitted to the UREFMFB, MUDCo not later than two weeks following receipt
of notification of official scores. When submitting the complaint, the ULG/Region must
enclose any relevant documentation in support of the issues in question. A UIIDP APA

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Complaints Resolution Committee will review and examine the complaint and recommend
action to be taken on the complaints.

The examination of the complaint will lead to one of the following results:
1. Correction of errors
2. Re-assessment in case of laxity by the assessment team
3. Rejection of the complaint
Composition of Complaints Resolution Committee:
 Representative from MUDCo, Chairperson
 Representative of MoF, Member
 Representative of Ethiopian Cities Association, Member
 Independent Expert in the area of concern, from MUDCo; and the
 UIIDP Program Coordinator, Secretary
Based upon the report from the Complaints Resolution Committee provided to them by the
Chairperson of the Federal Technical Committee, the APA Consultants will either
incorporate changes which they are convinced are justified and provide reasons on those
changes they do not accept.
The APA Consultants will submit simultaneously to MUDCo and World Bank, the Final
Draft Reports incorporating changes which they consider justified and provide a report on
changes made and not made (with justification).
The UIIDP Federal Technical Subcommittee (FTSC) will verify the APA results and
complaints resolution and submit its recommendations to the UIIDP Federal Steering
Committee (FSC).
The APA results will be formally reviewed and approved by the FSC, reviewed and
confirmed by the World Bank.
The APA Consultant will incorporate the final changes and confirmation of the World
Bank of the APA results and allocations and produce the Final ULG and Synthesis APA
Reports. MUDCo will distribute the Final ULG and Synthesis APA Reports to all regions
and will also officially notify them of the final allocations approved by the World Bank.

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 5 THE UIIDP APA PROCESS

5.1 GUIDING PRINCIPLES

The following principles apply to the APA processes:
 The ULGs are strictly assessed against their legal obligations and issues that fall
within their direct span of control; consequently, all PMs are anchored in existing
legal, regulatory and policy frameworks;
 The PMs acknowledge the specific legal, political, administrative and fiscal
environment in which ULGs operate;
 The PMs capture both the administrators and the elected representatives in the ULG
structure;
 In order to minimize discretion in the assessment process, the PMs are objectively
verifiable and simple to assess;
 The APA process facilitates a clear translation of identified capacity building needs
into corresponding institutional strengthening requirements; and
 The assessment process ensures that capacity building is fully integrated into the
budgeting cycle of the ULGs (see Annexes 1 and 2).

5.2 THE PROCESSES

Because the Urban Institutional and Infrastructure Development Program (UIIDP)
performance grants (PGs) are funded by International Development Association (IDA) – or
World Bank – through their Program for Results funding instrument, the APA is necessary
to identify performance of any ULG or regional agency receiving funds in achievement of
Disbursement Linked Indicators (DLIs). There are ten (10) DLIs and these are broken
down into:
 DLIs 1, 2, 3 and 4 which identify performance of ULGs.
 DLIs 5 , 6, 7, 8 and 9 which identify performance of RIAs, and
 DLI 10 is a legacy DLI disbursing against prior results achieved under the ULGDP
II that has arisen due to overachievement of performance results. This was already
assessed in the 1st APA and all funds disbursed. It will not be assessed in the 3rd and
4th APAs
The assessment for ULGs is broken down into DLI 1 - Minimum Conditions (MCs) and
DLIs 2, 3 and 4 Performance Measures.

DLI 1 - ULG Minimum Conditions (MCs)

The MCs are those conditions that a ULG needs to fulfil in order to qualify for access to
the basic grant component of the UIIDP Performance Grants and to qualify for funds
through performance in DLIs 2, 3 and 4 performance measures.
The MCs are formulated under eight heads; the ULG has:
1. A rolling three-year capital investment plan (CIP) with Annual Action Plan (AAP),
Annual Budget, and Annual Procurement Plan;

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 2. Submitted financial statements for the last EFY on time;
3. Received an external audit report from previous EFY that is not adverse or has a
disclaimer opinion;
4. Provided for its UIIDP co-funding requirements;
5. Staff in place in ten (10) key positions required for UIIDP implementation,;
6. A fully operational environmental and social management safeguard system in
place;
7. A fully operational procurement system in place; and
8. A fully operational complaint handling system in place.
Assessment of the 8 MC performance measures is made by reaching a “yes” or “no”
decision as to whether the MC has been achieved by the ULG. Some of the MCs are only
applicable from the second assessments to provide ULGs sufficient time to comply.
See Section 6 for the details.

DLIs 2, 3 and 4 - ULG Performance Measures (PMs)

The PMs are those conditions that will be used to determine each ULG’s allocation of the
UIIDP’s PG funds. The PMs involve detailed indicators to measure performance and are
classified under three DLIs and 14performance measures as follows:
DLI 2 - Institutional Performance
1. Planning and Budgeting Maximum 10 points
2. Assets Management Maximum 10 points
3. Public Financial Management Maximum 16 points
4. Procurement Maximum 15 points
5. Own-source Revenue Enhancement Maximum 10 points
6. Accountability and Transparency Maximum 14 points
7. Environment and Social Safeguards Maximum 10 points
8. Land Management and Urban Planning Maximum 15 points
Total maximum possible 100 points
An average of 70 points in Year 1, rising to an average of 85 points in year 5 of the UIIDP
period is the reference point for the targeted level of funding. Less than this average will
lead to less-than-targeted funding, and opposite, a score above the average will lead to
allocations above the average targets.
See Section 7 for more details.
DLI 3 - Infrastructure Investment Performance

1. Urban Infrastructure Targets Maximum 20 points

2. Maintenance Performance Maximum 30 points
3. Quality of Infrastructure Maximum 30 points

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 4. Timely completion and operation of infrastructure Maximum 20 points

Total maximum possible 100 points

An average of 70 points in Year 1, rising to an average of 85 points in year 5 of the UIIDP
period is the reference point for the average targeted level of funding (less than average
will lead to reduced funding level, as stated above).
See Section 8 for more details.
DLI 4 –Local Economic Development, Urban Resilience and Gender Mainstreaming

1. Local Economic Development Maximum 40 points

2. Urban Resilience Maximum 30 points
3. Gender Mainstreaming Maximum 30 points
Total maximum possible 100 points
An average of 70 points in Year 3, rising to an average of 80 points in year 5 of the UIIDP
period is the reference point for the average targeted level of funding (less than average
will lead to reduced funding level, as stated above).
See Section 9 for more details.

DLIs 5, 6, 7, 8 and 9- RIA Performance Measures (PMs)

5. BUDs Provide implementation support, capacity building to ULGs in the
NRS and support the Regional Ethics and Anti-Corruption
Commission.
6. ORAGs Timely execution of external audits of UIIDP ULGs in the NRS
7. REFCCCs Timely review of safeguards compliance by UIIDP ULGs in the
NRS
8. RRAs Support to UIIDP ULG in the NRS in municipal revenue
enhancement

9. RPPPAAs Timely execution of procurement audits of UIIDP ULGs in the

NRS
See Section 10 for more details.

5.3 THE ASSESSMENT PROCESS

There are three main activities in the assessment processes, and they can be classified as
follows:
 Pre-assessment activities,
 The actual assessment activities, and

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  Post-assessment activities.

5.3.1 The Pre-assessment Activities

Activities to be done include:
 Procurement of the Consultants through a competitive bidding process in
accordance with the World Bank’s Procurement Regulations for IPF Borrowers,
“Procurement in Investment Project Financing, Goods, Works, Non-
Consulting, and Consulting Services,” dated July 2016, Revised November
2017 and August 2018 and “Guidelines on Preventing and Combating Fraud and
Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants,”
revised as of July 1, 2016; and the provisions stipulated in the Financing
Agreement.
 Orientation of the Consultants on the DLIs, performance measures, scoring and
reporting formats.
 Orientation of the ULGs on the DLIs, performance measures, and scoring.
 Communicate to ULGs on the timing of the assessment, the specific documents /
evidence required for the assessment and the indicators at least a month before the
Consultants start the assessment.
Note: Procurement of the APA consultant will normally take place between beginning
February (Yekatit) and end July (Hamle) each year, and the assessments will be conducted
from August – October each year, with incorporation of the audit results in January in the
year prior to the allocation year. For the 3rd APA, procurement is delayed and will be
completed by end of September 2020 and the assessments will be conducted from October
15, 2020- December 15, 2021.

5.3.2 The Actual Assessment Activities

The assessment is conducted on the agreed DLIs, performance measures and indicators in
the 8 MCs and 14 PM areas indicated above for ULGs and the five PMs indicated for
RIAs. Details of the PMs and indicators are described in Sections 6, 7, 8, 9 and 10.
Activities to be done for the actual assessment include:

 Consultants undertake minimally four (4) day assessments in each of the 117
participating ULGs.
 Consultants undertake two day assessments (as required) in each of the 9
participating RIAs – note: in some cases it is possible to determine RIA
performance from evidence in ULGs, for instance evidence of the existence in the
ULG of external audit reports produced by the ORAG.
 Consultants will hold introductory meetings with key ULG officials including at
least the ULG Mayor and City Manager at the beginning and end of the assessment
of the ULG. The purpose of the meetings is: a) to set the agenda and agree on the
time schedule for the assessment, and b) sign-off on the (preliminary) assessment
results.
 Monitoring by the UIIDP Federal Technical Committee (FTC) and Regional BUDs
to conduct quality verification as part of quality assurance of the work of the
consultants.

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 Identification of Capacity Building Needs. Identifying the capacity building needs
of the ULGs and the RIAs is a key element of the APA exercise for the UIIDP (see
Annexes 1 and 2 for APA reporting formats). As part of the assessment of the DLIs
and performance measures the APA Consultants will assist the ULGs and RIAs to
determine their capacity building (CB) needs for inclusion by ULGs and RIAs in
their Capacity Building Plans (CBPs) through the following steps:
1. Identify logistics, skills and organizational gaps based on the APA,
2. Explore further to establish the specific capacity implications,
3. Identify CB needs in relation to specific performance measures and indicators,
4. Record in the appropriate performance measures and indicator column,
5. Document all the capacity needs in the format provided (see Annexes 1 and 2),
6. Debrief ULG & BUDCo leadership on the outcome of the assessment.
Note: Following the annual APA assessment, each ULG and the Regional BUD will ensure
that the demand driven capacity building needs form an integral part of the UIIDP Capacity
Building Plan for implementation the following year when the allocations are
communicated to them by MUDCo. This process implies that demand driven capacity
building needs identified by the assessment of any particular year will be planned for
implementation in the following year (see Annexes 1 and 2).

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 6 DLI 1 GUIDELINE – MINIMUM
CONDITIONS FOR ULGS

6.1 INTRODUCTION
Unlike DLIs 2, 3 and 4, DLI 1 relates to minimum conditions to be met by ULGs and does
not involve award of points for performance indicators but a simple “yes” or “no”
verification of each minimum condition.

6.2 ENTRY-LEVEL CONDITION – PRIOR TO

RELEASE OF FUNDS FOR THE YEAR

Participatory performance agreement (PPA) signed with MUDCo. Show commitment by

all parties and defines the rules of the system. The format for PPA is included in the UIIDP
II Program Operations Manual. The Entry-Level Condition will be verified by the MUDCo
FTC and NOT by the APA Consultant.

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 6.3 DLI: MINIMUM CONDITIONS GUIDELINE

Justification for Minimum

No. Minimum Condition Evidences to be Produced Comments, phasing in and others
Condition

1.1 ULG has produced and the council Document minimum capacity 1. A consolidated CIP document prepared The subject for review is the plans developed in the previous
approved a: in planning and project as per CIP manual year for the year where assessments are conducted, for
handling. example, if assessment is conducted in September 2018, it is
2. Annual Action Plan the plans for FY 2018/19 /EFY 2011), which are typically
 Rolling three-year CIP with 3. Annual Budget developed from March – June 2018.
 Annual action plan; Implementation readiness. The plans to be reviewed are as follows: -
 Annual budget; 4. Annual Procurement Plan.
 Annual procurement plan 5. Minutes of meeting of city councils 1st APA (September 2018) for EFY 2012 Allocations: Plans
showing the approval of CIP or for EFY 2011 (2018/19);
published newsletter/newspaper that 2nd APA (September 2019) for EFY 2013 Allocations: Plans
 The planned use of the reports approval of CIP, AAP, annual for EFY 2012 (2019/20);
performance-based grants budget and APP by the council
from UIIDP/ULGDP II 3rd APA (September 2020) for EFY 2014 Allocations: Plans
follows investment menu (only 6. IBEX report on Capital Expenditures to for EFY 2013 (2020/21);
from assessment in 2019 of the verify actual use of grants as per the
performance in FY2018/19). investment menu 4th APA (September 2021) for EFY 2015 Allocations: Plans
for EFY 2014 (2021/22);
APA reviews refer to the latest version of the CIP Manual
To make this effective it is important that the APAs are
conducted timely in the future, see Section on APA
procedures.
Transitional arrangements. For new ULGs, the investment
menu will only be assessed from the second assessment where
there has been the first planning/budgeting on the use of the
performance-based grants. From the third assessment, the
actual utilization of grants in the previous year will also be
assessed.

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 Justification for Minimum
No. Minimum Condition Evidences to be Produced Comments, phasing in and others
Condition

1.2. Submission of financial statements Show evidence on minimum (a) Financial statements folder with For the external audits to start as early as possible cities
prepared from IBEX for the last capacity in PFM should close their accounts) within three Ethiopian calendar
FY(closure of the EFY accounts on 1. Statement of Financial months after the end of the EFY.. This will be applied from
time) within three Ethiopian position the first APA for all ULGs. The financial statements should
calendar months after the end of the 2. Statement of Financial be consolidated by the ULGs to include all sources (income)
EFY. and uses (expenditure) of the ULG
performance.
It is advisable to also include as part of the financial
3. Post-closing trial balance. of statements the following:
the last EFY.
Notes or schedules supporting the financial statement which
(b) Official Letters submitting the financial could include Revenue Summary of the last EFY, Recurrent
statements to Council and external auditor. Expenditure Summary of the last EFY, Capital Expenditure
This can also be verified or double checked Summary of the last EFY, Transfer Report, Receivable
with ORAG. Report, Payable Report

1.3. Audit report from previous fiscal To reduce fiduciary risks 1. Audit report of ORAG for previous Audit Report - consolidated audit report for the ULG should
year must be issued within six EFY. If done by an external private or be issued which review all sources and expenditure of the
Ethiopian calendar months after the government audit firms; letter of ULG.
end of the EFY and must not be endorsement by ORAG for the
clearance of the TOR and endorsement It should be ensured that audit quality continues, and there is
adverse or with a disclaimer need to combine with other minimum conditions to ensure
opinion. of the audit findings.
sufficient safeguards on PFM. Compared to the previous
2. Official Letter from ORAG to the ULG system, this is a strengthening of the requirements, as it is
submitting the Audit Report before the reviewing the audit report from previous financial year.
deadline
If the ORAG cannot conduct the audit in time, external audit
firms must be contracted, and their results applied. (ORAG
should clear the TOR and makes QA/endorsement of the
results).
Transitional arrangements:
In the first APA the audit report is a waiver for the new
ULGs.
Second and subsequent years (2nd- 4th APAs): All should be on
time, that is, within six Ethiopian calendar months after the
end of the EFY.

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 Justification for Minimum
No. Minimum Condition Evidences to be Produced Comments, phasing in and others
Condition

The deadlines for audit reports are as follows:

2nd APA (September 2019): Audit Report for EFY 2011
(2018/19, within six Ethiopian calendar months after the end
of the EFY
3rd APA (September 2020): Audit Report for EFY 2012
(2019/20), deadline within six Ethiopian calendar months after
the end of the EFY;
4th APA (September 2021): Audit Report for EFY 2013
(2020/21, deadline within six Ethiopian calendar months after
the end of the EFY
The audit report is the last “trigger” in the assessment
process, and will be checked after the fieldwork, but before
the consolidation of the results.

1.4. Co-funding requirements (defined Reflect sustainability of the Budget Plan documents: Is combined with performance measures so that contribution
with various rates of co-funding program and ensure that the above the minimum level is rewarded.
depending on the type of ULG). rule on counterpart funding is 1. Budget for own Revenue
adhered with. The co-funding Co-funding should be budgeted for before the start of the
The co-funding requirements are the 2. Budget for recurrent expenditure fiscal year, and by the end of a fiscal year ULGs should have
is set at a realistic level and
following: further contributions are 3. Budget (surplus) for Capital contributed with the specific percentage, measured by actual
promoted through the Expenditure from own Revenue use of funding on capital investments on areas defined in the
10 percent for ALL ULGs in the investment menu and source of funding (IBEX coding).
DRS (Afar, Benishangul Gumuz, performance measures. 4. Budget from (IDA) Performance
Gambella, Somali) Promote improved revenue Grant (as approved by the UIIDP Transitional arrangements/Phasing in: ULGs can only
mobilization and incentives to Federal SC) budget for this in the second assessment, as they do not know
20 percent for the new ULGs (i.e. the level for this coming financial year. The assessment of
ALL cities which are not part of the focus on longer-term 5. Budget for ‘Capital Investment
sustainable urban finance. actual utilization of funds can only be done in the assessment
old 16 ULGDP I ULGs) in the non- Projects’ following a year of actual disbursements of UIIDP funds, that
DRS regions (Amhara, Oromia, is, from the September 2020 assessments. (after a full year of
SNNPRS, Tigray). 6. % of co-funding from ULG
calculated from the approved CIP and spending in EFY2012 /FY2019/20
40 percent for the “old” 16 ULGs. the proclaimed Annual Budget. The % of co-funding to be assessed will be as follows:
(ULGDP 1) in the non-DRS regions
(Amhara, Oromia, SNNPRS, 7. Bank statement to show actual co- 2nd APA (September 2019) for EFY 2013 Allocations:
Tigray). funding contributed for the prior year Budgeted co-funding for EFY 2012 (2019/20);
50 percent for Dire Dawa and Harar. 3rd APA (September 2020) for EFY 2014 Allocations:

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 Justification for Minimum
No. Minimum Condition Evidences to be Produced Comments, phasing in and others
Condition

A higher level of co-funding is Budgeted co-funding for EFY 2013 (2020/21) and Actual co-
promoted in the performance funding applied for EFY 2012 (2019/20), that is, year before
measures. assessment.
4th APA (September 2021) for EFY 2015 Allocations:
Budgeted co-funding for EFY 2014 (2021/22) and Actual co-
funding applied for EFY 2013 (2020/21), that is, year before
assessment.
Note: As the first APA is in Sep. 2018, and as the first grant
allocation is for EFY 2012/FY2019/20, the ULGs cannot
budget fully for the co-funding at the point of time for this
first APA, but must revise their budgets and allocations when
results are known.

1.5. Key staff in place/coordination team To ensure that there is 1. Box file with personnel assignment The position should be filled for more than six months within
(as per POM TOR qualifications minimum capacity to handle letters signed by City Mayor and copied a year
and experience) with the following the entire program to the City Manager and operational
staff under the coordination of the implementation process at the office of the staff. The key staff should be in the position at the time of
city manager: full-time focal ULG level. assessment for all 117 cities for 2nd APA onwards. The APA
persons from relevant departments 2. Besides the appointment letter, the Consultant will however take into consideration and justify
for revenue, procurement, incumbents’ professional qualification positions that have recently fallen vacant for which the ULGs
environmental, social management, and work experience has to be clearly have not had time to take action to fill the vacant posts. Clear
M&E, PFM, and civil engineering, documented in the APA report and facts should be provided by APA Consultants in this
AMP expert, Urban planning and compared with POM TOR. justification. The POSITION should have been filled for at
land management, plus an internal least six months within the previous financial year0)
3. The ULG must provide evidence and
auditor. the APA Consultant must document Transitional arrangement/phasing in (first year only): The
how each POSITION was filled minimum period of position being filled is waived for new
throughout the previous EFY (i.e. not ULGs
only quote the latest appointment The minimum period of position being filled is waived for the
letter). 44 ULGDP II cities in regard to new positions that came with
UIIDP.

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 Justification for Minimum
No. Minimum Condition Evidences to be Produced Comments, phasing in and others
Condition

1.6. Safeguards: ULGs have To ensure that there is a 1. A letter of appointment or assignment Defined by:
demonstrated that they have mechanism and capacity to of focal person signed by City Mayor
established a functional system for screen environmental and and copied to the City Manager and Appointment/assignment of environmental and social
environmental and social social risks of the CIP before host office of the staff. safeguards focal person at the city level;
management including full time implementation. Endorsement of city level ESMSG and RSG documents that
dedicated one environmental person 2. Besides the appointment letter, the
includes procedures for due diligence; institutional procedures
(as per POM TOR) and one social incumbents’ professional qualification
for grievance management (see below under number 8) and
safeguards person (as per POM and work experience has to be clearly
management of environmental risks, managing
TOR) and updated ESMSG and documented in the APA report and resettlement/land take processes and environmental social
RSG endorsed by City Councils compared with POM TOR. mitigation and monitoring plan.
3. Minutes of meeting of city council for The minimum period for the position being filled (review past
endorsing city level ESMSG and RSG year’s performance) is: 06 months. Transitional
documents arrangement/phasing in: In the first assessment conducted
4. A folder containing endorsed city level from September 2018, it is sufficient for the new ULGs that
ESMSG and RSG documents that the positions are in place.
includes:
a. ESMSG provides procedures for due
diligence; ESIAs, EMPs, RAPs, SMP,
WMP
b. institutional procedures for complaints
handling, environmental management,
resettlement and land acquisition
processes

1.7. Functional institutional set-up for Procurement is a high-risk Functional unit is one recognized by the None
procurement system in place area, hence need to ensure city’s organizational structure, having
according to public procurement that basic systems, and defined mandate, working procedures, with The minimum period for the position being filled (review past
proclamation including: functioning of this is in place defined responsibilities, accountability and year’s performance being assessed) is: 06 months
before transfer of PB grant decision matrix, and the like. The minimum period for the position being filled (review past
Procurement function and installments.
minimum core or assigned 1. Box file with letters of assignment of year’s performance) is: 06 months should be for previous
staff in place – at least two The existence and procurement expert, signed by City financial year. The functioning of TAC /PEC (minutes of
procurement experts within functionality of the Mayor or authorized government TAC/PEC for recent procurements) which is a performance
procurement unit in ULG with; procurement system is basic officials related issue is for previous financial year.
first degree and experience in to make sure that Program If the current person(s) appointment letter shows that the
procurement at least for two systems coupled with the 2. Besides the appointment letter, the
person (s) existed on the position for less than six (6) months,
incumbents’ professional qualification

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 Justification for Minimum
No. Minimum Condition Evidences to be Produced Comments, phasing in and others
Condition

years mitigation measures provide and work experience has to be clearly the APA Consultant should check whether there was (were)
reasonable assurance that the documented in the APA report and previous person(s) who filled the position, and if not the
1. Functional tender award financing proceeds will be compared with POM TOR. condition is not fulfilled.
committee/TAC or used for intended purposes
procurement endorsing with due consideration of 3. Box file with letters of assignment, * Transitional arrangement/phasing in: 1st APA: For new
committee/PEC at ULG level economy, efficiency, signed by City Mayor or authorized ULGs it is sufficient that the positions are in place.
in place; transparency and fairness. government officials copied to the host
** Transitional arrangement/phasing in: For new ULGs, it is
office of the staff to be a member of tender
applicable from the 2nd APA
award committee/ TAC or procurement
endorsing committee/PEC.
2. Participating cities all the
program documents (such as 4. Box file with minutes of TAC or PEC for
Financing Agreement, POM, recent procurements
APA Guideline and all the 5. A folder containing copies of all the
applicable Manuals) and their program documents (such as Financing
respective region’s Agreement, POM, APA Guideline and
procurement law, directives, all the applicable Manuals) and their
manuals and standard respective region’s procurement law,
procurement documents and directives, manuals and standard
staffs are familiar with these procurement documents in secured space
legal documents for Procurement Records
6. Training report/plan: with ‘pre and post-
3. Establishment of procurement test’ to ensure staffs are familiar with
performance monitoring and these program and legal documents. Plus,
measurement using Public ULG staff involved are conversant with
Procurement Key Performance the program and RGs procurement law,
Indicators Guideline, format or directives, manuals and standard
equivalent. ** procurement documents if asked by APA
assessors.
7. A record or spreadsheet containing data
on procurement performance for the year
being assessed for the agreed KPIs 13 as

13
(i)Percentage (by no. and value) of procurement items not included in the original annual procurement plan should not exceed 5percent; (ii) Average deviation between original Planned and
Actual Procurement cycle time (procurement initiation-contract completion) should not exceed 5percent; (iii) deviation between original price in the procurement plan and award price should not
exceed 20 percent; (iv) deviation between contract price and completion price (turnout cost) should not exceed 25percent; (v) Percentage (by no. and value) of procurements conducted through
open bidding procedure is 85percent; (vi) Complaints resolved within the standard time frame is 100percent; and (vii) the percentage of action taken from the previous procurement audit

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 Justification for Minimum
No. Minimum Condition Evidences to be Produced Comments, phasing in and others
Condition

per the agreed format issued to regions

and ULGs

1.8. Complaints handling system related Receiving, reviewing and 1. The existence of legal base The UIIDP Program Operations Manual defines further the
to corrupt practice, environment and addressing complaints within (Proclamation, regulation or Minutes of requirements within this area.
social aspect as well as related to core areas such as fraud and meeting of city cabinet for endorsing
procurement in place and functional. corruption; related to city level complaints handling system
The system at least consists of legal environmental and social in core areas that is fraud and
base, existence of permanent impact; loss of livelihood, corruption, procurement and grievance
structure with sufficient manpower, income or assets is an related to environment and social
recording and consolidated important aspect of any impact);
reporting mechanism through the grievance redress mechanism.
ethics unit and addressing the The system will encompass a 2. Existence of permanent structure with Note: The existence of the permanent structure shall be
complaints. system for complaints at least a person in each structure to assessed assuming that the ethics officer is responsible for
received, registration of these, handle complaints related to the core fraud and corruption and for consolidating all complaints. The
Note: description of where to send areas (Fraud and corruption, structure shall also have separate persons to handle
the various types of procurement and grievance related to procurement related complaints as per the regional
The assessment of “in place” and environment and social impact);
“functionality” will be based on the complaints, to whom, and procurement laws and complaints on environment and social
evidences stated herein (a). the three how and description of the 3. Existence of recording on received impact as per the ESMSG.
persons should be “in place” at procedures. The information complaints and the follow-up measures
point of assessment; (b) their about these procedures should undertaken;
“performance” and evidences stated be published.
herein in regard to handling and 4. Existence of reporting system this
reporting on complaints for the include a consolidated report on the
previous financial year complaint cases and measures taken (in
all areas through the Ethic officers to
REACC), and reports on the respective
areas to the mayor and city council as
appropriate.

qualifications/ recommendations equals or exceeds 90percent.

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 7 DLI 2 GUIDELINE – ULG INSTITUTIONAL
PERFORMANCE

7.1 INTRODUCTION
Main changes compared to ULGDP II performance assessment system are on:-
 planning and budgeting where new performance indicators have been added on capacity
building performance and implementation of capacity building;
 public financial management with the addition of new performance indicators on ULG level
Fixed Asset and Inventory (stock) management;
 procurement management where the indicators have been streamlined (reorganized and
grouped) and with new indicators on competitiveness, fairness, transparency and controls, land
management:
 accountability and transparency with a new sub-indicator requiring ULGs to announce the APA
results to the public.
 Land management and urban planning with ne performance indicator on “Proportion of land
plots released through competitive auction/ bidding process (and not through direct
allocation)”. The land inventory indicator has been changed from “all vacant and occupied
land” to only “vacant land” take into account the stage at which the roll out of the land
inventory system by the MUDCo Urban Land Information Agency is at and in order to treat all
cities fairly and equally.

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 7.2 DLI 2, ULG PERFORMANCE MEASURES, INSTITUTIONAL PERFORMANCE

. DLI 2 - Institutional Performance (ULG Performance Measures)

Year Maximum Evidence to be Produced Objective Waivers/Exceptions/

No. Performance Measure/Indicators
Assessed points Clarifications

Planning and Budgeting 10

1. A consolidated CIP document with rolling three- year Capital The IDA, ULG and
CIP with linkages among the annual current 3 Investment Projects, annual budget, annual action plan, and To promote efficient
budget, annual action plan, annual planning, budgeting Region contribution
annual procurement plan
procurement plan, asset management and procurement for should be easily
2. REP
plan and REP 3. AMP effective infrastructure identified in the
development Budget Proclamation
1st APA (September 2018 for EFY 2012 Allocations: Plans for and in IBEX (UIIDP
EFY 2011 (2018/19); account). Additional
2nd APA (September 2019) for EFY 2013 Allocations: Plans for State, City and
EFY 2012 (2019/120); Community
3rd APA (September 2020) for EFY 2014 Allocations: Plans for contribution to the CIP
EFY 2013 (2020/21); both in the Budget
Proclamation and
4th APA (September 2021) for EFY 2015 Allocations: Plans for IBEX should be
EFY 2014 (2021/22);
clearly identified
APA consultants are required to review and apply the latest CIP Note: IBEX will only
Manual (applicable for the year being reviewed) in their show the contributions
assessment. deposited from the
different sources but
will not show the
actual expenditures
separately by source,
but these will be
grouped.
1. Quality, consistency, and alignment current 2 1. CIP should include: expenditure framework for 3 years, source To promote the rolling
of finance ,REP and AMP nature should not be
In rolling three 3-year CIP, to ensure

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 Year Maximum Evidence to be Produced Objective Waivers/Exceptions/
No. Performance Measure/Indicators
Assessed points Clarifications

effective rolling in the planning 2. Consistency of figures on all tables (summary, yearly budget, fictitious and
process budget source, annual procurement plan and annual action plan) encourage ULGs to
rely on the five-year
All projects considered for final 3. Alignment with REP and AMP forecast of three years strategic plan to derive
selection in the CIP are mapped in GIS the three-year rolling
plan
.
If all satisfied, then point 2. Otherwise 0.

2. Capturing infrastructure, O&M, current 1 1. Check the IBEX code in the annual budget applied is capturing
including using the appropriate IBEX the correct code of infrastructure, O&M.
code in the annual budget
2. Total O&M budget for infrastructure should be captured in
IBEX (excluding Road Fund).
3. O&M expenses estimated for projects completed in the last FY
CIP are accounted for in the current FY (operations &
maintenance) budget

2 To ensure citizens’
Participation of citizens in the planning
involvement and
process to meet service delivery
promote good
priorities identified by citizens
governance

1. No. of public consultations current 1 Invitation letters or call-for- meeting notices posted in public Due to COVID-19
restrictions on gathering
places or through mass media for the public to attend consultation
(lower level and city level) of persons (social
meetings, indicating, time, place, and purpose of each meeting.
distancing), ULGs can
Public consultations should be held at least two times: alternatively use various
forms of public
(a) for initial consultation, organized separately for women and consultations and these
men, and (b) for the final choice of investments, organized jointly alternatives will be
for both women and men. acceptable for the 3rd
APA.

2. 1. Increase in no. of people involved current 1 1. Signed attendance sheets of the meeting participants indicating Waiver for all 117 ULGs
for 3rd APAs due to
&prior sex of participants, and community or citizens/social groups they
2. Evidence of agenda and issues discussed COVID-19 restrictions
represent, for each consultation meeting individually. – The
on gathering of persons
increase in number of people is based on a comparison of current
(social distancing). The
and prior year. indicator will only be

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 Year Maximum Evidence to be Produced Objective Waivers/Exceptions/
No. Performance Measure/Indicators
Assessed points Clarifications

2. Minutes of each consultation meeting individually, assessed to confirm the

record of persons, but no
documenting: a) time and place of the meeting, b) meeting
scores will be awarded
agenda c) additional issues raised by the participants, d) course
and the DLI 2 score
of the discussion incl. points raised, proposals made, and
obtained for other
arguments put forward by the participants, e) conclusions, voting indicators will be
results, and prioritized proposals, and f) photographs and/or proportionately raised to
audio/video records. 100.

2 To promote effective
political leadership and
good urban governance
1. Minutes of meeting of councils or published The annual budget
1 Budget approved by Council current 2 newsletter/newspaper that reported approval of the budget by notification to finance
(Yes/No Indicator) the council AND should be signed off by
2. Budget proclamation or notification to the citizens using the Council represented
public notice board and/or mass media showing the budget by Speaker of the
following the standard charts of accounts Council and issued from
Scoring: (Yes/No indicator) the office of the city
council.
If all satisfied, point 2. Otherwise 0.
1. Consolidated capital and recurrent budget vs. expenditure for Breakdown of budget
1 all city’s funds (including state, municipal services, ULG To promote proper
budgeting and figures should be
program, and so on) as generated by IBEX, for the last year provided in addition to
implementation
percentages. (as an annex
of the APA report).

between overall city1budget and actual expenditure for previous EFY prior 1 Consolidated budget vs. expenditure for all city’s funds
less than 10%. Yes/No (including state, municipal services, UIIDP, UIF, Road
Fund) as generated from the IBEX (for state, municipal
services, UIIDP, and UIF) and from manual reports
(for Road Fund, if any) for the previous EFY

5 2
1. The documented assessment reports clearly identifying and To help ULGs Review the capacity
1 Capacity building planning: current 1 prioritizing capacity gaps in each of the thematic focus areas positively respond to building and check the
1. The capacity building plan has been through participatory community involvement, internal self- institutional planning.

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 Year Maximum Evidence to be Produced Objective Waivers/Exceptions/
No. Performance Measure/Indicators
Assessed points Clarifications
produced through a systematic assessment, and APA report. performance gaps and The capacity gap
assessment and gap analysis in the 2. The capacity building plan prepared in the format detailed in access fund assessment and gap
main thematic focus areas. the capacity building manual. analysis should cover all
2. The capacity building plan includes thematic areas.
activities covering at least two The capacity building
capacity building modalities. plan may not cover all
3. The capacity building activities are identified gaps and all
clearly traceable to the identified thematic areas due to
capacity building gaps shortage of budget. It
If all above satisfied, then 1 point. should cover some of ,
and only, the issues/gaps
identified in the capacity
gap assessment
Revised capacity
building plan in the
revised CIP accepted
provided it was approved
on or before April 30,
2020. Only applies to 3rd
APA.
.
1. Capacity building plans. To ensure that planning Revised capacity
2 Implementation of capacity building activities: Prior 1 building plan in the
2. Execution and reporting on capacity building is realistic, and
1. More than 80% of capacity building activities are revised CIP accepted
activities included in the capacity 3. Annual financial statements. implemented. provided it was approved
building plan successfully completed on or before April 30,
2. More than 80% of the funds budgeted 2020. Only applies to 3rd
in the capacity building plan are APA
utilized
If all above satisfied, then 1 point.

1
Asset Management
10

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 Year Maximum Evidence to be Produced Objective Waivers/Exceptions/
No. Performance Measure/Indicators
Assessed points Clarifications

nagement Plan prepared

1 and updated14 1 To strengthen the
0 management of ULG
assets - infrastructure
and facilities.

updated
1 as per Asset Management Manual featuring a prior 4 , Consolidated Asset Inventory updated, for all infrastructure
tabular and spatial database of all categories of assets of the city
infrastructure, with specification and
characteristics, for all categories of for the last EFY as per the Asset Management Manual.
assets of the cities as listed in the 1st APA: EFY 2010 asset inventory (conducted during EFY
AMM 16 2010);
2nd APA: EFY 2011 asset inventory;
3rd APA: EFY 2012 asset inventory;
4th APA: EFY 2013 asset inventory;
APA consultants are required to review and apply the latest Asset
Management Manual (applicable for the year being reviewed) in
their assessment.
Parameters to be assessed.
(i) Realistic asset inventory baseline document of the ULG (This
can be asset inventory baseline prepared by a consultant or ULGs
own force);
(ii) A complete inventory of assets is conducted and recorded in
backup sheets (hard copy);
(iii) The inventoried assets are correctly updated in the tabular
data base (the updates in the inventory backup sheets, tabular data
base and AMP should be in full harmony).
(iv) All infrastructure assets are correctly updated in the spatial
database (on the GIS Map).
14
Where a ULG has not correctly updated asset inventory, the APA cannot then award points for subsequent steps of asset management without considering that those subsequent steps would be deeply flawed if they
were based on a deeply flawed inventory. Awarding points for such deeply flawed subsequent steps do not reflect the expectation that is obviously expressed in the indicator, namely that the ULGs manage their assets
professionally.
15
An asset inventory which qualifies should feature a tabular and spatial database of all infrastructure, with specification and characteristics, at least for the five categories of municipal assets (roads and drainage, solid
and liquid waste, socioeconomic infrastructure and public parks and greenery, utilities, public buildings including abattoirs).
16
The existence of two or more tabulations with different figures is in itself not sufficient evidence of correct updating.

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 Year Maximum Evidence to be Produced Objective Waivers/Exceptions/
No. Performance Measure/Indicators
Assessed points Clarifications

Evidences/documents to be assessed.
(i) Asset inventory baseline;
(ii) AMP of the previous year;
(iii) AMP of the year assessed;
(iv) Tabular and spatial data base;
(v) Asset inventory backup sheets.
(vi) M&E reports and CIP of the ULG.
If four out of four satisfied, then 4 points.
If three out of four satisfied, then 3 points.
If two out of four satisfied, then 2 points.
If one out of four satisfied, then 1 point.
If less: 0 point.

onditions correctly reflected

2 in inventories as per procedures in Asset prior 3 Consolidated Asset Inventory updated, for at least five categories
Management Manual of municipal assets, for the last EFY as per the Asset Management
Manual.
Evidence from selective field checks by APA team
APA Consultant to provide/state in the city reports the names of
the sampled infrastructure used in the field checks.
APA consultants are required to review and apply the latest Asset
Management Manual (applicable for the year being reviewed) in
their assessment.
Parameters to be assessed.
(i) The AMP includes a condition indicator table for all
infrastructure assets as per the AMM;
(ii) Asset condition indicators are correct and prepared as per the
AMM;
(iii) Asset conditions of infrastructures on the ground are correctly
reflected (site verification on sample sub-projects).
If three out of three satisfied, then 3 points.

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 Year Maximum Evidence to be Produced Objective Waivers/Exceptions/
No. Performance Measure/Indicators
Assessed points Clarifications

If two out of three satisfied, then 2 points.

If one out of three satisfied, then 1 point.
If less: 0 point.
NB: If the ULG loses one, two or three points in 2.2.1.1 above,
one, two or three points will respectively be deducted at this
indicator as well. If the ULG scores zero in 2.2.1.1 above this step
will be automatically be zero.

Asset inventory shows

3 an asset value and deficit, which calculates the prior 3 Consolidated Asset Inventory updated, for at least five categories
remaining asset value, maintenance of municipal assets, for the last EFY as per the Asset Management
and rehabilitation deficit based on Manual.
annual depreciation rates as per
procedures in Asset Management APA consultants are required to review and apply the latest Asset
Manual. Management Manual (applicable for the year being reviewed) in
their assessment.
Parameters to be assessed.
(i) Existence of recently approved unit rate (by the respective
departments such as Road, Water and Sanitation, etc) for
valuation of the assets;
(ii) Calculations of the remaining asset value, maintenance and
rehabilitation deficit and incorporation of the same in the tabular
database and alignment with the AMP.
(iii) The AMP with a) A comprehensive maintenance budget, and
a detailed maintenance deficit; (b)The replacement cost and the
current value of all assets; (c)A detailed cost estimates for
the list of proposed New Works set out in order of priority; (d)A
detailed plan for ongoing maintenance, together with a plan to
address the maintenance deficit.
If three out of three satisfied, then 3 points.
If two out of three satisfied, then 2 points.
If one out of three satisfied, then 1 point.
If less: 0 point.
NB: If the ULG loses one, two or three points in 2.2.1.1 above,
one, two or three points will respectively be deducted at this

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 Year Maximum Evidence to be Produced Objective Waivers/Exceptions/
No. Performance Measure/Indicators
Assessed points Clarifications

indicator as well. If the ULG scores zero in 2.2.1.1. above, this

indicator will be automatically be zero.

Public Financial Management 16

ng and timely reporting

1 4 To strengthen
accountability, proper
management of ULG
finances and ensure
provision of useful up-
to-date management
information.

1. prior 1 1.Statement of Financial position and Statement of Financial As above

performance
2.Consolidated Capital Budget versus expenditure and recurrent
BEX for all operations except Road Fund and other specialist projects budget versus expenditure of last EFY generated from IBEX,
done by ULGs that are not part of (budget vs. Expenditure as per the budget proclamation and as
Budget coding system for IBEX generated by IBEX, for the last year).
3. Revenue and Expenditure Summary of the last EFY, as
generated by IBEX

2. prior 1 Quarterly financial reports formally submitted to the regional As above

office with registered cover letter by deadline in accordance with
regional FM manual and regulations
Timely financial reporting
The date on the cover letter can be crosschecked with date of the
IBEX print out to ensure the reports are submitted within the
deadline.

cash & bank reconciliation

3. reports submitted to BoFED timely as per prior 2 Cash Count: Monthly cash count report and bank reconciliation formally As above
regional regulations and manuals submitted with cover letter to BoFED timely as per regional regulations
and manuals by registered mail. In addition: -
(i) For any differences between cash count balance and ledger balance,
the cash count report should provide valid justifications and explanations.
Furthermore, it should recommend specific actions to address the
difference. The difference amount should be disclosed.

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 Year Maximum Evidence to be Produced Objective Waivers/Exceptions/
No. Performance Measure/Indicators
Assessed points Clarifications

(ii) For bank reconciliation, proper monthly bank reconciliation should be

prepared.
- Break down for reconciling items with reference number and dates
-At the year end for the month of June, payments made by the bank
but not recorded in the IBEX should not be shown in the reconciling
items or should be recorded in the IBEX. If shown, the amount
should be disclosed
- At the year end for the month of June deposits by the bank but not
recorded in the IBEX should not be shown as reconciling items
especially at the year end (should be identified and recorded in the
IBEX). If shown, the amount should be disclosed.
If both (i) and (ii) are satisfied, then score 2 points, otherwise 0 point”.
MUDCo: accepted with changes.

2 3 As above

nal financial audit report

1. of the previous audit has a clean opinion prior 3 External audit report for the previous financial year

3 2 As above
1. External audit reports for the pervious FYs, both the short and
1. Evidence that audit queries raised in the prior 2 long form reports For example, the
external audit report have been acted on – 2. Audit findings rectification plan to address audit queries requirement by the ULGs
80% minimum raised in the previous year external audit report in EFY 2010 is acting on
3. Status report on audit findings rectification plan . audit queries for EFY
2009 raised in the
4. Supporting documents such as letters, accounting records, external audit report.
count sheets, registers, vouchers, documents showing Therefore, the 1st APA
evidences such as refunds and internal control procedures Consultant refers the
adopted as per the recommendations of the auditors. audit queries for EFY
2009, and the actions
taken in EFY 2010. The
2nd APA assesses the
audit queries for EFY
2010, and the actions
taken in EFY 2011. The
3rd APA assesses the
audit queries for EFY
2011and the actions

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 Year Maximum Evidence to be Produced Objective Waivers/Exceptions/
No. Performance Measure/Indicators
Assessed points Clarifications

taken in EFY 2012. The

4th APA assesses the
audit queries for EFY
2012 and the actions
taken in EFY 2013

Audit –functioning
4 and adherence to procedures with good practices, 3 As above
reflected by:

1 prior 1 The names of staff and their professional qualifications

have to be clearly documented in the APA report and
ate staffing (80%) with required number and qualifications of internal
auditors as per the structure and compared with the structure.
production of quarterly reports Quarterly internal audit reports produced by internal audit unit

2 prior 1 Formal submission of Quarterly internal audit reports produced by

Reports submitted to BoFED/ Zonal internal audit unit to BoFED/ Zonal Office of Finance and
Office of Finance and Economic Economic Development and copied to Mayor with cover letter
Development and copied to the Mayor

3 Evidence of follow-up of audit findings prior 1 Status report on internal audit findings rectification

5 ULG level Fixed asset and inventory prior 4 As above

(stock) management weaknesses are
addressed

1 Record keeping- maintain fixed asset 1 (i)Fixed assert register which includes as a minimum asset name, This is a continuous
register, stock card and bin card type, cost, date of purchase, location, user or custodianship, activity and is both prior
identification number and condition year and current.
It is preferable if the
(ii) stock card kept with finance department – that includes as a person who handles
prior & minimum the movement and balance of inventory items, goods stock card is from
current receiving vouchers and goods issuing vouchers finance. However, if this
(iii) Bin cards kept at store -includes as a minimum the movement is not possible and if
and balance of inventory items, goods receiving vouchers and both functions (are with
goods issuing vouchers the property management
case team) then there

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 Year Maximum Evidence to be Produced Objective Waivers/Exceptions/
No. Performance Measure/Indicators
Assessed points Clarifications

should be different
personnel assigned to
If all satisfied, then 1 point, otherwise 0 point. handle the stock card and
bin cards

2 prior 2 There should be a minimum of annual fixed asset and This is prior year (count
stock/inventory count -The evidence for this is (a) cover letter by as at July 7, 2018 for 1st
the inventory/count team; (b) detail listing of both fixed assets and APA; count as at July 7,
stocks with quantities counted and quantities in records (stock 2019 for 2nd APA; count
cards for inventories or stocks and fixed asset register for fixed as at July 7, 2020 for 3rd
assets) and differences there of; (c) final summary report with APA and count as at July
Count and Reconciliation
recommendation for action on discrepancies, obsolete stocks, 7, 2011 for 4th APA)
damaged items, and so on.

If all satisfied 2 points, otherwise 0 point.

3 prior & 1 Placement of separate individuals one responsible for stock cards This is continuous and is
current at finance department and one person at stores responsible for the therefore both prior year
inventory custodianship and bin card. and current
It is preferable if the
person who handles
stock card is from
finance. However, if this
is not possible and if
both functions (are with
Segregation of duties the property management
case team) then there
should be different
personnel assigned to
handle the stock card and
bin cards. The person
who handle stock card
can be from property
management section but
should have no custodian
ship responsibility

Procurement 15

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 Year Maximum Evidence to be Produced Objective Waivers/Exceptions/
No. Performance Measure/Indicators
Assessed points Clarifications

Proportional scores will be provided based on level of compliance on the parameters to be assessed. New ULGs will be
assessed based on
performance starting
from the second APA.

Procurement Planning,
1 Oversight and Controls Prior 2 2 Parameters to be assessed.
1. Annual procurement plans are prepared and updated/revised
together with the CIP;
2. Internal procurement audits are conducted by September 30
by the ULG internal audit department and their quality is
acceptable; General internal financial audit does not qualify
for Procurement Audit
3. Follow up and update was done on the action plan for
implementation of internal and external audit findings.
Evidences/documents to be assessed.
(i) Comprehensive and complete annual procurement plan was prepared for the financial year as part
of the CIP in accordance with the requirements of the
program documents and regional procurement proclamation,
directive, manual and prescribed templates and approved by
tender award committee or procurement endorsing committee
and management.
1. Procurement plan was updated/revised together with the CIP with justifications.
2. Internal procurement audit reports (submitted by 30stSeptemberand the audit planning, execution
and reporting are as per accepted internal audit standards)
3. Updated action plan for implementation and follow up of
internal and external audit findings.
If two out of three completed: 2 points, otherwise 0 point.
1. The assessment and scoring for individual procurement The APAG states
al Procurement2Transactions 8 transactions will be based on a reasonable sample (minimum To ensure that each
individual procurement minimum of 25% of all
25% of all contracts) with a good mixture of low risk-high contracts. This is a PforR
value, high risk-low value, high risk-high value contracts and transaction is carried
out following the set- for ULGs and no
different procurement methods and categories. distinction is made
out procurement rules
NB. The APA Consultant will record and present in all the city in a way that assures between funding sources.
reports, the particulars of the reviewed contracts including VfM to the ULG and The CIP contains ALL
contract description, contract reference numbers, name and fairness to eligible city administration
address of awardee, contract amount and implementation status of bidders. projects, irrespective of
the contracts that were sampled and reviewed. funding source. The

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 Year Maximum Evidence to be Produced Objective Waivers/Exceptions/
No. Performance Measure/Indicators
Assessed points Clarifications
2. The APA Consultants, in carrying out the procurement procurement plan covers
performance assessment, are required to also use the ALL the city projects in
Procedures for selection of sample contracts in annex the CIP irrespective of
For the samples taken, average of the individual score should be funding source. The
calculated. If decimal, round it to the nearest whole number. minimum 25% sample is
taken from all
projects/contracts
appearing in the
approved annual
procurement plan,
irrespective of funding
source.

1. Procurement Planning and Bidding Prior 2 Parameters to be assessed.

(i)The procurement item is included in the approved original
annual procurement plan. This should be done by comparing the
Expenditure Summary with the approved original annual
procurement plan;
(ii) Advertisements were made as required by the law;
(iii) Correct standard bidding documents are used, and the bidding
documents are complete. Bidding documents have provisions to
exclude bidders suspended or debarred by the World Bank.;
(iv) Bid floating periods are as provided in the law;
(v) Bid openings are conducted immediately after bid submission
and minutes are acceptable
Evidences/documents to be assessed.
1. Annual Expenditure summary and Annual Procurement Plan
for the prior year and contract registers
2. Extracts of adverts (as it was advertised) of invitation for bid or
request for expression of interest using appropriate public media
3. Standard Bidding Documents issued by RPPPAAs/FPPA
4. Folders for specific bidding documents issued consisting:
invitation for bids, invitation to bid, BDS, Evaluation and
Qualifications criteria, Schedule of requirements (specifications

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No. Performance Measure/Indicators
Assessed points Clarifications

and bill of quantities), bidding forms, General Conditions of

Contract, Special Conditions of Contract and other necessary
formats for all items procured. Similar documents for Consultancy
services selection. Bidding documents have provisions to exclude
bidders suspended or debarred by the World Bank.
5. Bid opening records/minutes signed by the bid opening
committee and bid opening attendance sheet.
If all 5 completed: 2 points,
If 3 or 4 completed: 1 point,
If less than 3 completed: zero.

2. Bid Evaluation and Contract Award Prior 3 Parameters to be assessed. Procurement audit
findings/recommendati
(i) Bid evaluations are consistent with bidding documents; ons follow up is waived
(ii) Contract was awarded to the legitimate bidder within bid for new ULGs for the
second year
validity period;
(iii) Bid evaluation results are announced to bidders and public;
(iv) Contract document contents are complete
Evidences/documents to be assessed.
1. Folders for bid evaluation report and verify if only those
selection and qualification criteria stipulated in the issued Bidding
Document are applied during bid evaluation for the sampled
contract;
2. Check whether the legitimate bidder is awarded the contract
3. (i) Issued bidding document containing the required bid validity
and submitted bids containing the same.
(ii) Any requests for extension(s) of bid validity and subsequent
extension(s) including bid securities.
(iii) Letter of Contract Award
(iv) Folders for bid evaluation results announcement to bidders
and to the general public for all items procured (extracts of

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 Year Maximum Evidence to be Produced Objective Waivers/Exceptions/
No. Performance Measure/Indicators
Assessed points Clarifications

advertisements, signed letters issued to bidders)

4. Contract documents containing all the relevant sections
included in the bidding document to be part of the contract. Check
for example, form of contract, special conditions of contract,
general conditions of contract, priced schedule items /scope of
works, specifications, drawings, securities, and so on.
If three out of four satisfied, then 3 points.
If two out of four satisfied, then 2 points.
If less: 0 point.

3. implementation and procurement recording

Contract Prior 3 Parameters to be assessed.
(i) Contracts implemented within planned time
(ii) Contracts implemented as per contract price
(iii) Payments are effected as per the contract and inspection and
acceptance is done correctly before acceptance or delivery
(iv) Availability of adequate auditable procurement records in a
secured space.
Evidences/documents to be assessed
1. Approved annual procurement plan with monitoring report,
procurement and contract management file, commencement
orders, provisional and final acceptance letters, agreed
delivery/work program, timelines, variation orders, and so on.
2. Approved annual procurement plan with monitoring report,
procurement and contract management file , t, variation orders,
cost overruns…)
3. Invoices and Payment certificates, payment deposit or transfer
slips, delivery, inspection and acceptance reports.
4. Procurement documents (transactions records) are kept in a
secured space and available and evidenced (procurements
documents for current year all key documents from Advertisement
up to contract closure or hand over)

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No. Performance Measure/Indicators
Assessed points Clarifications

If 3 or 4 completed: 3 points,
If 2 completed: 2 points,
If less than 2 completed: zero

3 5. 5 The assessment will be done based on the data available in the It is not expected that
procurement performance monitoring and measurement APA Consultants will go
database/sheet whose format is included in Section 11, Annex 1. through all procurement
The APA consultant shall verify the consistency of the files in regard to the
records/sheet to rely upon the data provided in the records/sheet as verification as time does
measured below. not allow for this.
Accordingly, a sample
All procurements included in the CIP Plan (both original and shall be taken. As
revised) shall be included in the KPI table. The dates and values Assessor, it is up to the
to be entered shall be based on the original procurement plan APA Consultant to take
except for new procurement items included in the revised reasonable sample to get
procurement plan. Nevertheless, only rolled and new reasonable assurance that
procurements completed as of 7th July of the year of performance the data given by the
shall be computed for performance assessment/analysis. ULGs can be relied
upon. However, in the
Procurement efficiency and effectiveness Prior 3 Parameters to be assessed. interest of time and
practicality, the same
(i) Percentage (by no. and value) of procurement items not 25% sample considered
included in the original annual procurement plan should not for assessing individual
exceed 5%. This should be done by comparing the original procurement transactions
approved Procurement Plan with the Expenditure Summary of the will be used to spot
CIP; check/verify the
information/data
(ii) Average deviation between original Planned and Actual contained in the KPI
Procurement cycle time (procurement initiation-contract Table. Nevertheless, in
addition to using the
completion) should not exceed 5%;
sample, the APA
(iii) deviation between the price in the original procurement plan Consultants will also use
and award price should not exceed(+) or (-) 20%; other procurement
files/contracts to spot
(iv) deviation between the original contract price and completion check specific KPIs
price (turnout cost) should not exceed 25%. which by their nature
(not common/routine
Evidences/documents to be assessed. processes) may not have
been covered by the
Procurement Performance Monitoring and Measurement

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 Year Maximum Evidence to be Produced Objective Waivers/Exceptions/
No. Performance Measure/Indicators
Assessed points Clarifications

records/spreadsheet and procurement files/records, for spot sample e.g. KPI on

verification. “Complaints resolved
within the standard time
If one out of four satisfied, then 1 points. frame is 100%;”
If two out of four satisfied, then 2 points.
If three out of four or all four satisfied, then 3 points.

2 Competitiveness, Fairness and Prior 2 Parameters to be assessed. Open bidding is defined

Transparency and Controls as ICB or NCB.
(i) Percentage (by no. and value) of procurements conducted RCB/LCB can be
through open bidding procedure equals or exceeds 85%; considered as open
bidding procedures as far
(ii) Complaints resolved within the standard time frame is 100%;
as non-MSE firms or
(iii) the percentage of action taken from the previous internal and individuals of similar
external procurement audit qualifications/ recommendations size and capacity are
equals or exceeds 90%. The fiscal year for procurement audit permitted to participate
findings/recommendations of the ULGs is the year before the year in the bidding process
of Performance being assessed. transparently and
evaluation criteria are
Evidences/documents to be assessed. non-discriminatory.
Procurement Performance Monitoring and Measurement The advertisements and
database/spreadsheet and procurement files/records, for spot evaluation criteria shall
verification. not specifically call for
MSEs but be open for all
If two satisfied, then 1 point. firms or individuals of
If all satisfied, then 2 points. similar size and capacity.

Own source revenue enhancement 10

1 REP updated for prior year as per the REP 2

Manual
1.Updated and approved REP of the city for the prior EFY Record of taxpayers is
1. ULG has carried out detailed analysis of prior 1 2. APA consultants are also required to review and apply the REP
each main revenue source and potential as waiver for second APA
Manual in their assessment.
per the REP Manual. (manual and 3. Review the base for projection/forecast if it is well aligned with
template to be provided) the analysis
4. Records of taxpayers for previous year under each municipal
tax codes

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 Year Maximum Evidence to be Produced Objective Waivers/Exceptions/
No. Performance Measure/Indicators
Assessed points Clarifications

NB. The expectation is that ULGs critically review and

revise the analyses of revenue sources, strategies, and
action plans for each EFY anew on the basis of the REP
manual, rather than simply presenting the substance of the
previous EFY unchanged, only with a fresh date. APA
Consultants should therefore assess this aspect.

1. Updated and approved REP of the city for the prior EFY
2. ULG has developed strategies for revenue prior 1 2. APA consultants are also required to review and apply the REP
enhancement as per the REP Manual. Manual in their assessment (The consultant to review strategy
implementation status ,alignment and consistency of strategy
with analysis of main revenue items).
3. Report for the actions proposed in the previous year REP
strategy
4. Detailed action plan for the strategy (when it will be
implemented, where (if possible) and who will undertake the
activity. Also, good to indicate the budget source for the
activity (if relevant)
1. Municipal revenues (excluding land lease income) by account
2 ULG’s municipal revenues (excluding 3 code for prior year (EFY) and the year before that, as
land lease income) increase generated by IBEX.

1. 5 to 10% increase prior 1

2. 11 to 20% increase prior 2

3. Greater than 20% increase prior 3

3 Revenue Planning: Percentage of prior 2 1. Municipal revenues plan by account code for prior year (EFY).
municipal revenue (excluding land lease The municipal revenue budget should be recorded in the IBEX.
income) on business taxes, municipal rent Planned figures should be obtained from IBEX which should be
and charges and fees collected against the same as the figure reported in the approved REP
planned target for the previous EFY
2. Actual Municipal Revenue by account code for prior EFY, as
generated by IBEX

1 Variation less than 5% prior 2

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 Year Maximum Evidence to be Produced Objective Waivers/Exceptions/
No. Performance Measure/Indicators
Assessed points Clarifications

2 Variation greater than 5% but less than 10% prior 1

1. Approved CIP for prior year
4 prior 3 2. Schedule of Allocations and Disbursements for prior year. To To promote
be used by APA Consultants to cross check figures in CIP. sustainability,
(MUDCo to provide schedule) ownership and
3. Bank statement showing deposit of co-funding amount and date accountability
for prior year.
Co-funding from ULGs is above minimum The % of co-funding to be assessed will be as follows:
threshold level – as percentage of
performance grant amount 2nd APA (September 2019) for EFY 2013 Allocations: Budgeted
co-funding for EFY 2012 (2019/20);
3rd APA (September 2020) for EFY 2014 Allocations: Actual co-
funding for EFY 2012 (2019/20);
4th APA (September 2021) for EFY 2015 Allocations: Actual co-
funding for EFY 2013 (2020/21)

1 Co-finance from 1-10 percentage points for example, If the minimum requirement is 10%, and the city co-
more than the minimum required level: 2 finances 12% (that is, 2 percentage points above), then the city
points gets 2 points.

2 Co-financing above 10 percentage points for example, If the minimum requirement is 10%, and the city co-
more than the minimum required level: 3 finances 22% (that is, 12 percentage points above), then the city
points gets 3 points.

Accountability and transparency17 14 To strengthen

accountability and
good governance

For all Yes/No indicators, partial points shall not be awarded. It is either Yes= full points or No = zero points.
17

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 Year Maximum Evidence to be Produced Objective Waivers/Exceptions/
No. Performance Measure/Indicators
Assessed points Clarifications
1. Service delivery standards issued by the Ministry through
Accountability and transparency in city prior 6 the regions to the cities18 The APAG has not
operations and service delivery 2. Implementation report produced by the city for the prior year specified or presented the
for solid waste management; land management; building 3 service indicators and
l service delivery as per service standards for solid waste accordingly the APA
management, land management, permits as per the standards
3. On site verification by APA Consultant taking 3 service Consultant has to select
building permits issued by the the 3 service indicators
Ministry standard indicators19 from each of the 3 basic services (same
indicators to be used across all cities each year) making a from each of the 3 basic
total of nine indicators for the city. The Consultant will services standards to
1 Solid Waste Management as per the standard 2 make a total of nine (9)
review the evidences/ documentation for the indicators to see
whether services where actually delivered as per the service indicators. The APA
2 Land Management as per the standard 2 indicators. Consultant selects the
indicators from the
Score will be split into 2 points for each of the three services. Minimum of 80% achievement for service delivery
each of the three indicators for the service will score 2 points standards which have
3 Building Permits as per the standard 2 for the service (All three indicators need to score minimum been issued by the
80%); 70-79% achievement for each of the three indicators Ministry which are also
for the service will score 1 point for that service (All three provided to the APA
indicators need to score minimum 70%). Consultant. Once the
APA Consultant selects
Note: For building permits or any other service which are provided based on demand/request by the indicators, they have
customer, if there has not been a request for the service and to use the SAME 9
the service has not been provided, the APA should select indicators for all the 56
other indicators to assess. cities and 61 cities
respectively.

ic dissemination4 (in city offices and other public places or webpages, prior 6 A box file/folder containing office notices, public notices or
newspapers) of information about: newspapers or webpages used to disseminate information in city
offices and for the public on:
a Annual budgets prior 1 a. summary of annual budgets
b. approved projects,
b Approved projects prior 1 c. expenditures
d. audited accounts, and
c Expenditures prior 1 e. results of the procurement decisions.
f. APA results as reported by the consultants and endorsed by
d Audited accounts prior 1 MUDCo

18
These are national and regional standards which cities are required to implement and no need for endorsement/approval by the cities
19
Three indicators will be selected by APA consultants has to refer the Ministry’s standard document and select at least three indicators for each service. These indicators will be presented in APA guideline.

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 Year Maximum Evidence to be Produced Objective Waivers/Exceptions/
No. Performance Measure/Indicators
Assessed points Clarifications

e Procurement decisions prior 1

f APA results announced to public 1

submission of quarterly,
5 a semi-annual and annual progress reports for prior 1 1 Quarterly, semi-annual, and annual physical reports formally This is a waiver for new
UIIDP as per the UIIDP M & E submitted to the region with registered cover letter. cities for the 2nd APA
Guidelines (Yes/No indicator) since the progress reports
for UIIDP will only start
in EFY 2012

ly submission of monthly
b reports for UIIDP as per the UIIDP M & E prior 1 1 Monthly physical reports formally submitted to the region by soft
Guidelines (Yes/No indicator) copy

Environment and Social Safeguards 10

mental and Social1 Screening To avoid adverse

environmental and
social impact and
promote environmental
and social
sustainability

1 Proper screening and acceptable prior 2 1. Proper screening reports of desired quality for all capital
categorization of ALL subprojects investment subprojects timely submitted to regulatory
based on their environmental and body;
social risks and impacts (the screening
2. Acceptable categorization of sub- projects based on the
reports should have the desired
sub projects environmental and social risks and impacts
quality; and risks for all subprojects
and proper analysis
should not be underestimated)
Scoring: One point for each criterion.

2 Obtained appropriate and timely prior 1 Thorough written review and endorsement/approval letter
Review and Endorsement of ALL for all screening reports by the competent authority
screening reports from the relevant
regulatory authority before the
commencement of the physical project
activity/implementation (the screening

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 Year Maximum Evidence to be Produced Objective Waivers/Exceptions/
No. Performance Measure/Indicators
Assessed points Clarifications

reports should have the desired

quality; and risks for all subprojects
should not be underestimated)

2 1 Preparation of acceptable safeguards 2 Safeguards instruments of acceptable quality developed for

instruments (ESMPs, RAPs, etc. as all Schedule-1 and Schedule-2 sub-projects.
appropriate) for ALL Schedule 1 and 2
projects (the ESMPs, RAPs should be
prepared based on the template in ESMG
and RSG, and for abattoirs, Landfill Sites
and large-scale market upgrading sub-
projects by independent consultant,
stakeholder’s consultation findings are
well captured, and minutes annexed in the
respective safeguards instruments)
Thorough written review and endorsement of safeguards tools by the competent authority
2 Appropriate Review and Endorsement for 1
ALL Safeguards instruments by the
Relevant Regulatory Authority (the
ESMPs, RAPs should be prepared based
on the template in ESMG and RSG)

3 Environmental and social clause 1 1. All construction contracts need to have appropriate
(which is annexed to ESMSG) and environmental and social clause and the contractors need to
ESMP included in ALL construction sign and agree to implement it.
contracts and the contractors sign and
2. The contractors formally write monthly performance
agree to implement it.
reports to the ULGs on the implementation of ESMPs and
the environmental clause.
Scoring: If both criteria are fulfilled, then 1 point,
otherwise 0 point.
4 Community consultation prior to and 1 1. Minutes of community/stakeholder consultation with
during implementation of ESMP and signed attendance sheets attached with the site-specific
RAPs as appropriate. safeguards instruments and the monitoring reports; all
sampled/visited projects should comply.
2. Summary of the views and concerns of the consulted
stakeholders should be reflected within each

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 Year Maximum Evidence to be Produced Objective Waivers/Exceptions/
No. Performance Measure/Indicators
Assessed points Clarifications

ESMPs/PESIAs and RAPs.

Scoring: If both criteria are fulfilled, then 1 point,
otherwise 0 point.

5 Proper implementation of ESMPs and 2 1. (a)Periodic (at least monthly, quarterly and annual) E&S
RAPs for ALL Schedule-1 and performance and (b) field visit reports by the ULGs and
Schedule-2 sub-projects; the ULGs quarterly field visit reports to all Schedule-2 and/or
write monthly, quarterly and annual Schedule-1 sub-projects.
implementation monitoring reports to
2. Action plans and related status update following the
the regulatory agencies. These reports
recent E & S audit recommendations and related status
should include evidences of actions
update.
taken following the Environment
Authority E & S audit and the ULG Scoring: one point for each criterion fulfilled
monitoring visits recommendations.
NB/
If a ULG’s projects are properly screened
with full consideration of environmental
and social risks and impacts, and if the
relevant regulatory agency thoroughly
reviews the screening reports with full
consideration of environmental and social
risks and impact and decides that the
project (s) do(es) not require ESMPs or
RAPs, then points can still be awarded to
ULG cities provided the risk levels are
fully considered.
During sampling, priority will be given for
those subprojects that required ESIA&
RAP where there is/are RAPs and ESIAs

Staffing: fulltime assignment of qualified

environmental and social experts,
actively engaged for a minimum of 6
months

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 Year Maximum Evidence to be Produced Objective Waivers/Exceptions/
No. Performance Measure/Indicators
Assessed points Clarifications

Land Management and Urban Planning 15

1 Statutory structure plan approved/in place 5 To promote planned
urban development in
ULGs

1 Existence of up-to-date approved statutory current 3 1. Approved statutory city-wide (structure) plans including base
city-wide (structure) plan at the point of map, existing land use map, existing road network map,
assessment (Yes/No indicator) Excluding proposed road network, drainage and land use map
extension of an existing plan
2. Council minutes approving statutory city-wide (structure) plan
3. The period of coverage should be in the plan and APA
Consultant should check the expiry date to see if the plan is
“up-to-date”.
If all satisfied, then 3 points. Otherwise 0 point.

2 CIP is in accordance with city-wide prior 2 1. Approved statutory city-wide (structure) plans and local
(structure) plan at the time of preparation (neighborhood) development plans
(Yes/No indicator)
2. Approved CIP document in accordance with structure plan
Step 1: identify CIP items that could potentially be in conflict with the structure plan. – Step 2: verify
the compatibility of these with the structure plan

If all satisfied, then 2 points. Otherwise 0.

2 10 To promote effective
land management and
serviced land delivery
of ULGs

1 Land released for different uses are as per Prior 3 1. Location map/site plan of the released site and basic
the laws of land management and have infrastructure services;
access to basic infrastructure facilities i.e. 2. Land lease records and documents showing land leased to the
road, water, electricity at a radius of 250 public;
meters
To verify that the land released is as per the laws of land
management and have access to basic infrastructure facilities at a
radius of 250meters, the APA Consultants will take a sample of 3-
4 sites and provide/state in the city reports, complete with

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 Year Maximum Evidence to be Produced Objective Waivers/Exceptions/
No. Performance Measure/Indicators
Assessed points Clarifications

geographical coordinates for unequivocal double checking /

verification

Scoring: Yes/No indicator, based on a sample of 3-4 projects

Note: If city has not released any lands in the prior year, 0 point.
2 Proportion of land plots released through Prior 2 Land supply data and documents showing methods of land release
competitive auction/ bidding process (and
Scoring:
not through direct allocation)
: If at least 15%, then 2 points. Otherwise 0 point

3 Updated land inventory featuring a tabular Current 5 Consolidated Urban Land Inventory updated for vacant,
and/or spatial database for example, a
residential, commercial and industrial areas.
map20(Yes/No indicator)
1. Existence of tabular and/or spatial database (i.e. updated base
map/land use plan featuring a tabular and spatial database
supported by GIS) for the corresponding land uses.
2. To verify that the land inventory is up to date, the APA
Consultant will take a sample of 3-4 land use categories;
APA Consultant to provide/state in the city report the names of
the sampled land inventory used in the field checks;

The linkage may not be fully automatic (e. g. by simple mouse click) but where maps show ID numbers of plots and these ID numbers are also included in the tabular database then the linking is possible (in reverse
20

direction, the linking is facilitated if the “kebele” – the urban neighborhood –is listed in every record

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 8 DLI 3 GUIDELINE – ULG
INFRASTRUCTURE&SERVICE DELIVERY
PERFORMANCE

Main changes compared to ULGDP II performance assessment system are the removal of the
performance indicator on job creation which has been moved to a new DLI 4.
The Performance Measure on maintenance performance has been strengthened and improved with a
new performance indicator that incentivizes cities to budget more for expenditure “Maintenance
budget either 2% of the asset replacement cost or 10% of CIP budget (whichever is less)”
There is a new indicator on the Quality of Infrastructure Performance Measure that now rewards
follow up and action on recommendations of the Value for Money Audit. The points for the Value for
Money Audit has also been increased from 20 to 30 making a total for the PM of 40 points compared
to the previous 20 points.

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 8.1 DLI 3 - ULG PERFORMANCE MEASURES, INFRASTRUCTURE &SERVICE DELIVERY PERFORMANCE

Maximum
No. Performance Measure / Indicators Evidence to be Produced Objective
points Waivers/Exceptions/Clarifications

3.1 Urban Infrastructure Targets (for weighting, see 2

the note following this table) 0
1. Minimum condition for any point: monthly
1 Physical targets as included in the original CIP prior 20 progress reports (due by fifth of the next To ensure effective *For the 1st APA in October 2018,
and annual work plan implemented (The % of month) from the engineer, based on the field implementation of the CIP to be used is for EFY 2010
implementation against original plans will be verification and compared with the plan. The infrastructure and service and this can be original (if there is
reflected directly in the score multiplied by 30% report should be submitted to the region. delivery no approved revised plan) or
(weight of this indicator), that is, 100 % 2. Urban infrastructure development plan revised CIP (provided it is approved
implemented = 30 points, 60 % implemented = (disaggregated by categories and locations) up to April 15, 2018). .This waiver
18 points. under the original CIP for the EFY is given due to the severe
3. Urban infrastructure physical depreciation of Birr in October
Note: 2017 and the need to encourage
implementation/ progress report
(1) Assessment is done only for all civil works (disaggregated by categories and locations) cities to budget more for
projects planned in the original CIP for that EFY under the original CIP for the EFY) maintenance.
and the final contract prices should be used in 4. Field trip verification of a sample of the For the 3rd APA, the CIP to be used
the calculation. The assessment table should projects. APA Consultant to state in the city is revised CIP (provided it is
consist of ALL CIP civil works projects and not reports the names of projects visited approved by regions not later than
just the sampled ones. (If there is no monthly 5. APA Consultants should use the table April 30, 2020”. This waiver is
engineering standard report no points will be format provided in the Example below by given due to the COVID 19
given). converting it to Excel. pandemic in Ethiopia and the need
(2) Physical infrastructure achievements should to encourage cities to prevent the
be cross checked with contract agreements, spread of COVID 19 in the cities.
payment certificates, provisional acceptance
certificates and other actual transaction
documents .

3.2 Maintenance performance 30

1 Maintenance Budgeting and Implementation

a. Maintenance plan derived from the Assets 1. Assets management plan updated for the
1 Management Plan; prior 10 EFY as per the asset management manual/ Ensure sustainability in *For the 1st APA in October 2018,
b. Maintenance Budget either 2% of the asset guideline with clear budget for maintenance the investments through the CIP to be used is for EFY 2010
replacement cost or 10% of CIP* budget and new assets. up-keep of infrastructure and this can be original (if there is
(whichever is less) 10 2. Urban infrastructure maintenance budget no approved revised plan) or
revised CIP (provided it is approved

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 Maximum
No. Performance Measure / Indicators Evidence to be Produced Objective
points Waivers/Exceptions/Clarifications
(disaggregated by categories) under the CIP
for the EFY up to April 15, 2018).This waiver is
3. Urban infrastructure maintenance given due to the severe depreciation
expenditure report (disaggregated by of Birr in October 2017 and the
categories) under the CIP for the EFY need to encourage cities to budget
more for maintenance.
For 3rd APA revised plans approved
by regions not later than April 30,
2020 accepted and can be used in
the assessment. This is due to
COVID-19 where ULGs where
directed by MUDCo with
agreement of the World Bank to
revise their CIPs to respond to
COVID -19

2 Actual Maintenance
1. Urban infrastructure maintenance physical
1 ULGs have developed a clear maintenance prior 10 plan (disaggregated by categories and To ensure sustainability *As above.
budget and actual implementation rate (review locations) under the CIP for the EFY. in the investments
overall budget and utilization rate in final 2. Urban infrastructure maintenance physical through effective
accounts of all maintenance projects to review progress report (disaggregated by categories recurrent and
actual maintenance) is minimum 80% (financial) and locations) under the CIP for the EFY. rehabilitative
of the planned. indicator: The assessment table 3. Urban infrastructure expenditure reports maintenance of
compiled by the APA Consultants should such as from IBEX, Road Fund, payment infrastructure and
consist of ALL planned maintenance projects as certificates, etc. (disaggregated by categories facilities
per the AMP/CIP* (and not just the sampled and locations) under the CIP for the EFY.
ones) whose budgets and expenditures will be
individually stated and aggregated to arrive at
the utilization rate.

NB: 1) only infrastructure asset including

construction machineries
2) Expenditure amounts which could only be
substantiated with actual financial transaction
documents such as IBEX,Road Fund, payment
certificates should only be considered. Reports
which are not supported with actual transaction

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 Maximum
No. Performance Measure / Indicators Evidence to be Produced Objective
points Waivers/Exceptions/Clarifications

documents will not be acceptable.

3.3 Quality of Infrastructure 3

0

1 Value for the money in the infrastructure prior 25 The following evidence will be presented by Ensure efficient and
investments funded by the UIIDP. The VfM audit OFAG or independent consultant to APA high- quality
will be conducted as a separate exercise from the Consultants to make the assessment on infrastructure and service
APA and then calibrated from 0 – 30 points. “quality of infrastructure”: delivery
1. Draft Final Report (or Final Report if
available at the time) from OFAG or
independent consultant on the VfM Audit.
The scoring by OFAG (or its delegate) will
be questioned and evaluated by the APA
Consultant based on the evidences
presented. OFAG (or its delegate) shall, if
applicable, make appropriate adjustments to
the scoring based on the comments of APA,
WB or MUDCo.
The following evidences will be presented by
cities to OFAG or independent consultant to
carry out the VfM Audit:
1.Urban infrastructure physical
implementation/ progress report
(disaggregated by categories and locations)
under the CIP for the pervious FYs since the
beginning of the program
2. Urban infrastructure budget expenditure
report (disaggregated by categories and
locations) under the CIP for the pervious
FYs since the beginning of the program
3. Design documents, bidding documents
including specifications and bill of quantities
for all items procured.
4. Contract agreement and contract
amendments for all items procured.
5. Change Orders and payment certificates for
all items procured.

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 Maximum
No. Performance Measure / Indicators Evidence to be Produced Objective
points Waivers/Exceptions/Clarifications

Provisional and final handover (acceptance)

for all items procured.
1. List of recommendations from the previous
2 Proportion of recommendations of previous VFM prior 5 VFM report. To ensure and enhance
audit addressed (80 to 100% gets full mark; 50 to 2. Quarterly progress report of cities the quality of VFM audit
80% gets half mark and below 50% will get zero) 3. VfM auditor to report back on follow-up and response the
actions for the previous recommendations implementation of
and on number and percentage of recommendations for
recommendations addressed/not addressed assuring sustainability
4. APA Consultant to capture from the VfM and operationality of the
audit Reports the percentage of investment.
recommendations addressed and also
state/list in the ULG reports the
recommendations not addressed

1. MUDCo’s record of
3.4 Timely completion and operation of Prior 20 uncompleted To ensure use of For the 3rd and subsequent
infrastructure contracts and infrastructures for the APAs the score for this sub
contracts that are intended purpose indicator will be 20 by taking 5
completed but not points from sub-sub indicator 3.1.1
operationalized from and 5 points from sub-sub indicator
Bank-funded 3.3.1.
projects
2. Field verification of Operational means providing
the investment services as envisaged in the project
projects (from the design
MUDCo’s report
and Consultant’s
own finding from
various sources).
 A city with one investment project with
original completion date extended beyond
one year and still under construction during
the APA will get zero point.

 A city with one investment project

completed but not operational for one year

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 Maximum
No. Performance Measure / Indicators Evidence to be Produced Objective
points Waivers/Exceptions/Clarifications

and above (from the time of the APA) will

get zero point

Note: The “execution rate” will be determined by a review of the monthly engineer’s progress reports, bills of quantities, and verified by the physical progress against planned targets.
Hence, for projects not yet fully completed, e.g. a road project, the team will review the progress on the major items in the bills of quantities, both in the regular monthly reports from the
engineer, as well as through field trip verification of the actual implementation rate. The % (rate), of completion measured by the bills of quantifies and physical progress against planned
annual target will be determined for each project as the status was in the situation at the end of each Fiscal Year. The completion rate (%) of each project, when determined, will then be
weighted with the relative contracted size of the projects (or portion of contract size for the budget year under consideration) to get an aggregate result, see the example below.

3.1.1. Urban Infrastructure Targets &Weighted Completion Rates– Calculation Example

APA Consultants will use the Excel Model to be provided by MUDCo which contains a template of the following example

Output table (copy white/green cells to APA report, best by "Paste Special")

Physical and financial targets

Actually Implement. Creditable
Civil works project planned for Total
Unit Procur. Plan This EFY Achieved Ratio Amount
previous EFY contract
(a) (c) (d) (e)=(d)/(c) (f)=(c)*(e)
(b)
Phys. m 200 200 200 110
Name_of_project 55% 495,000
Financ. ETB 1,000,000 900,000 900,000 375,000
Phys. m 400 350 350 350
Name_of_project 100% 987,000
Financ. ETB 1,000,000 987,000 987,000 375,000
Phys. m 400 400 190 380
Name_of_project 100% 890,000
Financ. ETB 2,000,000 1,800,000 890,000 375,000
Phys. m 200 200 200 120
Name_of_project 60% 540,000
Financ. ETB 1,000,000 900,000 900,000 333,000
Phys. m 200 200 200 120
Name_of_project 60% 540,000
Financ. ETB 1,000,000 900,000 900,000 375,000
Name_of_project Phys. m 200 200 200 110 55% 495,000

P a g e 82 | 186
 Financ. ETB 1,000,000 900,000 900,000 375,000
Phys. m 200 200 200 110
Name_of_project 55% 495
Financ. ETB 1,000,000 900,000 900 375,000
Phys. m 200 200 190 110
Name_of_project 58% 515,263
Financ. ETB 1,000,000 900,000 890,000 375,000
Phys. m 200 200 200 110
Name_of_project 55% 495,000
Financ. ETB 1,000,000 900,000 900,000 375,000
Phys. m 200 200 200 100
Name_of_project 50% 450,000
Financ. ETB 1,000,000 900,000 900,000 375,000
Phys. m 200 0 200 0
Name_of_project 0% 0
Financ. ETB 1,000,000 0 1,000,000 0
Phys. m 200 0 200 0
Name_of_project 0% 0
Financ. ETB 1,000,000 0 1,000,000 0
Phys. m 200 0 200 0
Name_of_project 0% 0
Financ. ETB 1,000,000 0 1,000,000 0
Phys. m 200 200 200 110
Name_of_project 55% 495,000
Financ. ETB 1,000,000 900,000 900,000 375,000
Phys. m 200 200 200 110
Name_of_project 55% 495,000
Financ. ETB 1,000,000 900,000 900,000 375,000
Phys. m 200 200 120 110
Name_of_project 92% 458,333
Financ. ETB 1,000,000 900,000 500,000 375,000
Phys. m etc etc etc etc
Name_of_project etc etc
Financ. ETB etc etc etc etc
(c) (e)=(f)/(c) (f)
Aggregate
82,000,000 71,287,000 59,859,757 28,958,000 63.34% 37,914,728

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 Score (maximum 20 points): 12.67 points

Note: Where contract agreement has not been signed or the project has not been started, the project should still be included in the Table and the planned
figure from the Annual Action Plan will be used in place of the “financial amount as per signed contract agreement” in column (b).

3.2.2.1.Maintenance implementation rate for each ULG - Calculation Example

APA Consultants will use the Excel Model to be provided by MUDCo which contains a template of the following example

Actual Maintenance in ABC_city

Input Table (Insert raw data into yellow cells)

Item Budget (ETB) Actual (ETB)

X_road 3,000,000.00 2,900,000.00
B_drain 1,234,567.89 1,356,789.00
C_else 1,000,000.00 1,100,000.00
Etc 1,000,000.00 900,000.00
Etc 999,888.77 999,777.88
Etc 13,579.00 0.00
Etc 0.00 2,468.00

Output table (copy white/green cells to APA report, best by "Paste Special")

Budget Creditable
Maintenance Item Actual (ETB)
(ETB) (ETB)
X_road 3,000,000 2,900,000 2,900,000
B_drain 1,234,568 1,356,789 1,234,568

P a g e 84 | 186
C_else 1,000,000 1,100,000 1,000,000
Etc 1,000,000 900,000 900,000
Etc 999,889 999,778 999,778
Etc 13,579 0 0
Etc 0 2,468 0
Total 7,248,036 7,259,035 7,034,346
Implementation
97.1%
Rate:
Score (points): 10

3.3.1. VfM Satisfactory Level for each ULG - Calculation Example

VfM Weighted
Contract amounts in
Projects Satisfactory contract
Birr
level amounts
Project 1 100,000 70% 70,000
Project 2 500,000 80% 400,000
Project 3 1,000,000 90% 900,000
Total Project Costs 1,600,000 1,370,000
Weighted VfM Satisfactory Level for this ULG (=1,370,000/1,600,000) 86%

This ULG would then get from the APA Consultant 21.50 points i.e. (25*86%) in the APA for this indicator.

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 9 DLI 4 GUIDELINE – LOCAL ECONOMIC DEVELOPMENT, URBAN RESILIENCE
AND GENDER MAINSTREAMING

This is a new DLI to support the achievement of the additional emphasis in the PDO on local economic development. The new DLI also accommodates Job
Creation which has been moved from DLI 3 and also new performance indicators on urban resilience and gender mainstreaming.

Waivers/
Year Maximum
No. Performance Measure / Indicators Evidence to be Produced Objective Exceptions/
Assessed points
Clarifications

4.1. Local Economic Development 40 DLI 4 performance

measures will only be
applied as from the
2nd APA

1 Job creation 20
1. No. of people employed in infrastructure works;
1 No. of people employed through infrastructure prior 10 disaggregated by gender and age
works under UIIDP against annual target 2. Data collected from contractor’s log books, job
registration in the M&E system of projects, and so on.
Scoring: max 10 points for achieving 100%; calibrated
proportionally; decimals will be rounded to the nearest
whole number
1. No. of people employed in firms provided with ULGs shall be
2 No. of people employed in firms provided with prior 10 serviced land and/or MSE sheds in the last year evaluated against
serviced land21 and/or MSE sheds22 under CIP against targets in CIP their own regular plan
against annual target 2. Data collected from ULG’s records, APA consultants versus achievements.
to visit minimum 3 plots of land or MSE sheds to
verify firms are operational, and so on.
Scoring: max 10 points for achieving 100%; calibrated
proportionally; decimals will be rounded to the nearest
whole number

21
This refers to all serviced land allotted to firms engaged in economic activities including agriculture, services and manufacturing.
22
This refers to working premises / sheds allotted to microenterprises, which should be serviced and provided with water, electricity and a connective road

P a g e 86 | 186
 Waivers/
Year Maximum
No. Performance Measure / Indicators Evidence to be Produced Objective Exceptions/
Assessed points
Clarifications

2 Public private dialogue 10

1. Existence of meeting agenda and minutes, including
1 ULG held at least 2 public private dialogue/open Prior 5 participant list, agreed actions/ responsibility/ timeline Due to COVID-19
meetings with city mayor and a wide range of 2. Private sector representatives should include: (i) trader’s restrictions on
private sector representatives associations, (ii) local chamber of commerce, (iii) local travel and
business owners and MSEs; and (iv) foreign and social/work
-structured meeting, mayor participation, gatherings including
presentation of constraints and economic domestic investors from industrial parks (if any)
ban on workshops,
potentials to inform the CIP. Scoring: If all satisfied: 5 points, otherwise 0 point. for the 3rd APA at
least one meeting
should have been
held in EFY 2012

2 Implementation of min. 2 agreed actions from Prior 5 1. Subsequent meeting minutes indicate that at least 2 For 3rd APA, other
each meeting agreed actions were implemented per meeting – 5 points, documentary
otherwise 0 point. evidence of action
taken will also be
acceptable where a
ULG has not held a
second meeting.

3 Micro Small Enterprise 10

1. Support can include: MSE setting up, working premises,
1 No. of MSEs supported through open business Prior 3 financing/loan or training Annual target
plan competitions, against annual target 2. Open business plan competition will be verified by should be stated in
evidence of public issue of call for business plan through the CIP or other
public media channels official document of
3. Business plan the ULG that was
4. Records of MSE office prepared at the start
of the year being
assessed.
Scoring: Max 3 points for achieving 100%; otherwise
calibrated proportionally, decimals will be rounded to the
nearest whole number. If 0 planned, then 0 point.

2 No. of MSE One Stop Center (OSC) supported to Prior 4 Fully functional OSC means: Annual target
be fully functional throughout the years against should be stated in
annual target 1. caters for 15,000 individuals or maximum of 500 MSEs; the CIP or other

P a g e 87 | 186
 Waivers/
Year Maximum
No. Performance Measure / Indicators Evidence to be Produced Objective Exceptions/
Assessed points
Clarifications
2. has at least 5 key positions filled23;
3. is equipped with equipment and furniture; official document of
4. provides fundamental trainings to staffs, at least 2 areas the ULG that was
in the OSC Service Provision Standard 2017; prepared at the start
5. Documents consultation notes as an evidence of of the year being
operationality. assessed.

Scoring: max 4 points for achieving 100%; otherwise

calibrated proportionally, decimals will be rounded to the
nearest whole number. If 0 planned, then 0 point.

3 No. of graduated MSEs provided with support Prior 3 1. follow up of status/progress of graduated MSEs and Annual target
from the Medium Manufacturing Enterprises continue training and coaching for two years should be stated in
Development Unit in the city administration, the CIP or other
against annual target official document of
Scoring: Max 3 points for achieving 100%; otherwise the ULG that was
calibrated proportionally, decimals will be rounded to the prepared at the start
nearest whole number. If 0 planned, then 0 point. of the year being
assessed.

4.2. Urban Resilience 30

1. DRM and emergency response 30 To promote disaster

management and
emergency response

1. Disaster and Climate Risk Management 10 Risk map(s) developed showing flood/landslide/earthquake *Applies only in the
risk areas, prepared in accordance to guidelines developed 2nd APA
by MUDCo and Disaster Risk Management Commission.*
Scoring: Yes/No

23
According to the new One Stop Center Service Provision Standard (2017), the following seven positions are the key staffs: 1. OSC coordinator; 2. Office Administrator/Secretary/Information
Desk; 3. Job Seekers Registration, Trade Registration, Trade License, and TIN preparation Expert; 4. Saving and Loan Facilitation Officer; 5. Accounts and Audit Officer; 6. Production and
Sells Site Facilitation, Training Industry Extension and Market Linkage Expert; 7. Graduation/Transfer facilitation expert

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 Waivers/
Year Maximum
No. Performance Measure / Indicators Evidence to be Produced Objective Exceptions/
Assessed points
Clarifications

1.Current 1. Risk map(s) developed and/or updated within the last

5
five years showing flood/landslide/earthquake risk areas,
COVID-19 hot spot areas prepared in accordance to
guidelines developed by MUDCo and Disaster Risk
Management Commission or best available science on
exposure to flood/landslide due to climate change
2.Prior 2. Capital projects in the CIP and annual budget are located
5
to avoid exposure to or prevent damage from historic and
climate-effected levels of flood and landslide (as shown in Applies in 3rd APA
GIS and other maps of CIP projects compared to risk maps,
and considering whether the purpose of the project is to
provide resilience to flood/landslide).
APA consultants are required to review and apply the latest
CIP Manual (applicable for the year being reviewed) in
their assessment.

1.Current 5 1. Hazard map(s) developed and/or updated within the last

five years showing flood/landslide/earthquake areas,
prepared in accordance to guidelines developed by
MUDCo and Disaster Risk Management Commission or
best available science on exposure to flood/landslide.
 Hazard maps are integrated into planning instruments
2.Prior (and these could include area, zonal, regional planning Applies in 4th APA
and even urban planning policies)- 3 points and following years
for CIP; 4th APA for
 Consultative process conducted within ULG to
evidence of proper
develop cities exposure database and priority actions
procurement as
for hazard, exposure and vulnerability reduction-1
shown in the CIP
point1
from the 3rd APA
 Development of an exposure/asset database as basis
for prioritizing disaster risk reduction investments – 1
5 point

2. Capital projects in the CIP and annual budget are located

to avoid exposure to or prevent damage from flood and

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 Waivers/
Year Maximum
No. Performance Measure / Indicators Evidence to be Produced Objective Exceptions/
Assessed points
Clarifications

landslide hazards (as shown in GIS and other maps of CIP

projects compared to hazard maps, and considering whether
the project accounts for resilience to flooding/landslides).
APA consultants are required to review and apply the latest
CIP Manual (applicable for the year being reviewed) in
their assessment.
Scoring: Yes/No

Emergency response unit established with minimum

staffing including DRM officer, rapid assessment officer,
2. Emergency Response institutional structure Current 10 and emergency response officer.
Scoring: Yes/No

3. Emergency Response Plan Current 10 Emergency Response Plan developed and approved by the *Applies only in the
city council/mayor. * 2nd APA
The emergency response plan should contain these
elements: (i) Emergency Declaration/Proclamation Process;
(ii) Response Activities/Process; (iii) Direction, Control
and Coordination; (iv) Responsibilities; (v)
Communications; (vi) Administration, Finance and
Logistics; (vii) Plan Development and Maintenance

Scoring: Yes/No

Current 10 APA reviewers are to review and apply MUDCo and Scoring in 3rd APA:
Disaster Risk Management Commission guidelines. In the
3rd and following APAs, reviews are to include assessment
of the plan and proposed response activities according to
their ability to reduce the risks as identified on the maps
provided in accordance with 4.2.1 (item 1) and impacts
listed in 4.2.1 (item 3).
Emergency Response Plan addresses all listed elements, 2

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 Waivers/
Year Maximum
No. Performance Measure / Indicators Evidence to be Produced Objective Exceptions/
Assessed points
Clarifications

points possible; addresses all risks as noted in 4.2.1 (item

1), 4 points; addresses all impacts as noted in 4.2.1 (item
3), 4 points.

Current APA reviewers are to review and apply MUDCo and Scoring in 4th APA
Disaster Risk Management Commission guidelines. In the
3rd and following APAs, reviews include assessment of the
plan and proposed response activities according to their
ability to reduce the risks as identified on the maps
provided in accordance with 4.2.1.1.
Scoring:
Emergency Response Plan addresses the elements listed
above, in particular the Plans contain the following: (i)
Planning and Coordination Team, (ii) Main Hazards and
10 Vulnerabilities, (iii) Roles and Responsibilities for
Emergency Coordination, (iv) Roles and Responsibilities
for Emergency Support Functions. - 2 points
 Emergency Response Plan addresses landslides,
earthquakes, floods etc as relevant and their expected
impacts as noted in 4.2.1.1- 4 points
 Emergency Contingency Planning exercise conducted
(e.g. in consideration of disaster scenario, Emergency
Support Functions etc) -2 points
Main roles and responsibilities for Emergency Response
have been assigned – 2 points -2 points

DLI 4 performance
measures are only
4.3. Gender Mainstreaming 30
applied starting from
the 2nd APA

1. Women’s voice and rights 7

1. Women’s participation in decision making current 2 Invitation letters or call-for-meeting notices posted in Due to COVID-19
process: public places or through mass media for the public to restrictions on
attend consultation meetings, indicating time, place, gathering of persons

P a g e 91 | 186
 Waivers/
Year Maximum
No. Performance Measure / Indicators Evidence to be Produced Objective Exceptions/
Assessed points
Clarifications

and purpose of the meetings. (social distancing),

ULGs can
1. total women involved in all consultation The letters/notices for the initial consultation alternatively use
meetings >50% meetings must make it clear that women will meet various forms of
separately from men, and must state clearly time and public consultations
place for the women-only meeting. and these alternatives
2. women involved in the meeting for the final will be acceptable for
choice of investments >50% the 3rd APA.
Evidences for each individual women-only meeting:
*Linked to Performance Measure 2.1.2 1. Signed attendance sheets, indicating community or
citizen participation
citizens/social groups they represent,
2. Meeting minutes documenting: a) time and place
of the meeting, b) meeting agenda, c) additional
issues raised by the participants, d) course of the
discussion incl. points raised, proposals made, and
arguments put forward by the participants, e)
conclusions, voting results, and prioritized proposals,
and f) photographs and/or audio/video records.
Scoring: If all fulfilled, then 2 points, otherwise 0
point.

2. Women’s voice heard 2 Minutes of participatory consultations indicating a As above

compiled list of issues raised by women during
consultations,
*Linked to Performance Measure 2.1.2 Scoring: Yes/No
citizen participation

3. No. of awareness raising workshop/training on current 3 Workshop/training on women’s right in workplace (gender- Waived for 3rd APA
women’s right in workplace against annual target based violence, sexual harassment, and equal payment due to COVID-19
gender awareness, & other contextual gender related issues restrictions on
of the ULGs such as Girls & women’s right to education) travel and
social/work

P a g e 92 | 186
 Waivers/
Year Maximum
No. Performance Measure / Indicators Evidence to be Produced Objective Exceptions/
Assessed points
Clarifications

targeting both men and women. gatherings including

ban on workshops.
Annual target must be consistent with capacity building
plan and gender development plan. No scoring for this
indicator and the DLI
Evidence: Program/workshop attendance sheet (aggregated 2 score obtained for
by gender), capacity building plan and gender development other indicators will
plan. be proportionately
Scoring: raised to 100

Minimum three workshops/trainings in the year, otherwise

0 point.
3 points for 100% achievement; otherwise, calibrated
proportionally, decimals will be rounded to the nearest
whole number.

2. Gender mainstreaming system 13

1. Gender-balanced employment: prior 3 Evidence: ULG Civil Service HR Report Professional is

Grade10 plus 4 with
1. Proportion of women public professionals in the Scoring: minimum Diploma.
city administration These are positions
women professionals >= 25% (1 point)
within the city
women professionals >= 35% (2 points) administration
women professionals >= 45% (3 points) permanent structure
and does not include
contract positions.

2. Proportion of women on managerial positions prior 3 Evidence: ULG Civil Service HR Report
such as office heads, city manager, mayor and
Scoring:
deputy mayor ,department head, deputy head of
department ,process head , in the city women leadership >= 20% (1 point)
administration
women leadership >= 30% (2 points)
women leadership >= 40% (3 points)

2. 1. Gender focal person dedicated for UIIDP current 3 Evidence:

2. Annual gender and development planning and 1. Gender focal person dedicated for UIIDP in place in

P a g e 93 | 186
 Waivers/
Year Maximum
No. Performance Measure / Indicators Evidence to be Produced Objective Exceptions/
Assessed points
Clarifications

budgeting WCO or/and UIIDP coordination team”

2. Annual gender development plan and budget
(template/manual in POM): i) approved by the city council,
ii) consistent with ULG annual plan and budget, capacity
building plan, and gender mainstreaming guideline*
NB. *Gender mainstreaming guideline is only valid when
gender and youth mainstreaming directorate in MUDCo
developed and disseminated it.The Gender mainstreaming
guideline referred to here is the Gender and Development
Manual dated May 9, 2018 prepared by the UIIDP Team
with full participation of gender and youth mainstreaming
directorate in MUDCO and distributed by MUDCo to
regions/ULGs.
Scoring: If all above satisfied, then 3 points,
otherwise 0 point.

3. 1.Quarterly meeting with gender focal persons prior 4 Evidence: Waived for 3rd APA
from each sector Office due to COVID-19
1.Signed attendance sheet of focal persons (indicating restrictions on
2. More than 80% of gender activities in the gender, occupation) from each sector Office and meeting travel and
gender plan successfully completed and more than notes (quarterly) social/work
80% of the funds budgeted in the gender plan are gatherings including
utilized. 2. Periodic gender progress report that shows the plan-
versus-achievement comparison of budget and activities ban on workshops.
Scoring: If one of two satisfied, then 2 points. No scoring fir this
If both satisfied, then 4 points. indicator and the DLI
2 score obtained for
other indicators will
be proportionately
raised to 100.

3. Economic empowerment 10

1. % of women employed through infrastructure Prior 2 Evidence:

works under UIIDP
1. No. of people employed in infrastructure works;
disaggregated by gender and age
2. Data collected from contractor’s log books, job

P a g e 94 | 186
 Waivers/
Year Maximum
No. Performance Measure / Indicators Evidence to be Produced Objective Exceptions/
Assessed points
Clarifications
registration in the M&E system of projects, and so on.
*linked to 4.1.1.1 LED indicator
Scoring:
women >= 30% (1 point)
women >= 40% (2 points)

2. % of women employed in firms provided with Prior 3 Evidence:

serviced land24 and/or MSE sheds25 under CIP
1. No. of people employed in firms provided with
serviced land and/or MSE sheds in the last year
against targets in CIP
*linked to 4.1.1.2 LED indicator 2. Data collected from ULG’s records, APA consultants
to visit minimum 3 plots of land or MSE sheds to
verify firms are operational, and so on.
Scoring:
women >= 30% (1 point)
women >= 40% (2 points)
women >= 50% (3 points)

3. % of women-headed MSEs supported to access Prior 3 Evidence:

working premises/sheds and/or serviced land
under UIIDP 1. Records of MSE office
2. Data collected from ULG’s records
Scoring:
women >= 20% (1 point)
women >= 30% (2 points)
women >= 40% (3 points)

4 %of women-headed MSEs awarded with civil Prior 2 Evidence:

works contracts under UIIDP
1. Records of MSE office
24
This refers to all serviced land allotted to firms engaged in economic activities including agriculture, services and manufacturing.
25
This refers to working premises / sheds allotted to microenterprises, which should be serviced and provided with water, electricity and a connective road

P a g e 95 | 186
 Waivers/
Year Maximum
No. Performance Measure / Indicators Evidence to be Produced Objective Exceptions/
Assessed points
Clarifications
2. Data collected from ULG’s records
More than 10% (1 point), more than 20% (2
points) Scoring:
women >= 10% (1 point)
women >= 20% (2 points)

*Progress of projects monitored through monthly engineer’s reports, bills of quantities and field verification by the APA team.

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10 DLI # 5, 6, 7, 8 AND 9 GUIDELINES – REGIONAL
AGENCIES PERFORMANCE

10.1 INTRODUCTION

Regional government BUDCos will be the main coordinating RIA. They will be
responsible for the following:
 Capacity building of the ULGs in their jurisdiction;
 Consolidation of progress reports from ULGs; and
 Oversight functions and backstopping support on various tasks related with the
UIIDP implementation.

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 10.2 DLIS 5, 6,7, 8 AND 9: RIA PERFORMANCE MEASURES,

DLI No. Regional Implementing Agency / Performance Year Scoring Evidence to be Produced Application
Measures Assessed
5 Bureau of Urban Development, Housing and Construction (or regional state equivalent)
1. Regional government capacity building and support teams
in place and deliver effective capacity building services to
ULGs
1 1. Regional government has developed plans according to current 1. Capacity Building Plan of and TOR for CB Plan for region & 1st APA
formats in the POM regional mobile capacity building and mentoring TOR for regional team. (2018 with
teams and positions are in place. The capacity impact on
2. Regional mobile capacity building & mentoring teams building plan cover all 4 modalities and at least FY2019/20)
are in place and are operating. 80% of the thematic focus areas from the POM.
The plan is prepared with inputs from the
regional entities.
2. Teams are in place and operating. More than
80% of the staff in place: 100% allocation, 50-
80%: 50% allocation, less than 50%: No
allocation.
Scoring:(Result 1) must be in achieved before
any points (allocations) are awarded.
Calibration (reduction) against achievement rate
on item 2: teams in place.
2 1. Regional government has developed plans according to current 1.Capacity Building Plan of and TOR for CBP; Staff assignment 2nd APA
formats in the POM. regional mobile CB & mentoring teams and letters and physical (2019 with
positions are in place. The capacity building plan check/confirmation; impact on
2. Regional mobile CB & mentoring teams are in place cover all 4 modalities and at least 80% of the service delivery standards 2020/21)
and are operating, thematic focus areas from the POM. The plan is issued to ULGs;
3. Needs assessments prepared with inputs from the regional entities. implementation reports.

4. Regional governments have disseminated service 2.Teams are in place and operating. More than Work plan, evidence of
delivery standards (as issued by MUDCo) toEligible 80% of the staff in place: 100% allocation; 50- approval by the client,
ULGs, and provided guidance in implementation 80%: 50% allocation; less than 50%: no approved ToR for
(reports). allocation. (weight 40 %) regional team.
3. Annual capacity building need assessment has

P a g e 98 | 186
DLI No. Regional Implementing Agency / Performance Year Scoring Evidence to be Produced Application
Measures Assessed

been done by involving all regional entities

covering all thematic areas and representatives
of the ULGs. If not, 40% reduction.

4. The region has disseminated service delivery

standards (as issued by MUDCo) to Eligible
ULGs. If not, 20% reduction.

Scoring: (Result 1) must be achieved to get

allocations. Calibration (reduction) in allocation
on target 2, 3 and 4 according to weightage if no
achievement of defined result.
3 1. Regional government has developed CB plan for the 1.current 1. Capacity Building Plan approved by Regional CBP for ongoing EFY; 3rdAPA (2020
ongoing EFY according to formats in the POM. Steering Committee and TOR for regional CBP for previous year and with impact
mobile CB & mentoring teams and positions are expenditures; Staff on 2021/22.);
2. Regional CB & mentoring teams are in place in place. The capacity building plan cover at assignment letters and
2. current 4th APA
3. Needs assessment least 4 modalities and all 80% of the thematic physical
3. current focus areas from the POM. The plan is prepared check/confirmation; (2021 with
4. Execution of the CB plan. with inputs from the regional entities. service delivery standards impact on
4. previous 2022/23)
5. Improvement in average scores of the ULGs within the issued to ULGs;
5. previous & 2. Teams are in place and operating. More than implementation reports
region on DLIs 2 and 3. 80% of the staff in place: 100% allocation; 50-
current
6. Timely submission of monthly, quarterly, semi-annual 80%: 50% allocation; less than 50%: no
6. previous
and annual reports by region to federal (MUDCo) as per allocation.(weight 30%)
the UIIDP M & E Guidelines 3. Annual capacity building need assessment has
been done by involving all regional entities
covering all thematic areas and representatives
of the ULGs. If not, 10 % reduction.
4. Execution of plan above 80%: full allocation;
execution between 60-80%: 80% allocation, 40-
59%: 40% allocation; and below 40%: no
allocation. Reduction based on a 25 %
weightage.
5. Average score on the ULGs on DLIs 2 and 3
(average) in the region should increase from the
previous year’s APA, otherwise proportional
reduction (weight: 25%, that is, max reduction

P a g e 99 | 186
DLI No. Regional Implementing Agency / Performance Year Scoring Evidence to be Produced Application
Measures Assessed

25 %)
6. Timely submission of monthly, quarterly,
semi-annual and annual reports by region to
federal (MUDCo) as per the UIIDP M & E
Guidelines (weight: 10%, that is, max reduction
10 %)
Scoring: (Result 1) has to be in place to get
allocations. Calibration (Reduction) in
allocation on target 2, 3, 4, 5 and 6 according to
weightage.
6 Office of the Regional Auditor General

1 ORAGs carry out timely audits of ULGs’ financial reports current Scoring calibrated by number of ULGs for Audit Reports of ULGs 1st to 4th
(final audit report is issued within six Ethiopian calendar which ORAG has conducted external audit and and letters from ORAG APAs
months from the end of the EFY to which the audit delivered audit report in a thorough and timely issuing the audit report.
refers,). (within six Ethiopian calendar months from the
end of the EFY to which the audit refers,)
manner.
As a minimum condition to access fund related
to audit of a ULG, ORAG must deliver timely
audit. If the condition is satisfied, scoring
calibrated as follow with full unit allocation if all
complied with:

(i) Quality of the report- -Audit Report -

consolidated audit report for the ULG should be
issued which review all sources and expenditure
of the ULG. The audit report should be
structured to include the following as a
minimum:
a. Cover letter from ORAG to City
b. Audited financial statements (Audited
accounts)- which includes at least- (i)
Statement of Financial Position for the
year end date (i.e. Balance Sheet), (ii)

P a g e 100 | 186
DLI No. Regional Implementing Agency / Performance Year Scoring Evidence to be Produced Application
Measures Assessed

Statement of Financial Performance

(or otherwise called Income &
Expenditure Statement or Statement of
Sources and Uses of Fund) of the last
EFY, and (iii) Post-closing trial
balance of the last EFY; The audited
financial statements’ balance should
match with the IBEX reports (at least
for treasury, UIIDP, and UIF)”
c. Notes or schedules supporting the financial
statement which could include Revenue
Summary of the last EFY, Recurrent
Expenditure Summary of the last EFY,
Capital Expenditure Summary of the last
EFY, Transfer Report, Receivable Report,
Payable Report, etc.;
d. Short form Audit report which includes as a
minimum the following paragraphs:
i. The mentioning of city’s financial
statement under audit stating the
period covered by the audit;
ii. The main accounting
standards/policy in use by the city
and the audit standards followed;
iii. The responsibilities of city
management and that of the auditor,
iv. The basis of opinion- key findings
leading to qualifications if any. This
is only needed if there are
qualification points that will qualify
the audit opinion;
v. The Audit opinion expressed-
clearly stating the opinion
expressed-that is, Unqualified
(unmodified), qualified, Adverse,

P a g e 101 | 186
DLI No. Regional Implementing Agency / Performance Year Scoring Evidence to be Produced Application
Measures Assessed

Disclaimer.
e. Long for audit Report or Management letter
or Internal Control Memorandum that
details out findings on internal control
weaknesses and noncompliance with
rules/regulations
(ii)Audit opinion- -The fairness or correctness
of the opinion expressed -the fairness of the
audit opinion by looking at the findings reported
in the short form audit report and the long form
or management letter.

Reduction by 25% per ULG if all the criteria

indicated in (i) is not complied with for these
ULGs,
Reduction by 25% per ULG if (ii) is not
complied with for these ULGs.

7 Regional Environment, Forest and Climate Change

Commission
1 Regional Environment, Forest and Climate Change prior Scoring calibrated per ULG for which the Safeguards Audit/Review 1st to 4th
Commissions (REFCCs) carry out timely review of ULG REFCC has performed timely review/audit as Reports. APAs
safeguards compliance. This indicator will be fulfilled per standard (report template) and approval of
when the REFCCs have carried out the safeguards safeguard documents with acceptable
reviews/audits of ULGs in their jurisdictions by end categorization of projects and review of
October implementation capacity for environmental and
social mitigation and monitoring measures for
CIP and annual environmental and social audits.

As a minimum condition to access funds for

audit of a ULG: timely environmental audit (by
end of October), and appropriate and timely
Review and Endorsement of ALL Screening
Reports and Safeguards instruments like
ESMPs, RAPs presented by ULGs; and the

P a g e 102 | 186
DLI No. Regional Implementing Agency / Performance Year Scoring Evidence to be Produced Application
Measures Assessed
calibration as follows::

(i) Quality of audit must indicate:

 Key staffing involved: environmental
specialist, social specialist
 Evidence of site visits on at least 20%
of subprojects
 Evidence of follow-up of previous
audit recommendations
(ii) REFCC has to ensure timely review and
approval of safeguards instruments with the
required quality of standards and with acceptable
categorization of projects as per the ESMSG.

Reduction by 25% per ULG if (i) is not

complied with.
Reduction by 25% per ULG if (ii) is not
complied with.
8 Regional Revenue Authority

1 RRBs support ULGs’ efforts to mobilize revenue. prior As a minimum condition to access funds for Minutes of consultation/ 1st to 4th
support to a ULG is that: Capacity building focal support meetings between APAs
point in place to coordinate with RMTs. RRB/BoFED and ULGs;
The RRB has provided inputs to annual capacity up-to-date tax bands for
building program.Then the calibration is as major taxes and charges.
follows:
(i) The numbers of ULGs where regions have
conducted consultative meetings with ULGs
of municipal revenues/tariff/tax rates and
bands, evidenced by meeting minutes
weighting 25% of total allocation per ULG.
(ii) Review tariff and tax directive and provide
ULG’s flexibility compared to the previous
year weighting 25% of total allocation per

P a g e 103 | 186
DLI No. Regional Implementing Agency / Performance Year Scoring Evidence to be Produced Application
Measures Assessed

ULG.
(iii) Technical review, feedback of ULG’s REP,
weighting 25% of total allocation per ULG.
(iv) Undertake revenue potential studies
(including user fees) for at least 30% of
participating ULGs, weighing 25% of total
allocation per ULG.

For example, if a region has provided support on

(i) and (iii), but not (ii) and (iv) for a ULG, it
will get the annual disbursement amount X 50%
for this ULG.

9 Regional Procurement Audit by the RPPPAAs

1. Procurement Audit report produced timely. prior First Year, RPPPAA must prepare a 1st APA
procurement audit plan with TOR for the audit
to get access to funds.

From Second APA: 2st to 4th

As a minimum condition to access fund APAs
related to audit of a ULG, RPPPAA must deliver Procurement Audit with
timely audit (by no later than six Ethiopian its transmittal letter dated
calendar months after the end of the EFY). no later than six
If the condition is satisfied, scoring calibrated as Ethiopian calendar
shown in (2) and (3) below: -: months after the end of
the EFY
2. Quality of Audit (25% reduction max) prior Audit Planning Sampling, Audit Execution, and Audit report duly signed
Audit Reporting as per the TOR included in the by the RPPPAA.
POM
1. The Audit Planning includes audit Attendance sheets for
schedules, audit entry meeting; timely Audit entry and exit

P a g e 104 | 186
DLI No. Regional Implementing Agency / Performance Year Scoring Evidence to be Produced Application
Measures Assessed
notification of the auditee on the audit meetings.
to be conducted;
2. The Audit staff/consultant shall have a Letters from RPPPAA
minimum of 5 years relevant notifying the auditee on
experience and BA/BSC Degree in the audit schedule;
procurement and supply chain Letters from RPPPAA
management, Economics, Law, submitting the Audit
Engineering, Management, reports.
Accounting or other related fields of
study
3. The selected samples are
representative considering the nature,
complexity, value, and method of
procurement;
4. The Audit was conducted as scheduled
without unnecessary disruptions;
5. The Audit Report is completed with
enough documentation of the auditing
procedures followed, audits carried out
on all the stages of the procurement
and contract management process,
audit findings/recommendations; audit
report written in a clear language and
concise and manner;
6. Consistency of Audit
Recommendations with Audit
findings;
RPPPAAs shall include audit plans, audit staff,
sampling methods, audit timeline and others to
be part of the audit reports as part of the main
body or in the annex. The procurement audit
shall be conducted as per the TOR enclosed
in Annex 6 of this APAG
Scoring:
If 5 out of 6 are satisfied, no reduction; if 4
out of 6 are satisfied, reduce 10%,
otherwise, reduction of 25%.

P a g e 105 | 186
DLI No. Regional Implementing Agency / Performance Year Scoring Evidence to be Produced Application
Measures Assessed
3. Follow up of implementation of Audit Findings and prior A checklist of audit findings/recommendations RPPPAAs’ audit
Recommendations (25% reduction max) showing all audit findings/recommendations of findings/recommendations
the previous year (including those spilled over follow up checklist.
from previous years, if not addressed); status of
implementation of each
finding/recommendation, action taken on
offenders
Scoring:
If not complied with 25% reduction for each
ULG where this is not complied with.

P a g e 106 | 186
11 ANNEXES

11.1 ANNEX 1: PROCEDURE FOR SELECTION OF SAMPLE

CONTRACTS AND TEMPLATES FOR PROCUREMENT
ASSESSMENT BY THE ANNUAL PERFORMANCE ASSESSMENT
CONSULTANT

Appendix 1: Procedure for Selection of the Sample Contracts

1. To assist the consultant/ in selecting the samples to be reviewed, the Client (or
ULG) will provide to the consultant, at the time of contract signature, comprehensive lists
of contracts, if available, for each city and copies of the relevant FAs and, Program
Appraisal Document (PAD), Integrated Fiduciary Assessment Report (IFA) and previous
audit reports and Annual Performance Assessment Reports. On the basis of the
information provided by the Client and other sources, the consultant will prepare the list
of contracts to be reviewed in each City.

2. The following criteria and considerations should be used in selecting the sample
contracts to be reviewed:

 Nature, size and complexity of contracts will be taken into considerations while
sampling the 25% of contracts for detail review. In addition, to the extent
possible, the review sample should cover most of the following
categories/scenarios:

 Nature: civil works, goods, service contracts, supply and installation,

consulting services;

 Complexity: simple, less complex and complex;

 Value: high, medium and low;

 Critical items: Contracts that are necessary for the success of the project;

 Method of Procurement: Pre-qualification, Single/Two Stage bidding,

ICB, NCB, LIB, Shopping Direct Contracting, etc. for goods/works;
QCBS, QBS, Least-Cost, Individual etc. for selection of consultants; and

 Contract awards: contracts awarded to the lowest evaluated bidder which

met the qualification criteria; awarded to higher bids as the lowest bidders
failed to meet the qualification criteria or for other reasons, etc, awards to

P a g e 107 | 186
 national or international firms, awards to single and multiple lots, awards
affected by domestic preference.

 Contract Management: Contract amendments, price revisions,

protests/claims during contract execution and bidding stages.

3. The consultant/ shall review project files with special focus on the following
aspects, documentation and procedures:

 Executing Agency's Capacity, Adequacy of Staff (availability and skills);

Role of Procurement Agents/Consultants; Implementation Arrangements;
defined procurement decision roles, maintenance of Minimum Access
Conditions.

 Procurement Plans and Monitoring;

 Advertising;

 Pre/Post Qualification;

 Short listing (for Consultancy)

 Bidding Documents;

 RFP (for consultancy)

 Bid Opening Minutes

 Evaluation and Awards;

 Technical Proposals Evaluation Report

 Combined evaluation report

 Bid Validity Extensions;

 Protests or complaints from Bidders/Contractors;

 Signed Contracts;

 Contract Amendments and Change/Variation Orders;

 Delays in payments; actual contract payments vs. contract award amount;

P a g e 108 | 186
  Securities (for Bid, Performance, Advances, Insurance, Liability, etc.);

 Contractors’ Claims/ Contractual Disputes and their Resolution;

 Damages and Penalties for Delays, non-compliance with Functional

Guarantees, etc.;

 Reasons for Slow Progress of Completion;

 Imports, Customs, etc. if any;

 List of deliverables and completion (date, description, quantity, location of

goods or works);

 Other Relevant Matters.

Using the documents and information itemized above and other information
collected during the review, the consultant shall compile a comprehensive history of the
procurement process for each contract reviewed.

4. Distortions in the procurement process are frequently manifested in one or more

of the following situations:

 low participation of bidders and reduced competition;

 one or more bidders winning a disproportionate amount of contracts in a
project over time;
 bid prices consistently over cost estimates and/or current market prices;
 significant number of changes from bid to contract award and to final
completion; and
 significant and recurring increases in the final contract price over the original
bid price and/or the original contract price.
 Significant Variation Orders (change orders);
 Inordinate delays in procurement decision making;
 Unjustified cancelation of procurement process;
 Repetitive request for extension of bid validities;
 Rejection of majority of bids and ending up with single qualifier

5. If patterns are identified in a series of contracts, which reflect any of the above
distortions, one or more of the contracts in the series should be selected for more detailed
review in the review sample.

P a g e 109 | 186
Appendix 2: Checklist of Data and Documents to be Made Available by the Client to
the APA Consultant for each City

Credit Agreement, Guarantee Agreement, Program/Project Agreement (the legal

documents).
All amendments to the legal documents.

Agreed Program Action plans,

Program/Project Operational Manual

Annual Performance Assessment Guideline (APAG)

Annual/semi-annual reports from the Executing Agencies, as available.

Financial audits.

Relevant Program/ Project Status Reports (PSRs); mission aide mémoires, relevant
correspondance files, etc.

Disbursement Data:

i. for the Credit:

(a) total credit amount;

(b) amount disbursed; and

(c)undisbursed balance.

ii. breakdown of disbursed amount:

(a) against each DLI;

In addition, the consultant will be given web references and, as needed, copies of
the Government Guidelines, Standard Bidding Documents and other relevant
procurement notes and policy statements including Regional Guidelines on Standard
Bidding Documents, Evaluation Reports, etc. A list of the Federal and Regional PPAs
publications, notes, etc., dealing with procurement and consultant services will be given
to the consultant so that they can request any additional publications, notes, etc., which
they may consider relevant.
P a g e 110 | 186
P a g e 111 | 186
Appendix 3: Checklist of Documentation to be provided by the ULGs

For All Contracts in the Audit Sample:

1. Updated Procurement Plan, including list of all contracts.

2. Publications in National Press and other Trade Journals.

3. National Competitive Bidding (NCB) procedures:

4. Consultant Contracts:

i. Request for Expressions of Interest (consultants), if applicable:

 date and publication.

ii. Request for Proposals and Short List (consultants):

iii. Addenda issued

iv. Evaluation of proposals (consultants):

v. Minutes of Negotiations and Signed Contract (consultants):

vi. Contract Addendum, if any:

5. Goods, works, technical services and consulting services contracts:

i. Invitation for pre-qualification, if any:

 date and publication.

ii. Prequalification Documents, if any:

 Clarification requested and issued; and

 Addenda issued.

iii. Prequalification Evaluation, if any:

P a g e 112 | 186
  Clarification requested and received; and

iv. Invitation for Bids:

 date and publication.

v. Bidding documents:

 Clarifications requested and issued;

 Addenda issued;

 Minutes of pre-bid and site meetings.

vi. Bid Evaluation Report:

 Minutes of bid opening;

 Clarifications requested and received;

 Complaints received and responses;

vii. Notification of Award/Letter of Acceptance

viii. Signed Contract:

ix. Contract Amendments, if any.

6. Any other relevant information/documentation required by the consultant relating

to contracts reviewed.

P a g e 113 | 186
Appendix 4: Procurement Performance Monitoring and Measurement
database/sheet

Appendix 5: Qualification and experience of procurement staff of the ULG

S.No. Name of Educational Number of For how For Is staff

procurement qualification and Years of many how familiar
staff of the area of experience months many with
ULG specialization in was the months procurement
Procurement position was the legal
(B.A in
filled in position documents?
Management, etc)
the past vacant
fiscal year in the
(EFY past Yes or No
====) fiscal
year
(EFY
====)

1.

2.

3.

4.

P a g e 114 | 186
Appendix 6: Identifying Sample Procurements

Procureme Planned Executed Sample

nt Method Size

Total
W G C

Consul

Consul
Works

Works
Goods

Goods
tancy

tancy

P a g e 115 | 186
 Appendix 7: List of Sampled Procurements (EFY -------)
Cont Proc.
S ract Meth Name and Specific Contr
Contract Contract
/ Amo od Address of the act
Description Reference No.
unt and Awarded Status
N
(Br.) Type
1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

P a g e 116 | 186
14.

15.

16.

17.

18.

19.

20.

21.

22.

23.

24.

25.

26.

P a g e 117 | 186
P a g e 118 | 186
 Appendix 8: Use of Proper Media, SBD for Advertising and Floating Period

S. Contract Reference Was Required Actual Were Bid Actual Was bid Were
No Number procureme advertiseme advertis correct floating bid openings minutes
. nt item nt needed to ement standard periods as floating conduct taken
included in be used as used bidding provided periods ed during
the per the law documents in the law for the immedia bid
approved used? contract tely openings
annual after bid acceptab
procureme Yes or No submissi le?
nt plan? on?
Yes or
Yes or No Yes or No
No

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

14.

15.

16.

17.

18.

19.

P a g e 119 | 186
20.

21.

22.

23.

24.

25.

26.

P a g e 120 | 186
 Appendix 9: Bid Evaluation and Contract Award

S/ Is Bid Bid Duration of Is the bid Is the Bid Are

N Evaluation Valid award of awarded Result Contract
consistent ity contract to the Communicate document
Contract with bidding Perio from bid legitimate d to: (Mention contents
Reference documents? d opening to bidder the media) complete
Number award within or
bid incomplete
validity ?
period?

Bidder Publi
s? c?

P a g e 121 | 186
Appendix 10: Implementation of procurement within planned time and contract

S Contract Original planned Actual Price Is Are

/ Referenc procurement cycle completio ther adequate
N e Number Time n e auditable
(Acceptan Tim procureme
ce) e nt records
and available in
/or a secured
Pric space?
e
Vari
anc
e?

Planne Planned Pre- Origin Final

d completi tender al (turnou
initiatio on cost t)
Contra
n estima
ct Price-
te
price Paid
1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

14.

15.

P a g e 122 | 186
16.

17.

18.

19.

20.

21.

22.

23.

24.

25.

26.

P a g e 123 | 186
Appendix 11: Procurement Efficiency, Effectiveness, Competitiveness, Fairness and
Transparency and Controls
Description Actual Value Remark

Percentage by Number of Procurements not Included in

Original APP does not exceed 5%

1. Number of procurements not included in the original annual

procurement plan

2. Total number of procurements

3. Percentage of the number of procurements not included in the

original annual procurement plan (1/2) *100

Percentage by Value of Procurements not Included in

Original APP does not exceed 5%

1. Value of procurements not included in the original annual

procurement plan

2. Total Value of all procurements

3. Percentage of the value of procurements not included in the

original annual procurement plan (1/2)*100

Average deviation between original Planned and Actual

Procurement cycle time does not exceed 5%

1. Total sum of deviations between Actual and Original Planned

Procurement Cycle Time

2. Total number of procurements

3. Average deviation between original Planned and Actual

Procurement cycle time (1/2)

Deviation between original price in the procurement plan and

award price does not exceed + or -20%

1. Total sum of deviations between price in the original

procurement plan and award price

2. Total number of procurements

3. Average deviation between price in the original procurement

plan and award price (1/2)

Deviation between contract price and completion price (turnout

cost) does not exceed 25%

P a g e 124 | 186
1. Total sum of deviation between Original Contract price and
completion price (turnout cost)

2. Total number of procurements

3. Average Deviation between contract price and completion price

(turnout cost)(1/2)

Percentage by Number of procurements conducted through open

bidding procedure equals or exceeds 85%

1. Number of procurements conducted through open bidding

2. Total Number of procurements

3. Percentage by Number of the number of procurements

conducted through open bidding procedure (1/2) *100

Percentage by Value of procurements conducted through open

bidding procedure equals or exceeds 85%

1. Value of procurements conducted through open bidding

procedure

2. Total Number of procurements

3. Percentage by Value of procurements conducted through open

bidding procedure (1/2) *100

Complaints resolved within the standard time frame equals 100%

1. Total number of procurement related complaints

2. Total number of complaints

3. Percentage of complaints that were resolved within the standard

time frame ((1/2) *100

Percentage of action taken from the previous procurement audit

qualifications/ recommendations is equal or above 90%

1. Number of previous procurement audit qualifications/

recommendations

2. Number of actions taken on previous procurement audit

qualifications/ recommendations

3. Percentage of action taken on the previous procurement audit

qualifications/ recommendations (1/2) *100

P a g e 125 | 186
 11.2 ANNEX 2: APA DRAFT & FINAL REPORT
FORMAT

Format for APA Synthesis Report

Table of Contents
List of Tables
List of Figures
Acronyms and Abbreviations
Acknowledgements
Executive Summary

Section 1: Introduction
(Background; Objectives of Assignment; Approach & Methodology, Reference
documents, Assessment Process, Organization of the Assignment Teams. Logistics,
Challenges faced, Team Responses to such challenges.

Section 2: Assessment of Minimum Access Conditions for ULGs (DLI 1)

- Narrative
- Summary Table for all 117 cities. To indicate Yes or No on each of the MAC.

Section 3: Assessment of Institutional Performance of ULGs (DLI 2)), Infrastructure &

Service Delivery, Maintenance Performance & Job Creation (DLI 3) and Local Economic
Development, Job Creation and Gender Mainstreaming (DLI 4)

- Narratives, Analysis and Graphs by city, region, performance area etc

Section 4: Assessment of Regional Government capacity building and support for ULGs in
urban service delivery (DLI 5)
- Region by region subsections, each with
- Narrative
- Table

Section 5: Assessment of the extent to which Offices of the Regional Auditor General
(ORAGs) have carried out financial audits for ULGs (DLI 6)
- Region by region subsections, each with
- Narrative
- Table

Section 6: Assessment of the extent to which Regional Environment Protection Agencies

(REPAs) have reviewed environmental and social safeguards compliance in their
respective ULGs (DLI 7)
- Region by region subsections, each with
- Narrative
- Table

P a g e 126 | 186
Section 7: Assessment of regional revenue authorities (RRAs) support for ULGs’ efforts to
generate revenue (DLI 8)
- Region by region subsections, each with
- Narrative
- Table

Section 8: Assessment of the extent to which regional public procurement and property
administration agencies have carried out timely and equality procurement audits of ULGs
(DLI 9)
- Region by region subsections, each with
- Narrative
- Table

Section 9: (i) Review of previous APA and how weaknesses, observations and
recommendations have been addressed by ULGs and Client, and (ii) Review of previous
Quality Assurance (QA) Reports and how weaknesses, observations and recommendations
have been addressed in current APA

- Region by region subsections, each with

- Narrative
- Table (as per format)

Section 10: Observations and Recommendations for System Improvement

- Narrative; and/or
- Table

Annex 1: Summary of Capacity Building Requirements

- Completed Table for RIAs/MUDCo as per format in Annex 2 of this APAG;

Annex 2: Summary of Complaints

- Completed Table for regions as per format in Annex 2 of this APAG;

Annex 3; Details of dates of presentation/briefing and wrap-up meetings with regions,

persons present and brief minutes documenting key aspects of any queries, issues raised or
agreements made;

Annex 4; Lists of all documents secured for the regions providing evidence of the assessed
performance.

P a g e 127 | 186
Formats
The following formats are suggested and Consultants will prepare and submit report format
and all other additional/required table formats for MUDCo review before starting the
preparation of the ULG and synthesis reports

Table 9.1 (a). Review of previous APA and how weaknesses, observations and
recommendations have been addressed in current APA: ULGs

No ULG Weaknesses in previous APA Improvements in Current APA

1 - -
2

Table 9.1 (b). Review of previous APA and how weaknesses, observations and
recommendations have been addressed in current APA: Regions

No Region Weaknesses in previous APA Improvements in Current APA

1 - -
2

Table 9.1 (c). Review of previous APA and how weaknesses, observations and
recommendations have been addressed in current APA: MUDCo

No Region Weaknesses in previous APA Improvements in Current APA

1 - -
2
Table 9.1 (d). Review of previous QA Report and how weaknesses, observations and
recommendations have been addressed in current APA: APA Consultant

No Region Weaknesses in previous APA Improvements in Current APA

1 - -
2

Table 9.2. Observations & Recommendations on System Improvement

No Observation Recommendation
- -

P a g e 128 | 186
 Format for ULG (City Level) Individual Reports

Table of Contents
List of Tables
List of Figures
Acronyms and Abbreviations
Acknowledgements
Executive Summary

Section 1: Introduction
(Background; Objectives of Assignment; Approach & Methodology, Reference
documents, Assessment Process, Organization of the Assignment-Teams. Logistics,
Challenges faced.

Section 2: Assessment of Minimum Access Conditions (DLI 1)

Narrative: Summary of findings and conclusions on overall performance on DLI 1 (NB. do

not repeat detailed information already contained in Table)
Table 2.1. as per format below: -

MA MAC Assessment Evidences Complied Remarks

C Findings Produced & with MAC
No. Reference Yes/No
Numbers,
Dates, etc.
1.1
1.2
etc. etc.

Section 3: Assessment of Institutional Performance (DLI 2) & Infrastructure & Service

Delivery, Maintenance Performance & Job Creation (DLI 3)and Local Economic
Development, Job Creation and Gender Mainstreaming (DLI 4)

Narrative: Summary of findings and conclusions on overall performance

on DLI 2, DLI 3 and DLI 4. (NB. do not repeat detailed information already contained in
Table)

P a g e 129 | 186
 Table 3.1.DLI 2: as per format below:-

Name of City

numbers and
Justification
Maximum

(Evidences
for Scoring

produced,
reference
Points

dates)
No. DLI 2, ULG Institutional Performance

TOTALS 100 xx

2.1 Planning and Budgeting xx xx

2.1.1 Capital Investment Plan with linkages x x

2.1.1.1 Consistency & alignment x x

2.1.1.2 Capturing O&M & recurrent costs x x

etc. etc.

Table 3.2. DLI 3: as per format below:-

P a g e 130 | 186
 Max

(Evi

and dates)
produced,
reference
Na

numbers
Points
imum

dences
me of

Justification for
City

Scoring
N DLI 3, ULG Service Delivery
o. Performance

1 x
TOTALS 0 x.x
0 x

x
3 x
Job Creation x.x
.1 x
x
3 x
x
.1. Cities’ achievement of jobs created x.x
x
1. x
3
x x
.2 Urban Infrastructure Targets
x x
.
3
x x
.2. Targets in CIP & AAP achieved
x x
1.
3
x x
.3 Maintenance performance
x x
.
3
Maintenance Budgeting and x x
.3.
Implementation x x
1

3.3.2. Actual Maintenance xx xx

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Table 3.3. DLI 4: as per format below:-

Max

(Evi

and dates)
produced,
reference
Na

numbers
Points
imum

dences
me of

Justification for
City

Scoring
N DLI 3, ULG Service Delivery
o. Performance

1 x
TOTALS 0 x.x
0 x

x
4 4
Local Economic Development x.x
.1 0
x
4 x
x
.1.1 x.x
x
.1 x
4 3 x
Urban Resilience
.2. 0 x
4
x x
.2.1
x x
.1
4 x x
Gender Mainstreaming
.3. x x
4
Maintenance Budgeting and x x
.3.1
Implementation x x
.1

P a g e 132 | 186
Section 4: Review of previous APA and how weaknesses, observations and
recommendations have been addressed in current APA

- Table 4.1. as per format below:-

No Weaknesses in previous APA Progress Achieved in Current APA
1 - -
2

- Table 4.1. as per format below: -

No Weaknesses in previous APA Progress Achieved in Current APA

1 - -
2

(2) Review of previous QA Report and how weaknesses, observations and

recommendations have been addressed in current APA

- Table 4.2. as per format below: -

No Weaknesses in previous APA Progress Achieved in Current APA

1 - -
2

Section 5: Observations and Recommendations

- Narrative; and/or
- Table 5.1. as per format below
No Observation Recommendation
1 - -
2

Annex 1: Summary of Capacity Building Requirements

- insert completed Table as per format in Annex 3 of this APAG
Annex 2: Summary of Complaints
- insert completed Table as per format in Annex 3 of this APAG
Annex 3; Details of dates of presentation/briefing and wrap-up meetings, persons present
and brief minutes documenting key aspects of any queries, issues raised or agreements
made
Annex 4; Lists of all documents secured for the city providing evidence of the assessed
performance

11.3 ANNEX 3: APA STANDARD FORMATS FOR

CB REQUIREMENTS & COMPLAINTS

11.3.1Summary of Capacity Building Requirements for ULGs

Name of ULG: ………………………………………….

Date of Assessment:…………………..
P a g e 133 | 186
No. Minimum Conditions Weaknesses Remarks on Specific
Disagreements between APA
Consultant and ULG
1 3-year CIP with (AAP,
budget, and APP
2 Financial statements
submitted on time
3 External audit report is not
adverse or has disclaimer
4 UIIDP co-funding
requirements
5 Staff in place in six key
positions
6 Fully operational ESMS in
place
7 Fully operational procurement
system in place
8 A fully operational CHS in
place
No. DLI 2 Institutional Weaknesses Remarks on Specific
Performance Disagreements between APA
Consultant and ULG
1 Planning and Budgeting
2 Assets Management
3 Public Financial Management
4 Procurement
5 Own-source Revenue
Enhancement
6 Accountability and
Transparency
7 Environment and social
Safeguards
8 Land Management and Urban
Planning
No. DLI 3. Infrastructure and Weaknesses Remarks on Specific
Service Delivery Disagreements between APA
Performance Consultant and ULG
1 Urban Infrastructure Targets
2 Maintenance Performance
3 Quality of Infrastructure
No. DLI 4. Local Economic Weaknesses Remarks on Specific
Development, Urban Disagreements between APA
Resilience and Gender Consultant and ULG
Mainstreaming
1 Local Economic
Development

P a g e 134 | 186
2 Urban Resilience
3 Gender Mainstreaming

11.3.2Summary of Capacity Building Requirements for RIAs

Name of RIA: ………………………………………….

Date of Assessment:………………..

No. DLI RIA Weaknesses Remarks on Specific

Disagreements between APA
Consultant and RIA

1 5 BUDHos

2 6 ORAGs

3 7 REPAs

4 8 RRAs

5 9 RPPPAAs

11.3.3Complaint Form for ULGs

Name of ULG: ………………………………………….

Date of Assessment:………………..

No. Minimum Conditions Specific Disagreements, and Justification

of ULG’s Position

1 A rolling 3-year CIP with (AAP, budget, and

APP

2 Submitted financial statements on time

3 external audit report is not adverse or has

disclaimer

4 Provided for its UIIDP co-funding

requirements

5 Staff in place in six key positions

6 A fully operational ESMS in place

7 A fully operational procurement system in

P a g e 135 | 186
 place

8 A fully operational CHS in place

No DLI 2 Institutional Performance Specific Disagreements, and Justification

. of ULG’s Position

1 Planning and Budgeting

2 Assets Management

3 Public Financial Management

4 Procurement

5 Own-source Revenue Enhancement

6 Accountability and Transparency

7 Environment and social Safeguards

8 Land Management and Urban Planning

No DLI 3 Service Delivery Performance Specific Disagreements, and Justification

. of ULG’s Position

1 Urban Infrastructure Targets

2 Maintenance Performance

3 Quality of Infrastructure

No. DLI 4. Local Economic Development, Specific Disagreements, and Justification

Urban Resilience and Gender Mainstreaming of ULG’s Position

1 Local Economic Development

2 Urban Resilience

3 Gender Mainstreaming

11.3.4Complaint Form for RIAs

Name of RIA: ………………………………………….

Date of Assessment:……………..

No. Minimum Conditions Specific Disagreements, and Justification of RIA’s Position

1 BUDHos

2 ORAGs

P a g e 136 | 186
3 REPAs

4 RRAs

5 RPPPAAs

P a g e 137 | 186
 11.4 . ANNEX 4: DISBURSEMENT LINKED INDICATOR MATRIX

Table 7. Disbursement Linked Indicator Matrix

Indicative Timeline for DLI Achievement
As
Total
percent Year 1 Year 2 Year 3 Year 4 Year 5
financing DLI
DLI of total
allocated to Baseline27 EFY2010 EFY2011 EFY2012 EFY2013 EFY 2014
financin
DLI26
g amount (year ended (year ended July (year ended July (year ended July (year ended July
July 7, 2018) 7, 2019) 7, 2020) 7, 2021) 7, 2022)

DLI 1
Eligible ULGs have achieved Program 0 117 ULGs 117 ULGs 117 ULGs 117 ULGs
minimum conditions.

$109.32
DLI 1 Allocated amount 19.0% $27.33 million $27.33 million $ 27.33 million $ 27.33 million
million

DLI 2
70 75 80 85
Eligible ULGs have strengthened 0
(average score) (average score) (average score) (average score)
institutional performance.

$190.0928
DLI 2 Allocated amount 33.0% $ 34.21 million29 $51.96 million $51.96 million $51.96 million
million

26
See annex 11 for calibration for each DLI.
27
Baselines on DLIs 1 to 9 are 0, as the system of minimum condition/PMs have changed since the ULGDPII, with strengthening of some of the performance measures.
For DLI2, assuming the average score is achieved every year, the total disbursement amount will be $189.62 million (and at $34.17million for year 2, and $51.82 million each
28

year for years 3-5). However, an additional amount of $0.47 million is allocated to this DLI2, bringing the total amount allocated to US$190.09 million to allow for better than
average performance. This is based on previous experience from ULGDPII. The higher overall amount of US$190.09 million does not affect the disbursement formulation and
verifications for DLI2 and its performance measures, which are as detailed in this annex 4, and in annex 11, as well as the POM.
29
In the first APA, only the 44 ULGDP II cities will be assessed for the performance measures under DLI 2 and 3. In subsequent APAs, all 117 ULGs will be assessed.

P a g e 138 | 186
 Indicative Timeline for DLI Achievement
As
Total
percent Year 1 Year 2 Year 3 Year 4 Year 5
financing DLI
DLI of total
allocated to Baseline EFY2010 EFY2011 EFY2012 EFY2013 EFY 2014
financin
DLI
g amount (year ended (year ended July (year ended July (year ended July (year ended July
July 7, 2018) 7, 2019) 7, 2020) 7, 2021) 7, 2022)

DLI 3
70 75 80 85
Eligible ULGs have implemented quality 0
infrastructure and maintenance activities (average score) (average score) (average score) (average score)
and ensured value for money

DLI 3 Allocated amount $90.09 million 15.6% $16.23 million $24.62 million $24.62 million $24.62 million

DLI 4
60 65 70
Eligible ULGs have strengthened 0
performance on LED, urban resilience (average score) (average score) (average score)
and gender mainstreaming

DLI 4 Allocated amount $52.95 million 9.2% $17.65 million30 $17.65 million $17.65 million

DLI 5 CB Plan of and CB Plan of and CB Plan of and CB Plan of and

TOR for RMTs TOR for RMTs TOR for RMTs TOR for RMTs
Regional support teams have delivered prepared and prepared and prepared and prepared and
effective capacity building services to positions are in positions are in positions are in positions are in
Eligible ULGs in urban institutional and place. The CB place. The CB place. The CB place. The CB
infrastructure development. plan covers at plan covers at plan covers at plan covers at
least 4 modalities least 4 modalities least 4 modalities least 4 modalities
and at least 80% and at least 80% and at least 80% and at least 80%
of the thematic of the thematic of the thematic of the thematic
focus areas from focus areas from focus areas from focus areas from
the POM. Teams the POM. the POM. the POM.
are in place and
operating. Teams are in Teams are in Teams are in
place and place and place and
operating. operating. operating.
Annual CB needs

30
Assessment against DLI 4 performance measures starts from the second APA.

P a g e 139 | 186
 Indicative Timeline for DLI Achievement
As
Total
percent Year 1 Year 2 Year 3 Year 4 Year 5
financing DLI
DLI of total
allocated to Baseline EFY2010 EFY2011 EFY2012 EFY2013 EFY 2014
financin
DLI
g amount (year ended (year ended July (year ended July (year ended July (year ended July
July 7, 2018) 7, 2019) 7, 2020) 7, 2021) 7, 2022)

Annual CB needs Annual CB needs

assessment assessment assessment
conducted by conducted by conducted by
involving all involving all involving all
regional entities regional entities regional entities
covering all covering all covering all
thematic areas thematic areas thematic areas
and and and
representatives of representatives of representatives of
the ULGs. the ULGs. the ULGs.
Execution of CB Execution of CB
plan and outputs. plan and outputs.

DLI 5 Allocated amount $27.88 million 4.8 % $6.97 million $6.97 million $6.97 million $6.97 million

DLI 6
Regional Government Audit Agencies 117 ULG audits 117 ULG audits 117 ULG audits 117 ULG audits
0
(ORAGs) have carried out timely audits completed completed completed completed
of Eligible ULGs’ financial reports

DLI 6 Allocated amount $14.96 million 2.6 % $3.74 million $3.74 million $3.74 million $3.74 million

DLI 7 117 ULGs 117 ULGs 117 ULGs 117 ULGs

Regional environment protection, forest safeguards safeguards safeguards safeguards
and climate change authorities (REFAs) performance performance performance performance
0
have completed timely review of Eligible reviews and reviews and reviews and reviews and
ULGs’ environmental and social annual audits annual audits annual audits annual audits
safeguards compliance. completed completed completed completed

DLI 7 Allocated amount $13.12 million 2.3 % $3.28 million $3.28 million $3.28 million $3.28 million

P a g e 140 | 186
 Indicative Timeline for DLI Achievement
As
Total
percent Year 1 Year 2 Year 3 Year 4 Year 5
financing DLI
DLI of total
allocated to Baseline EFY2010 EFY2011 EFY2012 EFY2013 EFY 2014
financin
DLI
g amount (year ended (year ended July (year ended July (year ended July (year ended July
July 7, 2018) 7, 2019) 7, 2020) 7, 2021) 7, 2022)

DLI 8 117 ULGs 117 ULGs 117 ULGs 117 ULGs

Regional Revenue Bureaus (RRBs) have revenue revenue revenue revenue
0
supported Eligible ULG revenue mobilization mobilization mobilization mobilization
mobilization31 supported supported supported supported

DLI 8 Allocated amount $7.04 million 1.2% $1.76 million $1.76 million $1.76 million $1.76 million

DLI 9 Procurement 117 ULGs audits 117 ULGs audits 117 ULGs audits
audit plan with completed on completed on completed on
Regional Public Procurement and ToR for the audit time and time and time and
Property Administration Agencies elaborated. qualityto be qualityto be qualityto be
(RPPPAA) conduct timely and quality incorporated in incorporated in incorporated in
procurement audit of Eligible ULG’s the APA. ie. audit the APA. ie. audit the APA. ie. audit
accounts and performance.32 is planned and is planned and is planned and
0
procurement procurement procurement
audit conducted audit conducted audit conducted
for 117 ULGs by for 117 ULGs by for 117 ULGs by
end of November end of November end of November
in compliance in compliance in compliance
with the APAG. with the APAG. with the APAG.

DLI 9 Allocated amount $7.04 million 1.2 % $1.76 million $1.76million $1.76 million $1.76 million

DLI 10 0 Achieved
average target
Strengthening institutional performance, of 92 points in
infrastructure and service delivery, the APA.
maintenance, and job creation for 44

31
The regional revenue authorities will need time to build up the capacity within this area, and the tariff regulations. Support is expected to be rendered every year.
32
Costs of procurement audit up to the first round of disbursements is covered by the ULGDP II.

P a g e 141 | 186
 Indicative Timeline for DLI Achievement
As
Total
percent Year 1 Year 2 Year 3 Year 4 Year 5
financing DLI
DLI of total
allocated to Baseline EFY2010 EFY2011 EFY2012 EFY2013 EFY 2014
financin
DLI
g amount (year ended (year ended July (year ended July (year ended July (year ended July
July 7, 2018) 7, 2019) 7, 2020) 7, 2021) 7, 2022)

ULGs (Prior Results).

US$63.74 $63.74
DLI 10Allocated amount 11.1%
million million

Total Financing Allocated based on US$576.23 $63.74

100.0% 0 $95.29million $139.07 million $139.07 million $139.07 million
DLIs: million million

11.5 . ANNEX 5: VERIFICATION PROTOCOL TABLE AND BANK DISBURSEMENT TABLE

Table 8. Disbursement Linked Indicator Verification Protocol

Definition/
# DLI Description of Scalability Data Source Verification Entity Procedure
achievement33

1 ULGs have The indicator will be Yes ULG compliance TC, based on inputs MUDCo hires private sector consulting/audit firm(s)
achieved satisfied when the APA with Program from the (whose TOR must be acceptable to the WB) to carry
Program has been completed, and minimum conditions out the independent APA.
minimum based only on the assessed by the independent private
conditions. minimum conditions, the independent firm carrying out the APA determines whether all minimum conditions
disbursements to Program performance APA (Note: The ToR have been met for each ULG.
ULGs have been assessment. of the firm must be
determined. acceptable to the WB).
The APA firm calculates the allocation to each ULG
as per the formula in the WB disbursement table and
Draft Assessment provides the aggregate disbursement amount (along
reports are submitted with the full APA) simultaneously to government and

P a g e 142 | 186
 Definition/
# DLI Description of Scalability Data Source Verification Entity Procedure
achievement

by the APA the WB for review.

simultaneously for
review to the final
verification entity – the The TC reviews and verifies the results which are
TC34, which verifies and then approved by the SC.
the results, and the WB
for review.
QAR/review by the WB.

Neither party can

modify such reports As part of implementation support, WB will review
except for factual the assessment results. WB retains the right to make
errors. the final decision as to whether a DLI has been
achieved or not. The WB reviews and provides QAR
of sample findings to ascertain that it is satisfied with
the quality of results.

2 ULGs have The indicator will be Yes ULG progress against Same as above Same as in DLI 1, MUDCo hires private sector
strengthened satisfied when the APA Program performance firm(s) to carry out the independent APA. APA
institutional has been completed measures assessed by assigns a score to each ULG. The firm(s) will
performance.35 (based on the minimum independent APA. calculate the allocation to each ULG as per the
conditions and formula in the WB disbursement table, and provide
performance measures) the aggregate disbursement amount simultaneously to
and the allocation based the government and the WB for review.
on the score of all ULGs
has been determined. The The APA results are finally verified by the TC, and
achievement rate will be approved by SC.
determined by the results QAR by the WB.
in the APA (average
scores against the annual As part of implementation support, WB will review
targets set). the assessment results. The WB retains the right to
make the final decision as to whether a DLI has been
achieved or not.

34
The TC will have representation from MUDCo (chair), MoFEC and other agencies as appropriate.
Composite index of performance based on performance in the areas of planning, revenue enhancement, assets management, fiduciary systems, procurement, accountability/
35

oversight systems, environmental and social systems management and urban land management. See annex 11 for detailed performance measures.

P a g e 143 | 186
 Definition/
# DLI Description of Scalability Data Source Verification Entity Procedure
achievement

3 ULGs have The indicator will be Yes ULG progress against Same as above. Similar to DLIs 1 and 2 above.
implemented satisfied when the APA Program performance
quality has been completed measures assessed by
infrastructure and (based on the minimum independent APA In addition to the above, the VfM Audit results will
maintenance conditions and and performance as be incorporated in the APA results. Its results will be
activities and performance measures) assessed by the shared with the APA firm, and included in the overall
ensured VfM. and the allocation based independent VfM results. Then, as under DLIs 1 and 2, the firm will
on the score of all ULGs audits (which calculate the allocation to each ULG as per the
has been determined. contribute as part of formula in the WB disbursement table, considering
the results in the the findings of the VfM and provide the aggregate
APA). disbursement amount simultaneously to government
The achievement rate will and the WB for review.
be determined by the
results in the APA
(average scores against QAR by the WB.
the annual targets set).
The TC finally verifies the results which are
approved by the SC.
As part of implementation support, WB will review
the assessment results. The WB retains the right to
make the final decision as to whether a DLI has been
achieved or not.

4 ULGs have The indicator will be Yes ULG progress against Same as above Same as DLI 1 and 2 above.
strengthened satisfied when the APA Program performance
performance on has been completed measures assessed by
LED, resilience (based on the minimum independent APA.
and gender conditions and
mainstreaming. performance measures)
and the allocation based
on the score of all ULGs
has been determined.
The achievement rate will
be determined by the
results in the APA
(average scores against
the annual targets set).

P a g e 144 | 186
 Definition/
# DLI Description of Scalability Data Source Verification Entity Procedure
achievement

5 Regional support Achievement of the DLI Yes Regional government Same as above This will be finally verified by the TC, and approved
teams have will be determined on the (allocation performance against by SC and after review by the WB.
delivered basis of (a) existence of per region, capacity plan
effective capacity work plans, (b) staff which is reviewed and
building services deployment as per plan, calibrated) assessed by the APA SC finally verifies the results.
to ULGs in urban (c) field work as per plan, team.
institutional and and (d) effectiveness of
infrastructure the support, measured in Sample QAR (WB).
development. the percentage of ULGs
under the team’s care that
pass the Minimum
SC and WB approve.
Conditions.

6 ORAGs have This indicator will be Yes APA Same as above The private consulting/audit firm will assess that the
carried out timely fulfilled when the regional results against this indicator, following the same
audits of ULGs’ audit entities, or their process of verification as in the DLIs above.
financial reports. delegated agencies, which
includes certified private
audit firms, carry out and
complete the financial
audits of ULGs in their
jurisdictions by January 7
of each year.

7 REFAs have This indicator will be Yes APA Same as above The private sector consulting/audit firm will assess
completed timely fulfilled when the REFAs that the results against this indicator, following the
review of ULGs’ have carried out the same process of verification as in the DLIs above.
environmental regular performance
and social safeguards reviews and
safeguards annual audits of ULGs in
compliance. their jurisdictions before
end of October each year.

8 RRBs have This indicator will be Yes APA Same as above The private consulting/audit firm (APA) will assess
supported ULG fulfilled when Regional and verify the results against this indicator, following
revenue revenue authorities/ the same process of verification as in the DLIs above.
mobilization. BoFEDs have held The APA will review whether there have been
consultations with the consultations, documented with minutes.
ULGs on tax rates and

P a g e 145 | 186
 Definition/
# DLI Description of Scalability Data Source Verification Entity Procedure
achievement

bands, with review of

REPs and have updated
the tariff regulations as
per the verification
protocol.

9 RPPPAA This indicator will be Yes APA Same as above The private sector consulting/audit firm will assess
conduct timely fulfilled when the regional that the results against this indicator, following the
and quality procurement audit entities, same process of verification as in the DLIs above
procurement or their delegated under DLIs 4-7. The APA team will check that the
audit of ULG’s agencies, performing time and quality of the procurement audit is in
accounts and procurement audits of accordance with the APA guidelines on MCs and
performance. ULGs in their PMs for procurement.
jurisdictions by no later
by January 7 of each year.

10 Strengthening This result will be fully Yes APAs which have Same as above. Based on the APA conducted in FY2017/18 and
institutional achieved if ULGs have documented results review of results against prior result defined as 92
performance, the average score of 92 against targets points.
infrastructure and points on institutional
service delivery, performance, service
maintenance, and delivery, maintenance and
job creation for job creation in the APA in
44 ULGs. (Prior FY2017/18.
Results)

Table 9. Bank Disbursement Table

P a g e 146 | 186
 # DLI Bank Of which Deadline for Minimum Maximum Determination of Financing Amount to be disbursed
financing Financing DLI DLI value to DLI value(s) against achieved and verified DLI values
allocated available for Achievement be achieved to expected to be
to the DLI trigger achieved for
Prior Advances disbursements Bank
(US$, of Bank disbursements
results
million) Financing purposes

Disbursement from the WB is calculated on the basis of

compliance of ULGs with minimum conditions.
(US$27.33million per annum) for 4 years FY2019/20,
2020/21, FY2021/22 and FY2022/23
Formula for disbursement from the WB to government is:
[total annual disbursement] = [total population in all
ULGs have minimum condition compliant ULGs] X [US$4.13]
achieved At point of
US$109.32
1 Program 0 0 time for the 0 117 ULGS
million Formula for disbursement from government to ULGs is:
minimum APA
conditions. [disbursement to each ULG] = [total population in that ULG]
X [US$4.13], provided that the ULG has complied with the
minimum conditions.

Disbursement will be made if previous financial year’s

disbursements from government to ULGs have all been
made.

2 ULGs have US$190.09 0 0 At point of 0 100% Disbursement from the WB to government will be
37
strengthened million time for the performance determined as:
institutional APA
performance.36 Compliance of ULGs with minimum conditions measured (as
above);
Sum of scores of all ULG calculated (non-minimum

Composite index of performance based on performance in the areas of planning, revenue enhancement, assets management, fiduciary systems, procurement, accountability/
36

oversight systems, environmental and social systems management and urban land management.
For DLI2, assuming the average score is achieved every year, the total disbursement amount will be $189.62 million (and at $34.17million for year 2, and $51.82 million each
37

year for years 3-5). However, an additional amount of $0.47 million is allocated to this DLI2, bringing the total amount allocated to US$190.09 million to allow for better than
average performance. This is based on previous experience from ULGDPII. The higher overall amount of US$190.09 million does not affect the disbursement formulation and
verifications for DLI2 and its performance measures, which are as detailed in this annex 4, and in annex 11, as well as the POM.

P a g e 147 | 186
# DLI Bank Of which Deadline for Minimum Maximum Determination of Financing Amount to be disbursed
financing Financing DLI DLI value to DLI value(s) against achieved and verified DLI values
allocated available for Achievement be achieved to expected to be
to the DLI trigger achieved for
Prior Advances disbursements Bank
(US$, of Bank disbursements
results
million) Financing purposes

condition compliant ULGs are assigned a score of zero) and

divided by 117 (note in FY2019/20 only the 44 current
ULGDP-II ULGs will get access to the funds and the
adjusted amount for this will be divided between those 44
ULGs);

A. If score equal to target for financial year, full allocation,

B. If score below target for the financial year, pro-rata
reduction,
C. If score above target for financial year, pro-rata increase.
Disbursement will be made if previous disbursements from
government to ULGs have all been made.

Disbursement from the government to ULGs will be

determined as: Total disbursement amount (as calculated
above) divided across compliant ULGs in accordance with
population and score.

Formula for disbursement from the Bank to the government

is:
[total annual disbursement] = [{sum of individual scores of
all ULGs/117 (first year only 44 ULGs)*}/ {target score for
the financial year}] X [target disbursement amount i.e.
US$51.87 million for 117 ULGs in FY 2020/21, FY
2021/22 and FY 2022/23 (first financial year only US$34.17
million for the 44 targeted ULGs)]

P a g e 148 | 186
# DLI Bank Of which Deadline for Minimum Maximum Determination of Financing Amount to be disbursed
financing Financing DLI DLI value to DLI value(s) against achieved and verified DLI values
allocated available for Achievement be achieved to expected to be
to the DLI trigger achieved for
Prior Advances disbursements Bank
(US$, of Bank disbursements
results
million) Financing purposes

Performance targets for this DLI are:

2019/20: 70 points
2020/21: 75 points
2021/22: 80 points
2022/23: 85 points

Formula for disbursement from government to ULGs in

2019/20 is:

[disbursement to any ULG] = [population of ULG X

performance score of ULG] / [∑ (population of ULG 1-..44
X performance score of ULG 1-..44)] X [total disbursement
amount for the financial year], if the ULG has complied with
the minimum conditions.

Formula for disbursement from government to ULGs in

FY2020/21, FY2021/22 and FY2022/23 is:

[disbursement to any ULG] = [population of ULG X

performance score of ULG] / [∑ (population of ULG 1-..117
X performance score of ULG 1-..117] X [total disbursement
amount for the financial year], if the ULGA has complied
with the minimum conditions.

* Note: For the new 73 ULGs, this DLI will only be applied
from 2020/21 and the following financial year, hence amount

P a g e 149 | 186
 # DLI Bank Of which Deadline for Minimum Maximum Determination of Financing Amount to be disbursed
financing Financing DLI DLI value to DLI value(s) against achieved and verified DLI values
allocated available for Achievement be achieved to expected to be
to the DLI trigger achieved for
Prior Advances disbursements Bank
(US$, of Bank disbursements
results
million) Financing purposes

to be distributed in FY2019/20 is only US$34.17 million

which will only be allocated across the 44 ULGs.

3 ULGs have US$90.09 0 0 At point of 0 100% Disbursement from the WB to government will be
implemented million time for the performance determined as:
quality APA
infrastructure Compliance of ULGs with minimum conditions measured (as
and above);
maintenance Sum of score of all ULGs calculated (non-minimum
activities and condition compliant ULGs are assigned a score of zero) and
ensured VfM. divided by 44 ULGs (in 2019/20) and by 117 ULGs in
38
FY2020/21, FY2021/22 and FY2022/23.
A. If score equal to target for the financial year, full
allocation,
B. If score below target for the financial year, pro-rata
reduction,
C. If score above target for the financial year, pro-rata
increase.

Disbursement from the government to ULGs will be

determined as: Total disbursement amount (as calculated
above) divided across compliant ULGs in accordance with
population and score.

Formula for disbursement from the WB to the government is:

[total annual disbursement] = [{sum of individual scores of

38
Composite index of performance based on areas in infrastructure implementation, maintenance performance, and value for the money of investments implemented.

P a g e 150 | 186
# DLI Bank Of which Deadline for Minimum Maximum Determination of Financing Amount to be disbursed
financing Financing DLI DLI value to DLI value(s) against achieved and verified DLI values
allocated available for Achievement be achieved to expected to be
to the DLI trigger achieved for
Prior Advances disbursements Bank
(US$, of Bank disbursements
results
million) Financing purposes

all ULGs/117 (first year only 44 ULGs)*}/ {target score for

the financial year}] X [target disbursement amount that is,
US$24.62m for 117 ULGs in FY2020/21, FY2021/22 and
FY2022/23. In FY2019/20, the amount is: US$16.23 million
for the 44 targeted ULGs)]

2019/20: 70 points
2020/21: 75 points
2021/22: 80 points
2022/23: 85 points

Formula for disbursement from government to ULGs in

2019/20 is:
[disbursement to any ULG] = [population of ULG X
performance score of ULG] / [∑ (population of ULG 1-..44
X performance score of ULG 1-..44)] X [total disbursement
amount for the financial year], if the ULG has complied with
the minimum conditions.

Formula for disbursement from government to ULGs in

FY2020/21, FY2021/22 and FY2022/23 is:

[disbursement to any ULG] = [population of ULG X

performance score of ULG] / [∑ (population of ULG 1-..117
X performance score of ULG 1-..117)] X [total disbursement
amount for the financial year], if the ULGA has complied
with the minimum conditions.

P a g e 151 | 186
# DLI Bank Of which Deadline for Minimum Maximum Determination of Financing Amount to be disbursed
financing Financing DLI DLI value to DLI value(s) against achieved and verified DLI values
allocated available for Achievement be achieved to expected to be
to the DLI trigger achieved for
Prior Advances disbursements Bank
(US$, of Bank disbursements
results
million) Financing purposes

* Note: For the new 73 ULGs, this DLI will only be applied
for 2020/21, FY2021/22 and FY2022/23, hence amount to be
distributed in FY2019/20: US$16.23 million will only be
allocated across the 44 targeted ULGs.

Disbursement will be made if previous disbursements from

government to ULGs have all been made.

4 ULGs have US$52.95 0 0 At point of 0 100% Disbursement from the WB to government will be
strengthened million time for the performance determined as:
performance APA
on LED, urban Compliance of ULGs with minimum conditions measured (as
resilience and above);
gender
mainstreaming.
Sum of score of all ULGs calculated (non-minimum
condition compliant ULGs are assigned a score of zero) by
117 ULGs in FY2020/21, FY2021/22 and FY2022/23.
A. If score equal to target for the financial year, full
allocation,
B. If score below target for the financial year, pro-rata
reduction,
C. If score above target for the financial year, pro-rata
increase.

Disbursement from the government to ULGs will be

determined as: Total disbursement amount (as calculated
above) divided across compliant ULGs in accordance with

P a g e 152 | 186
# DLI Bank Of which Deadline for Minimum Maximum Determination of Financing Amount to be disbursed
financing Financing DLI DLI value to DLI value(s) against achieved and verified DLI values
allocated available for Achievement be achieved to expected to be
to the DLI trigger achieved for
Prior Advances disbursements Bank
(US$, of Bank disbursements
results
million) Financing purposes

population and score.

Formula for disbursement from the WB to the government is:

[total annual disbursement] = [{sum of individual scores of
all ULGs/117 *}/ {target score for the financial year}] X
[target disbursement amount that is, US$17.65m for 117
ULGs in FY2020/21, FY2021/22 and FY2022/23]

2020/21: 70 points
2021/22: 75 points
2022/23: 80 points

Formula for disbursement from government to ULGs in

FY2020/21, FY2021/22 and FY2022/23 is:

[disbursement to any ULG] = [population of ULG X

performance score of ULG] / [∑ (population of ULG 1-..117
X performance score of ULG 1-..117)] X [total disbursement
amount for the financial year], if the ULGA has complied
with the minimum conditions.

Disbursement will be made if previous disbursements from

government to ULGs have all been made.

5 Regional US$27.88 0 0 At the point of n.a. 10 RMTs 10 teams X 697,000 (if targets achieved) Reductions in case
support teams million time for (US$6.97 minimum requirements and results are not met.
have delivered assessment million per

P a g e 153 | 186
# DLI Bank Of which Deadline for Minimum Maximum Determination of Financing Amount to be disbursed
financing Financing DLI DLI value to DLI value(s) against achieved and verified DLI values
allocated available for Achievement be achieved to expected to be
to the DLI trigger achieved for
Prior Advances disbursements Bank
(US$, of Bank disbursements
results
million) Financing purposes

effective Maximum amount per regional mobile where the CB plans,

capacity formats and achievement is achieved as per requirements:
building US$697,000 per team. Reduction for lack of achievement
services to rates according to protocol.
ULGs in urban year)
institutional
and
infrastructure See the verification protocol and narrative in annex 11 for the
development. details

Audit: US$14.98 million/ = US$3.74 million per year

Disbursement calibrated in a manner where each region

receives US$32,000 per ULG, for which the audit has been
Regional made for the accounts of the previous financial year. If a
Government region has covered 7 ULGs in a timely fashion, it will be
Audit All regions allocated 7 X US$32,000. Reduction in amounts if standards
Agencies supporting all are not followed as per the verification protocol.
By end of
(ORAGs) have US$14.96 117 ULGs
6 0 0 February
carried out million (US$3.74
each year
timely audits million per The timeliness of audit is reviewed and verified by the APA
of ULGs’ year) teams in January each year, with implications for the
financial allocations for the following financial year.
reports.

Amount of funds is calibrated in accordance with number of

timely audit in the regions (timely audit means that the final
audit report is issued no later than January 7 after the
financial year for which the audit concerns.

P a g e 154 | 186
# DLI Bank Of which Deadline for Minimum Maximum Determination of Financing Amount to be disbursed
financing Financing DLI DLI value to DLI value(s) against achieved and verified DLI values
allocated available for Achievement be achieved to expected to be
to the DLI trigger achieved for
Prior Advances disbursements Bank
(US$, of Bank disbursements
results
million) Financing purposes

Environmental and social safeguards audit and reviews:

Regional US$13.02 million / 4years = US$3.28 million per year:
environment
protection,
forest and
Disbursement calibrated in a manner where the disbursement
climate change All regions
is: US$28,000 per ULG for which the region has performed
authorities supporting all
By end of timely review/audit and approval of safeguard documents and
(REFAs) have US$13.12 117 ULGs
7 0 0 February review of implementation capacity for environmental and
completed million (US$3.28
each Year social mitigation and monitoring measures for CIP and
timely review million per
environmental and social audit (annual). Reduction and
of ULGs’ year)
calibration as per the narrative, annex 11.
environmental
and social
safeguards
compliance. If a region has conducted timely audit of 6 ULGs, the
allocation will be 6 x US$28,000.

8 Regional US$7.04 0 0 By end of All regions Regional revenue authorities providing support to revenue
Revenue million February supporting all mobilization: US$7.02 million / 4 years = US$1.76 million
Authorities each year 117 ULGs per year.
have supported (US$1.76
ULG revenue million per
mobilization. year) US$15,000 per ULG per year which is supported in
accordance with target in the protocol.

Disbursements are made according to the number of ULGs

where regions have conducted consultative review with
ULGs of municipal revenues/tariff/tax rates and bands, and
REPs, and up-dated tariff proclamations with consultation
and decisions recorded in regional council minutes in the
year before the APA:

P a g e 155 | 186
# DLI Bank Of which Deadline for Minimum Maximum Determination of Financing Amount to be disbursed
financing Financing DLI DLI value to DLI value(s) against achieved and verified DLI values
allocated available for Achievement be achieved to expected to be
to the DLI trigger achieved for
Prior Advances disbursements Bank
(US$, of Bank disbursements
results
million) Financing purposes

Disbursement calibrated as US$15,000 per ULG where

conditions are fulfilled, as per the annex 11 with calibration
for performance.

Procurement audit: US$7.02m/ 4 years = US$1.76 million

per year.

Disbursement calibrated in a manner where each region

receives US$15,000 per ULG, for which the audit has been
made for the accounts of the previous financial year in
Regional accordance with the standards outlined in the APA
Public Guidelines, and with compiled timely reports (by January 7).
Procurement If a region has covered 7 ULGs in a timely fashion, it will be
and Property allocated 7 X US$15,000.
All regions
Administration
supporting all
Agencies By end of
US$7.04 117 ULGs
9. (RPPPAA) 0 0 February
million (US$1.76 The timeliness of audit is reviewed and verified by the APA
conduct timely each Year
million per teams in January each year, with implications for the
and quality
year) allocations for the following financial year.
procurement
audit of ULG’s
accounts and
performance. Amount of funds is calibrated in accordance with number of
timely audit in the regions (timely audit means that the final
procurement audit report is issued no later than January 7
after the financial year for which the audit concerns). To
achieve the compliance, the quality of the reports has to
comply with the APA guidelines and compiled in a
consolidated report. Calibration of amounts per audit as per
narrative in annex 11.

Strengthening US$63.74 As per the The target score for disbursement of US$63.74 million is an
10. institutional Yes 0 legal 63.74 million average score of 92 for all ULGs for the 44 ULGDPII
million
performance, agreement Program ULGs: (a) institutional performance and (b)

P a g e 156 | 186
# DLI Bank Of which Deadline for Minimum Maximum Determination of Financing Amount to be disbursed
financing Financing DLI DLI value to DLI value(s) against achieved and verified DLI values
allocated available for Achievement be achieved to expected to be
to the DLI trigger achieved for
Prior Advances disbursements Bank
(US$, of Bank disbursements
results
million) Financing purposes

implementation of their local infrastructure, maintenance,

infrastructure and job creation activities (as measured against their CIPs
and service and their Annual Action Plans) as determined in the APA
delivery, conducted in FY2017/18 for FY2018/19 allocations.
maintenance,
and job
creation for 44
ULGs. (Prior Proportional scalability up and down with less and more
Results) points than targeted, that is, if 90 points, it is 90/92 X
US$63.74 million, and so on.

P a g e 157 | 186
 11.6 ANNEX 6. PROCUREMENT AUDIT TOR

FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA

Ministry of Urban Development and Construction

URBAN INSTITUTIONAL AND INFRASTRUCTURE DEVELOPMENT PROGRAM (UIIDP)

TERMS OF REFERENCE

FOR

PROCUREMENT AUDIT

BY

REGIONAL PUBLICPROCUREMENT ANDPROPERTY ADMINISTRATION AGENCIES (RPPPPAs)

OF ----- ULGs PARTCIPATING IN UIIDP

July 2020

P a g e 158 | 186
ABBREVIATIONS AND ACRONYMS

AFD AgenceFrançaise de Développement (French Development Agency)

APA Annual Performance Assessment

APAG Annual Performance Assessment Guidelines

BoFED Bureau of Finance and Economic Development (Regional)

BUDCo Bureau of Urban Development and Construction (part of regional governments)

CBP Capacity Building Plan

CIP Capital Investment Plan

EFY Ethiopia financial year

ETB Ethiopian birr

FMT Federal Mobile Team

FSC Federal Steering Committee

FTC Federal Technical Committee

FPPPAA Federal Public Procurement and Property Administration Agency

FY Financial Year

GC Gregorian Calendar

GoE Government of Ethiopia

GTP Growth and Transformation Plan

ICB International Competitive Bidding

IDA International Development Association

MoFEC Ministry of Finance and Economic Cooperation

O&M Operations and maintenance

OFAG Office of Federal Auditor General

ORAG Office of Regional Auditor General

PAP Program Action Plan

PDO Program Development Objective

P a g e 159 | 186
PforR Program for Results

PM Performance Measure

POM Program Operational Manual

PPSD Project Procurement Strategy Document

QCBS Quality and Cost Based Selection

REOI Request for Expressions of Interest

RMT Regional Mobile Team

RSC Regional Steering Committee

RTC Regional Technical Committee

TAC Tender Award Committee

ToRs Terms of Reference

UIIDP Urban Institutional and Infrastructure Development Program

ULG Urban Local Government

ULGDP Urban Local Government Development Project (or ULGDP I)

ULGDP II Second Urban Local Government Development Program

UREFMFB Urban Revenue, Fund Mobilization and Finance Bureau in MUDCo

P a g e 160 | 186
 1. INTRODUCTION

In Ethiopia, for federal level budgetary bodies, public procurement is regulated by the Public
Procurement and Property Administration Proclamation No. 649/2009 and the Federal Public
Procurement Directive dated June 2010.

The Proclamation established the Federal Public Procurement and Property Administration Agency
(FPPPAA) as a body responsible for regulation and monitoring of federal bodies’ public procurement
activities. The FPPPAA has also developed and issued the Public Procurement Manual dated December
2011, Public Procurement Audit Manual dated May 2011 and the Manual on Procurement Complaint
Procedure dated April 2011.

The nine regional states and two federal city administrations, Addis Ababa and Dire Dawa, have their
own procurement proclamations and directives, which are based on the federal prototype. The ULGs are
required to abide by their respective regional procurement laws. At the federal level, directives, manuals,
and standard bidding documents and standard requests for proposals templates have been issued. Most of
the regional states have also issued these. However, some of the standard bidding documents and
standard requests for proposals templates are not comprehensive, and some of the procuring entities lack
knowledge and understanding of the proper implementations of the procurement legal framework. As a
general assessment, the procurement legal framework of the nine regional states and two city
administrations are found to be sufficient, with some shortcomings with respect to content and many
weaknesses in implementation.

The major issues with all the implementing agencies are the weakness of implementation of the
applicable public procurement rules and procedures including complaints handling and oversight
mechanisms. Both the regional government entities and the ULGs have limited capacity to follow the
rules and procedures, so there is a risk of the agencies under performance in implementing the applicable
procedures under the program. The overall performance of procuring entities in complying with the
established system and therefore ensure transparency, efficiency, and economy is found to be deficient.

Several risks were identified for Program procurement and contracts administration. These are:
-compliance with national and regional directives;
ak procurement capacity at the ULGs;
nsparency and fairness issues related to procurement process, as the result of not implementing the legal procedures
available;
mpetitiveness issues as the result of involvement of state-owned enterprises in tenders and application of different
preferential treatment and reservation schemes to MSEs;
ak accountability, integrity and oversight arrangements;
k contracts administration, complaints handling mechanism, and the inefficient resolution of contractual disputes;
r procurement recording;

P a g e 161 | 186
l and knowledge gap in the procurement staffs of ULGs as well as the Tender Award/Procurement Endorsing Committee
members; and
e of ULGs Procurement Plan is not SMART especially in not procuring as per the planned time.

To overcome the above mentioned the following four mitigation measures should be implemented:

First, ULGs will have to comply with the MCs to participate in the Program. These include having the
minimum institutional and staff capacity in place. This will be checked annually through APA.

Second, implementation of activities specified in the PAP will be closely monitored. This includes
measures to build capacity of ULGs and other entities for procurement.

Third, an annual procurement performance audit will be carried out through the Regional Public
Procurement and Property Administration Agencies (RPPPAAs). This will also be supported by DLI 8
providing an incentive for the RPPPAAs to perform.

Fourth, the MUDCo through the OFAG or an consultant will carry out VfM audits of ULGs’ investments
in infrastructure.

As per the Program Operation Manual, the responsibility for third mitigation measure is given to
FPPPAA and the RPPPAAs to achieve the program objective shortly described as follows:

1.1. Urban Institutional and Infrastructure Development Program

The Ministry of Urban Development and Construction of the Federal Democratic Republic of Ethiopia,
with support from the World Bank and the Agence Francaise de Development (AFD) is implementing the
Urban Institutional and Infrastructure Development Program (UIIDP) during the period from March 2018
to December 2023.

The UIIDP will provide Performance Grants (PGs) for investments in infrastructure and services and in
capacity building for 117 urban local governments (ULGs) and capacity building in all nine Regional
Governments (RGs), MUDCo and several Regional Ministries/Agencies.

The UIIDP is being financed through World Bank & AFD Program-for-Results (PforR) financing
instrument at the regional and ULG levels and an Investment Project Financing (IPF) instrument at the
Regional level. The regional governments and urban local governments are expected to provide matching
funds (counterpart contributions) as per the percentages agreed between MUDCo and the World Bank
which are stated in the IIDP Program Operations Manual.

Funding available under the UIIDP will depend on the performance of each city and Regional
Government assessed annually against verifiable results described in the Program Operations Manual
(POM) and in the Annual Performance Assessment Guideline (APAG) which is a standalone Annex of
the POM.

Program Development Objective

P a g e 162 | 186
The Program Development Objective (PDO) of the UIIDP is to enhance the institutional performance of
participating urban local governments to develop and sustain urban infrastructure, services, and local
economic development.

2. BACKGROUND TO THE PROCUREMENT AUDIT

As per the Ethiopian Procurement Laws, the RPPPAAs have mandates to conduct procurement audits on
public entities within their jurisdictions. The FPPPAA will be responsible for all training of regional and
ULG officials on procurement laws, procedures and procurement audits and ensuring the quality,
consistency and alignment of the procurement audit reports. Each Regional Public Procurement and
Property Administration agency will monitor the proper applications of the legal procedures including
availing the legal documents to the ULGs. The compliance with the legal procedures and use of
appropriate procedures will be monitored through annual procurement audits carried out by the
RPPPAAs.

The UIIDP has been designed to improve the performance of the audit functions of the
RPPPAAs through performance grants based on dedicated DLI. This design incentivizes the
RPPPAAs to better build their audit capacity, control their budget and enhance performance. It is
intended that this enhanced capacity and capability will assist the RPPPAAs to effectively
carryout their statutory obligations of carrying out procurement audits on all public entities under
their jurisdictions.

The RPPPAAs will carry out audits of each ULG and paid under DLI 9 based on timely and
quality audit for each ULG. The UIIDP APAG provides that the assessment for DLI 9 will
carried out as per Table 1 below.

Table 1.DLI 9. Regional Procurement Audit by the RPPPAAs

9 Regional Procurement Audit by Scoring

the RPPPAAs Evidence to be
Produced
1. Procurement Audit report prior First Year, RPPPAA must prepare a 1st
produced timely. procurement audit plan with TOR APA
for the audit to get access to funds.

From Second APA:

As a minimum condition to access 2st to
fund related to audit of a ULG, Procurement Audit with 4th
RPPPAA must deliver timely audit its transmittal letter dated APAs
(by no later than six Ethiopian r no later than six
calendar months after the the end of Ethiopian calendar
the EFY). If the condition is months after the the end
satisfied, scoring calibrated as shown of the EFY
in (2) and (3) below: -:
2. Quality of Audit (25% prior Audit Planning Sampling, Audit Audit report duly signed
reduction max) Execution, and Audit Reporting as by the RPPPAA.
per the TOR included in the POM
1. The Audit Planning Attendance sheets for
includes audit schedules, Audit entry and exit

P a g e 163 | 186
 audit entry meeting; timely meetings.
notification of the auditee
on the audit to be Letters from RPPPAA
conducted; notifying the auditee on
2. The Audit staff/consultant the audit schedule;
shall have a minimum of 5 Letters from RPPPAA
years relevant experience submitting the Audit
and BA/BSC Degree in reports.
procurement and supply
chain management,
Economics, Law,
Engineering, Management,
Accounting or other
related fields of study
3. The selected samples are
representative considering
the nature, complexity,
value, and method of
procurement;
4. The Audit was conducted
as scheduled without
unnecessary disruptions;
5. The Audit Report is
completed with enough
documentation of the
auditing procedures
followed, audits carried
out on all the stages of the
procurement and contract
management process, audit
findings/recommendations;
audit report written in a
clear language and concise
and manner;
6. Consistency of Audit
Recommendations with
Audit findings;
Scoring:
The procurement audit shall be
conducted as per the TOR enclosed
in Annex 6 of this APAG
If 5 out of 6 are satisfied, no
reduction; if 4 out of 6 are satisfied,
reduce 10%, otherwise, reduction of
25%.
3. Follow up of implementation prior A checklist of audit RPPPAAs’ audit
of Audit Findings and findings/recommendations showing findings/recommendations
Recommendations (25% all audit findings/recommendations follow up checklist.
reduction max) of the previous year (including those
spilled over from previous years, if
not addressed); status of
implementation of each
finding/recommendation, action
taken on offenders
Scoring:
If not complied with 25% reduction
for each ULG where this is not
complied with.

P a g e 164 | 186
3. OBJECTIVES OF THE PROCUREMENT AUDIT
The objectives of this Procurement Audit are as follows:

(a) Verify the procurement procedures followed for the project, and identify noncompliance with the
agreed provisions of the legal agreement and applicable Guidelines;

(b) To review the procurement planning, processing, contracting, and implementation processes for
all the participating cities, to confirm their consistency with the agreed program procurement
systems, Project Operational Manual and the Financing Agreement.
(c) To review at the ULG level, the availability, sustainability and operationally effectiveness of the
program procurement systems (legislative, institutional and operational systems including
availability of qualified staff, tender award or procurement endorsing committees and complaints
handling systems) and overall performance of the system in terms of procurement planning and
implementation.

(d) To seek a professional opinion on compliance by the procurement processes with the general
principle of economy and efficiency, equal opportunities, transparency and verify technical
compliance, physical completion and price competitiveness of each contract in the selected
representative sample of contracts.

(e) To review the capacity of implementing agencies (ULGs) in handling procurement efficiently,
comment on the quality of procurement and contracting, and identify reasons for delays, if any
and overall, how procurement management facilitates Program implementation.

(f) To identify any indicators of questionable standards of ethics in the procurement management and
oversight environment that make the processes vulnerable to fraud and corruption or collusive
and obstructive practices and report any suspicious cases. Note fraud and corruption red flags and
report any evidence of fraud and corruption.

(g) To review the effectiveness of procurement complaints handling, contracts implementation

effectiveness in terms of quality delivery (timeliness, cost and fitness to the purpose).

(h) To recommend actions needed to improve project procurement and contracts delivery
performance in light of deficiencies.

(i) To verify that ULGs stated in all their bidding documents that bidders debarred or suspended by
the World Bank are not eligible to bid and contracts are not awarded to such bidders. The list
may be found on the World Bank website: http://web.worldbank.org › Projects › Procurement.

(j) To review procurement complaints, reasonableness of decisions and indicate actions to be taken
to avoid similar complaints and unreasonable decisions, if any.

P a g e 165 | 186
 (k) Produce an annual procurement audit report to be provided to the audited ULG, Regional Bureau
of Finance and Economic Development, Regional Bureau of Urban Development (RGs),
Regional Offices of Auditor Generals, FPPPAA, MUDHo and World Bank.

(l) Check that technical compliance and physical completion reviews for the contracts in the selected
sample have been carried out.

4. SCOPE OF THE PROCUREMENT AUDIT

The annual Procurement Audit will cover all the cities in the region that are participating in the UIIDP
and review the proper implementation of the program procurement system, institutional setups,
availability of skilled staff and clear procurement decisions and delegations. Apart from the institutional
and legal systems, the Auditor will look into the procurement planning and effectiveness of the plan
implementation. The Regional Public Procurement and Property Administration Agencies (RPPPAAs)
will sample contracts procured from each participating city and conduct detailed review of the entire
transaction process from compliance and performance aspects. The Procurement Audit will cover a
minimum of 25% of all rolled and new completed contracts by each implementing ULG each audit year.

5. METHODOLOGY OF THE PROCUREMENT AUDIT

The Procurement Audit exercise may be conducted in the following stages:

- Inception Planning. This stage will involve reviewing the most recent Procurement audit reportsincluding procurement
audits conducted by internal audit units, if any, and obtaining an original and updated, if any,
approved procurement Plan, list of contracts (contracts register) procured during the audit
period/FY, Key Performance Indicator Data Spread Sheet and agreeing the dates for the cities
visits. Inception planning will involve finalizing the list of contracts to be audited per city;
scheduling the visits to the cities; and obtaining the Client’s consensus of the inception plan.
During this period, the auditor is required to review all the program documents to better
understand the implementation arrangement, program procedures and manuals.

– Procurement Audit/review. The audit of procurement will involve reviewing of the implementation of action plans to
address previous audit findings, implementation of the program system (legal framework,
procurement planning (including verification that all eligible procurements in reference to the
financial expenditure summary were included in the Procurement Plan), use of SBDs, bidding
documents, bid evaluations, functionality of the procurement units, tender award/procurement
endorsing committees, effectiveness of decision matrix, internal controls including procurement
audits by internal audit, and complaints handling and contracts management; progress of
implementation of Program Action Plan on procurement ; updating the organization of the
procurement function at the implementing agency (ULGs)and its sustainability; a detailed audit
of the sample of contracts; physical inspection of assets and deliverables under the contracts; and
preparation and submission of the draft Procurement Audit Report. The Procurement audit
coverage may be broadly divided in to four areas: (i) Review of application of procurement legal

P a g e 166 | 186
 framework/system; (ii) institutional performance; (iii) procurement process management; and (iv)
contracts management and results.

–Draft and Final Procurement Audit Report. Preparing the Draft Procurement Audit Report will involve discussion of
the draft report with the ULG and Client in the form of audit exit meeting; incorporating all new
information and comments provided by the ULG and Client into the draft report including
satisfactory Management response as to how the audit issues will be resolved; and submitting the
final audit report to the audited ULG, Regional Bureau of Finance and Economic Development,
Regional Bureau of Urban Development (RGs), Regional Offices of Auditor Generals, FPPPAA,
MUDCo and World Bank.

5.1. Detailed Steps and Procedures

nation and Conflict of Interest. The procurement audit exercise is conducted in five stages. RPPPAA official assigned
for the purposes of a procurement audit, shall avoid any circumstances of conflict of interest and
must not audit any of the cities and contracts where (s) he has provided advice or performed the
procurement function.

Stage 1. Inception Planning.

ive. The objective of this stage is to finalize the work plan, scope and program of the Procurement Audit.
ents. The RPPPAA should obtain the following documents of the Project to facilitate the planning of the Procurement
audit.

i. Original and updated, if any, Procurement Plan approved by the cities/regions/federal levels
(usually part of approved CIP document).
ii. Most recent Procurement Audit Report on the implementation of status of the action plan to
address previous audit findings, Value for Money Audit Report and Annual Performance
Assessment Report, if any.
iii. For the period under audit: Program (Financial) Monitoring Report, List of all contracts
executed by the city, and Key Performance Indicators spread sheet.
iv. Financing Agreement and any amendments.
v. Program Operations Manual.
vi. Annual Performance Assessment Guideline.
vii. Program procurement system legal documents.

cts Review/Audit Data Sheet. It may be useful to develop a standard “contract audit data sheet” to perform the initial
documentary audit. For each of the selected contracts, key information should be gathered based
on documents obtained from the Client. The aim of this initial review is not necessarily to find all
the information, which will be needed for the purpose of the audit, but rather to collect and
compile key procurement data to the greatest extent possible, based on documents made available
to the Auditor. In some instances, specific contract information may not be found at the initial
audit stage. This may be retrieved during later stages of the audit or identified as a deficiency in
the information trail of the project.

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ng of Projects/Contracts for Audit. The RPPPAA will select 25% of the rolled and new completed contracts awarded by
each city administration. If the auditor should find it necessary, during the conduct of the audit, to
introduce variations to the number, nature and other aspects of contracts to be audited, such
changes should be agreed in advance with the Client.

. The RPPPAA will then finalize the work plan, Site Visit arrangements, and Implementation Schedule for the audit as
agreed with the Implementing Agencies. All the arrangements, list of selected contracts and
dates of visits will be compiled into an Inception report and submitted for the Client’s
MUDCo/RBUDCo approval latest August31, two hard and soft copies for both.

Stage 2. Conduct of the Procurement Audit

ve. The objective of this stage is to carry out the procurement audit at each city administration level.

dology. The procurement audit is carried out in the presence of and in close collaboration with the procurement staff of
the implementing agency/city. The implementing agency will be informed of the audit well in
advance and given opportunity to prepare any required documents in advance of the site/cities
visit. Findings/Recommendations on performance of the various procurement activities will as
far as possible be concluded after discussion with the relevant staff and justification recorded
against the final findings/recommendations. .

liance with FAs. The RPPPAA will verify whether procurement and contracting procedures and processes followed by the
Implementing Agencies are in compliance with procedures agreed as program system, financing
agreement, program operations manual, annual performance assessment guideline and other
agreed procedures in conformity with approved city Procurement Plan, the regional
proclamations, directives and manuals.

cal Inspection. The RPPPAA will verify, to the extent possible, whether goods, works, and consulting and non-consulting
services contracted were supplied/completed according to the required specifications and
technical standards and comment on the reasonableness of prices and physical completion of
the contract. In this context, the Auditor will randomly select 10% of the number of contracts
under audit under each category of goods and works and visit the project or delivery sites to
carry out the physical inspections. Depending on the type of goods/works, the following types
of inspections should be performed as appropriate: (a) standard physical inspections of
goods/installations: quality control (conformity with technical specifications stipulated in the
contract) and confirmation that quantities were delivered; (b) site visits to works: field visits
should be undertaken to verify the status of works or to confirm their completion, documentary
checks (certificates of acceptance/completion, defects list, tests, etc.) should also be made.
Where appropriate, and to the extent practical, prices should also be compared with similar
contracts financed by other agencies in the country and the region and verified against local and
international market prices for the items in question.

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d and Corruption. Identify and report on any red flags and possible cases of fraud and corruption and/or suspected cases
of collusive, coercive, or obstructive practices as defined in the Bank’s fraud and corruption
guideline.

ut. The output from this stage of the assignment is the preparation of a brief summary of findings on each sampled
contract which should be completed immediately after the audit and discussed with the ULG at
the exit conference before the RPPPAA departs from the city. The brief summary of findings
and minutes of the exit conference will be prepared by the RPPPAA and signed by both parties.
One copy of the summary and minutes will be given immediately in the field to the ULG and
copies will be annexed later to the Procurement Audit Report for the city.

e 3. Preparation of the Draft and Final Annual Procurement Audit Report.

Objective. The objective of the third stage is to prepare the Final Annual Procurement Audit
Report.

Methodology. The RPPPAA will prepare the Draft and Final Annual Procurement Audit Report
for each city which will be submitted to the audited ULG, Regional Bureau of Finance and
Economic Development, Regional Bureau of Urban Development (RGs), Regional Offices of
Auditor Generals, FPPPAA, MUDCo and World Bank.
The draft report shall be finalized incorporating any comments to be provided and
management responses on the findings/recommendations of the RPPAAs.

eport will be as per the format in Annex 4.

Output. The Final Annual Procurement Audit Report.

h city and one synthesis report for all audited cities will be issued latest by January 7 in the physical year.

6. DELIVERABLES
As mentioned above, the conduct of the Procurement Audit will be in three stages with distinct outputs as
follows:

i. Stage 1: The RPPPAA output at this stage will be an Inception Plan detailing: (i) the work
plan, and (ii) the implementation schedule of the audit (including site visits and dates) for
the Client’s prior clearance. This stage and output should not exceed fifteen (15) days
from the commencement of services,
ii. Stage 2: The output from this stage will be the RPPPAA’s brief summary of findings on
each sampled contract and minutes of the exit conference. These will be given to the
ULG in the field and copies will be annexed later to the Final Annual Procurement Audit
Report.
iii. Stage 3: The output from this stage will be theDraft and Final Procurement Audit Report
on the audited City.

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 iv. All reports and deliverables are to be delivered in English Language in both hard and
electronic copies (7 copies each). One copy each will be submitted to the ULG, Regional
Bureau of Finance and Economic Development and Regional Office of the Auditor
General, and the remaining four copies will be submitted to the Regional Bureau of
Urban Development who will retain one copy and submit three copies to MUDCo who
will retain one copy and submit one copy each to FPPPAA and the World Bank.

Deliverable Timelines
Inception Report August 31
Exit Conference Minutes October 15
Draft Report November 15
Final Report January 7

7. DURATION OF THE PROCUREMENT AUDIT AND ASSIGNMENT OF STAFF FOR THE

AUDIT
The duration of the procurement audit and assignment of staff depends on the number of cities in each
regional state. The RPPPAA will have the responsibility for estimating the number of staff required,
costing and the man day requirement for the assignment. The RPPPAA will assign properly qualified,
trained and experienced staff for the procurement audit. The assignment should commence soon after
the end of the financial year on July 7 but should commence not later than July 31, It should be
completed by not later than January 7 each year.

8. TEAM COMPOSITION AND QUALIFICATIONS

The Procurement audit team should have one team leader and, depending on the number of auditee
entities (number of cities in each Regional State) and possible number of contracts to be reviewed,
minimum of two public procurement and contract management experts. Each of them should have
minimum of first-degree qualifications in procurement, supply chain management, Law, commerce,
engineering and related field of studies with minimum of five years of direct experience in public
procurement and contracts management. For RPPPAA staffs, attendance of Procurement audit training is
mandatory. Knowledge of public financial sector management, institutional performance development
and auditing will be an advantage. Special training on Program for Result implementation monitoring
would be an advantage.The RPPPAA shall provide any additional technical personnel required to audit
civil, electrical, mechanical and chemical works and products.

9. Management of the Assignment

The mandate of the FPPPAA for procurement audit is derived from the Ethiopian Federal Government
Procurement and Property Administration Proclamation No. 649/2009 and established under the Article
15.9 (Functions of the Agency) and Article 5.19 of the Directive to conduct audit to ensure that
procurement and property administration activities of public bodies are in accordance with this
Proclamation and other documents governing public procurement and property administration; and make

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arrangements necessary for procurement audit or inspection to be conducted by the Agency in respect of
the execution of procurements by the Public Body, including the following:-

a) Make available in due time, documents necessary for procurement audit,

b) Cause the provision of office space and facilities for employees assigned to conduct the procurement
audit.

c) Assign a staff to give explanation on the conduct of procurements made by the Public Body.

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APPENDICES
Appendix1: Note on the Selection of the Sample contracts

2. To assist the RPPPAA in selecting the audit sample, the Client (or ULG) will provide to the
RPPPAA, at commencement of the audit, comprehensive lists of contracts, if available, for each city and
copies of the relevant FAs and, Program Operations Manual (POM), Annual Performance Assessment
Guideline and previous procurement audit reports including internal audit reports and a report on the
status of implementation of the action plan to address previous audit findings and recommendations ,
value for money audit reports and Annual Performance Assessment Reports. On the basis of the
information provided by the Client and other sources, the Auditor will prepare the list of contracts to be
audited in each City.

2. The following criteria and considerations should be used in selecting the sample contracts to be
audited:

 The Auditor shall verify that all eligible procurements in reference to the financial expenditure
summary were included in the Procurement Plan before sampling. If there are procurements
carried out outside the procurement plan, the sampled contracts for auditing shall include those.

 Nature, size and complexity of contracts will be taken into considerations while sampling the
25% of contracts for detail review. In addition, to the extent possible, the audit sample should
cover most of the following categories/scenarios:
 Nature: civil works, goods, non-consulting service contracts, supply and installation,
consulting services;
 Complexity: simple, less complex and complex;
 Value: high, medium and low;
 Critical items: Contracts that are necessary for the success of the project;
 Method of Procurement: Pre-qualification, Single/Two Stage bidding, ICB, NCB,LIB,
Shopping Direct Contracting, etc. for goods/works/non-consulting services; QCBS, QBS,
Least-Cost, Individual etc. for selection of consultants; and
 Contract awards: contracts awarded to the lowest evaluated bidder which met the
qualification criteria; awarded to higher bids as the lowest bidders failed to meet the
qualification criteria or for other reasons, etc, awards to national or international firms,
awards to single and multiple lots, awards affected by domestic preference.
 Contract Management: Contract amendments, price revisions, protests/claims during
contract execution and bidding stages.

The RPPPAA shall audit project files with special focus on the following aspects, documentation and
procedures:

 Executing Agency's Capacity, Adequacy of Staff (availability and skills); Role of

Procurement Agents/Consultants; Implementation Arrangements; defined procurement
decision roles, maintenance of Minimum Access Conditions;

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  Procurement Plans and Monitoring;
 Advertising;
 Pre/Post Qualification;
 Short listing (for Consultancy)
 Bidding Documents;
 RFP (for consultancy)
 Bid Opening
 Evaluation and Awards;
 Technical Proposals Evaluation Report
 Combined evaluation report
 Bid Validity Extensions;
 Protests or complaints from Bidders/Contractors;
 Signed Contracts;
 Contract Amendments and Change/Variation Orders;
 Delays in payments; actual contract payments vs. contract award amount;
 Securities (for Bid, Performance, Advances, Insurance, Liability, etc.);
 Contractors’ Claims/ Contractual Disputes and their Resolution;
 Damages and Penalties for Delays, non-compliance with Functional Guarantees, etc.;
 Reasons for Slow Progress of Completion;
 Imports, Customs, etc. if any;
 List of deliverables and completion (date, description, quantity, location of goods or works,
inspection and acceptance reports);
 Other Relevant Matters.
Using the documents and information itemized above and other information collected during the
audit, the RPPPAA shall compile a comprehensive history of the procurement process for each contract
audited.

Distortions in the procurement process are frequently manifested in one or more of the following
situations:

 low participation of bidders and reduced competition;

 one or more bidders winning a disproportionate amount of contracts in a project over time;
 bid prices consistently over cost estimates and/or current market prices;
 Significant differences in the technical scoring of the first and second ranked bidders;
 significant number of changes from bid to contract award and to final completion; and
 significant and recurring increases in the final contract price over the original bid price and/or
the original contract price.
 Significant Variation Orders (change orders);
 Inordinate delays in procurement decision making;
 Unjustified cancelation of procurement process;
 Repetitive request for extension of bid validities;
 Rejection of majority of bids and ending up with single qualifier

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5. If patterns are identified in a series of contracts, which reflect any of the above distortions, one or
more of the contracts in the series should be selected for more detailed audit in the audit sample.

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Appendix2: Checklist of Data and Documents to be Made Available by the Client to the
Procurement
Auditor for each City

 Credit Agreement, Guarantee Agreement, Program/Project Agreement (the legal documents).

 All amendments to the legal documents.
 Agreed Program Action plans.
 Program/Project Operational Manual.
 Annual Performance Assessment Guideline (APAG).
 Annual/semi-annual reports from the Executing Agencies, as available.
 Financial audits, previous procurement audits including internal audits and a report on the status
of implementation of the action plan to address previous audit findings, value for money audits.
 Relevant Program/ Project Status Reports (PSRs); relevant correspondance files, etc.
In addition, the RPPPAA will be given references and, as needed, copies of the Government Guidelines,
Standard Bidding Documents and other relevant procurement notes and policy statements including
Regional Guidelines on Standard Bidding Documents, Evaluation Reports, etc. A list of the Federal and
Regional PPPAAs publications, notes, etc., dealing with procurement and consultant services will be
given to the Auditor so that they can request any additional publications, notes, etc., which they may
consider relevant.

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Appendix3: Checklist of Documentation to be provided by the ULGs

For All Contracts in the Audit Sample:

1. Original and Updated, if any, approved Procurement Plan, including list of all contracts.
2. Publications in National Press and other Trade Journals.
3. National Competitive Bidding (NCB) procedures:
4. Consultant Contracts:
vii. Request for Expressions of Interest (consultants), if applicable:
 date and publication.
viii. Request for Proposals and Short List (consultants):
ix. Clarifications and Addenda issued:
x. Records and minutes of proposal opening:
xi. Evaluation of proposals (consultants):
xii. Minutes of Negotiations and Signed Contract (consultants):
xiii. Signed Contracts and Contract Amendments:
xiv. Payment invoices and evidences of payments:
xv. Deliverables and Reports.

5. Goods, works, technical services and non-consulting services contracts:

x. Invitation for pre-qualification, if any:

 date and publication.
xi. Prequalification Documents, if any:
 Clarification requested and issued; and
 Addenda issued.
xii. Prequalification Evaluation, if any:
 Clarification requested and received; and
xiii. Invitation for Bids:
 date and publication.
xiv. Bidding documents:
 Clarifications requested and issued;
 Addenda issued;
 Minutes of pre-bid and site meetings.
xv. Bid Evaluation Report:
 Minutes of bid opening;
 Clarifications requested and received;
 Complaints received and responses;
xvi. Notification of Award/Letter of Acceptance
xvii. Signed Contract:
xviii. Contract Amendments, if any:
xix. Payment invoices and evidences of payments:
xx. Inspection and Acceptance Reports.

Any other relevant information/documentation required by the Auditor relating to contracts reviewed.

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P a g e 177 | 186
Appendix4: Reporting Format for Draft and Final Annual Procurement Audit Report

 Title Page with information on: Country Name; Region name; City name; Project Name; Name
of the Client/Agency; Name of RPPPAA that conducted the Procurement Audit; Date of Report.
 Table of Contents
 List of Tables
 List of Figures
 Acronyms and Abbreviations
 Acknowledgements
 Executive Summary including the findings on the Audit of the Cities procurement environment
including status of implementation of previous audit findings and recommendations, if any,
institutional setups, procurement decision matrix and staff availability; Procurement Planning and
monitoring; ongoing procurement processes and implementation issues; signed contracts,
assessment of risk to procurement, complaints handling and resolution issues; internal controls
including procurement audits by internal audit, contract administration issues, results achieved
and recommendations for improvements and proposed actions.

Section 1: Introduction
(Background; Objectives of Assignment; Approach & Methodology, Reference documents, Audit
Scope and Approach, Audit/Assessment Process, Organization of the Assignment Teams. Logistics, dates
of visits, Challenges faced, Team Responses to such challenges.

Section 2: Findings on Review of Procurement Processes

[As per paragraph 3.a), provide a brief description of findings on procurement processes, including procurement
planning, publications, bidding, evaluation, and awards – see also Worksheets in Annexes 5.1, 5.2, 5.3 and
Discuss all audit findings including status of implementation of previous audit findings ]
Section 3: Findings on Review of Contract Administration
[As per paragraph 3.l), provide a brief description of findings on procurement processes, including procurement
planning, publications, bidding, evaluation, and awards – see also Worksheets in Annexes 5.1, 5.2, 5.3 and
Discuss all audit findings including status of implementation of previous audit findings ]
Section 4: Indication of Possible Governance Issues
[As per paragraph 3.f) of this guidance note, provide a brief description of any findings on red flags that could lead
to possible fraud or corruption related to the procurement processes, contract administration, or any other related
issues at contract, project, sector, or country level]

Section 5: Progress of Implementation of Recommendations in the Last Audit

[brief description of the progress with regard to the recommendations and actions submitted in the last procurement
audit)]

Item Audit Recommendations Responsible Current Status of Action to be Remark

No. of Last year* Body Implementation taken if the
recommendation
is not
implemented

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*include any outstanding recommendations from the years previous to last year also

Section 6: Conclusion, Observations and Recommendations

- Narrative (conclusions, observations and recommendationsincluding actions to be taken on any
inactions in addressing previous audit findings and recommendations); and
- Table as per format below
No Observation/Finding Recommendation
1 - -
2

NOTE:
Annexes containing detailed audit data, supporting documents as evidences, if necessary, Procurement
register and list of selected/sampled contracts for detailed inspection with detailed information can be
provided.
The RPPPAA shall prepare audit checklist for the procurement audit however, optionally the RPPPAA
may use the checklists shown in the Annex 5.

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 Appendix 5: Contract procurement review Data collection samples:

Appendix5.1: Worksheet for Review of Procurement Processes and Contract Administration of

Contracts Awarded under Shopping/Request for Quotations Procedure

Date of Review: Name of Reviewer:

Contract Name/No/ Contract Date: Contract Amount USD:

Contractor’s Name and Address:

Aspects Findings and Comments

Procurement What was missing in the file?

Documentation (Filing) Does the unit keep all procurement files in one location?
Who handles the filing?
Are evidence of payment (e.g. payment vouchers, receipts) filed separately in the finance unit?
Is this Contract in the
Agreed Procurement Plan?39
Solicitation Letter issued to Date of Solicitation Letter:
minimum of three firms and Closing Date:
the names of the firm to Sent to:
whom sent
Time allowed for
submission of written # …… days
quotations
Verification (not evaluation) Names of the suppliers who responded to the solicitation letter are:
of existence of the 1) Name, bid amount
quotations. 2)
Names of suppliers who 3)
gave quotations
Quotation evaluation report Evaluation report date:
and date; were quotations Quotations opened at the same time?
opened at the same time?
Comments if any
Signed Contract / Purchase Date of signed contract or Purchase Order Document:
Order document Date of beginning and end of the contract:
Bill of lading/Way Bill, if
any
“Delivery Receipt” or Date & Delivery Receipt No.
“Store Receipt
Complaints or related If yes, date of complaint:
matters Name of complainant:
Date resolved:
Fairness and Treatment of bidder’s complaint:
39

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Actual completion date
Timeliness of Payments # of days between Date of Invoice and Payments?
Indication of possible
Governance Issues
Physical inspection for this
contract?
Other matters
Compliance with key
agreed provisions
Yes or No (explain)

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 Appendix5.2: Worksheet for Review of Procurement Processes and Contract
Administration of Goods/Works Contracts

Date of Review: Name of Reviewer:

Contract Name/No/Date: Contract Amount USD:

Contractor’s Name and Address:

PROC. METHOD: ICB NCB LIB Direct Contract Others, specify:

__________

CATEGORY: Goods Works Non-Consulting Services

Aspects Findings and Comments

Procurement Documentation (Filing) What was missing in the file ?

Does the unit keep all procurement files in one location ?
Who handle the filing?
Are evidence of payment (e.g. payment vouchers, receipts) filed adequately?
Is this Contract in the Agreed
Procurement Plan?40
Advertising Date of Advertisement:
Where was it advertised?

Pre/Post qualification
Quality of Bid Documents
Time allowed for submission of bids Closing date for Advertisement:
Number of days to submit bids:
Is the number of days sufficient?
If no, how many days should have been given to the bidder:
Bid opening & minutes of bid opening Bid Opening Date:
date(s) Minutes of Bid Opening on file:
Who attended the Bid Opening?
Was price read out loud?
Record of the read out prices:
Bid security records: Is it as stated in
the bidding document?

40

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BER, verify existence of bids and give
Names of bidders, checking also their
eligibility
Methods used in the evaluation of bids
and awards of contracts objectives &
made known in the bidding documents
and not applied arbitrarily?
Bid validity Extensions? How many
days? Is the bid valid?
Date of Publication:
Publication of contract award Where was it published?
Contract document (same as for
selected bid ?)
Reference to Bank and “no objection,” Date of NOB
if any (not required under Agreement) OR N/A
Advance payment and guarantee:
details and records:
Performance Security details and Name of Bank:
records Amount:
Complaints and related matters If yes, date of complaint:
Name of complainant:
Date resolved:
Fairness and Treatment of bidder’s complaint:
Contractual completion date (extended? Plan date for end of contract as scheduled:
amendments, variation orders Actual:
acceptable?) Date of Amendment, if any:
Revised date for contract to end:
Actual:
Variation orders:
Planned/Actual completion date Planned completion date (as per the approved original procurement plan):
Actual completion date:
Was the procurement completed in time?
Contract payments same as contract? Contract payments scheduled in the contract:
Was it paid as scheduled? Any deviation? Why?

Cost evaluation Pre-tender estimated amount:

Contract Award Amount:
Final Contract Amount:
Was the increase in cost, if any, justified?
Bill of lading/Way Bill, if any
Delivery receipt or like instrument
Liquidated damages, details and
enforcement for delays.
Timeliness of payments Invoice date: Payment date:
Number of days to process payment:
Is this in accordance with the contract? :

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 Indication of possible Governance
Issues?
Other matters

ontract (if applicable)

greed provisions – Yes or No (explain)

this contract (include comment on quality of

goods, services or works)

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 Appendix5.3: Worksheet for Review of Procurement Processes and Contract
Administration of Consultants Contracts

Date of Review: Name of Reviewer:

Contract Name/No/Date: Contract Amount USD

$
Consultant’s Name and Address:

PROC. METHOD: QCBS QBS Fixed Budget Least Cost

CQS Single Source Others, Specify: __________________

CATEGORY: Firm Individual

Aspects Findings and Comments

Procurement Documentation What was missing in the file?

(Filing) Does the unit keep all procurement files in one location?
Who handles the filing?
Are evidence of payment (e.g. payment vouchers, receipts) filed separately in the finance unit?
Is this Contract in the Agreed Date of Procurement Plan:
Procurement Plan?41
Advertising Date of Expression of Interest:
Closing Date:
Where was the EOI advertised
Request for Proposal
Shortlist Date of Short-List:
How many on the short-list?
Short-List is composed of the following consultant (or firm), Country:
Time allowed for submission of
proposals
Evaluation Criteria
Technical Evaluation
Evaluation report, and
comments, if any (verify
existence of proposals)
Financial Bid Opening Bid Opening Date:

41

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 Combined quality and cost
evaluation
Publication of contract award Date and name of publication:
Signed Contract / Purchase Contract No. (or Purchase Order No).……………….. Date of contract signature:
Order document
Advance payment guarantee etc.
Complaints and related matters If yes, date of complaint:
Name of complainant:
Date resolved:
Fairness and Treatment of bidder’s complaint:

Planned completion date (as per the approved original procurement plan):
Actual completion date (Date of final Report):
Was the procurement completed in time?
:
If report was not final or no certification of service delivery, explain why?

Date of invoice:
Date of payment:
Number of days to pay invoice:
Is # of days acceptable? If no, what would you recommend?
Indication of possible
Governance Issues

on (if applicable)

greed provisions – Yes or No (explain)

(include comment on quality
of service)

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