PIM For NAP From Davis - 2013

GOVERNMENT OF THE STATE OF ERITREA
MINISTRY OF AGRICULTURE
NATIONAL AGRICULTURE PROJECT
PROJECT IMPLEMENTATION MANUAL
DECEMBER 2013
State of Eritrea: National Agriculture Project (NAP)
Project Implementation Manual (PIM)
Preface
This Programme Implementation Manual (PIM) is an interpretation of the Financing Agreement signed
between the International Fund for Agricultural Development (IFAD) and the Government of the State
of Eritrea (GoE) to facilitate implementation of the National Agriculture Project (NAP). It is prepared
based on the Financing Agreement, Project Design Report (PDR), IFAD Letter to the Recipient (LTR),
IFAD’s Guidelines on Financial Reporting and Auditing of Projects, IFAD’s Disbursement Manual,
IFAD’s Guidelines for Procurement of Works, Goods, and Consultancy Services, GoE financial
guidelines, regulations and circulars, and experience gained from implementing the Post Crisis Rural
Recovery and Development Programme (PCRRDP), PCRRDP Add-On, and the Catchment and
Landscape Management Project (CLMP). In the event that there is any inconsistency or conflict
between this Manual and the Financing Agreement, the Provisions of the Financing Agreement shall
have precedence.
This PIM is prepared with the objective of providing the implementing agencies, particularly the
National Project Office (NPO) and the Zoba Project Coordinating Offices (ZPCOs) at the Zoba levels
with a guide that would facilitate effective implementation of the NAP. The PIM is presented in two
parts. Part One (and its associated Appendices and Annexes) describes the management and
organizational set up required for Project implementation. It also discusses the procedures and
modalities to be followed when carrying out planning, implementation, management, reporting, and
monitoring and evaluation activities of the Project. It defines the processes to be followed with respect
to Project supervision and environmental screening, mitigation and monitoring. Part Two (and its
associated Appendices and Annexes) of the PIM provides processes and procedures to be followed
on all fiduciary-related aspects during NAP implementation.
The PIM is prepared following the Government’s guideline which requires line ministries and Zoba
administrations to implement development programmes/projects within the existing decentralised
government institutional framework following procedures and modalities that are consistent with the
policies, regulations and directives of the Government. Consequently, the management and
implementation arrangements that are described in this Manual reflect this Government’s approach to
programme/project implementation and management.
Finally, the Manual should be viewed as a dynamic document that needs to be updated whenever
circumstances change to ensure that it remains relevant and responsive to the Project.
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Table of Contents
I. INTRODUCTION AND BACKGROUND 10

A. Background..............................................................................................................10
B. Contents of the PIM Manual..................................................................................11
II. PROJECT FRAMEWORK 11
A. Project Goal and Objective........................................................................................11
B. Project Strategy.........................................................................................................11
C. Project Area, Target Group and Targeting................................................................12
D. Project Description....................................................................................................13
III. INSTITUTIONAL AND IMPLEMENTATION ARRANGEMENTS 19
A. The Collaborative Framework and Implementation Arrangements..........................19
B. Monitoring and Evaluation (M&E)...........................................................................23
IV. ENVIRONMENTAL SCREENING, MITIGATION AND MONITORING 26
A. Environmental Screening Procedures........................................................................26
B. Environmental Evaluation Procedures......................................................................26
C. Mitigation of Environmental Impacts.......................................................................27
D. Environmental Monitoring........................................................................................27
V. PROJECTS COSTS AND FINANCING 30
VI. ADMNISTATION MANAGMENT/ ROLES AND RESPONSIBILITIES OF KEY
ACTORS IN NAP FINANCIAL MANAGEMENT 31
VII. BUDGETING AND PLANNING 35
VIII. ACCOUNTING SYSTEM 40
IX. PROCUREMENT 45
A. Procurement Cycle.................................................................................................45
B. IFAD Prior review thresholds................................................................................46
C. Roles and Responsibilities....................................................................................46
D. Institutional Roles....................................................................................................47
E. Procurement Methods............................................................................................47
F. Inviting Bidders........................................................................................................48
G. Receiving Bids.........................................................................................................49
H. Opening of Bids.......................................................................................................49
I. Evaluation....................................................................................................................51
J. Settlement of Procurement Accounts..................................................................52
X. RECORDS MANAGEMENT 53
VII: INTERNAL CONTROLS 53
XI. FLOW OF FUNDS, CASH AND BANK ACCOUNT MANAGEMENT 55
XII. PROCESSING OF PAYMENTS 63
XIII. FINANCIAL REPORTING 68
XIV. FIXED ASSET MANAGEMENT 70
XV. AUDIT ARRANGEMENTS 71
XVI. IFAD SUPERVISION 73
XVII. GRANT COMPLETION AND CLOSING 75
Acronyms
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ADDA Agricultural Division of District Administration

AED Agricultural Extension Department
AEZ Agro-Ecological Zones
AFD Administration and Finance Division
AWPB Annual Work Plan and Budget
AWRD Agricultural Water Resources Development
CA Conservative Agriculture
CAADP Comprehensive Africa Agriculture Development Programme
CAHW Community Animal Health Workers
CB Central Bank
CGIAR Consultative Group for International Agricultural Research
CIMMYT International Maize and Wheat Improvement Centre
CIP International Centre for Potato
CIP International Potato Centre
CLMP Catchment and Landscape Management Project
COSOP Country Strategy Opportunities Paper
DA District Administration
EC European Community
ELWDP Eastern Lowland Wadi Development Project
NSU National Seed Unit
ERN Eritrean National Currency
ERR Economic Rate of Return
FA1 Farmers’ Association
FA Financing Agreement
FC Financial Controller
FDP Fisheries Development Project
FO Farmer Organizations
GBLADP Gash-Barka Livestock and Agricultural Development Programme
GDP Gross Domestic Product
GEF Global Environmental Facility
GOE Government of Eritrea
HH Household
ICARDA International Agricultural Research in the Dry Areas
ICBA International Centre for Bio-saline Agriculture
ICRISAT International Crop Research Institute for the Semi-Arid Tropics
ICT Information and Communication Technology
IDD Irrigation Development Division
IDP Internally Displaced People
IFAD International Fund for Agricultural Development
IPRSP Interim Poverty Reduction Strategy Paper
LPA Lead project Agency
MLWE Ministry of Land, Water and Environment
MOA Ministry of Agriculture
NAP National Agricultural Project
NARI National Agricultural Research Institute
NEPAD New Partnership for Africa’s Development
NEPFP National Economic Policy Framework and Programme
NGO Non-Governmental Organization
NNSS National Nutrition Surveillance System
NPO National Project Office
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NUEW National Union of Eritrean Women

OCHA Office for the Coordination of Humanitarian Affairs
PCR Project Completion Report
PCRRDP Post-Crisis Rural Recovery Development Programme
PERA Proclamation Establishing Regional Administration
PIC Planning and Implementation Committee
PIM Project Implementation Manual
PSD Planning and Statistics Division
PSMU Project Support Management Unit
RSD Regulatory Services Department
SDR Special Drawing Rights
SPC Sub-Zoba Planning Committee
TLU Total Livestock Unit
TOR Terms of Reference
WA Withdrawal Application
WHH Woman Headed Household
ZPCO Zoba Project Coordination Office
ZNRS Zoba Northern Red Sea
ZSRS Zoba Southern Red Sea
I. INTRODUCTION AND BACKGROUND
A. Background
1. Eritrea has a decentralized government with two major levels: (i) the central level, and (ii) the
Zoba (regional) level. Zoba administrations operate at a three further levels: Zoba; Sub-zoba (sub-
regions), and Kebabi (group of 1-5 villages including 400-500 households). Eritrea is divided into: 6
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Zobas (Anseba, Debub, Gash Barka, Maekel, Northern Red Sea, and Southern Red Sea); 58 Sub-
zobas; and 701 Kebabis. At central level the national parliament with 150 assembly seats is the
legislative body. At Zoba level an appointed Governor chairs the Zoba council, heads the Zoba
administration and is a member of Executive Council at the central level. A unified service is
maintained with staff at Zoba/Sub-zoba levels operationally/administratively responsible to the Zoba
Governor, and technically to their respective departments in the national line ministries. Kebabi
administration is headed by the Kebabi Administrator.
2. Achieving food security is a primary objective of the GoE and the cornerstone for sustainable
economic growth and poverty alleviation strategy in Eritrea. The realization of this food security
objective of the Government primarily rests on enhancing domestic food production. However,
increasing domestic food production requires addressing the multitude of challenges currently facing
the agricultural sector, including over-dependency on rain-fed agriculture; rapid degradation of land
and loss of soil fertility; small farm size and farm land, and fragmentation and dispersion of plots;
utilization of low level of production and post harvest technologies; inadequate agricultural research
and extension service; low producing breeds, inadequate animal disease surveillance and control,
and shortage of animal feed; inadequate rural infrastructure; low level of integration and management
of production systems; and inadequate financing of the sector. Over the last few years, the
Government has worked with its development partners to implement programmes/projects that aim at
addressing some of the challenges. Some of such interventions include the International Fund for
Agriculture Development (IFAD) supported ones, such as the Post-Crisis Rural Recovery
Development Programme (PCRRDP), the IFAD/European Community supported one – the Post-
Crisis Rural Recovery Development Programme Add-On (PCRRDP Add-On) and the IFAD/Global
Environment Facility (GEF) supported one – the Catchment and Landscape Management Project
(CLMP).
3. However, the challenges are still many and the Government and its development partners
continue to devise ways and means to systematically and sustainably address them. As part of this
continued endeavour, the GoE signed a Grant Agreement with IFAD on 22 nd December 2012 to
finance implementation of the National Agriculture Project (NAP); the Grant Agreement became
effective on the same date. To guide and facilitate implementation of the NAP in line with the
Financing Agreement, the Ministry of Agriculture (MoA), together with the regional administrations of
the six Zobas (Anseba, Debub, Gash Barka, Maekel, Northern Red Sea and Southern Red Sea) have
put in place the necessary institutional setup at the national and Zoba levels. The setup includes
expansion of the existing National Steering Committee (NSC) to include the additional Zobas,
establishment of Zoba Project Coordination Committees (ZPCCs), realigning the existing National
Project Office (NPO) to ensure consistence with the NAP requirements, and establishment of Zoba
Project Coordination Offices (ZPCOs) in those Zobas where they were non-existent. To further
strengthen the Project Coordination Offices, technical experts (subject matter specialists) from the line
departments, divisions and units of the MoA at Headquarters and Zoba offices were assigned with the
aim of providing technical guidance to NAP implementation.
4. The provision of a PIM to help guide Project implementation is a Financing Agreement

requirement. This PIM is prepared to serve as a reference document for the staff of the NPO,
ZPCOs, and other implementing bodies during the course of NAP implementation. Efforts have been
made to include as many tools as possible to provide the required guidance and facilitation to the
implementers. However, the document is, by no means, exhaustive in terms of what the
implementing agencies will require for effective delivery of the Project goal and development
objectives.
B. Contents of the PIM Manual
5. This PIM consists of two parts; Part One (and its associated Appendices and Annexes)
describes the management and organizational set up required for Project implementation. It also
discusses the procedures and modalities to be followed when carrying out planning, implementation,
management, reporting, and monitoring and evaluation activities of the Project. It defines the
processes to be followed with respect to Project supervision and environmental screening, mitigation
and monitoring.
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6. Part One is divided into four Sections. The first Section is the introductory part which deals
with background information. The second Section presents the Project framework, including its goal,
development objectives, strategy, components, Project area, target groups and targeting. The third
Section defines the Project planning, implementation, management, reporting, monitoring and
evaluation processes and the organizational structure and implementation arrangements of the
Project. It also deals with the role of Project supervision, namely Project Launch Workshop, Project
Reviews, Project Supervision Missions, and Project Completion Report. The fourth Section describes
environmental screening, mitigation, and monitoring procedures to be followed with respect to sub-
projects and activities to be financed by NA
7. Part Two (and its associated Appendices and Annexes) of the PIM provides processes and
procedures to be followed on all fiduciary-related aspects during NAP implementation.
II. PROJECT FRAMEWORK
A. Project Goal and Objective

8. The Project Goal is to contribute to rural household and national food security and poverty
alleviation. The Development Objective is to raise smallholder agricultural production and
productivity.
B. Project Strategy
9. The Project strategy is to employ an integrated development approach to addressing the
identified constraints facing the target beneficiaries. The following are the facets of the approach:
10. National Framework for Smallholder Agricultural Development – NAP seeks to lay the
foundation for the medium to long-term development of smallholder agriculture in order to ensure rural
household and national food security and reduce poverty. This approach is consistent with the IFAD
country programme approach to support the transition from a focus on post-crisis livelihood re-
establishment to structured agricultural development for national food security and alleviation of rural
poverty.
11. Agricultural Water Resource Development – Limited water availability is a major constraint for
agricultural development in Eritrea. With extremely limited perennial surface water (no lakes, one
perennial river) and limited, though underexploited, groundwater, Eritrean agriculture depends mainly
on rainfall and the resultant runoff from the highlands. Rainfall in the highlands serves a variety of
users and agricultural systems (rain-fed, irrigated, rangeland) within each watershed. Adopting a
watershed approach and using watershed characterization and studies of related hydrometry, to
understand the inter-linkages between these systems, is therefore crucial to develop a coherent
strategy for sustainable agricultural production.
12. Sustainable productivity enhancement – Mixed agriculture, including cropping and livestock
production, is practiced by smallholders to improve household food security, as a drought coping
strategy, to maximize utilization of their land resources and to derive benefits from the communal
rangeland. The Project will support and improve this rational approach to resource exploitation.
13. Livestock as priority investment for low income households – Food security, including
nutrition, cannot be effectively addressed without proper attention to livestock. More than 80% of
smallholders own livestock and over 60% of agricultural land is suitable only for livestock. However,
support to livestock should not worsen the degradation of rangeland which is already at a critical
stage, and importantly should seek to enhance food security of the low income households, including
women, with limited access to agricultural land.
14. Technology generation and dissemination – A participatory approach to the development and
dissemination of modern and traditional technologies (including labour-saving technologies) involving
the producers, MOA, Agricultural Divisions of the Zoba administrations and NARI will be piloted by the
Project. When proved successful, it will be adopted as a national strategy for widening access to
appropriate and affordable agricultural technologies and technical support services.
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15. Community Focused Development – Settled communities will be the focus for Project
activities within each watershed. The interventions to be implemented within each watershed will be
tailored to the potential of the natural resource base and the needs of the communities. Local
community institutions and producer organizations (e.g. Water Users Associations (WUAs)) are vital
for sustainable development and will be strengthened and encouraged to participate in all stages of
implementation of Project activities including designing, construction, operation and maintenance of
infrastructures, including irrigation, and soil and water conservation, seed development facilities, and
livestock investments.
16. Streamlined Policies and Formalization of Stakeholder Participation – Various informal

approaches operate to facilitate investments/contributions from different stakeholders in activities
such as irrigation, afforestation, livestock development and local institution development. National
modalities will need to be streamlined and formal arrangements for responsibility-sharing between
GOE and producers/communities will be established to avoid ad-hoc arrangements which may create
conflicts and reduce transparency/accountability.
C. Project Area, Target Group and Targeting

17. Project Area – The Project will be national in scope with activities being implemented in 34
Sub-zobas spread across all six Zobas and in the three AEZs. It should be noted that some Zobas
have a mixture of different AEZs. The total agricultural area covered by the Programme has been
estimated at 1.2 million ha. However, some activities, namely watershed characterization and
establishment of the National Seed System, will have a national focus and be implemented through
the MOA but with strong collaboration with the Zoba administrations.
18. Target Group – The 65% of the Eritrean rural population (c. 2.6 million individuals) who are
classified as low-income will constitute the wider target group of the Project. The total population of
the 34 Sub-zobas the NAP will initial operate in is estimated at 1.7 million. The NAP is expected to
benefit 81,292 households or approximately 410,000 of these individuals (based on average poor
household size of 5 people). They engage mainly in rain-fed agriculture using poor production
practices; this, together with erratic climatic conditions, is accelerating desertification and further
reducing agricultural productivity. The lowest income groups are represented by smallholders
cultivating only rain-fed crops. They have food deficits even in good years due to low yields resulting
from the low level of technology, late ploughing (because they have no draught animals), small land
holdings and lack of livestock1.
19. The beneficiaries will be selected according to specified criteria, beginning with the selection
of priority watersheds and including minimum targets for WHH participation which should lead to
16,258 WHHs benefiting.
20. Specific target groups of the Project are:

 Households cultivating rain-fed crops on holdings of not more than 2.0 ha in arid or semi arid
areas and not more than 1.0 ha in the highlands, with no livestock and no access to irrigation;
 Households cultivating irrigated crops of 0.1-0.25ha;
 Pastoralist households with not more than five heads of cattle and not more than ten sheep
and goats, and undertaking limited rain-fed agriculture to improve their family food security;
 Transitional landless/near landless including households resettled/to be resettled (these in
turn comprise of IDPS, expellees, returnees and demobilized soldiers); and
 Women and women-headed-households.
21. Targeting – Targeting mechanisms have been included to ensure that Project benefits reach
the low-income earners. Each Zoba has a database detailing household status, including resettled
households and the Kebabi administration and communities can assist to identify the poor and
vulnerable households. Each Zoba Project Coordination Office includes a sociologist to support
mobilization and organization of the rural communities and identify the primary target groups, in
collaboration with Zoba and Kebabi administrations, community elders, and the National Union of
1
A detailed account of target group characteristics and targeting mechanisms is provided in NAP’s Working Paper 2: Poverty,
Gender, Social Capital and Targeting.
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Eritrean Women. Both direct and self-targeting will be applied for small stock, small-scale dairy,
backyard poultry and apiculture activities which are targeted at the lowest income earning groups,
particularly women. Small stock and backyard poultry are exclusively for women and WHHs 2.
22. Pro-poor and gender mainstreaming dimensions of the Project will be stressed during the
Inception Workshop, at Kebabi Development Committees and during mobilisation. Appropriate
training will be provided to staff of implementing agencies to enable them to identify and encourage
participation of target groups. Efforts will be made to engage low-income earning households
particularly women in decision making processes during implementation. Employment of women as
extension officers and para-officers will be promoted and support will be provided to NUEW to provide
technical and business training to women in livestock, agriculture, and agriculture-related enterprises.
Support will also be provided for formation and capacity building of different types of producer
organizations.
D. Project Description
23. NAP has three components and five categories. The project components include: a)
Agricultural Water Resources Development; b) Integrated Agricultural Production; and c) Project
Support Services. The paragraphs that follow give a summary of the components and the constituent
subcomponents.
24. Component 1: Agricultural Water Resources Development – Due to limited water

availability, Eritrean agriculture depends heavily on rainfall and the resultant runoff from the highlands;
this is a major constraint for the country’s agricultural development. Thus, rainfall in the highlands
serves a variety of users and agricultural systems (rain-fed, irrigated, rangeland) within each
watershed. Hence, the objective of this component is to use a watershed approach and hydrometry
to understand the inter-linkages between these systems, with the aim of developing a coherent
strategy for sustainable agricultural production. The information to be generated will be used to better
harness and manage water and land resources, identify the potentials of agricultural production areas,
and develop medium to long-term smallholder agricultural development programmes, including
prioritisation of investments, such as agricultural infrastructure development. It will also enable a
better management of soil and water which will enhance an efficient use of improved inputs, including
seeds, fertilizers and agro-chemicals to achieve the planned productivity enhancements. This
component comprises three subcomponents: (a) Watershed Characterization; (b) Improvement of
Meteorology and Hydrometry Systems; and (c) Agricultural Infrastructure Development.
a. Subcomponent 1.1: Watershed Characterization – Activities under this subcomponent

will focus on characterisation of watersheds in the Zobas and nationally to provide
information on the resource base ((physical: soils, water, etc.); and (social: communities,
farming systems)) in order to provide a foundation for improved planning of sustainable
smallholder agricultural development. This will involve GIS mapping of all watersheds
based on satellite imagery and field visits. Using this information, each watershed’s
agricultural potential, including total agricultural land area available, will be identified and
the best agricultural systems and soil and water management practices to adopt will be
defined. The Project will source Technical Assistance (TA) from the International Centre
for Agricultural Research in the Dry Areas (ICARDA) for undertaking the watershed
characterisations. The GIS Unit at MOA, and in key Zobas, will be supported with
equipment, materials and training. Successful implementation of Subcomponent 1.1 will
lead to the following outputs:
i. Production of detailed resource information by watersheds. The information will provide

a base for resource use planning and agricultural development;
ii. A definition of agricultural potentials by watersheds in each zoba and nationally. This
will be done/specified by rain-fed agricultural potential, irrigation agricultural potential
and areas best suited for rangeland activities;
iii. A specification of improved crop and livestock practices to raise agricultural productivity
and conserve the environment; and
2
Detailed eligibility criteria for small livestock investments are provided in Annex II Of NAP’s Working Paper 8: Detailed Project
Description.
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iv. Capacity building of at least 25 staff at MOA and Zoba administrations in watershed
characterization techniques.
b. Subcomponent 1.2: Improvement of Meteorology and Hydrometry System – In order to

effectively utilize rainwater run-off from the highlands for irrigation and other agricultural
purposes and ameliorate the negative effects of flooding, advance knowledge of the rainfall and
the resulting run-off is required. The objective of this sub-component is to provide the
mechanisms to acquire this information. The existing network of manually operated rain gauges
will be improved and supplemented by automatic rain gauges. Better weather Stations will be
established and equipped to collate and disseminate rainfall data, measure other important
parameters (e.g. temperatures, humidity, etc.) and provide weather forecasts. Bubbler stations
and float operated systems will be provided to measure rainfall run-off and estimate the water
discharges reaching the headwork of spate irrigation systems, retention dams, reservoirs, etc.
They will be complemented by 10 water level measuring scales to be installed at each of 13
sites in rivers and irrigation canals (5 in Gash Barka, 3 in Northern Red Sea, 3 in Debub and 2
in Anseba). In important locations for small-scale irrigation and spate development, sediment
load will be measured. Groundwater status will be investigated, focused on sites with potential
for supplementary irrigation. A network of observation wells will be constructed and a manually
operated underground water check instrument will be provided for identifying suitable locations.
To ensure that information generated by the above is collected and transmitted in a timely
manner; data transmission base-stations will be set-up-as at MLWE Zoba office. Five base
stations in or near major spate irrigation systems. The staff of MOA, MLWE and Zoba
Agricultural Divisions will be trained in the installation, operation, maintenance and
management of the systems and provided with logistic support for field operations. Successful
implementation of Subcomponent 1.2 will lead to the following outputs:
i. Strengthened Hydrometry and Meteorology systems to provide real time information on

rainfall, run-offs, and river flows;
ii. Information on ground water becomes readily available; and
iii. Capacity of MOA, MLWE and Zoba Agricultural Divisions improved to manage the
systems and provide real time information on rainfall and runoffs from highlands to
producers and communities downstream.
c. Subcomponent 1.3: Agricultural Infrastructure Development – Based on the information

generated from Subcomponent 1.1 – Watershed Characterisation, the watersheds in the
different Zobas with the highest agricultural potential will be identified. This will be followed with
the selection of one or two priority watersheds selected on the basis of socio-economic,
agricultural and other criteria according to the specified selection criteria 3. These watersheds
will then be targeted for integrated investments in catchment protection and irrigation
infrastructure, to be designed and constructed in close coordination with the communities
concerned. Different mechanisms and processes will be employed to adapt NAP
implementation to local conditions while, at the same time, addressing prioritised development
needs as determined by Zobas/Sub-zobas/Kebabis/communities/farmers. Building on the
experiences from Eastern Lowlands Wadi Development Project (ELWDP), Gash Barka
Livestock and Agricultural Development Project (GBLADP), Post-Crisis Rural Recovery
Development Programme (PCRRDP) and Catchment and Landscape Management Project
(CLMP), efforts will be made to involve the communities/producers in all stages of planning,
development, operation and management. The investments will include small-scale irrigation
drawing water from dams, reservoirs and wells; spate irrigation using run-off diversion,
complemented with wells and surface reservoirs for supplementary irrigation; and catchment
protection tied to the small scale irrigation to minimize siltation of dams and reservoirs, and
clogging of pressurized systems. The knowledge of the local farmers concerning spate flows
will be essential in designing appropriate spate irrigation systems. Therefore, they will be
consulted in the process of site selection and design. Designs and BoQs will also be subject to
peer-review to ensure quality of works. The community participation in the process of
development and operation will be enhanced through the formation of Water Users
Associations (WUAs) and appropriate training and capacity building will ensure that
communities are eventually able to take on responsibilities for the maintenance of irrigation
infrastructure, operation and management of schemes – though GOE support will continue in
3
Please refer to Working Paper 4 of NAP’s Project Design Report for details.
14
providing technical and management support services. The communities will be expected to
make an in-kind contribution to infrastructure development. These activities will then be out-
scaled from pilot watersheds to other priority watersheds within the Zoba taking into account
lessons learned and experience gained.
25. Given that large investments in irrigation infrastructure, including water capture and storage,
have already been made in many Zobas, an important focus of the NAP investments will be on
capitalising on ‘sunk investments’ by bringing new knowledge and lessons learned to bear on past
investments (by IFAD, GOE and other donors) and improving existing irrigation systems, many of
which have suffered due to weak/inappropriate design or insufficient attention to developing
community capacity for Operation and Maintenance. This is reflected in the above design. It is
expected that the overall balance of investment in new as compared to existing pressurised irrigation
will be 45% new and 55% existing. With regard to spate irrigation, the expected balance is 16% new
and 84% existing. However, these balances may change during implementation depending on the
results of the watershed characterisation studies. Investment in catchment protection will be closely
coordinated with the activities of the CLMP. Successful implementation of Subcomponent 1.3 will
i. Irrigation system improved and expanded covering 539 ha of small-scale pressurized

system and 3,700 ha of spate;
ii. About 3,332 ha of catchment area protected;
iii. Capacities to design, construct, and maintain agricultural infrastructure improved; and
iv. Producers/Communities organized, trained and effectively utilize the developed
infrastructure.
26. Component 2: Integrated Agricultural Production – The objective of this component is to

put an intensive crop production system in place that would enable the target beneficiaries to
maximise the benefits by making use of the mechanisms put in place under Component 1 (improved
irrigation infrastructure development). Crop production intensification will be done both on irrigation
and rain-fed plots. This will be achieved through appropriate technology generation and
dissemination and the timely provision of appropriate inputs to the target beneficiaries. Such inputs
include certified/improved seeds, fertilizers and chemicals. In addition, the Component seeks to
augment incomes of the poor rural households, particularly woman and other low-income households
with limited land, through small-scale livestock investments. The Component comprises three
subcomponents: a) Development of a National Seed System; b) Intensification of Crop Production;
and c) Livestock Production Support. It should be noted that the interventions to be designed under
each of the subcomponents build and expand on past support provided under the ELWDP, GBLADP,
PCRRDP and PCRRDP-Add-on.
a. Subcomponent 2.1: Development of National Seed System – This sub-component builds on

the initiatives supported under the PCRRDP in Zobas Gash Barka and Debub and expands
operations to cover the remaining four Zobas. Unlike the ad hoc approach that has been
adopted in the past, a structured seed development system will be pursued for sustainability
and scaling up. The institutional, regulatory and policy base will be developed and capacity will
be built to produce basic and certified seeds to ensure a viable and sustainable seed system.
The following activities will be involved. i) Strengthening of National and Zoba Seed Production
Systems; ii) Strengthening of Variety Introduction, Evaluation, Screening and Maintenance
(VIESM) – to be coordinated by the National Agricultural Research Institute (NARI); and iii)
Strengthening the Capacity of Regulatory Services Department (RSD) of MOA. Successful
i. A National Seed System (including National Seed Unit (NSU); Zoba Seed Units
(ZSUs); farmer/private company and Village Based Seed Enterprises (VBSEs))
established and functional;
ii. NARI is strengthened to carry out variety introduction, screening, and maintenance,
and for production of breeder and foundation seeds;
iii. RSD is strengthened to undertake seed quality certification; environmental
assessment/evaluation;
iv. Three seed processing units established and functional; and
v. About 1,945 Mt of certified seed, 19.5 Mt of breeder seed and 195 Mt of foundation
seed produced and used.
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b. Subcomponent 2.2 Intensification of Crop Production – The subcomponent aims at

facilitating the derivation of maximum benefits, by the target groups, from the improved
irrigation infrastructure (Component 1) and the established National Seed System
(Subcomponent 2.1). Production intensification will be achieved through improved access to
certified/improved seeds, fertilizers and chemicals and a system of technology generation and
dissemination. Producers’ capacities will be improved through organisation, training and
improved extension services. Inputs will be distributed by the Sub-zoba Agricultural Marketing
Units using the established system involving supervision by the Kebabi Administrator who
keeps the records of distribution and payments. For animal health inputs – drugs, vaccines, the
system of distribution and payment for animal drugs which has proved successful under
GBLADP and PCRRDP will be adopted. For seed, payment in kind will be permitted for poor
farmers. A commitment by such farmers to return, at harvest, three times the quantity of seed
received will be made prior to supply. Successful implementation of Subcomponent 2.2 will
i. Food crop production intensified through the provision of seeds, fertilizers, and
agrochemicals on 4,249 ha of irrigated and 16,760 ha rain-fed land on an annual basis;
ii. Certified/improved seeds made available to at least 22,410 ha small-scale spate
irrigation and 39,036 ha rain-fed, annually;
iii. Technology generation and dissemination system strengthened and extension services
provided to about 160,000 households, annually.
iv. Farmers trained in improved management and production under pressurised irrigation
systems.
c. Subcomponent 2.3: Livestock Production Support – The objective of this subcomponent it

to provide alternative and/or supplementary income sources to the poor rural households,
particularly woman and other low-income households with limited land and those in Sub-zobas
with few opportunities to produce crops. The support will be in the form of: a) Small-stock (goat
breeding, five goats per household (hh)) small scale dairy (1 head/hh) and backyard poultry
(10-25 pullets/hh); b) Apiculture; c) Animal Health Services; and d) Animal Feed Production.
Support to households will be based on demand and subject to meeting the conditions for
participation4 which have been designed to ensure sustainability of NAP support but without
excluding the target group. The number of livestock can vary by region based on the principles
of financial/economic viability and potential to improve the livelihoods of beneficiaries.
Appropriate training will be provided alongside livestock with particular focus on health, feeding
and raising awareness on the dangers of over-stocking. The NAP recognizes that it is not
necessarily the number of animals an individual begins with which is of the utmost concern,
rather it is the number of animals they end up with. Redistribution arrangements practiced
under GBLADP and PCRRDP will be followed to extend benefits to those households that
cannot benefit directly from the Project provided funds.
With regard to apiculture, support will be provided in the form of providing training to staff of
existing apiculture development centres in Debub, Maekel and Anseba to enable them to: a)
provide training for bee keepers; b) produce and distribute basic colonies for start-off; c) train
artisans to produce improved bee hives; and d) supply production materials – smokers,
protective clothing and simple primary processing equipments. For Animal Health Services,
support will be improved through the provision of vaccines and drugs, enhancement of
community-based services, including the training and provision of health kits to Community
Animal Health Workers and para-veterinarians who will be employed by communities to provide
simple treatments and undertake sales of drugs and vaccines under the supervision of qualified
veterinarian. Support for Animal Feed Production will be provided in order to raise livestock
productivity and to protect the environment by reducing overgrazing and consumption of crop
residues. Building on previous successful experiences in past IFAD projects/programmes,
communal rangeland improvement will be undertaken including promotion of the development
of Voluntary Livestock Exclusion Areas (VLEA) and over-sowing of rangelands. Successful
i. Small-scale Livestock investments promoted and adopted by low income households;

4
These conditions are provided in detail in Annex II of Working Paper 8 of NAP’s Project Design Report.
16
ii. Animal health services strengthened and sustained;

iii. Two stock routes developed to control spread of pests and diseases and raise livestock
productivity;
iv. Animal feed enhanced through range improvement (7,732ha) and forage production
(1,354ha) and number of watering points increased; and
v. Technical base for apiculture strengthened; 6 honey collection centres, and 2 processing
centres established and operational; 6 apiculture associations established and functional.
27. Component 3: Programme Support Services – The objective of this component is to

facilitate and manage the Project in an efficient and effective manner by providing overall coordination
of the Project, including planning and implementation, financial management and control,
procurement support, monitoring and evaluation and progress reporting. The component will
strengthen Project coordination, monitoring and evaluation at national level and in Debub and Gash
Barka Zobas and coordination arrangements will be established in the four new zobas (Anseba,
Maekel, Northern Red Sea and Southern Red Sea). Different training will be provided to staff of
institutions involved in NAP implementation 5. The Planning and Statistics Division (PSD) of MOA will
be strengthened to undertake the additional responsibilities of NAP. The Administration and Finance
Division (AFD) of MOA will be strengthened with additional staff in order to adequately provide
fiduciary services to all IFAD assisted programmes managed by MOA. Successful implementation of
Component 3 will lead to the following outputs:
Project Summary
i. National capacity strengthened for Project planning, implementation coordination,
monitoring and evaluation;
ii. Knowledge management system developed and operational;
iii. Coordination and monitoring/reporting system established and operation at National and
Zoba levels;
iv. MOA Administration and Finance Division strengthened and carries out financial
management, procurement and disbursement.
28. The chart below provides a summary of the Project and how the different
components/subcomponents interact to contribute to the Project’s overall goal and development
objective. From the chart, it is evident that NAP is an integrated agricultural development initiative.
Goal: To positively contribute to rural household and national food security and
poverty alleviation
Development Objective: To raise smallholder agricultural production and

productivity
Outcome-1: Sustainable physical Outcome-2: Increased

environment for smallholder smallholder agricultural production
agricultural development and productivity
5
A full list of the planned trainings is provided in Working Paper 8 of NAP’s Project Design Report.
17
Comp.1: Agricultural Water Resource Development Comp.2: Integrated Agricultural Production
Output-1.1: Output-1.2: Output-1.3: Output-2.1: Output-2.2: Output-2.3:

Resource Hydrometry and Efficient Sustainable Crop Livestock
Base for Meteorology irrigation national seed production management
agricultural system infrastructure system intensified in improved and
development development and catchment established; rain-fed and animal health
defined and and improved protection developed new irrigation services
used for information developed and varieties and areas strengthened
planning and available on functional produced
investments agricultural breeder,
decisions in water and used foundation, and
agricultural for agricultural certified seeds
development water control for key food
and crops
management
Sub-component 1.1: Watershed Characterisation Sub-component 2.1: National Seed System

-Physical features of watershed defined -Development of Eritrea national seed enterprise
-Land use specified -Development of zoba seed units
-Soils characterization defined -Development of processing centres
-Water resources situation identified -Variety introduction, evaluation, and maintenance
-Watersheds prioritized for agricultural development -Network of seed out-growers
-Watersheds mapped -Breeders, foundation and certified seed production
-GIS units strengthened Sub-component 2.2: Crop Production Intensification
-Staff trained in watershed characterisation -Rain-fed crops intensification
Sub-component 1.2: Development of Hydrometry and -Irrigated crops intensification
Meteorology System -Technology generation and dissemination
-Hydrometery system improved and expanded -Conservation Agriculture
-Meteorology system improved and expanded -Adaptive trials and promotion
-Development of information collection and dissemination Sub-component 2.3: Livestock Production
centres -Small-scale livestock investment
Sub-component 1.3: Agricultural Infrastructure -Animal feed production
Development
-Design and construction of pressurized irrigations
schemes
-Design and construction of spate irrigation schemes
-Catchment protection
-Producer organization and training
Comp.3: Project Support Services
18
III. INSTITUTIONAL AND IMPLEMENTATION ARRANGEMENTS

29. This part of the report describes the main institutions that are to be directly involved in NAP’s
overall management and implementation. The chapter also gives a detailed account of each
institution’s expected roles and responsibilities. Inter-governmental institutional collaboration is
essential for NAP’s successful implementation. It describes the planning and budgeting process,
implementation arrangements, and monitoring and evaluation system.
A. The Collaborative Framework and Implementation Arrangements

30. Technical Responsibility – At the national and Zoba levels, the relevant Departments and
Divisions will assume overall technical responsibility for Project implementation and will ensure that
implementation is carried out within the government policy framework. They are fully responsible for
planning and implementing work plans in accordance with their respective mandates. The concerned
departments will ensure a timely institutionalization of effective and sustainable technology generation
and dissemination system as may be agreed under the Project. The line departments will also ensure
that necessary actions are taken in the area of policy, strategy, and guidelines for the use of
Community Animal Health Workers (CAHW), village extension agents, farmer’s representatives, etc.,
to ensure Project effectiveness and sustainability. The specific technical responsibilities of the
departments and divisions at both levels are briefly discussed hereunder.
31. Ministry of Agriculture – The Project will be implemented within the Government’s
decentralized institutional framework and in collaboration with the private sector. The overall
management of the Project will be the responsibility of the Minister of Agriculture. The Planning and
Statistics Division of MOA will have the responsibility for the coordination of Project planning,
including the preparation of the consolidated NAP’s Annual Work-Plan and Budget (AWPB) based on
the respective AWPBs from the MOA, NARI, MLWE and Zobas; production of consolidated 6-monthly
and annual progress reports. It will also conduct impact evaluation and knowledge management,
including production of annual evaluation reports, conducting the annual implementation review
workshops, carrying out special/thematic studies and preparing the Mid-Term Review (MTR) and
Project Completion Report (PCR). The Administration and Finance Division will have responsibility for
planning and coordination of procurement and disbursement; ensure proper accounting and financial
management, including the preparation of six-month and annual financial reports. It will also ensure
consistency of budget with annual work plan, and preparation of 18-month Procurement Plan.
32. Zoba Administrations – The day-to-day implementation and coordination at the Zoba level
will be the responsibility of the respective Zoba Administrations, under the direction of the Governor.
Within each Zoba, the development process is going to be, largely, driven by the local communities
through the Sub-zobas and Kebabi administrations following the GOE’s decentralised participatory
planning system6 whereby Village Development Plans are consolidated into Kebabi plans, which are
then consolidated into Sub-zoba plans, and finally then into Zoba plans. The Sub-zoba Agricultural
Divisions will provide direct supervision of the Kebabi-based technical teams as well as prepare
progress reports following Government guidelines. The same Sub-zoba Agricultural Divisions will
technically backstop Kebabi operations, including training, support to planning including preparation of
Sub-zoba AWPBs. The Kebabi Administration will also play a key role in conflict resolution. Each
Zoba will establish and operate a ZPCO which will have the responsibility for the preparation of a
Zoba-AWPB, the six monthly and annual progress reports, and monitoring activities. Finance,
accounting and local procurement will also be entrusted to the ZPCO.
33. Agricultural Extension Department (AED) of MOA – The AED will provide technical
backstopping to the Zoba Administrations and ensure that Project implementation is aligned with GOE
policy and strategy. It will collaborate with the RSD and MLWE in ensuring that agricultural production
activities are carried out within the environmental guidelines and policies. AED has responsibility for
providing technical specifications of livestock drugs and vaccines to AFD for procurement, the sales,
and management of the related revolving accounts. The marketing unit also operates under AED and
is responsible for agricultural input supply and managing the related revolving accounts. AED has
been strengthened to continue the services. AED will, working in collaboration with NARI and Zoba
6
This is described in detail in section E of NAP’s Working Paper 1.
19
Seed Units, ensure the effective implementation of the seed programme. It will be responsible for the
implementation of the stock routes.
34. Past endeavours to create a National Seed Enterprise have not yet been successful. NAP is
expected to supplement such endeavours to help put the enterprise in place. Once in place, it is
expected to collaborate with AED and MoA Zoba offices for coordinating the provision of technical
support to farmers (both subsistence and commercial) who will be contracted to undertake seed
production activities. It is also expected to ensure accountability and effective coordination of seed
multiplication activities by establishing its own focal points in each of the participating Zobas.
However, in the interim, AED, in collaboration with the NPO, NARI and the Zobas, will assume
responsibility for coordinating seed multiplication activities. Accordingly, AED will distribute foundation
and/or certified seeds to the Zobas and provide them with technical backstopping. The MoA Zoba
branch offices will in turn assume implementation responsibility, including the selection of farmers to
be contracted for seed multiplication, provision of technical support, monitoring and follow-up,
collection of produced seed, etc. NARI will provide subject matter specialists from AED with technical
support, including training on seed production. RSD, particularly its regional inspectorates, will be
responsible for ensuring that seed multiplication activities are undertaken in line with its guidelines
and standards.
35. Improving agricultural productivity will require putting in place an efficient and sustainable
system of technology generation and dissemination. Although the MOA has in place a good number
of subject matter specialists at the national, Zoba and sub-zoba levels, the intermediate and frontline
extension staff levels have traditionally not fared well. To ensure effective delivery of extension
services, a pilot extension project was designed and undertaken during the PCRRDP implementation.
The pilot was tested in two sub- Zobas in each of Zobas of Debub and Gash Barka (Senafe and
Debarwa in Zoba Debub and Goluj and Laelay Gash in Gash Barka). The pilot involved frontline
extension workers for delivery of information and technology. It is reported that the pilot extension
strategy performed quite well and was found to be effective. However, the pilot is yet to be formally
evaluated so that it can be replicated in other Zobas and sub-Zobas where NAP will be operating.
Under NAP, the pilot will be evaluated to establish what worked well, how it worked, the cost
implications and then develop a mechanism through which the successful approaches can be scaled-
up. This would, essentially, involve setting up a Zoba Committee comprising NARI, the Zoba
Agricultural Division and representatives of farmers, to define production problems to be addressed
through adaptive research and farm trials, and technical extension messages (extension impact
points) to be extended to the farmers. AED will take the lead in coordinating this endeavour.
36. Regulatory Services Department (RSD) of MOA – RSD will provide quality assurance and
certification services for agricultural inputs and outputs including quarantine for imported plant
products. It will ensure necessary training for private and public institutions with regard to policies and
regulations for quality control. It will certify the quality of seeds and agro-chemicals before use. It will
assure proper assessment and evaluation of environmental aspects of key agricultural activities
including ensuring that chemical used as well as their handling meeting Eritrea and international
standards.
37. National Agricultural Research Institute (NARI) – NARI will have direct responsibility for
variety screening, evaluation and maintenance, producing breeder and foundation seeds, and training
of the private sector in the production of foundation seed for an eventual transfer of that responsibility
to them. It will collaborate with Hamelmalo Agricultural College in variety screening, evaluation and
dissemination to assure synergy.
38. Ministry of Land, Water and Environment (MLWE) – The MLWE will provide support to the
Project to ensure that its activities are carried out in line with the environmental guidelines and
procedures of the country. It will approve all plans for irrigation development before commencement of
construction; supervise and monitor construction and operations to ensure compliance with
environmental guidelines. The Ministry will participate in the planning and development of watershed
and catchment areas. It will also take the lead in policy and legal reviews in relation to land-tenure,
water-use and management, and general environmental management issues. The MLWE’s Zoba
units will have the responsibility for the implementation of the meteorology and hydrometry systems
and ensuring that Project activities are within the environmental guidelines.
20
39. The Forestry and Wildlife Authority (FWA) will provide technical backstopping to Zoba
Branches in terms of forest nursery development and management; community based forest
plantation/woodlots enhancement; natural forest/woodland conservation and development by giving
emphasis to the establishment and management of enclosures; ensure proper utilization of wood and
non wood forest/wooded land products which are pertinent to the program components. It will also
undertake effective measures on protection and movement of forest and wildlife products and bi-
products in accordance with the Forestry and Wildlife conservation and development Proclamation
No. 155/2006.
40. National Steering Committee (NSC) – The current NSC was established to serve past
IFAD-supported Programmes/Projects. The same NSC will remain in place for the NAP with the
addition of the Governors of the four new Zobas. Its functions will remain the same and will include: (i)
oversight of Project implementation; (ii) ensuring that the Project is implemented within the national
policy and strategy framework; (iii) approval of the AWPB; and (iv) assistance in resolving conflicts
and/or implementation bottlenecks. It will review and approve key reports before forwarding them to
IFAD. The NSC will meet, at least, every six months or as often as conditions may warrant.
41. National Technical Committee (NTC) – The NTC is formed at the national level by drawing
experts from the relevant technical disciplines to provide technical support to the Project. The
committee reviews the consolidated AWPBs submitted by the line departments of the MoA and Zoba
Project Coordination Offices. It also reviews and appraises project proposals submitted by subject
matter specialists from the line departments of the Ministry and MoA Zoba offices to ensure that they
are technically and financially feasible and consistent with the Project Design Report and the AWPB.
The National Project Coordinator chairs the NTC. The other members of the NTC are seed expert,
dairy development expert, poultry and beekeeping expert, irrigation development expert, regulatory
services expert, researcher, and Planning Officer.
42. Zoba Project Coordination Committees (ZPCCs) – The ZPCCs operate at the Zoba level
and are already established and functional in Zoba Debub and Zoba Gash Barka. Similar committees
will be established in the four new Zobas with the same composition and functions. Their basic
functions are to provide oversight of operation at Zoba level and to review and endorse the Zoba
AWPBs and key reports before forwarding to PSD for consolidation. The ZPCCs will meet on a
quarterly basis or as often as may be required.
43. Technical Partners in Implementation – The EC is providing technical collaboration and co-
financing under the PCRRDP–Add-on. It also has a national programme for food security which has
similar objectives to as the NAP, and is being implemented under the same institutional framework as
other IFAD assisted programmes. IFAD and the EC are also providing support in ICT to the MOA.
GEF is providing assistance in the Catchment and Landscape Management Project which
compliments PCRRDP and is coherent with the integrated watershed management approach of the
NAP. Consultations on harmonization of policies, resource use and technical approaches which have
been established between IFAD and EC will continue under NAP to ensure synergy and better impact
on the development of the agricultural sector for enhanced food security and rural poverty alleviation.
ICARDA has provided significant technical inputs in the design of NAP, and consultations have been
established with relevant CGIAR centres (ICRISAT, CIMMYT, CIP and ICBA) for technical support
during implementation. All IFAD programmes/projects have established close working relations with
the MLWE to ensure that the environmental and natural resource management aspects are
addressed in a coordinated way.
44. Link with Complementary Projects – It is the policy of GOE that all agricultural sector
projects/programmes are overseen by the MOA and directly implemented by the Zoba
administrations. This arrangement facilitates linkage of complementary agricultural sector
projects/programmes. The NAP will be implemented following this institutional arrangement. IFAD is
also a member of the Food Security Cluster in Eritrea which interacts with GOE on policies and other
issues related to food security and poverty alleviation. This has facilitated harmonization by
development partners of policies and strategies for food security and smallholder agricultural
development. IFAD has collaborated with ICARDA, ICRISAT and FAO who have supported seed
production activities in Eritrea for over 5 years and the National Seed System under the proposed
NAP will build on their experiences, and make use of facilities already established.
21
45. Planning and Budgeting Process – The development process under NAP will be
community driven. Therefore, the Project will use a participatory planning process to ensure that
activities included in the AWPBs are responsive to the needs of the target communities. In order for
this to function, the communities must identify and prioritise their problems and define development
actions to address them. Each Kebabi administration has a Planning and Implementation Committee
(PIC) to review and consolidate the Village Development Plans into a Kebabi plan. The PIC is headed
by the Kebabi Administrator, assisted by the local Zoba assembly members. PIC would receive
technical support from the Sub-Zoba line agencies. The Kebabi plans will be submitted to the Sub-
Zoba Planning Committee (SPC) for review, approval and incorporation into Sub-Zoba development
plan. SPC is composed of the Sub-Zoba development Administrator as the chairperson, heads of
Sub-Zoba departments, local Zoba assembly members, National Union of Eritrean Women (NUEW),
Kebabi Administrators, and civil society organisations. Once endorsed, the AWPBs will then be
forwarded by the Sub-Zoba administration to the Zoba administration office for consolidation. The
consolidated Zoba AWPBs would be sent to the NPO for review and consolidation into the overall
NAP AWPB. The Project has provided financing for workshops and training as may be required and
for capacity enhancement through training and payment of community development agents to be
appointed by the council. An allowance has also been made for the strengthening of the Kebabi
technical teams. The AWPB should be presented in the recommended format (attached as Annex I).
The NPO should provide all implementing agencies with the recommended format for the AWPB to
ensure a common approach to preparing and presenting the respective work plans; this would make
the process of aggregation a lot easier.
46. In order to stick to the expected deadlines with regard to the approval process of the draft
AWPB and ensure that the draft is approved in time for the planned activities to be implemented in a
timely fashion, the schedule in the table below should be followed.
Annual Work Plan and Budget Preparation and Approval Schedule

Item
Activity Time schedule Responsibility
no
1. Briefing on the preparation of AWPB - Provision of Last week of April NPO
guidelines, format, schedule of preparation, and issue
of call letter
2. Each implementing institution/agency initiates 2nd week May Head of implementing
consultation process, set-up AWPB preparation team institution/agency
3. Preparation of AWPB by implementing institutions and 3rd week May to 2nd Implementing
agencies week July institutions/agencies
4. Review of draft AWPB of implementing Mid-July Implementing
institution/agency by the respective implementing institutions/agencies
institution/agency and agreement on draft AWPB
5. Presentation of draft AWPB by implementing End of July Head of respective
institutions at the Annual Review Workshop institution/agency in
collaboration with the NPO
6. NPO receives, reviews and prepares the draft 1st and 2nd weeks of NPO
consolidated AWPB August
7. Submission of draft Project AWPB by NPO to Technical 3rd week August NPO
Coordinating Committee for
review/comments/endorsement
8. Review of draft AWPB by NTC, provision of comments 1st week September NTC
and recommendations, and endorsement
9. Submission of draft AWPB incorporating NTC 2nd week September NPO
comments, and recommendations for NSC action
10. NSC review, comments and approval 3rd week September NSC
11. Preparation of final draft of AWPB incorporating NSC 4th week September NPO
comments
12. Submission of AWPB to IFAD for expression of no Mid-October NPO
objection
13. Review by IFAD, provision of comments if any, and Mid-October/Mid- IFAD (CPM)
expression of no objection November
14. Preparation of final AWPB by RPCMU incorporating Last week of NPO
IFAD comments if any November
15. Finalization of AWPB and distribution to implementing 1st week December NPO
institutions and agencies
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B. Monitoring and Evaluation (M&E)

47. Monitoring and Evaluation (M&E) is an ongoing process that is used to assist the NPO to
understand how the Project resources are used within the framework of an approved AWPB and what
outputs are obtained out of this process. The exercise is carried out throughout the implementation
cycle of the Project to assess its performance against a set of pre-set milestones/ targets regarding
inputs, activities, outputs. The outputs would progressively contribute to outcomes and, eventually,
impact.
48. The purpose of M&E is to keep track of day-to-day duties on a continuous basis in order to
identify as early as possible any shortcomings regarding delivery of inputs, execution of different
activities or production of outputs so as to undertake timely corrective measures . Thus, M&E is
primarily an instrument for improving Project management. The process should generate relevant
information for the stakeholders that include the Government, donors, executing agency, Project
management. Using the information, the process should establish whether resources are used
according to plan, if Project objectives are being achieved or whether these objectives need adjusting
as a corrective measure. Information which indicates inadequate operation, shortfall in performance
and discrepancy between target objectives or expected impact and those being achieved, provides a
basis for decision-making by Project management. The decisions would be aimed at addressing the
identified deficiencies to bring the Project back on track. As a management tool, the priority task of an
M&E system must be the provision of information that contributes to effective decision making.
49. Responsibility and Coordination – The NPO has the overall responsibility for Monitoring
and Evaluation of the Project. The Planning and Statistics Division of the MOA has experience from
coordinating other IFAD-supported Programmes/Projects and this experience will be used to put in
place an effective M&E system for NAP implementation. Direct responsibility for M&E will be assigned
to the M&E Officers at the NPO and ZPCOs. A detailed M&E arrangement will be drawn up with
specific assignment of responsibilities between the NPO and ZPCOs, the specification of the schedule
of activities and the format of reporting. The design of M&E will be in line with the guidelines contained
in the Results and Impact Management System (RIMS) of IFAD. The NPO has the responsibility for
carrying out the Mid-Term Review (MTR) no later than the first quarter of Programme Year 4. The
NPCO will also produce the Programme Completion Report which shall be submitted not later than six
months after completion.
50. M&E Processes – Following below is presentation of the key steps that will need to be
followed to provide an adequate M&E function to NAP implementation.
51. Start-up Workshops – At the beginning of Project implementation, a start-up workshop

should be undertaken. The objective of the workshop is to: a) signal the official start of Project
implementation; b) introduce the Project’s goal, objectives, implementation modalities, institutional
set-up, and IFAD’s procedures and guidelines so that they all know what to do, when to do it and how;
and (iii) share lessons learnt from implementation of previous IFAD-funded Programmes/Projects. It is
recognised that the NAP start-up workshop was undertaken in June 2013. It is also recognised that
following the national NAP start-up workshop, all the Zobas organised and undertook Zoba-level start-
up workshops for stakeholders at the Zoba, Sub-Zoba and Kebabi levels.
52. Baseline Assessment – At the start of Project implementation, it will be required to obtain a
set of benchmark measures on Project interventions. A baseline survey will be conducted to provide
information about verifiable indicators as a benchmark for assessing impact of the project
interventions in line with the Project's goal, objectives and activities as contained in the logical
framework. Such benchmarks will be developed as a reference point when organising repeat surveys
and/or when conducting Project Mid-term Review and Project Completion Evaluation. It is desirable
that the survey is undertaken before the onset of Project interventions.
53. Performance Monitoring – Each year, Project activities will be undertaken within the
framework of an approved AWPB. In the participating Sub-Zobas, and starting with the AWPB for the
second Project Year, planning will be participatory and done at the Kebabi and Sub-Zoba levels. The
annual work planning will be used in order to: a) define Project activities and outputs; b)
accommodate community level beneficiary group needs and priorities; c) review and, where needed,
adjust the approaches, based on the implementation experience; and d) set realistic targets for each
year.
23
54. Performance monitoring will focus on annual implementation performance, by comparing

actual achievements against the targets specified in the AWPB. The system will track overall
performance, by recording cumulative physical progress data on activities completed and specific
outputs produced by the Project, as well as annual and cumulative expenditure, compared to budgets.
There will, also, be analysis that leads to the improvement of planning and implementation. The data
to be collected will: a) facilitate the preparation of six-monthly and annual progress reports; b) enable
learning from experience and amplify lessons learnt; and c) measure outcomes and impact for
comparison of the “with Project” and “without Project” scenarios.
55. Annual Reviews – Participatory Annual Performance Reviews will be organised at the
various levels and will be an essential participatory M&E activity. Resources will be provided for these
review workshops at Sub-Zoba and Kebabi levels. The reviews will involve all key stakeholders that
include communities’/beneficiaries’ representatives, implementing partners and service providers.
During the reviews, performance data on each Project Component, Sub-Component and activity will
be assessed against targets, and conclusions reached regarding successful interventions, constraints
and suggestions for adjustments for the following year. The involvement of beneficiary communities
in evaluating the services they receive in not only an empowerment tool but also a means of ensuring
ownership of the development process. This contributes to sustainability.
56. Input/Activity/Output monitoring (relevance, efficiency) is concerned primarily with the

monitoring of input delivery, activity implementation, and output achievements. This sub-system
should, in principle, be linked to the financial monitoring subsystem through input procurement in
order to monitor the Project. Financial/procurement monitoring (efficiency) is concerned mainly with
the monitoring of procurement of goods and services (inputs), Project accounts, Project expenditures
and disbursement and Project financing. Procurement monitoring is to be undertaken through a
regular (preferably monthly) review of the Procurement Plan to establish the status of each
procurement and, where required, follow up on the needed aspects.
57. Impact Assessment – Two specific occasions are designated for undertaking impact
assessments. First of all, half-way through Project implementation, a beneficiary assessment will be
undertaken to document Project outcomes, and will also guide preparation of the Mid-Term Review.
The MoA and IFAD will jointly carry out a review of Project implementation no later than the first
quarter of the fourth Project Year based on the terms of reference prepared by the MoA and approved
by IFAD. Among other things, the Mid-Term Review will consider the achievement of the Programme
objectives and the constraints thereon, and recommend such reorientation as may be required to
achieve such objectives and remove such constraints. It will also evaluate the appropriateness of
Project approaches, strategies, institutional arrangements, etc. The MoA will prepare a report
describing Project achievements two months before the Mid-term review is carried out.
58. The Project MTR and completion impact assessments will be undertaken by independent
firm(s) recruited under an open competitive bidding process. The scope for continuation, adaptation,
and replication of Project activities will be highlighted by these reports as appropriate. Before
recruiting the Consultants, the M&E Officer will prepare an overview of all relevant information that
could be used in the preparation of the impact assessments. The MoA will submit to IFAD the Project
Completion Report (PCR) no later than six months after the Project Completion Date. The Project
Completion Report will evaluate and detail the Project impact on the target group. The PCR will
include both technical and financial reports.
59. Supervision and Implementation Support – IFAD will directly supervise Project
implementation, including the provision of implementation support as may be needed. It will also
administer the grant. Supervision Missions will be undertaken at least twice a year or more frequently
as conditions may warrant during the course of Project implementation. The aim of the Supervision
Missions is to: a) review and evaluate the progress of implementation of the Project against the
AWPB and Appraisal targets; and b) assess the effectiveness of the implementation arrangements
put in place for the Project. At the end of each Supervision Mission, the Team will prepare a report
(Aide Memoire) to present its major findings and recommendations focusing on the achievements and
constraints of the Project for discussion with the MoA and other relevant partners. To facilitate the
work of the Supervision Missions, the MoA will prepare implementation progress reports describing
Project achievements and constraints prior to the start of the Supervision Missions.
24
60. Progress Reports – The provision of informative progress reports is a formal requirement;
the Financing Agreement stipulates this requirement. The six-monthly and annual reports should be
prepared and submitted to IFAD and all collaborating institutions in prescribed formats. The main
functions of progress reports are:
 Review current progress compared to planned activities, and expenditures compared to

budgets;
 Provide overall status information on the project since it started – in terms of physical progress
and total expenditure;
 Identify problems encountered during the reporting period and any remedial actions taken to
resolve the problems;
 Analyse strength and weaknesses, opportunities and threats;
 Discuss quantitative and qualitative progress made in achieving the overall objectives; and,
 Provide strategic direction for the next planning cycle.
61. The primary importance of preparing progress reports is that it enables implementing
agencies and project management to record data, review progress. Reflect on outputs, evaluate
performance, and discover weaknesses that can be improved and successes that can be up-scaled.
It is this process of reflection and analysis that matters; if done properly, the process would lead to
better plans and implementation in the future.
62. Progress reports are the most tangible result of monitoring and, usually, a distinction is made
between quarterly, six-monthly and annual reports. Monthly reports are not recommended although
some implementing agencies may use monthly reports as part of their internal management systems.
For IFAD projects, however, a month is generally too short to record significant change and prepare a
consolidated report. Thus, six-monthly and annual reports will be produced. Each of the participating
Zobas will prepare and submit six-monthly and annual progress reports to the NPO. The NPO will
review and consolidate them, highlight successes and constraints and produce recommendations to
address the identified constraints. The consolidated reports will be approved by the NSC before
submission to IFAD. The reports will be submitted to IFAD no later than one month after the close of
each reporting period. The Guidelines on Progress Report writing are attached as Annex II.
63. IFAD’s Results and Impact Management System (RIMS) – IFAD is committed towards
achieving Millennium Development Goals and recognizes the need to better document the impact of
its operations on these Goals. To this end, the February 2003 IFAD Governing Council called for the
establishment of “...a comprehensive system for measuring and reporting on the results and impact of
IFAD-supported country programmes. Approved by the December 2003 IFAD Executive Board, the
mechanism was originally called the ‘Framework for Results and Impact Management’ but has since
changed names to the ‘Results and Impact Management System’ (RIMS). The RIMS framework
consists of a number of standardised indicators and NAP will be expected to report on those RIMS
indicators that are of direct relevance to its overall objectives. The relevant RIMS indicators would be
selected by the NPO in consultation with the Zobas. Once selected, the list should be submitted to
IFAD for review and/or comments.
64. RIMS is based on a hierarchy of indicators which consist of:
a. Level 1 Indicators are measurements of results at the ‘Output’ level; they are taken from the
annual targets;
b. Level 2 Indicators – These are ‘Outcome’ indicators and are a measure of improved
functionality and/or behavioural changes. They are mostly more qualitative than those of
Level one indicators and take relatively longer to be realized. They correspond to the
objective level of the Project Logical Framework;
c. Level 3 Indicators – These are ‘Impact’ indicators; they measure the effects of the Level 1
and Level 2 indicators and correspond to the goal level of the Project Logical Framework;
d. Anchor indicators – These are a short list of critical ‘Impact’ indictors that are based on
objective, comparable data and linked to the Millennium Development Goals. They are
compulsory. There are two Anchor Indicators which are measured at the beginning, mid-term
and completion of the Project. They include:
 The number of households with improvement in household assets;
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 The % reduction in the prevalence of child malnutrition disaggregated by gender.
65. Details concerning RIMS and guidelines on its application are contained in a document called
‘RIMS – First and Second Level Results Handbook’. This is attached as Annex XIII.
IV. ENVIRONMENTAL SCREENING, MITIGATION AND MONITORING
26. The MoLWE has an overall responsibility for environmental screening, evaluation, mitigation,
and monitoring activities to ensure that projects and activities do not have adverse effect on the
environment.
A. Environmental Screening Procedures

27. Projects to be implemented under the NAP will pass through a screening process based on
the National Environmental Assessment Procedures and Guidelines (NEAPG) of the Ministry’s
Department of Environment in order to establish their appropriate level of environmental assessment
(EA). The project screening process will determine whether, for any particular project, environmental
impacts which might arise from implementing a project are potentially significant, that is whether
environmental assessment is required. This will be followed by the subjecting the relevant
activities/sub-projects to their appropriate level of environmental assessment which could be in the
form of Environmental Evaluation (EE) or an Environmental Impact Assessment (EIA), or whether the
activity/sub-project can proceed with no further environmental assessment. To ensure efficiency and
effectiveness, project screening will be undertaken by the MoA either at central or Zoba levels. The
Department of Environment (DoE) (or its branch office in the regions) will give advice to the project
screening process whenever required. The end result of the project screening procedure is to assign
activities/sub-projects correctly into one of the following three categories.
28. Category A: Activities/Sub-Projects which, because of their type, size, location, and/or mode
of operation are likely to lead to a diverse range of significant negative environmental impacts and
which are not easily predicted and assessed using existing information, and thus require full EIA
before project environmental clearance can be considered.
29. Category B: Activities/Sub-Projects which, because of their type, size, location, and/or mode
of operation could lead to significant negative environmental impacts if not carefully designed and
implemented, but whose impacts can usually be reduced to an acceptable level through use of
existing, appropriate design standards and mitigation measures; or for which insufficient information
exists to be able to make a definitive decision about likely environmental impacts.
30. Category C: Activities/Sub-Project which, after preliminary screening, are considered unlikely
to have significant environmental impacts, and which require no further environmental analysis before
consideration for approval via the normal licensing procedures.
B. Environmental Evaluation Procedures

31. Once the project environmental screening process is finalized and the category of the
activity/sub-project is known, then the next step is to decide about the appropriate level of
environmental assessment required for the activity/sub-project. Category C activities/sub-projects do
not require Environmental Evaluation (EE). For Category B activities/sub-projects, the MoA at central
or Zoba level will request questionnaire (Environmental Evaluation Questionnaire) from the DoE or its
Zoba branch office and will jointly evaluate the project with the DoE by completing the questionnaire.
The MoA will then complete Project Environmental Evaluation Clearance Form (DoE/EECF) which
records the decision taken in light of the evaluation, and submits immediately copies of the completed
forms to the DoE or its Zoba branch office along with copies of completed EE report plus any other
relevant reports/materials for public record and consideration. If a Category A project is recommended
for environmental clearance on the EECF, then environmental clearance is automatic, unless a written
disagreement is submitted by the DoE or its Zoba Branch offices within 10 working days of receipt of
decision (Form DOE/EECF); alternatively, project Environmental Impact Assessment (EIA) begins.
26
32. All Category A activities/sub-projects will be subjected to full EIA before environmental
clearance can be granted. Completion of EIA will be borne by the NAP with the coordination of the
DoE. The major steps of the EIA study are: (i) Scoping to produce Terms of Reference to define the
focus and the limits of the main EIA study; (ii) EIA study and draft environmental management plan;
(iii) EIA adequacy review; (iv) stakeholder consultation to get written comment on EIA report and draft
plan; and (v) Impact Review Committee which is an expert group, chaired by the DoE, formed to
review the reports produced by an EIA study and make recommendation on environmental clearance
(for detailed discussion of the EIA steps, please refer the NEAPG of the DoE of the MoLWE).
C. Mitigation of Environmental Impacts

33. The DoE requires project owners to prepare environmental management plan before issuing
environmental clearance for implementation. The environmental management plan outlines the
mitigation measures that the project owner (MoA) plans to undertake to mitigate potential negative
environmental impacts that may be caused during project implementation. Even though the
responsibility of supervising and monitoring falls with the DoE, the concerned implementing
government body (MoA) at central or Zoba levels will also monitor the proper implementation of the
mitigation measures.
D. Environmental Monitoring
34. The DoE is responsible for the overall monitoring of the effectiveness of the environmental
assessment process in Eritrea. This includes monitoring of approved projects in order to ensure that
negative environmental impacts arising from project implementation do not exceed allowable limits. In
recognition of the full integration of environmental management into the emerging Eritrean economy,
day-to-day monitoring of environmental performance will be the responsibility of the MoA. The results
of the monitoring will be sent to the DoE or its representative at agreed intervals. The DoE or any
other relevant Government agency (MoA) has the right to undertake inspection of a project site in
order to confirm adherence to monitoring procedures at any time.
PART II - FINANCIAL MANAGEMENT SECTION
Introduction
1. Financial Management is a matter of public concern and the systems, tools and internal
controls included in this manual should be used with:
27
 Diligence: The Financial Management players in NAP should be thorough and should
pursue the key controls that are necessary to protect NAP funds.
 Efficiency: The NAP finance teams should ensure that their work is carried out
economically by optimising the use of available tools, such as the laccie accounting
package.
 Objectivity: The NAP finance teams should have a professional attitude and be seen
to be free of any interest which might reasonably be regarded, whatever its actual effect
might be, as being incompatible with their integrity and objectivity. They have been entrusted
with public funds and should apply the tools, systems and controls in this manual to
safeguard NAP funds.
2. The key players in the NAP financial management have a fiduciary responsibility to ensure
that proceeds from the IFAD grant are used exclusively for intended purposes. Poor financial
management in the implementation of NAP could result in failure to achieve its intended impacts. Both
IFAD and GOE have a shared fiduciary interest during the implementation of NAP as illustrated below:
NAP: A shared fiduciary interest
Responsibility under the founding documents:
 “make arrangements to ensure that the proceeds of

IFAD any grant are used only for the purposes for which
the grant was provided”
 Sustains funders and public confidence that IFAD
resources are used appropriately.
GoE  Ensure proper management of resources in order to

achieve NAP’s development projects.
 Meet public accountability responsibility
3. IFAD will undertake thorough supervision missions that will include a review of all fiduciary
aspects, will undertake in-depth review of audit reports, may commission own audits/ reviews, etc
while the GOE has a number of systems and structures to achieve its mandate.
4. In summary the financial management section of the PIM aims to provide users with tools and
guidance on the entire NAP Financial Management cycle that involves the following typical stages:
The NAP financial Management cycle- the critical points at which input of finance officers will
is required:
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Treasury Function including

the Accounting system
Committi ng Funds- Financial Reports & Withdrawal

managing the Audit
Procurement process Applications
Budgeting and
Budget control
AWPB Preparation and Control

5. While not going into the detail of participatory planning and budgeting processes that are
covered in other parts of the PIM, this financial management manual provides the NAP finance teams
with the tools they can use at the budgeting stage, assessing the feasibility of the AWPB, and above
all the tools for budget control to ensure no expenditure can be incurred unless it has provision in the
AWPB. Going beyond conventional budget control, the manual also illustrates the converging points
between Financial controllers (financial progress up to activity level) and the Planning and M & E
officers (physical progress up to activity level).
Contribution to the process of committing funds- Procurement
6. While it is understood that NAP finance staff should not involve themselves in managing the
NAP procurement processes, there are certain inputs expected of finance officers such as
commitment control to avoid over committing the grant funds, provision of some information needed
for contract monitoring forms, management of financial instruments such as advance guarantees, etc.
This manual provides guidance on the instances when the procurement and financial staff “need the
support of the other” without compromising on the principle of segregation of duties.
Treasury Function
7. With the detailed IFAD draft disbursement handbook, it has not been found necessary to
reproduce the withdrawal application forms. The focus of the guidance in this manual is how to
provide checklist that can be used to collect complete sets of expenditure document payments. The
common Grant administration errors are also discussed so that users can avoid making the same
mistakes. The chart of accounts and common coding across the NAP is illustrated.
Financial Reporting and guidance
8. Reporting is crucial in ascertaining the performance of the project. Reports for external and
internal purposes will be prepared with key emphasis to the needs of each user. The Accounting
system comes with commands to generate reports which reports will need further analysis and
explanations to become more meaningful. With the detailed audit guidelines, the manual has focused
on the use of IPSAS cash basis as the basis of accounting but also emphasising the implications on
commitment control, advance control. Beyond reporting for external users, NAP needs informative
management accounting for management decision and control including key reconciliations.
Audit guidelines
29
9. The IFAD Executive Board approved the “Revision to the IFAD Guidelines on Project Audit with
immediate effect in Dec 2011”. The manual illustrates, without reducing the Published guidelines, the
critical steps/Calendar that NAP should follow to ensure full compliancy
Anticorruption policy
10. The management of the project funds shall be sufficiently rigorous to safeguard against Fraud
and Corruption. Fraud and corruption include, but are not limited to:
 corrupt practice - offering, giving, receiving, or soliciting, directly or indirectly, anything of value
to influence improperly the actions of another party
 Fraudulent practice - any act or omission, including a misrepresentation, that knowingly or
recklessly misleads, or attempts to mislead, a party to obtain a financial or other benefit or to
avoid an obligation
 Collusive practice - an arrangement between two or more parties designed to achieve an
improper purpose, including influencing improperly the actions of another party
 Coercive practice - impairing or harming, or threatening to impair or harm, directly or
indirectly, any party or the property of the party to influence improperly the actions of a party.
11. IFAD applies a zero-tolerance policy towards fraudulent, corrupt, collusive or coercive actions in
projects financed through its grants and grants. The IFAD anticorruption policy is available on IFAD
website at (www.ifad.org/governance/anticorruption/index.htm). The IFAD website also provides
instructions on how to report any alleged wrongdoing to the Office of Audit and Oversight
(http://www.ifad.org/governance/anticorruption/how.htm).
12. It is the National Project Coordinator’s responsibility to make sure that all NAP Office staff
including the financial department are aware of IFAD’s and the MoA anticorruption policy and whistle
blowing procedures.
V. PROJECTS COSTS AND FINANCING
13. The International Fund for Agricultural development (IFAD) provided a grant to the State of
Eritrea on the terms and conditions set forth in the Financing Agreement, the amount of SDR
11 400 000 (approximately USD 17.2 million) to implement the National Agriculture Project (NAP)
(here after referred to as “the Project”). The Project consists of the following components as outlined
in schedule 1 of the financing agreement: a) Agricultural Water Resources Development;
b) Integrated Agricultural Production; and c) Project Support Services.
14. The GoE and IFAD have agreed within the Financing agreement (FA) to allocate the financing
to categories of eligible expenditures shown in the Schedule 2 of the FA. The schedule 2 also
specifies the percentages of such eligible expenditures to be financed by the Financing: 100% net of
tax.
Category IFAD Grant Eligible
(SDR) expenditures (%)
net of Tax
I. Civil Works 3,050,000 100%
II. Vehicles, Motorcycles, Equipment and Materials 1,500,000 100%
III. Agricultural and Livestock Inputs 2,100,000 100%
IV. Technical Assistance, Training Workshops and Studies 2,840,000 100%
V. Recurrent costs- operations and maintenance 770,000 100%
Unallocated 1,140,000
Total 11,400,000
15. In addition to IFAD financing the Project will also receive counterpart financing from the
Government, equivalent to approximately the equivalent of USD 5.4 million. The counterpart financing
will include 1.098 million to cover a portion of civil works, livestock inputs, technical assistance,
trainings, workshops and studies. This will be in addition to an amount equivalent to approximately
30
USD 4,302,000 in the form of taxes and duties. The project beneficiaries will also contribute
approximately the equivalent of USD 3.7 million to the project.
VI. ADMNISTATION MANAGMENT/ ROLES AND RESPONSIBILITIES OF KEY ACTORS IN NAP

FINANCIAL MANAGEMENT
16. Successful NAP financial management involves many players including those that are directly
responsible to the day to day accounting and those who offer oversight/ supervision functions.
Therefore, this manual should not be restricted to only NAP finance staff, all concerned players should
internalise the provisions therein. The key players in the NAP financial management cycle are:
 Minister of Agriculture
 Zoba Governors
 Director of Statistics Division/ National Project Coordinator (NPO)
 Head of Finance and Administration- MoA
 NAP Coordinator
 NAP Financial Controller
 NAP Accountant
 NAP Zoba Level Project Coordinators
 NAP Zoba Level Project Accountants
17. At the MoA at the national level, there is a National Project Office (NPO) with the Director,
Planning and Statistics division being the National Project Coordinator that handles all projects with
NAP being one of them. Each project is assigned a Coordinator under the NPO. Thus the NAP has an
assigned Coordinator (here in referred to as NAP coordinator).
18. Within MOA at the national level, financial transactions are managed through the Ministry
structures, with the head of Finance and Administration being at the head of the finance division.
Fig 1. Financia l Ma nagement Players/ Information Flow
Minister of Agriculture
Also chairman of National stee ring
Committee,
Zoba
Governors
Director of Planning and Head of Finance

Statistics/ National Project and Administration
MoA
Coordinator
Project Financial Controller-

Coordinator- NAP NAP
Zoba Level (ZPCO) NAP

Coordinators
Project Accountant-
NAP
Zoba Level NAP
(ZPCO)Financial Controllers
Legend:
Information flow
Reporting National Level Staff
Zoba Level Staff
31
Project Implementation Manual – Financial Management Section
ROLES/ INPUTS OF THE KEY PLAYERS IN NAP FINANCIAL MANAGEMENT
Minister of Agriculture NAP Coordinator o Approves all journal vouchers

prepared to justify advances
 Overall Controller and Accountable for  Coordinates planning and budgeting processes given to implementers
NAP funds  Together with the Financial Controller (FC) National Technical Financial Management
 Chair- Project Steering Committee. approves all payment requisitions. Assistance:
 As overall controller, the Minister Head of Finance and Administration- MoA
enforces agreed financial management  Two national experts will be engaged to
actions as agreed with Auditors, Supervises the work of head of finance unit of the first and foremost install and train
supervision missions and institutes MoA regarding the NAP operations and others. national and zoba staff in the use of the
action for non-compliance areas.  All payment requests are routed through this laccie accounting software.
 Clears all Withdrawal Applications to office  In addition, to installing and training of
IFAD.  Signatory to the designated and operational the Laccie, these two experts will make
 Clears all withdrawals from the account a proactive monitoring of the operation
designated/ account; Head of Finance Unit- MoA of the laccie accounting software across
 Signatory to designated and operating all the Zobas and National Level cost
account  Supervises the work of the Overall Controller at centres. If problems arise the experts
National Project Coordinator (NPO)- NAP Financial Controller. will fix them so that NAP implementation
Director Planning and Statistics Division  Approves all Payments. is not affected.
(PSD)  ensures compliance with AWPB for each payment
 Approves Bank reconciliations
 The NAP Coordinator reports to the  Reviews the workings of NAP finance officers
National Project Coordinator including including:
in the process of approval of financial o Financial workings that show that the
transactions draft AWPB is financially feasible in
 Approves payments before being context of available balances, funds
forwarded to the head of Finance and absorption capacity, etc
Administration. o Ensures, before signing off any
payments, a vote book or equivalent has
been duly updated.
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Financial Controller (FC) National Level Project Accountant ZPCO - Project Accountant
 Responsible for overall financial  Raises vouchers, ensure they are well  Raises vouchers, ensure they are well
Administration functions of the supported-making use of the checklist in this supported-making use of the checklist in this
project manual. manual.
 In charge of Consolidation of Laccie  Keeps & maintains proper financial records  Keeps & maintains proper financial records
based returns from the various (chronological filing system). (chronological filing system).
Zobas and National level  Updates entries in the Laccie accounting  Updates entries in the Laccie accounting
transactions system for National Level Transactions. system for Zoba Level Transactions.
 In charge of preparation of  Prepares Bank reconciliations  Prepares Bank reconciliations
consolidated withdrawal applications  Ensures budget control; that no expenditure can  Ensures budget control; that no expenditure
to IFAD consolidating from all the be incurred unless it has provision in the AWPB. can be incurred unless it has provision in the
cost centres.  Provides SOE reports to enable the Financial AWPB.
 Treasury Management ensuring that Controller to consolidate withdrawal applications  Provides SOE reports to enable the
the replenishment cycle is not  Provides a well reconciled Laccie database for Financial Controller to consolidate
clogged National Level transactions to the Financial withdrawal applications
 Ensures compliance by the Zobas Controller to enable the latter undertake  Provides a well reconciled Laccie database
and other cost centres of all financial consolidations with other cost centres. for Zoba Level transactions to the Financial
management related aspects  Where the Zobas are unable to use the Laccie Controller to enable the latter undertake
 Preparation of financial reports as software, the NPO Project Accountant will help consolidations with other cost centres. (At
required by all stakeholders the NPO financial Controller to post the excel the start this may take the form of simple
 Prepares financial accounts and based returns from the Zobas into the Laccie excel based cashbooks until the Zobas have
facilitates Audits accounting software. been able to develop capacities to use the
 Ensure accurate costing for the  Maintains key registers, e.g fixed assets Laccie accounting software)
AWPB etc register, contract monitoring forms, contracts  Maintains key registers, e.g fixed assets
register. register, contract monitoring forms, contracts
register
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VII. BUDGETING AND PLANNING

19. Based on allocations availed by the NPO to the respective Zobas/ Cost centres, each centre will
prepare its respective AWPB in a prescribed format. The role of the NPO is to consolidate the Annual
Work Plan and Budgets (AWPB) received from the respective Cost Centres.
20. The processes of preparing the Annual Work Plan and Budget are well described in the IFAD
guidelines for AWPB preparation and progress reporting. What are covered here are the budget
aspects to the extent that they relate to financial management.
The critical importance of the AWPB in NAP Financial Control
In implementing NAP, the planning function is critical. During day-to-day financial

management, an approved AWPB is the most important document, and the principal guide
on what to do and how to use resources. In the context of NAP financial management, the
AWPB is more than a guideline. It represents:
a) a commitment of NPO/ZPCOs and implementing agencies to carry out a set

of activities, produce specific outputs and achieve certain targets; and
b) Agreement by government and IFAD that the planned activities are
appropriate in light of the NAP objectives and approval to spend the
necessary money as specified in the annual budget.
In other words, it is a means by which Government of Eritrea and IFAD will have provided
“prior approval” to implementers to spend resources on the activities included in the
AWPB. It should be taken so important; any expenditure incurred outside the AWPB
will be queried by auditors, supervision missions and will be declared ineligible for
IFAD financing.
It is a performance measure, therefore, NAP should set challenging targets but not
unrealistic ones. NAP’s performance will be assessed, among other ratings, by the extent
of AWPB execution.
21. In the planning and budgeting stage, the finance officers are expected to perform the four
functions below:
2. Analyse 3. Support in
1. Avail budget other restricting financial data
responsibility factors such as presentation 4. Develop a
centres status of amount that can and treasury plan
available balances be realistically consolidation in
category-wise and replenished for in the acceptable
component-wise a Year formats
22. Analysis of Restricting Factors: Prior to the start of the planning and budgeting exercise the
NPO FC will obtain from the Accounting system and from IFAD a status of funds balances available
category-wise. From the Laccie accounting system the FC also obtains balances component-wise,
including up to the major activities. The status of funds available should be adjusted by deducting
commitments, WAs in the pipe line and projected expenditure for the remaining part of the current
year. The adjusted information about the status of funds is provided to the budget responsibility
34
centres so that they are aware of budget ceilings. It would be poor financial management/ accounting
if the AWPB is cleared when in fact it is not feasible in the context of available balances category-
wise. A working form that can used in Ms Excel to determine the available balance is as given below.
Working Form to determine status of available balances category-wise (ERN )

Category Available Less Less Less Net
As Per Commitments WA’s Projected Available
IFAD LGS in Pipe Expenses Balance
Statement Line as at the
(convert to end of the
Nakfa) Fiscal
Year
I Works XXX XXX XXX XXX XXX
II Vehicles, Motorcycles, XXX XXX XXX XXX XXX

Equipment and Materials
III Agricultural and XXX XXX XXX XXX XXX

Livestock Inputs
IV Technical Assistance, XXX XXX XXX XXX XXX

Training Workshops and
Studies
V Recurrent costs- XXX XXX XXX XXX XXX

operations and
maintenance
Totals XXX XXX XXX XXX XXX
23. The net available balance should also be broken down according to components, sub-
components and major activity headings so that planners are able to determine the relative weights
for each component/ sub-component in the AWPB as illustrated in the table below. It is important to
keep a relative balance between components so that some components do not lag behind.
Working Form to deduce status of available balances Component-wise (ERN)
Component Available Less Less Less Net
As at NAP Commitments WA’s Projected Available
Accounting in Expenses Balance
software Pipe as at the
Line end of the
Fiscal
Year
1 Agriculture Water
Resources Development
1.1 Watershed XXX XXX XXX XXX XXX

Characterization
1.2 Improvement of XXX XXX XXX XXX XXX

meteorology and hydrology
systems
35
Component Available Less Less Less Net

As at NAP Commitments WA’s Projected Available
Accounting in Expenses Balance
software Pipe as at the
Line end of the
Fiscal
Year
1.3 Agricultural XXX XXX XXX XXX XXX

Infrastructure development
Sub-total XXX XXX XXX XXX XXX
2. Integrated Agricultural XXX XXX XXX XXX XXX

Production
2.1 Development of a XXX XXX XXX XXX XXX

National Seed System
2.2 Input supply XXX XXX XXX XXX XXX
2.3 Technology generation XXX XXX XXX XXX XXX

and dissemination
2.4 Livestock Support XXX XXX XXX XXX XXX
Sub-total XXX XXX XXX XXX XXX
3. Project Support XXX XXX XXX XXX XXX

Services and Capacity
Building
Totals XXX XXX XXX XXX XXX
24. A summary of commitments rolled-over from year to year should be included in the new AWPB
so that at any one time there should be one AWPB.
Other budget restricting factors
25. Whereas available balances may set the ceiling of what to include in the AWPB, other
restricting factors that the FC will have to communicate to the budget responsibility centres involved in
the planning process include the realistic amount that can be replenished for from IFAD, the size of
the initial advance.
Consolidating the NAP AWPB
26. In the AWPB there are a number of finance tables that have to be consolidated by the FC,
working closely with the Planning and M & E Officer. While the consolidation of the AWPB into
one document will be led by the Planning and M & E Officer, the finance tables will be a
responsibility of the FC. These tables will include:
 Past year financial performance and cumulatively

 Consolidated Annual Budget Summary What it will cost: the financial
i. Component-wise summary by cost centre summary
ii. Category-wise summary by cost centre

iii. Category-wise summary by financier
Iv. Component-wise summary by financier
36
 Detailed Activity based annual Work Plans and Budgets for each budget
responsibility centre
Formats for use by Finance Officers
27. The formats for each of the above summary tables is summarised below and more details can
be obtained from the IFAD guidelines for AWPB preparation and progress reporting.
Past year financial performance and cumulatively

28. The purpose of providing this finance table as part of the AWPB is to show how the Project has
performed in the past financially. It helps to assess the funds absorption capacity of NAP. If for
instance, in the prior years the NAP has managed to absorb an average of USD 1.0 million per year;
but however the proposed budget is say at three times the actual capacity in the past (USD 3.0
million); the budget would appear to be unrealistic and thus sufficient justification would have to be
provided to defend such an increase.
29. The data for this sub-section will come from the FC, who uses laccie accounting software to
enter, analyze and process financial data. Based on the detailed information in the accounting system,
summary tables should be prepared and included in the AWPB on the overall past financial
performance and status of the project. This would include, as a minimum:
o expenditure by cost center and component;
o expenditure by cost center and category;
o disbursement by financier
o GOE (taxes) and beneficiary contributions; and
o the status of project accounts.
30. Each of the main project components has an approximate budget in the project design or per
GoE priorities as reflected in approved work plans and budgets. Each component pursues its
objective, and jointly the components will contribute to achieving the overall project goal. In this
regard, the balance between the components, in terms of implementing activities, achieving outputs
and using up the associated budget, is important. When expenditure under a certain component falls
far behind the planned expenditure, this should be cause for concern, the reasons should be
investigated and action taken. Financial progress by component will provide the information that is
necessary to detect such an imbalance in expenditure. The information will also be useful to assess
whether budgeting is realistic and to track expenditure over time. As an option, expenditure by
component compared to the project budget can also be presented using graphs.
31. Similar to components, the total budget of the project can be broken down according to types or
categories of expenditure. These categories are not supposed to be overspent; however a
reallocation is possible. The reason is the same as described under components: there is a certain
balance in the project design, between different items and activities on which money will be spent. If
this balance is lost, for example because far more money than expected is spent on vehicles and
allowances and very little is spent Agricultural and Livestock inputs, certain aspects of the NAP will fail
to work as expected. When expenditure under a certain category approaches the limit while other
categories have a much lower level of expenditure, the reasons should be investigated. Financial
progress by category will provide the information that is necessary to detect such situations, which
may lead to reallocation.
32. It is important to track the cumulative disbursement for each financier in relation to the total
amount committed, in order to know how much money the project has left.
37
SAMPLE ACTIVITY BASED BUDGETING FORM
Indicate by
shading when the
Sub- Component planned activity
will take place
Zoba
E.g Sub-
Zoba
Time Frame BUDGET CONTRIBUTIONS

Beneficia
UNIT BUDGET IFAD GOE ries Category BY WHO Remarks
Chart of Accounts Code PLANNED ACTIVITY LOCATION PROGRESS INDICATOR Q1 Q2 Q3 Q4 QTY COST ERN Grant GRANT SECTOR
Avoid too
Bring out much details. Indicate the
briefly what is Use unit as a designated
it that will be set or kit but actor
produced referenve the
data to the
Composition of
the kit
Indicate the performannce
measure. what is that will
show that the activity has been
done.
38
Budget Controls
33. Laccie Accounting software is not able to encumber funds at the point of entering into
commitment in order to avoid over committing the project and to ensure budget control. Thus, in
addition to using Laccie Accounting software accounting package, manual Vote books must be
opened and updated to monitor prudent spending at each budget responsibility centre. Before
payment is effected/funds committed, the respective project accountant at the Zoba or cost centre
shall review the activity funding, to see whether the vote has enough funds so as to keep expenditure
within the budget or consult NPO on the need to ask the Steering Committee and IFAD on any likely
negative variance. Accurate completion of the vote book will enable the project to make informed
decisions based on budget performance per budget line and to ensure that transactions incurred have
adequate provisions in the AWPB.
34. The approach to NAP budget control has the following elements
a. Common and consistent budget coding from AWPB preparation, expenditure requisition,
payment and journal vouchers and posting the accounting system(Proactive control)
b. Posting the budget in NAP Accounting software and undertaking budget Vs actual on a
monthly basis (Reactive control)
c. Since Laccie accounting software is likely to provide a reactive control a vote book is
necessary.
Review of the AWPB
35. Every quarter, the Financial Controller should review the costs incurred during this time period.
In case of differences between the planned and actual costs presented in the Annual Budget, the
Financial Controller should identify the reasons for those differences and detail them in the periodic
Financial Reports presented to IFAD. In case of internal problems identified during the costs review,
the Financial Controller should take the necessary steps to eliminate them. Otherwise, the budget for
the next quarters should be readjusted to reflect the difference between actual and planned figures.
VIII. ACCOUNTING SYSTEM

36. NAP’s financial reporting will be in accordance with the International Public Sector Accounting
Standards (IPSAS)- cash basis. This is how the accounting system has been developed.
37. NAP uses Laccie accounting package to process its financials. The Laccie accounting
software has the following data filter features for which data is captured for every expenditure
posting:
Control Subsidiary Expenditure code (6 Cost Donor
Code (3 Codes (4 digits) Category
digits) digits) (1 digit)
38. The NAP chart of accounts is based on the above data filter features as follows:
Control Code Subsidiary Expenditure code (6 Cost Donor

(3 digits) Codes (4 digits) digits) Category
(1 digit)
Components/ Principal GoE Expenditure IFAD,

but through sub- Activities expenditure categories GoE,
components categorisation according to Beneficiaris
schedule 2 of
the FA
39
39. NAP coding to monitor expenditure trends component-wise:

 Digit 1 of the control code represents the respective component:
When the first digit of the control code is: The respective component is:
1 Component 1: Agricultural Water Resources
Development
2 Component 2: Integrated Agricultural Production
3 Component 3: Project Support Services and

Capacity Building
 Digit 2 of the control code represents the respective sub-component. For

example, when the control code is 110 means that this is the first sub-component
under component 1. The coding for components is therefore as follows:
Control Code Sub-component

110 Watershed characterization
120 Improvement of meteorology and hydrology systems
130 Agriculture infrastructure development
210 Development of a National Seed system
220 Input supply
230 Livestock support
300 Project Support Services and Capacity building
The NAP coding approach to monitor expenditure trends up to individual activity level
40. The subsidiary data filter that Laccie offers is used to track expenditures up to activity level with
each activity linked to one of the above sub-components. Below each sub-component set up in the
control coding, various activities will be established.
41. The subsidiary code facility offers 4 digits and the first digit reserved to identify the sub-
component under which the respective activity falls as follows:
First digit of Respective Sub-component under which the activity falls

subsidiary code
3 Agriculture infrastructure development
5 Input supply
6 Livestock support
42. The remaining three digits of the subsidiary data capture represent the various NAP
activities and the complete code for activities is below:
Subsidiary code Activities

1000 Watershed characterization (Main Header)
1001 GIS mapping of all watersheds based on satellite
imagery/ field visits
1002 Technical Support from ICARDA
1003 Equipment and materials for the GIS unit at MoA
40

1004 Training of Staff of GIS unit of MoA
2000 Improvement of meteorology and hydrology systems (Main header)
2001 Improvement of manually operated rain gauges
2002 Automatic rain gauges
2003 Establishment and equipment of First class stations
2004 Bubbler stations/ float operated systems
2005 Data transmission based stations
2007 Training of MoA, MLWE and Zoba staff
130 Agriculture infrastructure development (Main header)
3000 Agriculture infrastructure development (Main header)
3001 Construction of earth dams
3002 Construction of check dams for water harvesting
purposes
3003 Training of extension agents
3004 Training of farmers
3005 Soil and water conservation activities
3006 Drip irrigation schemes
3007 Spate Irrigation schemes
3008 Semi-pressurized irrigation schemes
3009 Sprinkler Irrigation facilities
3010 Training of water use Associations
3011 Maintenance of facilities
3012 Diversion Schemes
3013 Wells
4000 Development of a National Seed system (Main header)
4001 AED support to National Seed Unit
4002 NARI –Drip Irrigation equipments/ materials for breeder
and Foundation seed production
4003 NARI- Production Costs Breeder and foundation seeds
4004 Support for seed processing centres
4005 Staffing of seed processing centres
220 Input supply
5000 Input supply
5001 Improved seeds
5002 Farm tools
5003 Fertilisers
5004 Agro-chemicals
5005 Vaccines and animal drugs
5006 Veterinary equipments
5007 Inputs for pullet rearing
5008 Artificial insemination
5009 Training of Trainers (AED training for Zoba experts)
5010 Demonstrations/ farmers trainings
230 Livestock support
6000 Livestock support (Main Header)
6001 Dairy Cows/ Goats distribution
6002 Training of farmers
6003 Establishment and training of Dairy Association members
6004 Animal Health services
6005 Animal feed production
6006 Facilitation of Poultry program
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7000 Project Support Services and Capacity building (Main header)
7001 National Steering Committee costs
7002 Baseline survey
7003 Supervision visits
7004 Periodic meetings
7005 Training workshops for AWPB
7006 Training for M & E
7007 Car rentals
7008 Training on advanced project M & E
7009 Training on financial management
7010 Training on Procurement Contracts and Tendering
management
7011 IFAD regional workshops
7012 Audit
7013 Other trainings and workshops
7014 Technical Assistance and implementation support
7015 Telephone, FAX and mailing charges
7016 Impact assessment
7017 Office materials and stationery
7018 Vehicle Purchase
7019 Other operating Costs/ Allowance
43. The NAP coding approach to monitoring Expenditure category Wise: This is done based
on the category data filter feature of Laccie with the following being the respective codes:
Code Expenditure category
1 Civil works
2 Vehicles, Motorcycles, Equipment and Materials
3 Agricultural and Livestock Inputs
4 Technical Assistance, Training Workshops and Studies
5 Recurrent costs- operations and maintenance
44. The NAP coding approach to monitoring Expenditure by financing source: This is done
based on the donor data filter feature of Laccie with the following being the respective codes:
Code Financier
1 IFAD grant
2 Government of Eritrea
3 Beneficiaries
Recording and processing of transactions
45. Whenever a transaction takes place under the Project, it should be recorded and processed
using the Laccie accounting software. The recording of transactions under the Project follows the
Cash basis of accounting with allows for the recognition of cash inflows in the period they are received
and the reporting of expenses in the period those expenditures are paid.
42
46. Individual records of transactions are treated as source documents. For the project accounting
purposes, the following source documents are considered:
 Purchase orders/ Contracts
 Purchase invoices
 Service invoices
 Consultants/engineers’ reports
47. All transactions occurred should be registered in the accounting software in accordance with
the date of occurrence and under the form of journals. Vouchers should contain sufficient and detailed
information about the date of the transaction, its type, amount and reference to the source document.
All the transactions should be entered on the accounting software using the principle of double entry,
which means that each transaction should be recorded twice, once on the debit side of the transaction
and once on the credit side of the transaction. The accounting software will automatically process
those transactions and post them to the ledger accounts, which are accounts where all transactions of
similar type are recorded. This processing of transactions also allows for the production of timely
reports.
48. Other key aspects discussed later in this section are:
 Petty cash management: The accountant will manage and periodically reconcile the petty
cash account. The petty cash account is discussed more in detail later in this manual.
 Bank account reconciliations: The accountant will need to perform monthly bank account
reconciliations between the different accounts. The reconciliation is discussed more in detail
later in this manual.
 Withdrawal of funds: The accountant will be responsible for preparing withdrawal
applications to be submitted to IFAD. The necessary procedures are explained in later in this
manual and in the IFAD disbursement Handbook.
 Financial reporting: The accountant is not only in charge for recording the financial
transactions on a daily basis but also for summing up the expenditures made under each
component and sub-component and for each activity under those and posting the data on
accounting/financial reports on a periodic basis during the reporting periods specified in the
Letter to the GoE and in the Financing Agreement. The accountant will also need to keep
track and report on the availability of project funds in the different accounts (Designated
accounts, project accounts and petty cash) as well as the commitments made by the project
at the respective cost centre.
 Fixed asset register: The accountant needs to maintain a fixed asset register recording all
fixed assets but this will be done off the Laccie accounting system. Fixed asset management
is discussed more in detail later in this manual.
 Period for which records are to be kept: The accountant needs to file the original records in
an organised way to be maintained by the NPO/LPA/ the respective Zobas for a minimum 10
years after the project completion. Record management is discussed more in detail later in
this manual.
 Access Levels: The access to the accounting system should be governed by the privileged
metrics defining the levels of access by different users: (i) active use for inputting/editing of
data; (ii) read-only use; or (iii) no-access. This would allow a separated and controlled access
to the Accounting module (i.e. Journal recording, posting to the General Ledger). Each
accounting transaction records the user’s ID, preventing unauthorized access to the system
and an adequate level of protection against the input of false data or the destruction of the
records. At the same time, the data-sharing nature of the system involves a strict
coordination and active data exchange among its various users (primarily the NPO/ ZPCO). In
this respect the system should ensure the reliability in information storage and fast data
processing.
IX. PROCUREMENT
Caution!
 Without proper management of the procurement process, there cannot be good disbursements.
Therefore the smartness and effectiveness with which the procurement process is managed
determines the level of disbursements.
43
 Failure to comply with IFAD and GoE procurement procedures will result in transactions being
declared ineligible for IFAD loans and grants financing.
A. Procurement Cycle
PCRRDP: ROLES AND RESPONSIBILITIES IN THE PROCUREMENT CYCLE
Procurement
Requisition
Filled with
Procurement Clear
Plan and Specs/TOR/ Confirmation of Availability of
Budget 1 SOW 2 funds 3
Review of:
User Specifications/ TOR/SOW
Department Procurement Method
Evaluation Criteria
Potential Supply Market 4
Financial
Controller
Contract and
Performance Programme
Evaluation 15 Coordinator
Procurement Procurement Method

Officers Approval 5
Contract Contract
Management Monitoring
Delivery
Contracts
Payment 14 Committee
Preparation of Bidding
Documents e.g:
Sign Contract Instruction to Bidders

Communicate
Award Price Schedule
Administrativ
e review 13 Terms and Conditions 6
Award of
Contract 12
Approval of Bidding
Documents 7
Review of
Evaluation
Report and
Seeking
IFAD's No
Objection 11
Receipt
and Advertising
Evaluation of Opening and Invitation
Bids 10 of Bids 9 for Bids 8
49. If the Procurement Process is not well managed, the disbursement levels will be affected.
Before commitments are entered into there cannot be disbursements. Therefore disbursement is
directly dependant on how well the procurement process is managed.
50. The Procurement officers have to think through the draft AWPB with ingenuity to determine the
smartest contract packaging so that the direct payment method can be used to avoid overloading the
special account. In all cases, proper packaging of procurements will enable the programme utilise the
direct payment method, hence reducing pressure on the Special Account.
B. IFAD Prior review thresholds

51. Procurements that exceed USD20,000are subject to IFAD’s prior review and the Fund’s no
objection will be sought at the critical procurement process stages, including the clearance of bid
documents, evaluation reports and contracts. This threshold maybe changed from time to time by
IFAD depending on assessment of fiduciary risk.
52. GoE procurement guidelines and thresholds should be considered where the Financing
Agreement did not specify thresholds.
44
53. The Procurement Plan tracking form as per the Procurement Plan illustrated above should be
presented in monthly management meetings to indicate progress to date. The tracking form includes
a Planned and Actual rows for each procurement item. The planned row will have already been filled
during the procurement planning process and approved as such. Each month, the actual dates on
which a procurement stage has been done will be entered into the actual row, so that any spillages
are identified in time and rectified.
54. The force account, being an effective, practical and economical way of delivering some kinds of
works, should only be used when the following conditions are met:
 Quantities of work involved cannot be defined in advance;
 Works are small and scattered or in remote locations for which qualified construction firms
are unlikely to bid at reasonable prices;
 Work is required to be carried out without disrupting ongoing operations;
 The risk of unavoidable work interruption is better borne by the Programme than by a
contractor;
 There are emergencies needing prompt attention.
55. Where the above conditions do not apply, other procurement methods should be utilised.
56. Where the Programme lacks the necessary organization, resources or experience to deal with
international procurement, it may employ, as its procurement agent, a firm or entity specializing in
handling international procurement. The agent is to follow all the procurement procedures outlined in
the loan agreement on behalf of the programme. The process of acquiring the procurement agent
should meet the principles of efficiency, economy and effectiveness. The Programme should have a
contract with the agent. Where possible, the programme should utilise the direct payment method to
clear obligations due to the procurement agent.
57. Where an item is common to more than one Cost Centre, bulking should be applied at the
National Level. Where there is an item that is specific to a Zoba, then procurement should be done at
Zoba level provided a no objection to procure has been sought from the National Level and thresholds
as set in the Financing Agreement and GoE Procurement Guidelines have been observed. In such a
case, the procurement method will also be approved by at National Level.
58. Committing Funds and procurement management is about being able to manage a process,
ensuring that there are no slippages in each of the above 15 stages. It involves being proactive; and
pre-empting the procurement process using the 18 months procurement plan that is a requirement
before the AWPB is approved.
C. Roles and Responsibilities
User Departments
59. Users should perform the following functions:
(i) Provide their needs as input into the Procurement Plan and Budget
(ii) Fill in requisition forms while providing clear Terms of Reference for services, Bills
of Quantities for Works and Specifications for goods.
(iii) Participate in contract review, award and signing
(iv) Participate in contract monitoring
(v) Participate in contract performance evaluation
Financial Controller
(a) Provide confirmation of availability of funding
(b) Effect payment when the contract has been satisfactorily
performed
45
Procurement Officers
(i) Review specifications / ToRs/SoW
(ii) Recommend an appropriate procurement method
(iii) Recommend the evaluation criteria
(iv) Identify potential supply market
(v) Prepare bid documents
(vi) Carry out advertising and invitation for bids
(vii) Receive and open bids
Contracts Committee
(i) Approve the procurement method
(ii) Evaluate bids
(iii) Review Evaluation report and seek IFAD’s No Objection
(iv) Award contract
D. Institutional Roles
60. The MOA has a Procurement and Supplies Management Unit (PSMU), which reports to the
Head of Administration and Finance Division. The Unit has two main functions: Procurement, and
Supplies Management. This Unit will take charge of the NAP procurements and offer all the necessary
technical backstopping to Zobas for those procurements that cannot be bulked and centrally procured.
61. In the Zoba, there will be a specific Tender committee for NAP, whose members will be
constituted by the Governor with technical advice of PSMU. Although in Eritrea the procurement limit
for this kind of Tender committee is up to Nakfa one hundred thousand (100,000.00); a specific
exemption for NAP will be obtained in respect thereof, otherwise Programme Implementation may be
slowed down, if all Procurements above Nakfa 100,000 are to be done by the Ministry of Finance.
E. Procurement Methods
62. Goods, works or services are either procured locally or from foreign sources. For this reason,
the procurement is local or foreign procurement. The commonly known procurement methods are the
following:
63. Shopping: This could be local or international in which there are two methods:
 Purchase without profroma invoices, which are purchases of small value items that call for
no proforma invoices.
 Purchase with proforma invoices for which at least three proforma invoices have are
collected from suppliers, and the supplier offering the lowest price, all other things being
equal, is the winner.
64. Single Source (SS): In a situation where only a single source of supply is known to exist, the
procurement method is called single source procurement. The invitation for bid is sent to this sole
source. It must, however, be noted that unless the source of supply is verified to be the only and only
source, this method of procurement could be a pretext for abuse.
46
65. Invitation for Bids (IFB): The term invitation for bids is used for goods and works only. It refers
to the formal invitation for bids from bidders. There are four types of IFBs:
 Limited Local Bidding (LLB);
 National Competitive Bidding (NCB);
 Limited International Bidding (LIB); and

 International Competitive Bidding (ICB).
66. LLB refers to bidding where bidders are found within the country and are known to be few in
number. And an invitation for bid is sent to them directly.
67. NCB is a method of procurement in which the required item of procurement is believed to be
available in the country, and the payment is expected to be made in local currency. An invitation for
bid is announced through the country’s mass media.
68. LIB is applied where the bidders - found inside and outside the country - are known to be
limited in number. And an invitation for bid is sent directly to their address.
69. ICB is applied where bidders are many and scattered throughout the world. Invitation for bids
are advertised in internationally well known publications to reach bidders in a two stage, first through a
general procurement notice and second through a specific procurement notice.
70. Request for Proposal (RFP): RFPs apply to the procurement of services, and are issued to
short-listed consultants.
F. Inviting Bidders
71. RFQs are prepared with clear and detailed specifications and floated to known suppliers. The
responding time limits for local purchases are 7 days, and for foreign purchases 15 days.
72. IFBs are prepared and issued to bidders following a formal advertisement, except in the case of
single source bids. The essential features of IFBs are the following:
 Invitation for bids;
 Instructions to bidders, or qualification information.;
 General conditions of contract;
 Special conditions of contract;
 Bidding data;
 Schedule of requirements or bill of quantities;
 Technical specifications, drawings and designs; and
 Forms of contract and securities.
 The bid submission time for LLBs and NCBs is 30 days and that for LIBs and ICBs
45 days minimum respectively.
73. RFPs are prepared and issued to short listed consultancy firms or individual consultants
following an advertisement for expressions of interest. The salient features of RFP are the following:
 Letter of invitation;
47
 Terms of reference (TOR); and

 Forms of contract.
 The proposal submission times for national and international consultants are
minimum 30 and 45 days, respectively.
 Copies of RFQs, IFBs, and RFPs are made to the Store and the end user.
G. Receiving Bids
Quotations
 The suppliers’ responses to request for quotations must be submitted in sealed envelopes.
 Where confidentiality is protected, electronically transmitted responses are accepted.
 Suppliers’ offers are collected by a purchaser or hand delivered to the office of the PSMU.
Bids
 At bid closing time, the Chairman and Secretary of the Bidding Committee draw double lines
across the page of the form in which bids are recorded and put their signatures underneath.
The lines run under the name of the bid last recorded before bid closing. The lines signify that
no bids were received after the bid closing.
 No bids are received after bid closing.
Proposals
 Proposals are hand delivered or are mailed to the office of the PPMU Head, and are received
against numbered receipts. Because limited number of proposals are usually received there is
no need for a bid box.
 Bidders’ names are recorded on a form, and closed in the same manner as indicated above. No
proposals are received after bid closing.
H. Opening of Bids
Quotations
 The Secretary of the Bid Committee delivers the quotations collected by the purchaser and
those submitted to the PSMU office to the Bid Committee at its meeting.
 The committee members ensure that the envelopes in which quotations are presented are
properly sealed.
 The Secretary of the Committee opens the envelopes and reads the quotations out aloud to
members of the committee.
 The members ascertain that the quotations are filled in on the request for quotations form.
 Each member of the committee signs the quotations form.
 The secretary is asked to prepare a price comparison table. A form should be used for such
price comparison tabulation.
Bids
 The Bidding Committee Secretary takes the sealed bid box from its usual stand to the meeting
place of the Bid Committee.
48
 In case of bulk bids, the bids that are hand delivered are brought to the meeting place of the Bid
Committee.
 Attendance of Bid Committee members and bidders or their representatives who wish to attend
bid opening is taken and recorded in a form.
 The committee members and the bidders or their representatives ensure that the keyhole and
the slit of the box are sealed with paper that bears the signatures of the Chairman and
Secretary of the Bid Committee.
 In the case of bulk bids the committee members and bid participants or their representatives
ascertain that the bid recording form has been closed by the Chairman and Secretary of the
Bidding Committee upon bid closing by drawing double lines underneath the last name and
putting their signatures immediately below.
 The seals are broken and the bids taken out of the bid box.
 Each bid is held up by the Secretary of the Bid Committee for all to see that its envelope is
sealed and in order.
 The Secretary then opens each bid and reads out aloud the highlights of the bid: name of
bidder, total amount of each bid, alternative bids, discounts, bid security, etc.
 After all bids are read, the participants are asked if they have any questions on the bid opening,
and the Committee members provide clarification, if any.
 The Secretary ensures that the Committee Members sign on all the bids.
 Bid opening records are taken during bid opening on the basis of which minutes of the bid
opening is prepared.
Proposals
74. In the case of a two-envelope system, where technical and financial proposals are presented in
separate envelopes within an outer common envelope, the proposal opening procedures are as
follows:
 Bid Committee members open the technical proposal.
 Bidders or their representatives are invited to attend the financial bid opening –
which for all practical purposes is considered as the public proposal opening.
 The Secretary presents the proposals or takes the bid box, whichever is applicable,
to the place of proposal opening.
 If a box has been used the Bid Committee ascertains that the keyhole and the box
slit are sealed by a sheet of paper bearing the signatures of the Chairman and Secretary of
the bid committee. The seals are then broken and the proposals taken out of the bid box.
 If no bid box has been used the proposal opening participants ensure that the form
on which the list of bidders has been recorded is closed by the Chairman and Secretary of the
Committee upon bid closing and that no proposals are received thereafter.
75. In the case of a one-envelope system, where the technical and financial proposals are
presented in one envelope, the following proposal opening procedures are followed:
 The Bid Committee members and bidders or their representatives who wish to attend
participate in the proposal opening.
 Technical proposal opening minutes are kept, but bid opening minutes are taken
when financial proposals are opened officially.
76. Both the one- and two-envelope systems public bid openings observe the following procedures:
49
 Attendance of participants must be taken and recorded on the attendance form as

indicated in IFB.
 Both the outer and inner envelopes are held up by the Secretary of the Committee
for all the members and proposal participants to see that they are sealed and in order.
 The Secretary of the Committee opens each proposal and reads out aloud to the
meeting participants the highlights of the proposals, namely: name of contender, total
amount of proposal, alternative proposals, discounts, security, etc.
 The participants are asked if they have any queries after which the members of the
Bid Committee sign on all the proposals.
 Records of the opening of outer envelopes and technical proposals are kept but
formal proposal opening minutes are kept only for the financial proposals.
I. Evaluation
Quotations
77. Quotations are compared on the basis of a cost comparison table. Because quotations are
usually requested for goods of standard nature the overriding concern is price. Evaluation on the
basis of the lowest price is, therefore, the most appropriate evaluation method.
Goods
78. In the procurement of goods evaluation is carried out on the basis of the evaluation criteria
already set out in the bidding documents. There are three main evaluation methods:
 Evaluation on the basis of the lowest evaluated and responsive bid or Price plus
other factors. Under this method a preliminary examination is made to determine whether
bids are substantially (without material deviation) responsive. Then a detailed examination
is carried out to evaluate and compare bids. And finally the lowest evaluated responsive
bid is determined as the successful bid.
 Evaluation on the basis of life cycle cost. This method is used to determine the
initial acquisition cost plus the follow-on ownership costs during the life of a plant or
equipment.
 Evaluation on the basis of a merit point system. This method applies merit points
or weightages for technical and price factors to determine the overall most competitive bid.
Works
79. As in the case of goods, evaluation is carried out on the basis of evaluation criteria already set
out in the bidding documents. Bids are first examined on the basis of technical factors such as the
grade classification, experience, present work load, financial strength, ownership of construction
equipment, submission of bid bond, completion time, attendance at bid opening etc. of the contractor.
Bids are then assessed on the basis of price. The evaluation method usually applicable for the
selection of a works contract is the evaluation on the basis of the lowest evaluated and responsive bid
or price plus other factors method.
Proposals
80. Evaluation of proposals is carried out as set out in the request for proposal. There are seven
methods of evaluating proposals:
50
 Quality and cost based selection (QCBS), where quality and cost are the criteria for
selection.
 Quality based selection (QBS), where quality alone is the basis for selection.
 Fixed budget selection (FBS), where the cost of the services required should not
exceed the allocated budget which is disclosed in the bidding documents.
 Least cost selection (LCS), where technical requirements are complied with the
least cost is selected.
 Qualification based selection (QBS), where the most qualified individual consultant
or consulting firm is selected.
 Single source selection (SCS), where selection is limited by circumstances to only
one person or firm that can provide the desired service.
 Negotiation, where it is carried out first with the best bidder and if it proves
unsuccessful, it is carried on with the next successful bidder and so on. But it is not
encouraged as the only method of selection in public/government procurement.
J. Settlement of Procurement Accounts

81. The PSMU hands over necessary documents to the Finance Unit of the ministry for settlement
of the accounts. These documents are:
 Purchase Requisition.
 Tender Documents.
 Contract Documents.
 Bank Documents.
 Marine Insurance Policy.
 Bill of Lading or Airway Bill.
 Supplier’s Invoice.
 Packing List.
 Customs and Clearing Documents.
 Goods Received Note (GRN)
X. RECORDS MANAGEMENT
82. Financial records must be created and preserved for every financial transaction performed
under the project. Financial records are defined as any financial information including written,
computer data, internal forms, e-mails, or any other form of storage information originated from the
NPO such as internal forms, journal vouchers financial reports (Monthly & quarterly) copies of checks
and withdrawal applications etc. or received by the NPO such as supplier invoices and receipts, bank
statements, IFAD documents etc. within the framework of the project's official activities. The objective
of this procedure is to preserve the financial records and files for further official use by the LPA/ Zoba,
for financial audit and for review by the Fund during the supervision missions. The project’s financial
records are the property of the MoA and cannot be removed or destroyed.
It is important to note that in accordance with the IFAD general conditions, the GoE has to
maintain the original records for a minimum 10 years after the project completion.
Filing of the financial records
83. The accountant is responsible for filing the financial records created or received by the project
at his or her respective cost centre (National or Zoba Level). To fulfil this responsibility, the accountant
must maintain chronological files in which the financial documents have to be filed for future
reference. Filing should be performed daily to prevent the accumulation of papers and to ensure that
the financial records are maintained in an up-to-date manner at all times. Each financial record should
be filed under its code in a chronological order, with a sequential number assigned to every document.
Any kind of additions or amendments to the financial document should be filed in a chronological
order immediately following the principal document.
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Storage of financial records
84. The financial records of the project should be stored in the NPO/ ZPCO office, for a minimum
10 years after the project completion. The data should be stored within the accounting software, as
paper copies, as scanned copies and as computer disc copies. The Financial Officer should allocate
an appropriate storage area for the financial records in paper format and maintain them in locked
cabinets, safe from water and fire, to which access is controlled and limited. The Financial Officer
should also classify the financial records as "Confidential", or "General". All important
correspondences should be filed.
Archiving of financial records
85. In order to prevent an unnecessary pile-up of files in a limited office space, the Financial
Controller/ Accountants should make sure that the financial records are archived on a regularly basis.
Once a year, the Financial Controller/ Accountants should make sure that the completed or inactive
files are archived in a manner that will allow for easy retrieval of the files in case they are required at
some future date.
Back- up procedures
86. To avoid the loss or damage of financial data, the information should be kept in two copies: i) at
the computer server of the NPO/LPA/ ZPCO and ii) in the locked cabinets of the NPO/ ZPCO office.
Only authorised personnel should be allowed to access the financial records without authorization.
The access of external persons is prohibited except for the auditors & IFAD staff.
VII: INTERNAL CONTROLS

87. Designing, Installing, and maintaining a system of internal financial control is an integral part of
the Financial management function. Internal financial controls aim to ensure: i) efficiency, ii) reliability,
of financial reports and iii) compliance with applicable laws and regulations including the conditions
set forth in the financing agreement. The key features of the internal control system are summarised
below:
 Segregation of duties;
 Authorization;
 Reconciliations and checks;
 Restricted access; and
 Monitoring and review.
Segregation of duties
88. An important element in any control system is the separation of those duties which would, if
combined, enable one individual to record and process a complete transaction. It is the Financial
Controller’s responsibility to ensure that the following duties are segregated under the project:
preparation, authorisation, execution, custody, recording and the and operation of systems.
Authorization
89. Authorization controls require the certification that a transaction or event is acceptable for
further processing. Several types of authorization are in effect at the project, mainly in the
procurement cycle, payment cycle, bank and cash management cycle including reconciliation. The
Financial Controller/ accountants should ensure that the authorizations of NPO/ Zoba staff ensure
efficient implementation while keeping the risk as low as possible. The authorization of project staff
should be in line with their respective job descriptions.
Reconciliations and Checks

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90. Reconciliations between independent, corresponding sources of data are a key control for
identifying errors and discrepancies in balances. The Accountants should perform the following
reconciliations each month:
 Bank reconciliation
 Reconciliation between system and special account receipts and payments statement
 Any reconciling or balancing amounts should be promptly cleared. Unusual or long
outstanding reconciling items must be brought to the attention of the head of Finance Unit-
MoU. The head of finance unit will review and sign all reconciliations as evidence of his
review.
 In addition physical checks should be performed on assets held and on petty cash.
Restricted Access
91. All data, records and assets should be kept in a physically secure environment. This should
cover safe keeping of finance records such as official order forms and bank details. In addition, any
petty cash should be kept securely. Financial data and other records should also be protected in the
form of back up procedures. All work should be regularly backed up and copy records stored securely
off site
Monitoring and Review
92. Periodic financial reports must be prepared and submitted to the fund. For the purposes of
internal control the same information should be prepared and monitored by the project Coordinators
on a monthly/quarterly basis. The reports should be prepared on a timely basis and should normally
be available for distribution two weeks after the end of the reporting period to which they relate. The
periodic reports should be reviewed by the finance officer and the project coordinator as a minimum.
Where necessary, corrective action should be taken to ensure the authorized budget and procurement
plan is not exceeded.
XI. FLOW OF FUNDS, CASH AND BANK ACCOUNT MANAGEMENT

93. The NAP operates the following Bank Accounts:
a) Designated Account ‘Grant’- Denominated in United States Dollars.
b) Project Operational Account denominated in Nakfa for each of the following cost
centres:
 National Level
 Zoba Debub
 Zoba Gash Barka
 Zoba Anseba
 Zoba Nothern Red Sea
 Zoba Southen Red Sea
 Zoba Maekel
c) The bank signatories mandate will be structured as follows:

a) The mandate to operate the accounts and effect financial transactions is delegated
to the officers as detailed below.
PANEL “A”
I. Minister of Agriculture; alternate being the Head of Finance and administration
PANEL “B”
I. Head of Finance Unit- MoA
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94. The Operational Accounts denominated in Eritrean Nakfa at the Zobas: The mandate to
operate the accounts and effect financial transactions is delegated to the officers of the day as
detailed below:
PANEL “A”
I. The Governor
PANEL “B”
I. Zoba Head of Finance and Administration
II. The Zoba Project Coordinator (or head of MoA at the Zoba)
The NAP Funds flow Chart
SOURCES IFAD GOE
2 5
Designated Account
USD Bank of Eretria
3
1
7 Operational Ac c ounts; One for
eac h of the 6 Zobas and 1 for
National Level (Commerc ial Bank of
Eritrea)
Operational A/Cs (7)
Contractors/ service providers, suppliers, consultants, project implementers
95. An explanation of each of the above lines on the NAP funds flow chart of presented below:
Line 1. Direct payments from IFAD to suppliers, etc for disbursements valued with a
minimum value of USD 100 000.
54
Line 2. Initial allocation into the Designated Accounts (advances from IFAD grant)
and subsequent replenishments. This advance will be replenished until towards
project closure when recovery of the advance starts to take place. With the replenishment
system, the full initial advance should always be reconcilable within the
replenishment cycle as any ineligible expenses incurred will bereplenished back.
Towards project closure the advance to the Designated Account will be recovered
by IFAD by way of justification of expenditure accounted for by NAP. When recovery
commences, NAP will submit SOE justifications and will not be replenished in full, with a
portion going to the credit of the advance account.
Line 3. Transfer of IFAD Grant funds from the designated account to the respective NAP
Operational Accounts for covering eligible local costs in Nakfa.
Line 4. Payments of IFAD Grant portion of costs in Nakfa.
Line 5. GoE parallel financing of its counterpart contribution to NAP.
96. Based on the Funds Flow arrangement discussed above, the following accounting procedure
will apply:
Event Entries in the Accounting System

To record the initial deposits from IFAD Debit: Respective Designated Accounts in the Laccie
accounting package
Credit: Initial Deposit (As a receipt item on the receipts and
payments statement)
To record subsequent receipts from Debit: Respective Designated Accounts in the Laccie
IFAD accounting package
Credit: Replenishments from IFAD (Income)

To record transfers to the Operational Inter-bank transfer entry (even the transfers to the Zoba
Bank account accounts)
To record expenses incurred as part of Debit: Respective Expense account on chart of accounts
the respective components, sub- developed to reflect Project components and expenditure
components and activities categories
Credit: Operational Bank Account.
Dealing with Zobas
97. Each of the Zoba bank accounts will be accounted for as any other project bank accounts and
any balance remaining on those accounts will be treated as cash and bank balances. The Zobas will
have to submit bank statements along with the reconciled cashbooks to enable the FC at the NPO to
be able to collate the designated account reconciliation.
98. Daily Subsistence Allowances (DSAs): In the spirit of Paris Declaration, NAP will follow GOE
provisions for allowances/DSA rates. The NAP DSA rates are:
Rate
Officers travel from Asmara the Zobas (and ERN 900/ per day
from Zobas to Asmara)
Travel within Zobas ERN 600/ per day
Facilitation allowance- e.g at a training outside ERN 1,500/ per day
normal duty station
99. For international travels, GoE has not yet developed circular on the applicable rates. Therefore,
for these international travel, allowance rates will be based on UN rates for the respective country.
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100. Allowances are paid only when the officer has left his/her work station and should not be paid to
employees executing their normal duties at their work place. For example, if a NAP employee sits on
an evaluation committee, within Asmara, he or she should not be paid a “sitting” allowance; as this is
deemed to be part and partial of his or her work.
Withdrawal Applications
101. The IFAD draft disbursement handbook provides all the guidance and forms needed for the
preparation of withdrawal applications including replenishment applications. It has not been deemed
necessary to reproduce those forms and guidance into this manual.
102. As stated in the LTB and the LDH, four standard disbursement procedures may be used for
withdrawal of financing.
Procedure I
103. Advance withdrawal (using imprest account with replenishment to the Bank of Eritrea.
Procedure II
104. Direct payment. This modality is used for eligible project expenditure to be paid directly by
IFAD, generally for large contracts, to suppliers, contractors or third parties, as authorised by the GoE
over USD 100,000 and to be reviewed by IFAD depending on assessment of the fiduciary risk.
Procedure III
105. Special commitment. This modality is used for eligible project expenditure related to items
imported by specific implementing agencies under letter of credit requiring the issuance of guarantee
for reimbursement to negotiating banks by IFAD.
Procedure IV
106. Reimbursement. This is applicable when eligible project expenditures, reimbursable under the
financing, have been pre-financed by the GoE. Such reimbursements are expected to be claimed not
later than 90 calendar days from the date of payment by the GoE.
107. The tools needed in managing a proper treasury unit:

a) The accounting software (Laccie accounting package in the case of NAP) to manage the
entire accounting data (production of WA, AWPB control, disbursement rate, Variance
analysis etc)
b) Regular updating of the Cash Book (this will prevent NAP not to go into Overdraft which
could cause the Project to issue bouncing cheques and expose the Project)
c) Monthly Bank reconciliation for all currencies
d) Monthly Designated Account reconciliation (as per IFAD accepted format)
e) Regular update of the status of disbursement, commitment and undisbursement as
against the global approved fund allocated by category and component for your project
(ensure to include commitments)
f) Monthly Financial Report for management decision making
g) Regular reconciliation of WA presented to IFAD by NAP for reimbursement as against
the payment made by IFAD to the designated account
h) Cash & Expenditure forecast
108. NAP implementers must note that any delays to justify advances can clog the replenishment
cycle and can result in cash flow implementation constraints. A tool that can be used to measure the
efficiency of a replenishment process is the designated account reconciliation as shown below. Thus
the designated account reconciliation should not always be prepared as formality for inclusion in a WA
but should be used, on a monthly basis, as a performance measure as illustrated below.
109. Illustration on how the designated account reconciliation can be a good management tool for
use by Project Manager and FC to follow-up cash flow situation- it is synonymous to the balance
sheet in the Private Sector.
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Illustrating that Designated Account Reconciliation is good Treasury Management Tool

USD Management Tips
1 Total Advanced by IFAD xxx

This reconciliation should give the whereabouts of
2 LESS: Amount Recovered by IFAD - this advance and the FC should always on a
monthly basis be interested to know the
3 Outstanding Advance to xxx whereabouts of the initial deposit.
Designated Account
4 Balance of Designated Account as xxx

per Bank Statement- Bank of
Eritrea
If less than 50% of the initial deposit can be traced
5 Balance on Project Operational xxx to bank statements, this can always alert the FC
Accounts as per Bank Statements and NAP coordinator of lingering cash flow
(including national level and zobas) problems by looking at lines 4 and 5
xxx
Total of Bank Balances
6 Plus Total Amount claimed in this x If this amount is materially higher than 20% of the
Application No. xx initial deposits it points at laxity in the
replenishment system. If for example, this amount
is twice or more than the minimum amount for SPA
replenishment. It tells the FC could have lodged a
WA when expenditure reached the minimum
amount of 20% of the initial deposit but because of
laxity/ inefficiency they allow expenditure to over
bulk until expenditure accumulated to this level
which causes cash flow problems.
7 Plus Total Amount withdrawn from x This should cause the NAP Coordinator to demand
bank accounts not yet claimed xx why money to this magnitude has been withdrawn
but is not being included in the WA. The manager
should always demand for a schedule of this
amount—it reflects inefficiency and results in cash
flow problems to withdraw such a magnitude of
money from bank accounts and take such a long
time to replenish it back. Secondly care should be
taken that this figure is not only inserted as a
balancing figure, which would reflects that the
designated account is not well managed.
8 Plus Amounts claimed in previous xxx The WAs in the pipeline, if they take long to be
Applications not yet credited at processed, could reflect that IFAD raised many
date of Bank Statement queries on the quality of the WAs, in which case
the NAP Coordinator could request for staff
training; or it could be delays on the side of IFAD
and in which case the Coordinator would still have
to initiate follow-up from IFAD. It is advisable for
the FC to always follow the status of the WA on
IFAD’s Withdrawal Application Tracking System
(WATTS).
9 Minus Interest Earned

-
10. TOTAL ADVANCE ACCOUNTED x If this total does not equal to the outstanding initial
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USD Management Tips
FOR xx deposit, the manager should demand explanation.

It is so serious to fail to reconcile the initial deposit
110. It is key for FC to know NAP treasury position at all time in order to better manage the Project’s
liquidity position in a timely and efficient manner. The key goals are to ensure that:
a) There are sufficient funds in treasury to meet the project’s field activities for
implementation.
b) the disbursement rate of the project increases
c) Increase in the performance level of the project and meeting it objectives as in the PDR
111. The key elements on project treasury position are:
a) Status of Designated accounts balances (Using the cash books as at reporting date)
b) Status of the operation accounts balances (Using the cash books as at reporting date)
c) The status of cash in hand (Using the cash book as at reporting date)
d) The money value of WA with IFAD for reimbursement
e) The money value of WA to be submitted to IFAD
112. FC should prepare regular Cash and Expenditures forecasting including taking into account,
realistically, an estimated time when IFAD will actually reimburse the designated accounts, noting the
time frame the WA was presented to IFAD for payment, other considerations will include the time it
takes to complete preparing a withdrawal application.
113. Below is an Indication of NAP treasury plan for a quarter (can be done monthly, quarterly, half-
yearly, annual etc taking to account the realistic timeframes involved in processing a WA.
Formats for use to prepare a Cash flow; the cycle it takes to get a withdrawal application through
and the format for financial position as at a given date:
CASH FLOW FORECAST FOR THE NEXT 3 MONTHS
ADD: CASH FORECAST RECEIPTS Month 1 Month 2 Month 3
USD USD USD
B/f XXX XXX XXX
IFAD XXX XXX XXX
GOE XXX XXX XXX
Total expected Income XXXX XXXX XXXX
LESS: CASH FORECAST –EXPENDITURES
CATEGORY
I Civil works XXX XXX XXX
II Vehicles, Motorcycles, Equipment and Materials XXX XXX XXX
III Agricultural and Livestock inputs XXX XXX XXX
IV Technical Assistance, Training Workshops and Studies XXX XXX XXX
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V Recurrent costs- operations and maintenance XXX XXX XXX
Projected Expenditure XXX XXX XXX
Fore cast Closing Balance XXX XXX XXX
114. Common mistakes made by Projects in submitting WA that NAP must avoid
a) Failing to respect the SOE procedure. The SOE threshold for NAP is currently USD
20,000.
b) Completing the checklist usually attached to withdrawal applications casually, resulting in
incomplete WAs, incomplete supporting documents, wrong correspondent bank which
results into a series of correspondences with IFAD causing delays to receive the funds.
c) Charging wrong categories or submitting WAs against a given category when it is overly
overdrawn.
d) The commonest errors are usually on the designated account reconciliation
 Forgetting to attach correct bank statements (Bank statements will be needed for
all bank accounts including those held by the six zobas)
 Attaching bank statements with wrong cut-off dates or balance thereon not tallying
with amount shown on the designated account reconciliation
 Wrong use of exchange rates thus causing a surplus/shortage on the reconciliation
of the initial deposit
 Ineligible expenditure not refunded thus causing a discrepancy on the
reconciliation
 Inserting as a “balancing figure” amount withdrawn and not yet replenished without
obtaining a substantive breakdown of the amount
 Depositing on a designated account funds other than those drawn from the initial
deposit- eg refunds of items already replenished without corresponding ‘credit
note’ or banking on account proceeds from sale of bids etc. The mistake here is
the failure not to prepare the reconciliation in accordance with the double entry
accounting Principle.
 Including on the reconciliation on the part of withdrawal application applications in
the pipeline, direct payments yet these have been nothing to do with the initial
advance.
Petty cash account
115. In addition to the bank accounts outlined in the section above, the NPO and ZPCOs will operate
a petty cash account in local currency up to the equivalent of USD 500. The Petty cash will be
operated by the accountant. The purpose of the petty cash is to allow the NPO/ ZPCO to make
payments for low value items (e.g. minor repairs, small supplies, newspapers, taxi fares, and other
sundry expenses) in a quick and efficient manner. Payments through petty cash will only be allowed
for amounts up to the equivalent of USD 50 for a single transaction. The cash is placed in a locked
box which is kept in the NPO/ ZPCO safe.
116. The Petty cash disbursements may be in the form of an advance or a reimbursement (when the
staff member has personally advanced the funds). In both cases, the requesting staff fills out a petty
cash request form. The payee name, the description of the goods or services, the estimated (or
actual) cost and the transaction coding are indicated on the form, which is forwarded to the the
Accountant for processing.
117. For advances, the Accountant delivers petty cash advances on the basis of the approved
request. After the purchase is made, the requestor must return the invoice/receipt along with the
change, if any, to the Account for recording into the Accounting system.
118. For reimbursements (i.e. when the goods or services have already been delivered), the invoice
or receipt is given to the Accountant who reimburses the requesting staff member or directly pays the
supplier. The form is signed by the individual who receives the money.
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119. The petty cash transactions will be recorded in the accounting software petty cash journal as
they happen. At the end of each week, the Accountant will reconcile the petty cash journal with the
physical cash count In addition, a surprise cash count will be conducted by the Accountant or FC
twice a month. It will also be followed by a reconciliation of the petty cash balance per the cash journal
with the actual cash held in the petty cash box.
(Operation of the Petty Cash Account)
120. The petty cash will be replenished on a monthly basis (or more often if necessary) on the basis
of the last reconciliation done by the Accountant. The amount of the replenishment will be equivalent
to the total disbursements made since the previous replenishment, so that the petty cash balance is
maintained at the original level of the equivalent of USD 500. No funds can be deposited into the petty
cash, other than the replenishments.
Bank reconciliation
121. The financial controller must perform monthly reconciliations between the designated
account(s) balance recorded on bank statements and local cash book balance, recorded on the
system. Performance of the monthly reconciliation should follow the following steps:
i) Designate Account balance recorded on bank statement on reconciliation date is taken as starting
figure;
ii) Add reimbursements/replenishments/other deposits that have been processed and are due to
designated account, but not yet recorded on bank statements;
iii) Subtract undelivered cheques. Any long-outstanding cheques should be identified and investigated
iv) Following these adjustments, the bank statement and local finance system cash totals should
agree. Any remaining difference should be reported and investigated;
v) The completed bank reconciliation statement should be signed by the finance controller; and
vi) The reconciliation should be reviewed and countersigned by independent finance team member
who understands the reconciliation process.
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122. Similar bank reconciliations will be undertaken on a monthly basis for each of the project bank
accounts. Periodic designated account reconciliations will be submitted IFAD as part of periodic
progress report.
XII. PROCESSING OF PAYMENTS

123. The Project will mainly finance civil works consultants' services (design, supervision and
studies), goods, livestock and agriculture inputs etc. Last section outlined how the NPO will receive
funds from IFAD to cover the incurred expenditures related. This section will outline the different steps
involved in the outflow of funds from the NPO/ ZPCOs to the Contractors, Suppliers, Consultants etc.
General instructions
124. For all payments, the Accountant should ensure that the following steps are
performed:
i) Preparation of Payment request voucher. A payment request voucher should be prepared for
each payment.
ii) Validation of invoice. The following validation checks should be performed by the Accountant
on invoice:
o Invoice arithmetically correct; and
o Quantity and price recorded on invoice should be checked back to
contract, order, certification of completion/delivery. If there is any
discrepancy identified, it should be raised with the vendor prior to
proceeding with invoice processing,
iii) Supporting documentation: the following documents should be attached to the payment
voucher to support validation:
o Copy of invoice;
o Copy of letter of approval from technical committee or the specialist,
Director PSD or the minister;
o Copy of purchase order, goods received note and contract if applicable;
and
o Copy of required guarantees
Payment Documentation
125. Payments must be supported; and in GoE there are certain minimum set of supporting
documentation that should be attached to a payment/ journal voucher. To ensure that the Zobas and
other implementers’ collect all the supporting documents, the following checklists are provided; they
should be ticked-off carefully and attached to each cheque payment voucher.
126. Standard Goods In-Country Workshops (Tick)
(Tick) 1. Attendance sheets

1. Complete Written Voucher, duly 2. Attendance sheets should
approved be reconciled to DSA paid
2. Confirmation by Procurement
Officer that the Procurement 3. Availability of supporting
was properly done in documentation
accordance with GOE and IFAD a) Training report
procedures
3. Attach Copies of relevant No b) Hotel Receipts/ bills
Objections from IFAD, where for meals and
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126. Standard Goods In-Country Workshops (Tick)
(Tick) accommodation( shou

ld be reconciled to
applicable attendance sheets)
4. Availability of supporting 4. Procurement record on
documentation how the venue was
a) Contract selected
5. Justification for any fuel
b) Invoice refunds and related
support
c) Evidence of payment 6. Fund availability in
d) Bank guarantee a) Budget-Ensure Vote
Book has been
e) Delivery notes/reports updated
(Make Cross Reference b) Category(ies)
where bulky)
5. Fund availability in 7. Accuracy of
Computations/footings
a) Budget-Ensure Vote Book
has been updated
b) Category(ies) Consultancies (Tick)
6. Accuracy of 1. Time sheets in
Computations/footings comparison with the work
7. Reviewed optimality of the done;
disbursement method?
2. Attach Copies of relevant
8. Banking instructions
No Objections from IFAD,
9. Correspondence bank where applicable
3. An acceptable report
10. Percentage of financing 4. Availability of supporting
documentation
Workshops- Abroad (Tick) a) Contract
b) Invoice
1. Invitations and related c) Evidence of payment
IFAD’s No Objection d) Bank guarantee for
2. Availability of supporting advances
documentation 5. Fund availability in
c) Boarding passes c) Budget-Ensure Vote
reconciled DSA days Book has been
taken updated
d) Back to Office Reports a) Category(ies)
6. Accuracy of
3. Fund availability in Computations/footings
7. Banking instructions
c) Budget-Ensure Vote Correspondence bank
Book has been updated
d) Category(ies)
4. Accuracy of
Computations/footings
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Processing of payments for Civil Works and Goods
127. The Expenditure Cycle for works and goods is detailed in the following chart:
Procurement Officer:
 Prepare payment Request
Technical Approval by the supervising
 Attach technical approval & other
Engineer (s), or technical committee involved
supporting documents
in the activity
 Attach contractor’s/ supplier invoice and
Delivery Notes
Zoba Project Coordinator/ NAP Cost Centre NAP accountant/ Financial Controller
Coordinator at national level:  Checks the accuracy of payment request
 Review payment request & and supporting documents
supporting documents  Verify the payment request’s compliance
 Authorize and sign payment request with the contract
 In case of national level, approval of  Prepare cheques or withdrawal application
National Project Coordinator/ in case of direct payment
Director PSD
Head of Finance and Administration

 Approve the payments and directs
signs off cheques or request
Minister to sign off withdrawal
applications in case of direct
payments
128. Before releasing the payment to the contractor or supplier, the NAP accountants will make sure
the following processes are followed:
 The quantity of goods is checked back to the purchase order and to contract and bid award
letter (if applicable). The committee members, assigned by steering committee/LPA after being
assured that quality of goods is compliant with the contract conditions deliver an accepted
delivery sheet or a compliant report to the Procurement Officer. The Financial Controller/
accountants will ensure that the Procurement Officer provides all the necessary documents
including the invoice and the acceptance/compliant report before proceeding with the payment.
 The condition of the goods are reviewed for any damage or impairments. Damaged goods are
to be identified and returned to the supplier/replaced. If any goods are rejected or returned to
the supplier because they are not as ordered or are of sub-standard quality, the Financial
Controller should be notified. Financial Controller/ accountants must keep a central record of all
goods returned to suppliers and maintain a separate record of all goods and equipment
delivered by suppliers by contracts funded by the IFAD financing.
 All the works, are to be monitored by an architect or engineer. It is good practise to assign the
architect/engineer responsible for the design to monitor and assess the works of the contractor.
The architect or engineer is responsible for sending compliant reports/certificate of completion
to the Procurement Officer which includes the percentage of completion of the construction and
if the construction materials are compliant with the contract conditions and specifications. A
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request for payment is prepared by the Procurement Officer to be sent to the accountant. The
accountant will ensure that the payment request includes all the necessary documents
including the invoice and the compliant reports/certificate of completion before proceeding with
the payment to the contractor for the completed phase.
Processing of payments for Consultants' Services
129. Under the Project there are two types of consultants' services; a) Consultants with a lump sum
contract, and b) Consultants with a time based contract. For type (a) consultants, payments will be
made against the delivery of outputs as detailed in their contracts. For type (b) consultants, payments
will be made against the submission of a time sheet and a summary of activities performed.
130. The Expenditure Cycle for type (a) consultants is detailed in the following chart:
Procurement Officer:
 Prepare payment Request
Technical Approval of acceptance
 Attach technical approval & other
committee involved in the activity
supporting documents
 Attach consultant’s invoice
Zoba Project Coordinator/ NAP Cost Centre NAP accountant/ Financial Controller
Coordinator at national level:  Checks the accuracy of payment request
 Review payment request & and supporting documents
supporting documents  Verify the payment request’s compliance
 Authorize and sign payment request with the contract
 In case of national level, approval of  Prepare cheques or withdrawal application
National Project Coordinator/ in case of direct payment
Director PSD
Head of Finance and Administration

 Approve the payments and directs
signs off cheques or request
Minister to sign off withdrawal
applications in case of direct
payments
131. The Expenditure Cycle for type (b) consultants is detailed in the following chart:
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Cost Centre NAP accountant/ Financial controller:

 Checks the accuracy of Time sheet &
Submission of monthly Time sheet &
calculate pay
summary of activities performed report
 Prepare list of payments
Zoba Project Coordinator/ NAP Head of finance and administration

Coordinator at national level:  Approves payments
 Review and sign the Time sheet  Sign Cheques
 Review & approve summary of
activities performed report
132. Before releasing the payment to the consultant (firms), the Financial Controller will undertake
the following steps:
 The consulting services reports are monitored by technical committees, assigned by the
steering committee/LPA for the purpose of evaluating the deliverables submitted by the
consultant (firms). Therefore the financial controller will ensure that no payment to the
consultant is prepared unless an approved committee report or letter of approval received from
the committee assures that the deliverable submitted by the consultant is compliant with the
contract conditions, these documents should be passed first through the Procurement Officer.
 The consulting services reports are monitored by the specialist responsible for the activity for
the purpose of evaluating the deliverables submitted by the consultant (Individual Consultant).
Therefore the Financial Controller will ensure that no payment to the consultant is prepared
unless an approved report received from the specialist assures that this report is compliant with
the contract terms and conditions, these documents should be passed first through the
procurement officer.
133. All Supporting Documents and Internal Forms must be retained at the NPO Office in the LPA/
ZPCO and must be maintained and archived in accordance with the maintenance of records section
of this manual.
Processing of Payments for Office Supplies and Other Operating Costs
134. The payment for office supplies and operating cost will be against the preparation by the
procurement officer of a serially numbered checklist evidencing the receipt of office supplies, and the
presentation of the Purchase order and supplier invoice. The financial controller/ accountants will
compare the information on the checklist to the purchase order and supplier invoice, then sign the
checklist. The payment for services is against the presentation by the supplier performing the service
of a service invoice.
135. The following chart summarizes the process detailed above:
65
Procurement Officer Finance Officer:

 Custodian of procurement  Check Documents
documents even under limited  Prepare list of payments
bidding
 Prepare purchase order
 Collate Good Received Notes
 Supplier invoice
Zoba Project Coordinator/ NAP Coordinator at Head of finance and administration

national level:  Approves payments
 Authorise payments  Sign Cheques
Travel Arrangements & Processing of Travel Related Expenditures
136. Under the Project there is a budget allocated for workshops and study tours as well as staff
training courses. The following chart summarizes the transaction cycle that should be followed to get
approval for the travel and the expenditures related to it:
Person approved to travel National Project Coordinator (NPO)/ Director PSD

 Present a signed travel request  Approve & sign travel request form and ask
form IFAD for IFAD No Objection
 Upon return present all the  Forward Travel Request & No Objection to
necessary supporting the Head of Finance and Adminstration
documentation, invoices/ receipts  Approve the Travel Expense Report
and prepare a back to office report
Financial Controller Procurement Officer

 Check the availability of funds then  Approve & sign travel request form and ask
forward the Travel Request to the for IFAD No Objection
Procurement Officer  Forward Travel Request & No Objection to
 Check the accuracy and the Financial Controller
completeness of travel expense  Approve the Travel Expense Report
report and supporting documents
received from the procurement
officer
XIII. FINANCIAL REPORTING

137. Periodic financial progress reports are a formal requirement of the IFAD Financing Agreement.
Sufficient information must be made available about what money is spent on, how much is spent and
what the results are. The major financial reports include the following: AWPB, monthly financial
reports, periodic financial progress reports, supervision reports, annual financial statements and audit
reports. (See Annex I,II,IV,XIII)
66
138. In addition to the AWPB, supervision reports and audit reports the Financial Controller will
ensure that the following financial reports are prepared in a timely manner and submitted to IFAD in
due time (applicable to reports 2-4 only):
i. Monthly financial reports for NPO internal use only. These reports will be verified during IFAD
supervision missions.
ii. Periodic (semi-annual) progress reports, to be provided to IFAD within 45 days after the
reporting period
iii. Annual financial statements, to be provided to IFAD within 4 months after the end of the
project fiscal year.
iv. Annual financial statements audited by an independent auditor acceptable to the Fund and in
accordance with internationally accepted auditing standards and terms of reference cleared
by IFAD, to be provided to IFAD within 6 months after the project fiscal year (explained in
detail in section 11).
Monthly Reports
139. In accordance with best practises, the Financial Controller/ respective accountants will prepare
monthly financial reports based on the accounting system to aid management decision and control.
The monthly management accounts will include the following.
 Monthly Budget Execution Report, summarising the budget-actual comparison of the
expenditures incurred, component-wise and category-wise. The report will also include a list
of commitments entered into and still to be paid, by component and by category. (See
ANNEX IV)
 Bank Reconciliation Statement
 Petty Cash reconciliation form (See ANNEX IX)
Periodic Progress Reports
140. Semi-annual progress reports should be submitted to IFAD no later than 45 days after the end
of reporting period during the project implementation period. SEE ANNEX II and XIII
141. The importance of the periodic progress reports lies in the fact that they provide GoE/ IFAD with
sufficient information to determine whether the funds disbursed to the project are being used as
intended, the project implementation is on track and the budgeted costs will not be exceeded. The
financial information should be linked to the information on physical progress and procurement to give
assurance that the financial and physical progress are consistent.
142. The Periodic Progress Reports include the following:
67
 Project Statement of Cash Receipts and Payments by Category: This report

summarizes the sources of project financing, with the uses of funds in accordance with
the disbursement categories foreseen in the Financing agreement with the Fund. This
report also states the cumulative expenditures from the start of the project until the date
of the report as well as the cash flow forecast for the following semi-annual period.
 Uses of Funds by Project category: This report details the project expenditures by
each expenditure category or sub category and by financier.
 Uses of Funds by Project Activity: This report details the project expenditures by
each component or sub-component consistent with those foreseen in the Financing
Agreement. The total planned, actual and cumulative expenditures in this report should
correspond to those mentioned in the uses of funds section of the “Sources and Uses
of Funds” report presented above.
 Cash flow forecast: This report summarizes the cash inflow and outflow for the
following semi-annual period.
 Designated Account Reconciliation Statement
 SOE-Withdrawal Application Statement: This report summarizes the claimed and
received WA from IFAD during the reporting period.
 Contract Expenditures: This report details all the contracts signed and amounts paid
during the quarter by category.
 Physical progress report: This report summarizes the quantitative physical progress
made in achieving overall objectives and links them to project expenditures by
component and by category. This report should also contain a narrative part on the
strategic direction for the next planning cycle as well as the main financial problems
encountered.
Annual Financial Statements and Audit Reports
143. NAP follows the IPSAS Cash basis of accounting. The annual statements are provided to IFAD
within four months after the end of the fiscal year. In accordance with the Project Design Report, the
project will prepare it financial statements in accordance with IPSAS cash basis.
144. The project financial statements should include the following information:
 Project Information and performance,
 Statement of project management responsibilities,

 Statement of cash receipts and payments (by category and by financier),
 Statement of cash receipts and payments (by component),
 Statement of comparative budget and actual amount,
 Statement of Special Account movements,
 Statement of Special Account Reconciliations,
 SOE-Withdrawal Application Statement and Notes to the Financial Statements.
XIV. FIXED ASSET MANAGEMENT

145. Fixed asset management is an important process that seeks to track fixed assets for the
purposes of financial accounting and to ensure preventive maintenance, and theft deterrence.
Adequate Fixed asset maintenance also increases the sustainability of the project. See Annex VIII.
146. There are three elements in fixed asset management that require the attention of the Financial
Controller
 Purchase of equipment
 Setting up and maintaining an asset register including verification
 Setting up a plan for disposal and/or handover of the asset once the project is completed
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Purchase of Equipment
147. All procurement and payments for project equipment will be processed in line with the guidance
provided in the procurement section of the PIM. The accountant financial officer should assign a
unique, sequential asset number to all furniture and equipment items purchased (excluding minor
items such as stationary).This must be clearly labelled on each item. Each item of equipment must be
recorded in the fixed asset register.
Asset Register
148. The accountant must maintain a register of all (material) project equipment. The asset register
should record the following information for each individual piece of equipment: 1) Asset description, 2)
Asset number, 3) Serial number of the item, 4) Officer responsible for asset, 5) Funding of asset
(IFAD, government etc..), 6) Location; Date of purchase; and 7) Estimated life. The
Asset Verification Review
149. The Financial Controller must ensure that a verification count of all equipment recorded in the
fixed asset register is performed at least once a year. This should include the following checks:
 Verify that all equipment is still held in the location recorded on the register; and
 Check that equipment is still in a reasonable state of repair.
 Discrepancies between the verification exercise and the fixed asset register should be investigated.
Where assets are missing or seriously damaged, they should be removed from the asset register. The
removal should be formally documented and approved by the respective Coordinator at the cost centre.
150. The verification review must be performed by different staff from those who use the equipment,
to ensure adequate segregation of duty.
Vehicle Maintenance and Fuel
151. The drivers are required to record all trips and fuel refills in a logbook and collect all the
supporting documentation (invoices etc.). The vehicle logbook provides control over the use of the
cars as well as fuel consumption. For official missions, a special cash provision is given to mission
leaders to allow them to purchase fuel during the trip.
152. The safety of cars is the responsibility of the recipient staff members and drivers assigned to
the vehicles. Consequently, they must ensure that the cars are parked in a secure area when not in
use or outside working hours. The drivers are required to monitor the maintenance of their assigned
vehicles under the supervision of the NPO. The drivers must notify the NPO/ ZPCO of maintenance
needs so that the cars can be serviced on a timely basis.
153. The accountant should on a monthly basis review the mileage and fuel usage as well as any
undertaken service as reported in the log book of each car and compare these with the official
invoices and travel authorizations etc. to make sure the numbers are accurate.
154. An insurance policy must be taken by the NPO/ZPCO to ensure all cars and passengers
against all risks, including damage, theft, fire, as well as injury and property damage to third parties.
The insurance must also cover the same risks when the cars are used by the recipient staff members
outside of normal working hours.
XV. AUDIT ARRANGEMENTS

155. The project audit is an ex-post review of financial statements, records of transactions &
financial systems; It examines the adequacy of accounting systems & procedures, capacity to
maintain appropriate accounts & documentation of the project/grant expenditures. The objective of the
project audit is to provide credibility and assurance of accountability.
69
In accordance with the IFAD general conditions and the IFAD guidelines for project audits, the
NPO must have NAP financial statements audited by an external auditor acceptable to IFAD. The
Audited financial statements need to be sent to IFAD no later than 6 months after the end of the fiscal
year. The detailed instruction regarding project audit are outlined in the IFAD guidelines for project
audits available at http://www.ifad.org/pub/basic/index.htm. See also TOR for auditors Annex XI.
The Audit Cycle and Appointing the Auditor
156. The complete audit cycle can be divided into the three main roles carried out by the financial
controller/NPO, the Auditor and IFAD.
157. The NPO will:
 Timely prepare TORs of the Audit and submit these to the Fund for no objection, (See
Annex XI)
 manage the selection process of the auditor (if relevant)
 liaise with the Auditor General to appoint the auditor.
 Prepare the financial statements for reporting period
 Make available all the financial information necessary to the auditors.
 NPO should respond to the audit findings and recommendations.
 Submit the audit report to the fund no later than 6 months after the end of the project
fiscal year.
158. The Auditor will:
 perform the audit work including the three audit opinions
 Indicate any ineligible expenditures
 Provide a management letter
159. The Fund will:
 Provide a non objection to the auditors TORs
 Monitor timely submission and review of audit reports
 Follow up on remedial action\apply sanction and /or remedies if relevant including
suspension of disbursement and or cancellation of grant balance (Legal Notice is sent
to the LPA after 3 months of delay. Suspension of disbursement to the project after 6
months delay.)
70
160. When appointing the auditor the financial officer will need to ensure that the following steps are
followed:
a) Financial Officer/NPO prepares TORs for the auditor and sends it to IFAD for review
and no-objection.
b) IFAD communicates “no objection” to GoE.
c) NPO requests the Auditor General to appoint an auditor using the agreed TORs.
d) Financial Officer/NPO informs IFAD of the name of proposed auditor
e) IFAD communicates “no objection” to GoE on the proposed auditor upon performance
of the necessary due diligence.
f) NPO appoints the auditor.
g) The auditor appointed normally issues a formal engagement letter
TORs of the Auditors and the Engagement letter
161. When preparing auditors TORs the financial officer should address the point outlined below:
a) Description of the employing project authority or entity;
b) Term of the auditor’s engagement, namely whether it is for a fiscal year or some
c) other period;
d) Description and the timing of the financial statements and other material to be provided
by project management for the audit;
e) Terms for delivery of the audit report;
f) Specification that the audit be carried out in accordance with internationally accepted
auditing standards;
g) Provision of a management letter;
h) Statement of access to project records, documents and personnel available to the
auditor;
i) Details regarding submission of a proposal and work plan by the auditor.
j) A description in the TORs of the entity engaging the auditor and whether it is acting on
behalf of or is a constituent part of a larger entity
k) Legal and general descriptions of the project and the LPA, in sufficient detail to enable
the auditor to understand their nature, objectives and activities.
162. The following additional information should also be considered:

a) Organizational charts;
b) Names and titles of senior managers;
c) Names and qualifications of officers responsible for financial management, accounting
and internal audit;
d) name and address of any existing external auditor, if a change is made;
e) Description of information technology facilities and computer systems in use;
f) Copies of the latest financial statements, financing agreement, minutes of financing
negotiations, project design document, and annual work project and budget, if it is
available.
163. The auditors are required to provide a formal engagement letter confirming their acceptance of
the appointment and outlining the methodology, scope and responsibilities under the audit The GoE’s
representative will sign and return a copy of the letter to the auditor.
The Audit Report
164. The Audit Report must include the following elements which should also be reflected in the
auditor’s TORs:
 An opinion on the Project’s financial statements
 A separate opinion on the eligibility of expenditures included in the WA /Statement
of Expenditure procedure
71
 A separate opinion if the use of the Designated Account is in compliance with the
financing agreement
 In addition to the audit report, the independent auditor will prepare a management
letter. This will include comment and recommendations on the adequacy of the financial
management system, and on the system of internal control. The management letter should
also include a follow up section on the status of implementation of previous years
recommendations
XVI. IFAD SUPERVISION
165. The project will be subject to extensive supervision from IFAD during the whole implementation
period to ensure that the NPO fiduciary requirements are completed on time and to minimise the
project’s fiduciary risk.
166. If financial arrangements of the NPO are deemed acceptable, IFAD will rely on them to provide
assurance that the financing proceeds are being used for the intended purposes. In the case that
IFAD identifies weaknesses in the financial arrangements, it will require the NPO to take the
appropriate measures to mitigate those risks e.g. changing the design and operation of internal
control processes or modifying the disbursement arrangements for an operation.
167. The IFAD supervision of the project includes the following measures:
 Monitor of timely submission of audit reports and review of these reports

 Verify compliance to audit recommendations and recommendations made by past
supervision missions.
 Monitor the submission of timely periodic financial reports and review of these reports
 Monitor disbursements rate and the quality of the received Withdrawal Applications
 Annual or semi-annual financial management supervision missions.
168. Throughout project implementation, IFAD will conduct annual financial supervisory missions to
develop financial management ratings and ensure compliance with the IFAD’s requirements. During
the supervisory missions, IFAD will assess and monitor the adequacy of the NPO/ZPCO financial
management arrangements such as accounting, budgeting, internal controls, flow of funds, financial
reporting and the auditing practices. The key findings and recommendations of the mission will be
captured in the Aid Memoire.
169. When preparing for and during an IFAD supervisions mission, the necessary supporting actions
by the financial controller will include the following:
 Update and make available for the mission, the project financial information and especially
the incurred expenditures by component, by category and by financier as of the last day of
the preceding month.
 Update and make available reports on the status of counterpart funding (has the GoE/Lead
Project Agency made available financing proceeds to the Project as planned?
 Provide a walk through of the existing accounting system including its main modules,
budgeting, accounting, financial reports, fixed asset register as well as the security settings in
use.
 Facilitate checking of the internal controls, by system “walk through” to ensure that approved
procedures are consistently being followed.
 Make available Withdrawal Applications, Statement of Expenditures and all supporting
documentation regarding expenditures claimed under the SOE thresholds to facilitate the
verifying of adequacy, completeness and validity of claims.
72
 Make available evidence of qualifications and educational background of the financial staff
including, organogram of the NPO, CVs, TORs of each position and NPO training plan.
 Update and make available a complete a fixed asset register and facilitate sample test check
of physical existence of the asset.
 Make available written procedures regarding financial operations such as processing of
transactions, financial administration manual, accounting manual, fixed asset maintenance
and records management as well as the lead project agency’s anticorruption policy and
whistle blowing procedures.
 Prepare and make available the updated bank account reconciliation statement and bank
account statements for all designated and project accounts.
 Arrange meeting with the auditors and any other selected party requested by the mission.
 Make available all necessary documentation and contracts regarding procurement not subject
to prior review.
 Provide an update on the actions taken regarding past audit recommendations as well as
action points outlined in the past aide memoires.
 Make available the most recent AWPBs, annual and semi-annual reports
 Participate in report writing if necessary.
XVII. GRANT COMPLETION AND CLOSING
170. The closing of the grant/grant is due six months after the project completion date. Both the
completion and the closing date of the grant have financial implications on the project management
such as: development and submission of a recovery plan, ensuring eligibility of expenditures and
submission of the necessary documents outlined below. Please also refer to section 1.3 of the
Disbursement Handbook.
Recovery plan
171. To ensure that the designated account is completely and timely justified, the financial
officer/NPO has to develop and submit to the Fund a so called recovery plan outlining the
percentages per withdrawal application that will recovered and paid respectively. The recovery plan
should be submitted to the fund around 6 months before the completion date or when the outstanding
balance (amount still undisbursed by IFAD is less than the double of the authorized allocation. See
format on Annex VI.
Grant Completion
172. As defined in the Financing agreement the completion date of the grant its 6 th anniversary; that
is six years after it entered into force. By the completion date all the project activities must have been
finalised. The payments can be done also after the completion date, as long as the commitments/
contracts are signed prior to the completion date. Activities that have continued after the completion
date are not considered as ineligible expenditures and can therefore not be financed by the IFAD
funds.
173. After the completion date but no later than the closing date (six months after the completion
date) the NPO can still incur expenditures related to so called winding up expenditures e.g. Final
Audit, Project completion report, Project staff salaries involved in the winding up activities, NPO
maintenance cost, project completion workshop.
Grant Closure
73
174. The Fund requires the following to be provided by the NPO in order to close the grant:
 Confirmation of last withdrawal application

 Submission of final audit report
 Submission of project completion report
The Final Audit Report has to cover, the final project year up to the final expenditures and it can
be paid from the grant available balance by using for example direct payment or Reimbursement of
pre financed expenditures.
74
ANNEX I:
THE STATE OF ERITREA

NATIONAL AGRICULTURAL PRJECT (NAP)
FORMAT OF ANNUAL WORK PLAN & BUDGET
0
Annual Work Plan and Budget Format
TABLE OF CONTENTS
EXECUTIVE SUMMARY
CHAPTER ONE: SUMMARY PROGRAMME DESCRIPTION (As in the Appraisal/Final Design

Report)
1.1 Goal, objective and strategic approach

1.2 The target group and programme area
1.3 Component summary Description
1.4 Programme cost and financing by component followed by Table 1- Summary cost and
Financing (as per Appraisal Report)
1.5 Programme organisation and implementation arrangement
1.6 Benefits expected and sources; Beneficiaries
CHAPTER TWO: SUMMARY OF IMPLEMENTATION – DATE

2.1 Physical achievements in relation to targets
2.2 Disbursement status
2.3 Benefits and Beneficiaries
2.4 Constraints and issues (to be addressed for improved implementation)
2.5 Lessons learnt and implication for the plan
CHAPTER THREE: THE WORK PLAN FOR 1ST JANUARY 20XX TO 31ST DECEMBER 20XX
3.1 Introduction
3.2 The Plan Description
CHAPTER FOUR: BUDGET ESTIMATE AND FINANCING ARRANGEMENTS
4.1 Summary of budget and funding

4.2 Detailed Budget by components and category indication
CHAPTER FIVE: IMPLEMENTATION ARRANGEMENT

5.1 Overall coordination and link to review and approval process
5.2 Implementation responsibilities
5.3 Progress reporting
5.4 Monitoring and evaluation – knowledge managements
5.5 Procurement, Disbursements, Accounts and Finance Management
CHAPTER SIX: SUMMARY INPUT/CONTRACTS/SERVICES FOR THE PROGRAMME
CHAPTER SEVEN: EXPECTED BENEFITS AND BENEFICIARIES
7.1 Benefits and sources of benefits

7.2 Benefitting households disaggregated by type of benefits and gender
-1-
CHAPTER EIGHT: POSSIBLE CONSTRAINTS, RISKS AND MITIGANT
ANNEX
Updated Logical Framework
TABLES:
Table 1.1: Allocation of Budget & Financing by Component.
Table 1.2: Allocation of Budget and Financing by Category
Table 2: Estimated Financial Status by Component
Table 3: Programme – Estimated Financial Status by Category
Table 4.1: Unimplemented Plan Activities & Budget Rolled Over
Table 4.2: Summary of Budget by Component compared with previous year
Table 5: Summary Budget & Financing by Component/Sub-Component
Table 6: Summary Budget Estimate & Financing by Category/Sub-Category
Table 7.1: Detailed Budget Estimate Component 1
Table 8: Budget Estimate by Component/Sub-Component
Table 9: Budgeting Estimate by Category of Expenditure
Table 10: Schedule of implementation – monthly & responsibilities
Table 11: Results framework – RIM Levels 1&2
Table 12: Cost Centre/Implementing Institution
Table 13: NAP Consolidated Inputs/Contracts Services Requirement
Table 14: NAP 18-month Procurement Plan for the Programme – NAP
Table 15: Expected Benefits – Quantitative
Table 16: Estimation of Beneficiaries
Table 17: Constraints/Risk Analysis
-2-
NATIONAL AGRICULTURAL PROJECT (NAP)
PROGRAMME DATA
Date of Board Approach:

Signature Date:
Disbursement Effectiveness Date:
Completion Date:
Closing Date:
Total Programme Cost USD:
Financial Arrangement FUNDER USD MILLIONS

IFAD 17.2
GOE 5.4
Beneficiaries 3.7
Total 26.3
Main Component Sub Component

1 Agriculture Water Resources
Development 1.1 Watershed Characterisation
1.2 Improvement of meteorology and hydrology
1.3 systems
Agriculture Infrastructure development
2 Integrated Agriculture Production
2.1 Development of National Seed System
2.2 Input Supply
2.3 Technology generation and dissemination
2.4 Livestock support
3 Project Support Services and Capacity
Building
Programme Area
Year of Implementation PY
Disbursement as at XX/XX/XX USD XXX
% of total Disbursed USD XXX
% of Government contribution allocated financing
disbursed
ANNUAL WORK PLAN AND BUDGET: EXECUTIVE SUMMARY
-3-
The executive summary should be concise but should reflect important aspects of AWPB, particularly
those areas that may involve key decisions on policy, strategy, or amendment of Financing
Agreement particularly reallocation of proceeds. A maximum of 3 pages including the two tables is
expected.
- Summary of Implementation and programme financial status

- Plan objective
- Strategic approach and focus
- Plan area and Activities of focus
- Summary description of plan
- Summary budget and financing
- Implementation arrangements
- Benefits and beneficiaries
Table 1.1: Allocation of budget and financing by component
Budget Financing
Component Sub-Component Budget Budget IFAD GOE Benefici Others
USD ERN Grant USD ary USD
USD USD
Watershed
Characterisation
Agriculture Water Improvement of
Resources meteorology and
Development hydrology systems
Agriculture Infrastructure
development
Development of National
Seed System
Integrated Input Supply
Agriculture
Technology generation
Production
and dissemination
Livestock support
Project Support
Services and
Capacity
Total
% Financed
-4-
Table 1.2: Allocation of Budget and Financing by categories
Budget Financing
Category Total Total IFAD GOE Beneficiary Others
Budget Budget Grant USD USD USD
USD ERN USD
Civil Works
Vehicles, Motorcycles, Equipment
and Materials
Agricultural and Livestock Inputs
Technical Assistance, Training
Workshops and Studies
Recurrent costs- operations and
maintenance
Total
% Financed
I. SUMMARY PROGRAMME DESCRIPTION (As in the Appraisal/Final Design Report)
This chapter will give an overview of the programme, the target groups, the component description,
cost and financing, implementation arrangements, and benefits/ beneficiaries. This chapter invariably
will remain constant for the implementation period, unless major changes are made by GOE/IFAD.
The basic contents are shown below.
1.1 Goal, objective and strategic approach

1.2 The target group and programme area
1.3 Component summary Description
1.4 Programme cost and financing by component followed by Table 1- Summary cost and
Financing (as per Appraisal Report)
1.5 Programme organisation and implementation arrangement
1.6 Benefits expected and sources; Beneficiaries
II SUMMARY OF IMPLEMENTATION – TO-DATE
This chapter should show the summary of achievements to date both in physical and financial terms.
Constraints of implementation should be highlighted. The number of target beneficiaries reached
should be provided and disaggregated by gender. An important purpose of the chapter is to show the
physical achievement so far and reflect lessons learnt and which influence the plan focus; reflect the
resource available by component and category of expenditure. The chapter contents are shown
below. The chapter should not exceed 3 pages (Text and Tables)
2.6 Physical achievements in relation to targets

2.7 Disbursement status
2.8 Benefits and Beneficiaries
2.9 Constraints and issues (to be addressed for improved implementation)
2.10 Lessons learnt and implication for the plan
-5-
2.11
Table 2 – Estimated Financial Status by Component as at 31st December 20XX
NAP Estimated
Total Actual
Commitments Expenditure Total
Allocated Expenditure
Component Sub- Component As 0f 30TH for the last Estimated Balance
Cost As of 31
September Quarter of the Expenditure
(USD) SEPT 20XX .
20XX Project Year
Watershed Characterisation
Agriculture
Water Improvement of meteorology and
Resources hydrology systems
Development Agriculture Infrastructure
development
Development of National Seed
System
Agriculture
Technology generation and
Production
dissemination
Livestock support
Project Support
Services and
Capacity

Total
-6-
Table 3 programme - Estimated Financial Status by Category as at 31st DECEMBER 20XX
Actual Estimated
Expenditure As NAP Expenditure
Total
Total of 31 Commitments for the last
Category Estimated Balance
Allocated September As 0f 30TH Quarter of
Expenditure
March--- the Project
20XX Year
Civil Works
Vehicles, Motorcycles, Equipment and Materials
Technical Assistance, Training Workshops and

Studies
Recurrent costs- operations and maintenance
Total
Table: 4 Unimplemented Plan Activities and Budget Rolled-Over to the Following Year (20--)
Activity Budget 20-- IFAD Grant GOE (c) Beneficiary (d) Total (b+c+d) Category of Remark
(b) expenditure
-7-
III. THE WORK PLAN FOR 1ST JANUARY 20XX TO 31ST DECEMBER 20XX
3.1 INTRODUCTION
The section should provide a short background on the area where implementation of the plan
will occur i.e. the focal areas and District, demography and Agricultural Extension Area/village
classification by rural/urban, agriculture – constraints and opportunities, crops, livestock, the
relative importance of enterprises under focus, the main production area of focal crops and
livestock (maximum 1 ½ pages)
3.1.1 Background of the plan AEZs and Zobas
3.1.2 Agriculture, basic problems, and opportunities (GAPs to be promoted)

3.1.3 Key stakeholders and involvement of smallholders
3.1.4 Focus of Programme: Focal area/activities
3.2: THE PLAN DESCRIPTION
The section should document lessons from past implementation and how the proposed plan has
addressed them, constraints and problems which have been identified and which influence the
proposed plan should be highlighted, the process of plan preparation including involvement of target
groups and implementing agencies should be reflected. The plan should be clearly defined by
components/sub-components/activities and quantified as much as possible.
3.2.1 Lessons from experience, strategic approach and focus

3.2.2 The planning process
3.2.3 Description of the work plan
- Plan objectives
- The target group
- Description of plan by Programme components/Sub-Components/Activities/area of
operation
IV. BUDGET ESTIMATE AND FINANCING ARRANGEMENTS
4.1 Summary of budget and funding
Should be properly aligned with the plan and comparison of budget with the past year
expenditure/commitments, should be presented with explanations on any deviation. The allocation by
components/sub-components, categories/sub-categories should be highlighted in the text, and
reflected accurately in the summary tables. The financing plan should be consistent with financing
agreement/appraisal, unless if they have been changed by GOE/IFAD. Financing by others should
be explicit i.e. name of other financiers indicated. This can vary from year to year. The government
contribution should include the contribution from participating Districts, if any. Contribution by
Beneficiaries are expected in cash and kind; the basis for in-kind contribution estimate should be
provided and remain consistent with other years i.e. labour valuation should reflect the market wage
rate for the type of labour provided.
-8-
4.1 Summary budget and funding (Short text), followed by:
Table 4: Summary Budget;

Table 5: Budget and Financing by Component
Table 6: Budget and Financing by Category
Table 4.1: Summary of Budget by Component compared with previous year
Components Subcomponents PY- PY- % Comments

(20---------- ) (20----- ) difference
estimated proposed
expenditure Budget
(USD)a/ (USD)b/
Watershed
Characterisation
Improvement of
Agriculture Water meteorology and
Resources
Development hydrology systems
Agriculture
Infrastructure
development
Development of
National Seed
System
Input Supply
Integrated Agriculture
Production Technology
generation and
dissemination
Livestock support
Project Support
Services and Capacity
Total
a
/ This column refers to current year- information to be consistent with table 2
b
/ This column refers to following year
-9-
Table 5 - Summary Budget and Financing By Components/Sub-Components (USD/ERN)
Financing % Financed
Budget by
IFAD
Total GOE
Total Budget IFAD Grant Total IFAD Beneficiaries
Components/Sub-components Budget USD
USD USD USD USD
ERN
Agriculture Water Watershed
Resources
Development Characterisation
Improvement of
meteorology and
hydrology systems
Agriculture
Infrastructure
development
Integrated Development of
Agriculture National Seed
Production System
Input Supply
Technology
generation and
dissemination
Livestock support
Project Support
Services and
Capacity
Total
% Financed
Table 6 - Summary Budget Estimate and Financing By category/Sub-Category (ERN/USD)
- 10 -
Category/Sub- category Budget Financing % Financed

by
IFAD
Total Budget Total Budget IFAD Grant Total IFAD GOE Beneficiaries USD
USD ERN USD USD ERN
Civil Works
Vehicles, Motorcycles, Equipment and
Materials
Technical Assistance, Training Workshops

and Studies

maintenance
Total
% Financed
- 11 -
4.2 Detailed Budget by components and category indication.
The detailed cost tables should provide necessary details – by components/subcomponents activities, items of expenditure, unit of measure,
timing of operation and costs. The estimates should first be done by components – Tables 7.1 – 7.3. Each table is by component. Thus, there will
be as many tables as there are components. The last 2 columns should be carefully done as they are the basis for defining IFAD financing in
tables 8 and 9. Note that tables 8 and 9 are summation of tables 7.1 – 7.3
Table 7.1 - Detailed Budget Estimate – Component - 1
Sub-Component Activities Items Unit Unit Physical inputs by Total Category/Sub % of

of of Cost Period of Operation inputs Budget USD Total -category of Total
Expen Mea USD budget Expenditure financed
diture sure USD Specification by IFAD
Qtr Qtr Qtr Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4

1 2 3
Improvement of meteorology and
hydrology systems
development
Table 7.2 - Detailed Budget Estimate – Component 2
Sub- Activities Items of Unit of Unit Physical inputs Total Category/Sub- % of Total
Component Expenditure Measure Cost by inputs Budget USD Total category of financed by
USD Period of Operation budget Expenditure IFAD
USD Specification
Qtr Qtr Qtr Qtr Qtr Qtr Qtr Qtr

1 2 3 4 1 2 3 4
Development of
National Seed
- 12 -
Component Expenditure Measure Cost by inputs Budget USD Total category of financed by
USD Period of Operation budget Expenditure IFAD
USD Specification

1 2 3 4 1 2 3 4
System
Input Supply
Technology
generation and
dissemination
Livestock
support
Table 7.3 - Detailed Budget Estimate – Component 3
Component Expenditure Measure Cost by inputs Budget USD Total category of financed
USD Period of Operation budget Expenditure by IFAD
USD Specification

1 2 3 4 1 2 3 4
Project
Support
Services and
Capacity
- 13 -
- 14 -
Table 8 – Budget Estimate by Component/Sub-component – quarterly allocation and financing USD
Component Sub-Component Budget Estimate Financed By
Qtr Qtr 2 Qtr 3 Qtr 4 Total IFAD GOE Beneficiari % of total

1 Grant es financed by
IFAD
Agriculture Watershed Characterisation
Water Improvement of meteorology and hydrology
Resources systems
Development Agriculture Infrastructure development
Development of National Seed System
Agriculture
Production Technology generation and dissemination
Livestock support
Project
Support
Services and
Capacity
Total
The table is a summation of component wise budget i.e. 7.1 to 7.3
- 15 -
Table 9 – Budget Estimate by Category of Expenditure (IFAD) – Budget Code – Project/Quarterly Allocation and Financing USD
Category of Expenditure IFAD Project Budget Estimate Financed By

Budget
Code
Qtr 1 Qtr 2 Qtr 3 Qtr 4 Total IFAD GOE Beneficiaries % of total
Grant financed
by IFAD
Civil Works
Vehicles, Motorcycles, Equipment and
Materials
Technical Assistance, Training Workshops
and Studies
maintenance
Total
This table is a summation of the components budget using information provided in the column of category/sub-category of expenditure – table 7.1
to 7.3
- 16 -
V. IMPLEMENTATION ARRANGEMENT
This chapter should present details of implementation arrangements with clear specifications of
responsibilities. An important area often neglected is the staff capacity building. The Programme
Coordinator (PC) should ensure that this aspect is appropriately covered with a stipulation of training
planned, timing, where, who, cost and justification. The procurement plan (18 months projection)
should be prepared in detail following the IFAD established standard and using information provided
by implementing institutions. However, list of items to be procured must be prepared by implementing
agencies (Table 12) and consolidated by the PC as a basis for sound procurement plan. Procurement
of goods and services is a critical management area that needs special attention, in order to ensure
that programme funds are spent wisely, and that the goods and services obtained under the
programme are in line with needs, and of good quality. For these reasons, proposed procurement
plan will be summarized in a table that lists all the facilities, equipment, technical assistance,
contracts and other services that are to be procured. Minimum information on each item will include a
description with quantities, the procurement method, when the goods or services are expected to be
delivered, and the estimated cost. It will be useful to hold a meeting of implementing agencies (cost
centres), and the procurement unit of MOAFS to jointly review and have an agreement/common
understanding on the consolidated inputs/contracts before the procurement plan is draw-up. The
meeting of concerned implementing agencies should also be held to agree on the 18 month
procurement plan. Table 9 schedule of implementation and responsibilities should be carefully
prepared in close collaboration with the implementing agencies, and should be followed by an
implementation chart done on quarterly basis. The results framework table should be prepared and
should relate to the annual work plan and budget and not the appraisal estimates.
5.1 Overall coordination and link to review and approval process

5.2 Implementation responsibilities
5.3 Progress reporting
5.4 Monitoring and evaluation – knowledge managements
5.5 Procurement, Disbursements, Accounts and Finance Management
Table 10: Schedule of implementation and responsibilities

Table 11: Results Framework
Table 12: Implementing Institution: __Summary of inputs requirements for 20______
Programme
Table 13: Programme Consolidated Inputs/Contract Requirement for the year 2-....... by
Implementing Institution
- 17 -
Table 10 – Schedule of Implementation – monthly and responsibilities 7
Component Sub- Jan Feb March April May June July Aug Sept Oct Nov Dec Responsibility
Component
Activities
Watershed
Characterisatio
n
Improvement of
Agriculture Water meteorology
Resources
Development and hydrology
systems
Agriculture
Infrastructure
development
Development of
National Seed
System
Agriculture
Technology
Production
generation and
dissemination
Livestock
support
Project Support
Services and
Capacity
7
Please follow this table with quarterly implementation schedule chart
- 18 -
Chart 1: implementation schedule chart by quarter in line with table 10
Table 11 – Results Framework – RIMS Levels 1 & 2
Components Sub-components & Activities Expected Outputs Expected Outcomes

Agriculture Water Resources Watershed Characterisation
Development
hydrology systems
Agriculture Infrastructure development
Integrated Agriculture Production Development of National Seed System
Input Supply
dissemination
Livestock support
Project Support Services and Capacity
Table 12: Cost Centre/Implementing Institution (Insert name) Summary of input requirements for PY…. (20______) programme
Inputs/ Spec Unit Unit Quantities required Cost

/Contract/Servi ificat of cost Compon Compon Compon Total
ce ions Meas ERN/U ent ent ent Quanti ERN /
Requirements ure SD 1 2 3 ty USD
- 19 -
This table will be prepared based on the AWPB of every implementing agency/Cost Centre for NAP. The head of the implementing unit/cost centre
and his or her monitoring and evaluation officer, and accountant will prepare this table.
VI. SUMMARY INPUT/CONTRACTS/SERVICES AND 18-MONTH PROCUREMENT PLAN FOR THE PROGRAMME
This chapter should be the responsibility of the NAP Coordinator, and his or her Monitoring and Evaluation Officer, his Financial Controller and
procurement officer in consultation with the Head of the respective Implementation Unit/Cost Centre. The chapter include Table 13 and 14 as
shown below.
Table 13: NAP Consolidated Inputs/Contracts Services Requirement for the PY- (20______) By Zobas/ Sub Zobas
Quantity/Contract / services by Cost Centres Financiers Plan Category Time

Inputs/Co Specific Unit of Unit Total Required
Cost Cost Cost Cost Cost etc IFAD GOE Be
ntract/Ser ations Measur Cost Quant Total
centr centr centr centr centr loan n
vice e ERN/U ity Cost
e1 e2 e3 e4 e5
Requirem SD USD
ent
This table will be prepared by NAP Coordinator assisted by his/her relevant staff and it is a summary of table 12 from all Zobas. It is a table
showing the required items to be procured across implementing agencies. This table will provide the basis for producing the 18-Months
consolidated procurement plan for NAP.
- 20 -
The 18-month Procurement plan will not be prepared by implementing agencies/cost centres but
implementing agencies will provide input (Reference Table 12 & 13). Table 14 will be prepared by a
team of programme coordinator (NAP) and his relevant staff, the heads of implementing units and
cost centres along with their relevant staff, and the procurement officer of NAP.
Table 14: NAP 18-Month Procurement Plan for the Programmes - NAP
VII. EXPECTED BENEFITS AND BENEFICIARIES
The expected benefits and beneficiaries should be in line with the AWPB and quantified as much as
possible. The beneficiaries should be disaggregated by gender. The qualitative benefits are
important and should be covered. The presentation in this chapter should be in harmony with the
results framework (Table 11).
7.1 Benefits and sources of benefits [Quantitative/Qualitative]
Short Text
Table 15 – Expected Benefits – Quantitative
Components Sub component Items Unit of Quantifiable

Measure benefits
Agriculture Water Resources Watershed

Development Characterisation
Improvement of
meteorology and
hydrology systems
development
Integrated Agriculture Development of National
Production Seed System
Input Supply
and dissemination
Livestock support
Project Support Services and

Capacity
- 21 -
7.2 Benefitting households disaggregated by type of benefits and gender

Short Text
Table 16 – Estimation of Beneficiaries
Components Type of Benefits Beneficiaries Comments
Male Female Total %

Female
VIII. CONSTRAINTS, RISKS AND MITIGANTS
From experience, the possible constraints and risks that may hamper the implementation of the
AWPB should be identified along with the actions included in the plan to mitigate them. The
presentation should be real and practical and not a repeat of what is set-out in the Appraisal Report.
[Short Text followed by the table]
Table 17 – Constraints/Risk Analysis
Constraints/Risks Consequence Mitigating Factor
1. Constraints
2. Risks
- 22 -
STATE OF ERITREA
National Agricultural Project (NAP)
Progress Report Format
ANNEX
Updated Logical Framework
The Logical Framework Table in the Appraisal Report needs to be reviewed and updated. Please include
as much quantified targets by year as possible. The first review of the logical framework will be after PY1
and based on the findings of the baseline study and the implementation experience. Since no additional
information will be available in PY1 for a review of what have been set-out in the appraisal report, there
will not be a need to include this annex in the AWPB for PY1. However, should you wish to include, for
information, use the logical framework as set-out in the Final Design Report. The indicators will
progressively reflect actual situation with the progress in implementation.
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ANNEX II: FORMAT FOR PROJECT IMPLEMENTATION PROGRESS REPORT
24
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TABLE OF CONTENTS
INTRODUCTION
CHAPTER ONE: BACKGROUND ON PROGRAMME AND AWPB

1.1 Programme Background Information
1.2 Summary of current AWPB
1.3 Sources of information for this report
CHAPTER TWO: SUMMARY OF IMPLEMENTATION PROGRESS TO DATE

2.1 Physical/Financial Performance
2.2 Cumulative performance measured against Appraisal Target
2.3 Benefits/Impact and Beneficiaries
2.4 Financial Report
CHAPTER THREE: RESULTS AND IMPACT MANAGEMENT SYSTEM (RIMS)
CHAPTER FOUR: FACTORS INFLUENCING PERFORMANCE

4.1 External factors
4.2 Internal factors and proposed solutions
4.3 Successful Approaches/Lessons Learned
CHAPTER FIVE: THE WAY FORWARD
ANNEX
ACTION ON THE PREVIOUS SUPERVISION MISSION RECOMMENDATIONS
TABLES:
Table 1: Summary of the approved Budget by Component
Table 2: Financial & physical progress performance
Table 3: Cumulative financial and physical progress performance
Table 4: Implementation performance measured against Appraisal Target
Table 5: Benefits/Impact measured against Appraisal Target
Table 6: Beneficiaries reached compared with Appraisal Target
Table 7: Financial status report
Table 8: RIMS Reporting Form
Table 9: Constraints and proposed solutions
TABLE 10: RESPONSES TO LAST SUPERVISION MISSION RECOMMENDATIONS
25
STATE OF ERITREA
INTRODUCTION
Progress reports are a formal requirement; the loan/grant financing agreements dictate these
requirements, and half-yearly and annual reports are usually to be submitted to IFAD and the other co-
financing institutions. Sufficient information must be made available about expenditures, by
component/subcomponent; activities and items of expenditure; and what the results are (output, outcome,
and impact).
The main functions of progress report are to keep informed the GOE, IFAD and other financiers, the
progress of implementation in terms of achievements (output, outcome, beneficiaries, impact), and related
expenditure; highlight issues that need to be addressed for improved performance; and provide
management information to aid effective decision making on a timely basis. progress report requires that
implementing agencies and programme management records data, carefully analyse such data to
evaluate performance, discover weaknesses that can be improved and successes that can be expanded
on. it is this process of analysis performance evaluation, and reflection that constantly bring to focus the
extent of achieving the objective and goal of the programme/project
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I. BACKGROUND ON PROGRAMME AND AWPB
This chapter will have three parts: 1.1 – Background Information on Programme; 1.2 – Summary of
Current AWPB and 1.3 – Sources of Information for the progress report.
1.1 Programme Background Information
This section should include no more than a couple of sentences on some background information about
the programme/project, mainly as a reminder for people in government or outsiders who do not deal with
the project on a daily basis.
1.2- Summary Of Current AWPB
This sub-section should provide a summary of the current AWPB on which the report is being produced.
Efforts should be made not to reproduce Appraisal Report information. The summary would be
adequately presented under the following sub-titles followed by Table 1:
a) Plan Goal;
b) Plan Objective;
c) Summary of the AWPB.
Table 1: Summary of the Approved Budget by Component
Budget Financing
Total Total Other GOE Beneficiary
Component Budget Budget IFAD Grant Financier(s) Total ERN USD
Sub-Component USD ERN USD USD
Agriculture Water Watershed
Resources Characterisation
Development
Improvement of
meteorology and
hydrology systems
Agriculture
Infrastructure
development
Integrated Development of
Agriculture National Seed System
Production
Input Supply
and dissemination
Livestock support
Project Support
Services and
Capacity

Total
27
STATE OF ERITREA
% Financed
I.3. Sources Of Information For This Report
This sub-section should describe the sources of information on which this report is based. This could
include monthly/quarterly progress reports that have been produced by the implementing agencies,
consultants’ reports, studies, important elements of the M&E system, such as registers of assets and
contracts, etc. It could also be useful to indicate how the report has been prepared. The basic facts and
figures should be verified and consolidated by the M&E Officers. In situations where some findings may
have been arrived at during one or more review workshops, or through specific impact studies, this should
be stated.
II. SUMMARY OF IMPLEMENTATION PROGRESS TO DATE
This chapter presents the physical and financial progress of the project starting with a text description and
followed by the tabulated form. The chapter should capture implementation progress not only for the
particular year covered by the report (except for PY1) but cumulative progress. It would also be important
and useful to include explanation when actual performance (financial and physical) differ significantly from
the plan and budget; and when actual achievements (physical) do not have close relationship with the
related budget E.g. 57% of the budget has been spent on achieving 24% of physical targets in the
current Project Year. This chapter should have three sections namely, 2.1 – Physical and Financial
Progress of Implementation/Performance: Current year: PY-- (20...........); 2.2 – Cumulative
Implementation Progress/Performance; and 2.3 – Financial Report.
2.1 Physical/Financial Performance
The information in this sub-section will be based on detailed monitoring data that is collected from the
field or from reports submitted by various implementing agencies. This data will have to be interpreted
and summarized by the M&E Officers in collaboration with relevant implementing Officers.
The aim of this section is to provide insight into project results, principally at the level of key activities
indicating specific outputs and outcome produced in relation to expenditure and budget. Each of the main
project components has an approximate budget in the project design. Each component/sub component
pursues specified objectives, and jointly the components will contribute to achieving the programme
development objectives and goal. Costs to implement the component/sub component to achieve the
objectives and goal are also specified in the final design report (appraisal report), and are translated into
annual work plan and budget. It is therefore important to relate expenditures to physical achievements in
the form of outputs and outcomes. However, in a reporting period outputs/outcomes may not be achieved
because the implementation is ongoing. In such cases necessary explanation should be provided in the
comment columns of the report or/and in the text. When expenditure under a certain component falls far
behind the planned expenditure, this should be cause for concern, the reasons should be investigated
and action taken. The section should discuss the observed annual trends followed by Table 2. It should
be noted that table 2 reports on the result framework targets as contained in AWPB measured against
budget and expenditure.
Table 3 – Cumulative performance evaluation should be prepared on an annual basis starting from PY2.
The table should show cumulative achievements by summing up the data as reported in table 2. Note
however, that the table refers only to the AWPB and not appraisal targets. Table 4 address achievements
against appraisal targets.
28
STATE OF ERITREA
Table 2: Financial and physical Progress Performance as at DAY/MONTH/YEAR (i.e. reporting period)
OUTPUTS BUDGET OUTCOMES COMMEN

TS
Components/Subcom Unit of AWPB AWPB % AWPB Budget Budget % of Expected Expected %

ponents/Activities Measure ((INSERT Target Target for Expenditur Budget Outcome Outcomes Outcomes
PROJECT Outputs Outputs (INSERT e as at Expended (INSERT Achieved as Achieved
YEAR)) Achieved as Achieved PROJECT (DAY/ PROJECT at
Target at DAY/ YEAR) MONTH/ YEAR) DAY/MONTH/
Outputs MONTH/ (USD YEAR6 YEAR6
YEAR6 (USD)
1. Agriculture
Water Resources
Development
Watershed
Characterisation
Activities
XXXXXX
Improvement of
meteorology and
hydrology systems
Activities
XXXXXX
Agriculture
Infrastructure
development
Activities
XXXXXX
6
Put date referring to the reporting period; it should either be 31 Dec of the project year (for the six-monthly Project Progress Report) or 30 June of the Project Year (for
the annual Project Progress Report)
29
STATE OF ERITREA
2.2 Cumulative Performance measured against Appraisal Target
The aim of this section is to progressively keep track of the overall project outputs, outcomes, measured
against budget/expenditure or against appraisal targets (physical and financial) overtime. The information
generated would be able to inform management whether the programme is on course to achieve the
stated development objectives and goals or whether there is a need to rethink the original strategy. Table
3 measures cumulative achievement (physical and expenditure) against cumulative (plan and budget).
The result can indicate poor planning (over ambitions plan/budget) or poor implementation performance
(assuming plan/budget are realistic gauged against available implementation capacity). Table 4 has been
designed to cumulatively capture the achievements trends in physical terms (outputs/outcome) and
expenditures, measured against appraisal physical targets (output/outcome), and total cost estimates
including contingencies. The table will be set up using information contained in the project design
(appraisal report) and the AWPB cumulative achievements (Table 3). In most cases, Appraisal Targets
will be specifically defined/stated in the main Appraisal Report while, in other cases, information may be
contained in the associated Working Papers. Against the appraisal targets, the implementation
achievements will be measured, and conclusion drawn on whether the implementation is tandem or
otherwise with the appraisal targets. The objective is primarily to measure the efficiency of performance
assuming appraisal targets are realistic. Each table will be preceded by a short analysis of performance
on meeting set objectives as per appraisal report. It should be noted that apart from measuring
performance using percentage differences, it is important to also carry-out variance analysis
(physical/cost) to explain more objectively the sources of the deviations between appraisal targets and
implementation targets. Please note that variances can arise due to using more inputs to achieve an
expected output/outcome or using the same inputs as per appraisal to achieve less output/outcome as
appraisal, or due to price changes. Variance analysis is designed to reflect the source of variation found.
30
STATE OF ERITREA
Table 3: Cumulative Financial and physical Progress Performance (Project Year) 1
OUTPUTS (CUMULATIVE) BUDGET (CUMULATIVE) OUTCOMES (CUMULATIVE) COMMENT

S
Components/Subcomponents/Activiti Unit of AWPB AWPB % AWPB Budget for Budget % of Expecte Expected %
es Measur ((INSERT ((INSERT ((INSERT (INSERT Expenditur Budget d Outcome Outcome
e PROJEC PROJEC PROJEC PROJECT e as at Expende Outcom s s
T YEAR)) T YEAR)) T YEAR)) YEAR) (DAY/ d as at e Achieved Achieved
Target Target Target (USD/MWK MONTH/ (DAY/
Outputs Outputs Outputs ) YEAR..... MONTH/
Achieved Achieved (USD/MWK) YEAR.....
1. Agriculture Water Resources

Development
Activities
XXXXXX

hydrology systems
Activities
XXXXXX
development
1. Report will be prepared annually starting fron PY2
2. Put date referring to the reporting period; it should be 30 June of PY ……
Table 4: Implementation Performance Measured Against Appraisal
31
STATE OF ERITREA
Targets: (Project Year ……………)
OUTPUTS COST/BUDGET OUTCOMES COMMENTS
Components/S Unit of Appraisal AWPB % Achievement Appraisal AWPB % Apprais AWPB %

ubcomponents/ Measure Total Cumulative Total Cumulative Achievemen al Cumulativ Achieveme
Activities Target achievement Cost expenditur t PY……. Targets achievem nt PY……
PY…… including e (PY……) ent
Continge PY……
ncies
1. Agriculture
Water
Resources
Development
Watershed
Characterisat
ion
Activities
XXXXXX
Improvement
of
meteorology
and
hydrology
systems
Activities
XXXXXX
Note: - Appraisal targets are to be copied from appraisal detailed cost tables.
- AWPB – Cumulative target achievements are from Table 3 as up-date for the concerned project year.
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2.3 Benefits/Impact and Beneficiaries
The benefits/impact and beneficiaries are reflected in the appraisal report, but can be expanded to reflect
the actual situation during implementation. The information should be qualified as much as possible,
however, sight should not be lost of qualitative benefits which are equally important. The beneficiaries
should be comprehensive, and include not only the target groups but also beneficiaries from
implementing institutions, collaborating agencies e.g. private sector/NGO service providers etc.
Beneficiaries should be disaggregated as much as possible – gender, youth, others.
A Short text should precede the table. E.g:
- Benefits and sources of benefits (quantitative/qualitative) ensure as much as possible, a

comparison with appraisal target, and if date is available – reference comments and observations
that will assist the reader to form a good opinion of the situation in respect to programme
development objectives and goal.
- Beneficiaries – provide benefitting households disaggregated by gender, youth & others.

Compare with appraisal target, and if possible indicate proportion of target group in the
programme area reached. Provide information on other beneficiaries. Important information often
left-out is on indirect beneficiaries. For NAP this will be very important as farmer-to-farmer
extension may surpass those reached directly by programme staff. Please also avoid double
counting. Producers/farmers who continue improved practices after initial introduction should be
indicated separately and also as a proportion of initial up-takers. Beneficiaries should also be
classified by type of benefits as much as possible.
Table 5: Benefits/Impact Measured Against Appraisal

Targets: PY…….
Items of Unit of Appraisal Achievement %Achieved Comments

Benefits Measure Total Target by
Programme
33
STATE OF ERITREA
Table 6: Beneficiaries reached compared with Appraisal Target PY……
Type of Benefits Unit of Beneficiaries Appraisal Achievement by Programme % Comment

Measure Targets Achieved s
Male Femal Total Male Female Total

e
2.4 Financial Report
This sub-section is to be produced by the NAP Accountant/Financial Controller using financial

information/reports provided by the implementing centres. Based on the information provided and using
an accounting system, a consolidated financial report should be prepared showing the overall financial
performance and status of the Programme/Project. The format will be that required by IFAD in submitting
six month and annual financial reports. The report will be included in the progress report to IFAD.
Table-7: Financial Status Report
III. RESULTS AND IMPACT MANAGEMENT SYSTEM (RIMS)
The relevant RIMS indicators to be included in the programme’s M&E system should be identified and
agreed upon by the programme implementers and submitted to IFAD for no objection. Data and
information on the agreed RIMS indicators that are relevant to the programme will be captured from the
regular progress reports, monitoring/evaluation report, MTR, special studies, etc. The list of indicators
may be adjusted with time depending on the activities undertaken and completed during an
implementation period. It is important to note that RIMS indicators reported on are those related to
completed activities and not on ongoing activities however close they may be to completion. The results
and Impact Management System (RIMS) Handbook. (published February 2011) by IFAD and already
provided to the programme should be consulted for guidance.
A sample format for reporting on RIMS is provided – table 6. It is again emphasized that the format should
be reviewed and improved by the M/E team and detailed indicators as agreed by the team inserted. It is
34
STATE OF ERITREA
emphasized that indicators included should be key and measurable. The RIMS report is to be produced
annually.
The following should be noted. The production of a sound RIMS report require that sound AWPB has
been prepared and in alignment with Appraisal report, progress reporting in relation to AWPB is effective,
that monitoring/evealuation system is properly functioning, and that required monitoring and evaluation
report are prepared.
The RIM report should relate to the components/subcomponents/activities of the programme/project.

Care needs to be exercised in preparing the cumulative section of the report to avoid unnecessary
mistakes. It should be noted that the cumulative achievement is the net total from the beginning of
implementation including the current year. In valuing indicators for total project section duplication should
be avoided. For example if a particular household attended different training programmes, such
households will be counted only once in a total reflecting number of household trained.
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STATE OF ERITREA
Table 8. RIMS REPORTING FORM
Country: Malawi Reporting Date..................................

Fiscal year end: 30 June 20........................
Project Name: NAP Project year (PY).............................
Third Level Bench Mark PY2 Mid Term MT+1 MT+2 MT+3 Completion
Results: (MT)
Impact
(i) Household with
improved assets Number
Onwership: (ii) Prevalence
of malnutrition for children
under 5 Percent
(iii) Proportion of food percent
secured poor rural
household
INDICATOR Period ending: 30 June 20.......................

Unit of Bench Result AWPB Actual % of Appraisal Implementatio % of
Measure Mark Level Target Achievement.. AWPB Target Total n achievement
cumulative .. achieved Achievement against
Total Project PY......... Cumulative till date appraisal
PY........
1st
“
2nd
“
Component 1... 1st
Agriculture Water “
Resources “
Development “
Sub-component 1.1 1st
“ “ 1.2 “
“ 1.3 “
“
Component 2 2nd Level
“
Integrated “
Agriculture
Production
Sub-component 2.1 2nd Level
“ “ 2.2 “
“
36

IV. FACTORS INFLUENCING PERFORMANCE
This is an analytical chapter, where external factors that influence the programme positive and
negative experiences and performance under the programme and the progress towards achieving
project objectives and goal are discussed. The findings in this section will form the basis for
considering strategic changes that may be required to improve performance, and will provide an input
for the next AWPB, in terms of constraints to be resolved and successful interventions that should be
given more prominence. The chapter will contain three sections namely; 4.1-External Factors; 4.2-
Internal factors and proposed solutions; and 4.3 Successful Approaches and lessons learned.
4.1 EXTERNAL FACTORS
Various external factors can influence programme implementation and results and these factors may
change over time. The environment in which the programmes has operated during the past year, in
particular changes that have occurred and how these have affected implementation, should be
described here. Such factors could include:
 unexpected natural phenomenon – outbreak of pests/diseases, erratic weather patterns,

which have influenced agricultural/livestock production or have delayed infrastructure works;
and
 unexpected financial and economic developments, such as changes in cost of input, product
prices, access to basic services and markets, policy changes, and new market opportunities
that can be taken advantage of.
4.2 INTERNAL FACTORS AND PROPOSED SOLUTIONS
Implementation constraints that are within the area of influence of the project and that could be
resolved under the direction of project management would be presented here. There is no limit to the
types of issues and constraints that can be listed some examples are given below:
 poor quality of infrastructure works (by project staff, contractors or the community);
 poor quality of services (by project staff, community-based service providers, NGOs,
technical assistance);
 financial issues, such as late disbursement of funds, cash flow problems, delayed
accountability, over-expenditure, outdated allowance regulations;
 problems related to other project resources, including lack of facilities or equipment,
breakdown of vehicles, malfunctioning accounting software;
 inefficient or inappropriate use of project resources, such as excessive telephone usage,
inappropriate use of vehicles, inflated cost of works or services;
 insufficient staff capacity, in terms of an inadequate number of people for certain tasks, or key
positions that have not been filled, or lack of knowledge and skills; and
 Procurement problems.
 Donor coordination.
 other factors that hold back implementation of a project activity or sub-component.
Along with the listed constraints, suggestions should be made on how the constraints could be
overcome. When a certain project activity cannot be implemented, what is the best alternative use of
the funds or what can be done to unblock the activity?
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Table 9: Constraints and Proposed Solutions
Implementation Constraint Proposed Solution
4.3 Successful Approaches/Lessons Learned
This is where the positive results of the project should be highlighted, which are often overlooked
because the constraints require so much attention. However, a shift from activities and approaches
that do not work to those that do work is actually a way to resolve certain types of constraints.
Example could include:
 successful innovations under the technology development/dissemination activities of the

programme (e.g seed production and certification; conservation agriculture/ water/ soil
harvesting techniques) or approaches (e.g. for record community contribution, or better
involvement of women) that show promising results and should be replicated;
 project interventions (new crop variety, pest control measure, etc) that are producing
exceptional results in the sense that people show interest or even better, that it is rapidly
adopted and spreading among the target groups.
V. THE WAY FORWARD
This is the conclusion of the Report. Based on the financial and physical progress, the analysis of
programme performance, and progress towards achieving programme outcomes and impact that has
been discussed in previous sections, where is the project heading to? What new directions, changes
in the programme strategy (methodology of production, community participation approaches, gender
and poverty targeting) and logical framework (ineffective activities or outputs) need to be considered?
Should certain activities that have proven to be ineffective be abolished or scaled down? How should
certain approaches that have not worked as expected be modified? How will inefficient use of
programme resources e.g construction of unnecessarily expensive structures be stopped? Should
certain pilot initiatives, that were not foreseen in the programme design but have had a significant
impact, be introduced. This section should aim at providing ‘food for thought’ to management.
ANNEX
ACTION ON THE PREVIOUS SUPERVISION MISSION’S RECOMMENDATIONS
In order to stimulate a more active use of the supervision reports, the recommendations table of the
reports should be included in the Progress Report with a response by programme/project
management to the recommendations, mainly in terms of description of action taken with results.
Please note that, in some cases, the programme could express disagreement with any of the
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recommendations. The programme could also provide recommendations that can enhance
implementation performance.
TABLE 10: RESPONSES TO LAST SUPERVISION MISSION RECOMMENDATIONS
Recommendation/Agreed action Action Taken
Annex III: Terms of Reference for Key Project Staff
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National Project Coordinator (NPC)

The Director of PSD of the MoA is the National Project Coordinator (NPC) for the NAP. He is directly
accountable to the Minister of Agriculture. The NPC serves as secretary of the National Steering
Committee (NSC) and is also a chairperson of the NTC.
Duties and Responsibilities
(a) Responsible for overall coordination of planning, management, reporting, monitoring and
evaluation of the Programme;
(b) Ensuring Project implementation and management in compliance with the Financing
Agreement, Appraisal Report, PIM, AWPB, and other Project related documents;
(c) Coordinating and supervising the preparation of the consolidated AWPB and its timely
submission to the Minister of Agriculture;
(d) Ensuring the mobilization of the requisite international and national Technical Assistance;
(e) Liaising with IFAD to coordinate AWPB, and management and operational issues related to
the Project implementation;
(f) Developing close working relationships with Project partners, participants and stakeholders
who may compliment Project activities;
(g) Ensuring the implementation of recommendations of the NSC, NTC, supervision missions,
and external evaluators and reviewers.
(h) Ensuring that all financial disbursements are consistent with the AWPBs, Appraisal Report,
and PIM;
(i) Approving replenishment requests to be submitted to IFAD and NPO financial expenditures;
(j) Signing contract agreements on behalf of the Project;
(k) Facilitating the NSC meetings including preparation and distribution of minutes;
(l) Supervising and coordinating the preparation of the consolidated progress reports to be
submitted to the Minister of Agriculture;
(m) Ensuring the timely dissemination of Project-related information to ZPCOs and line
departments and divisions of the MoA;
(n) Ensuring the timely preparation of audit reports;
(o) Conducting NPO staff meetings as required; and
(p) Performs any other duty (related to the Project’s activities) as may be assigned by the
Minister of Agriculture.
Qualification and Experience
 A Bachelor’s degree in Economics, Agricultural Economics, Management, Agriculture, or
Applied Agriculture from a recognized university;
 A minimum of 10 years work experience in managing agricultural/rural development
Programmes;
 Knowledge of Programme management cycle with emphasis on result-based work planning
and budgeting;
 Computer literate (able to apply basic software);
 Fluent in English language both written and oral and good report writing skills;
 Good advocacy, communication and negotiation skills and ability to work both as a team
leader and member; and
 Working knowledge of GoE policies, operations and reforms; and strong leadership and team
building skills.
Duty Station: Asmara, with frequent travels to Zobas.
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Project Office Coordinator (POC)

Reporting directly to the NPC, the Project Office Coordinator (POC) is responsible for coordinating
the work of the NPO staff, organizes and facilitates Project supervisions, reviews, and evaluations,
coordinates all technical matters and studies for the Project, and is responsible for the timely
preparation and submission of the consolidated AWPB and periodic reports of the Project. S/He also
serves as the secretary of the NTC.
Duties and Responsibilities:
(a) Coordinating the work of the NPO staff;
(b) Organizing and facilitating Project supervisions, reviews, and evaluations;
(c) Coordinating all technical matters and studies for the Project;
(d) Reviewing and preparing the consolidated AWPBs of the Project to be submitted to the NPC;
(e) Ensuring synergies of activities of the Project with those of other development programmes
and projects to ensure overall efficiency and effectiveness;
(f) Providing technical support to Project coordination Offices and implementing agencies at
central and zoba levels in relation to economic and financial analysis of sub-projects and
activities to be financed by the Project. This includes the preparation of economic and
financial analysis formats and manuals;
(g) Assisting subject matter specialists in the preparation and appraisal of project proposals
related to the Project;
(h) Assisting in the organization of annual Project review meetings and workshops and preparing
and distributing their proceedings;
(i) Reviewing and preparing consolidated periodic reports on Project implementation to be
submitted to the NPC;
(j) Integrating NAP reports with the reports of other agricultural development programmes under
the NPO;
(k) Facilitating the National Technical Committee (NTC) meetings, including the preparation and
distribution of minutes; and
(l) Performs any other duties (related to NAP activities) as may be assigned by the NPC.

 A Bachelor’s degree in Economics, Agricultural Economics, Management Agriculture, or
Applied Agriculture from a recognized university;
 A minimum of 10 years experience in managing agricultural/rural development Programmes;
and budgeting;
 Strong computer skills;
 Good advocacy, communication and negotiation skills and ability to work as a team member;
 Working knowledge of GoE policies, operations and reforms; and
 Strong leadership and team building skills.
Duty Station:Asmara, with frequent travels to Zobas
-4-
Planning Officer (PO)

Reporting to the Project Office Coordinator (POC), the Planning Officer (PO) has overall responsibility
for guiding and coordinating the Project’s planning processes to ensure that the interventions and
activities are responsive to needs of the target groups.
(a) Developing and implementing a participatory planning system in collaboration with the POC;
(b) Supervising and guiding the preparation of the AWPB by the Project coordination offices and
implementing agencies;
(c) Reviewing and consolidating the draft Project AWPB forwarded by the cost centres to be
submitted to the POC;
(d) Enhancing the capacities of Zobas in Project planning and budgeting;
(e) In collaboration with Zoba Planning Officers, reviewing progress made in implementation and
proposing amendments required with respect to Project components and activities to make
them more responsive to the needs of the target communities;
(f) Interact directly with Zoba and MoA department planners to ensure the timely preparation of
AWPBs as well as provide on the spot advice on how to improve the planning process;
(g) Ensuring that project coordination offices and implementing agencies are adhering to
established planning processes and formats;
(h) Following up Project implementation to ensure that they are in conformity with the AWPB;
(i) Prepares periodic reports focusing on the planning activities of the Project;
(j) Any other duties (related to NAP activities) as may be assigned by the POC.
 A Bachelor’s degree in Economics, Management, Agricultural Economics, or Agriculture from
a recognized university;
and budgeting;
and
 Working knowledge of GoE policies, operations and reforms, and strong leadership and team
building skills.
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Monitoring and Evaluation (M&E) Officer
The M&E Officer has overall responsibility for the establishment and operation of a sound M&E
system in line with the Programme’s objectives and approach. He will also be responsible for the
preparation of periodic reports of Project implementation progress. He/she reports to the Project
Office Coordinator (POC).
Duties and responsibilities

(a) Ensuring the establishment and maintenance of a sound Project monitoring and evaluation
system in line with Project M&E guidelines;
(b) Conducting a training needs assessment on M&E for staff of participating agencies and other
stakeholders;
(c) Providing technical support on M&E including training to implementing agencies and other
parties at national and zoba levels to ensure that M&E activities are carried out in accordance
with established procedures and systems;
(d) In collaboration with the implementing agencies, coordinating the Project ’s baseline surveys
to establish indicators and develop reporting formats;
(e) Facilitating Project reviews (including Annual Review Workshops), evaluations and
supervisions;
(f) Directly interacting with Zoba M&E officers to ensure that the M&E system is functional and is
producing data and information required by the Project;
(g) Preparing monitoring and evaluation reports based on established Project indicators;
(h) Preparing consolidated periodic reports on Project implementation using agreed reporting
formats; and
(i) Any other duties (related to NAP activities) as may be assigned by the POC.

 A Bachelor’s degree in Economics or Agricultural Economics from a recognized university;
 A minimum of 8 years experience of which 4 years working in the field of M&E;
 Knowledge of Programme management cycle with emphasis on result-based work planning,
budgeting and accounting and in development of performance indicators;
 Sound knowledge of participatory M&E approaches and techniques;
and
 Working knowledge of GoE policies, operations and reforms.
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Financial Controller (FC)
The Financial Controller has responsibility for the management of Project finances including
replenishments, disbursements and financial reporting. He/she reports to the to the head of Finance
and Administration with a dotted line to NAP Coordinator for day to day NAP operations. The FC is
required to work in consultation with the Finance Unit Head under the Administration and Finance
Division of the MoA.

(a) Assisting in the preparation of the AWPB;
(b) Ensuring the financial procedures described in the FA and PIM are strictly followed by the
Project Coordination Offices and implementing agencies at national and zoba levels;
(c) Ensuring adherence to GoE’s financial directives and circulars;
(d) Supervising all billing and disbursement activities of the Project;
(e) Reviewing procurement requests and withdrawal applications to ensure that they are correct
and are supported with all necessary documents;
(f) Preparing replenishment requests in accordance with the Financing Agreements;
(g) Ensuring that financial reports are regularly obtained from the cost centres;
(h) Providing technical support to ZPCOs on matters related to financial management;
(i) Compiling the Statements of Expenditure (SOEs) for the cost centres to be submitted to the
NPO;
(j) Developing the financial procedures and accounting systems of the Project in line with the
PIM and other Project documents;
(k) Carrying out budgetary control and advising the NPC on the Project’s financial situation;
(l) Preparing consolidated financial reports in accordance with IFAD requirements;
(m) Facilitating and ensuring that external auditors are availed all necessary documents during
the audit as detailed in the Financing Agreement;
(n) Developing and recommending financial control systems to prevent misuse of funds; and
(o) Any other duties (related to NAP activities) as may be assigned by the POC.

 A Bachelor’s degree in Accounting from a recognized university;
 A minimum of 8 years experience in managing donor-funded Programme s;
budgeting, and accounting;
 Strong computer skills, electronic spreadsheets and other accounting packages;
 Capable of designing and using financial report formats that provide for variance analysis;
 Working knowledge of banking, financial control procedures and GoE accounting procedures;
 Fluent in English language both written and oral and good report writing skills; and
 Good advocacy, communication and negotiation skills and ability to work as a team member.
Duty Station: Asmara, involving travels to Zobas.
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Accountant
Reporting to the Financial Controller, the Accountant is responsible for performing the day-to-day
accounting functions.

(a) Assisting the Financial Controller with the preparation of AWPBs.
(b) Establishing and maintaining sound accounting system;
(c) Processing payments for the Project;
(d) Effecting the timely disbursement of funds to the Implementing Agencies based on approved
budget;
(e) Compiling the replenishment reports obtained from the implementing agencies to be
forwarded to the FC for review;
(f) Reconciling the Project Accounts and Special Accounts;
(g) Preparing all routine financial statements and Statements of Expenditures and Withdrawal
Applications on a timely basis for submission to Government and IFAD;
(h) Preparing draft financial statements for the cost centres at the head office and integrate them
with those forwarded by ZPCOs and submit them to the FC;
(i) Filing all financial source documents and fund receipts;
(j) Maintaining records of receipts, expenditures, assets, liabilities, and fund balance;
(k) Preparing bank reconciliation of all Project accounts; and
(l) Any other duties (related to NAP activities) as may be assigned by the FC.

 A Bachelor’s degree in Accounting or Business Administration from a recognized university;
 Working knowledge of banking and financial control procedures;
 Good advocacy, communication and negotiation skills and ability to work both as a team
member;
 Working knowledge of GoE accounting procedures; and
Duty Station: Asmara.
-8-

Procurement Controller (PC)
The Procurement Controller (PC) has the overall responsibility for local and international procurement
of goods, works and services of the Project in accordance with IFAD guidelines and procedures, this
PIM and Government requirements. He/she reports to the Project Office Coordinator (POC). The PC
is required to work in consultation with the Director of the Administration and Finance Division of the
MoA.

(a) Preparation of the consolidated Project Procurement Plan by using the lists of Procurement
Items as provided by the different Project cost centres;
(b) Ensuring that procurement of goods, works, and services are in compliance with IFAD
Procurement guidelines and government requirements;
(c) Conducting, assisting, and supervising all procurement activities of national scope;
(d) Ensuring that all procurement activities are carried out in an orderly and timely manner;
(e) Providing technical support to Project Coordination Offices and implementing agencies on
procurement procedures and activities;
(f) Serving as the Chairperson to the Bid Evaluation Committee;
(g) Processing and submitting procurement payment requests;
(h) Preparing, reviewing, and maintaining the Project’s supplier database;
(i) Preparing periodic procurement reports to be submitted to the NPO;
(j) Cooperating with the internal and external auditors in the execution of their duties; and
(k) Any other duties (related to NAP activities) as may be assigned by the POC.

 A Bachelor’s degree in Procurement Management, Business Administration, and Economics
from a recognized university;
 A minimum of 10 years experience in donor-funded Programme s;
 Knowledge of Programme procurement cycle, planning and budgeting;
 Strong computer skills (able to apply basic software);
and
 Working knowledge of GoE procurement directives and procedures;
Duty Station: Asmara, involving travels to Zobas.
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Procurement Officer
Reporting to the Procurement Controller, the Procurement Officer is responsible for ensuring that all
procurements are effectively and efficiently carried out in accordance with Project guidelines,
processes, and procedures, and documentation requirements.

(a) Assisting the PC with the preparation of the Project Procurement Plan.
(b) Facilitating the timely procurement of goods, works and services required by implementing
agencies;
(c) Checking procurement request details to ensure that they are properly and correctly
prepared, and are duly authorised.
(d) Assisting implementing agencies on Project procurement procedures and activities;
(e) Preparing and distributing Requests for Quotations to potential suppliers, and collecting them
within the specified deadlines;
(f) Preparing Purchase Orders and Contracts for the selected suppliers and submitting them to
the PC for further action;
(g) Serving as the secretary of the Bid Committee and facilitating its work by preparing invitation
for bids, receiving and processing proposals, calling tender committee meetings, carrying out
financial evaluation, and preparing and submitting tender report to the PC;
(h) Following up the delivery of the procured goods, works, and services;
(i) Checking invoices, and preparing procurement payment requisitions, and all other relevant
commercial documents;
(j) Arranging for the transportation of goods to the required destinations after procurement;
(k) Maintaining and keeping up-to-date the Project’s procurement records and documents;
(l) Ensuring that all procurement transactions are appropriately registered;
(m) Preparing monthly procurement report and submitting them to the PC;
(n) Assisting the PC in the preparation of the consolidated procurement report;
(o) Any other duties (related to the Project’s activities) as may be assigned by the PC.

 A Bachelor’s degree in Procurement Management, General Management and Economics
from a recognized university;
 A minimum of 10 years experience out of which 5 years in donor-funded Programmes;
and
 Working knowledge of GoE procurement directives and procedures.
- 10 -

Cashier
Reporting to the Financial Controller, the cashier effects and records cash disbursements in the NPO.

 Preparing and effecting cash payments against approved documents;
 Preparing cash on hand positions;
 Ensuring the safety of cash on hand;
 Establishing and maintaining proper bookkeeping records; and
 Any other duties (related to NAP activities) as may be assigned by the FC.

 A diploma/certificate in Accounting from a recognized university;
 A minimum of 4 years experience preferably in donor-funded Programme s;
 Computer literate;
 Capable of communicating in English both written and oral;
 Ability to work as a team member; and
 Working knowledge of GoE financial directives and procedures.
- 11 -

Project Support Officer
The Project Support Officer is responsible for providing management support for the day-to-day
administrative and office functions of the Programme. He/she reports to the Project Office
Coordinator (POC).
Duties and Responsibilities:

(a) Developing an accurate filing system that would ensure the safe maintenance of Project
documents and records;
(b) Maintaining the contracts’ file and regularly updating the Project’s Contracts Register for
goods, works and services;
(c) Organizing meetings and workshops, including the preparation and distribution of agendas,
making audio-visual and catering arrangements;
(d) Preparing and distributing minutes of the NPO staff meetings.
(e) Organizing logistics for field visits and ensuring that all related documents are in order;
(f) Prepares purchase requisitions for the NPO to be submitted to the Procurement Officer;
(g) Organizing and supervising the Project’s Documentation Centre;
(h) Ensuring that the NPO is run in an orderly and efficient manner; and
(i) Any other duties (related to NAP activities) as may be assigned by the POC.

 A diploma in Management or Accounting;
 A minimum of 4 years experience in office administration;
 Good command of English language both written and oral and good report writing skills; and
 Good communication skills and ability to work as a team member.
- 12 -

Secretary
The Secretary is answerable to the National Programme Coordinator and is responsible for providing
secretarial support to the NPO.
Duties and responsibilities:

(a) Providing reception services to internal and external visitors;
(b) Organizing the day-to-day meeting schedules for the NPC and briefing him on the same;
(c) Receiving visitors, findings out their needs and directing them to the relevant officer(s);
(d) Receiving incoming telephones and directing them to relevant officers;
(e) Receiving and dispatching mails/posts to relevant offices;
(f) Typing correspondence and management reports for the NPC and other Project staff;
(g) Maintaining the correspondence and reports register and files;
(h) Keeping stationary and other materials of the NPO and ensuring their timely replacement to
ensure the smooth operation of the office; and
(i) Any other duties (related to NAP activities) as may be assigned by the NPC.

 A diploma/certificate in Secretarial Science;
 A minimum of 4 years experience as a secretary;
 Strong computer skills (able to apply basic software); and
Duty Station: Asmara
- 13 -

Zoba Programme Coordinator (ZPC)
Reporting to the Governor, the ZPC is responsible for the overall coordination of the planning,
implementation, monitoring and evaluation activities of the Project at Zoba level. The ZPC will be the
secretary of the Zoba Project Coordination Committee (ZPCC).
a) Managing the Zoba Project Coordination Office (ZPCO);
b) Carrying out coordination of Project planning, implementation, management, reporting,
monitoring and evaluation with the Zoba;
c) Ensuring Project implementation and management in compliance with the Financing
Agreement, Appraisal Report and this PIM, and the requirements of Government.
d) Coordinating and supervising the preparation of consolidated AWPBs submitted by the Zoba
e) Developing close working relations with Project participants and stakeholders who may
compliment Project activities;
f) Facilitating ZPCC meetings and preparing and distributing minutes of the meetings;
g) Following-up on component progress and making the necessary contacts and efforts to ensure
implementation meets the Project’s targets;
h) Assisting external supervisions, and coordinating reviews and monitoring and evaluations of
the Project;
i) Facilitating field supervision of the National Steering Committee (NSC), and ZPCC;
j) Approving expenditures of the Zoba Project Coordination Office and signing contract
agreements on behalf of the ZPCO;
k) Ensuring that all financial disbursements and payments are in accordance with the AWPB and
in compliance with the PIM;
l) Ensuring the timely submission of the Statement of Expenditures (SOEs) along with the
necessary documents;
m) Ensuring the efficient flow and proper utilization of Project funds;
n) Ensuring the timely preparation of periodic reports on Project implementation; and
o) Any other duties (related to NAP activities) as may be assigned by the Governor.
 A Bachelor’s degree in Economics, Management, Agricultural Economics, Agriculture, or
Biological Sciences from a recognized university;
 A minimum of 8 years experience in managing agricultural/rural development Programme s.
and budgeting;
 Good advocacy, communication and negotiation skills and ability to work as a team leader;
 Strong leadership and team building skills and have the ability to work with minimum
supervision.
Duty Station: The six Zoba capitals with frequent travel throughout the Project area.
- 14 -

Zoba Deputy Project Coordinator
Reporting directly to the ZPC, the Deputy Zoba Project Coordinator (ZDPC) assists the ZPC with the
preparation and submission of the consolidated AWPB and periodic reports of the Programme.

(a) Reviewing and preparing the consolidated AWPBs of the Project to be submitted to the ZPC;
(b) Assisting subject matter specialists with financial and economic analysis in the preparation
and appraisal of sub-project proposals related to the Project;
(c) Assisting the ZPC in the facilitation of Project reviews, supervisions and evaluation;
(d) Overseeing the work and performance of the administrative staff;
(e) Overseeing local contracting arrangements with the Project implementing agencies;
(f) Reviewing and preparing consolidated periodic reports on Project implementation to be
submitted to the ZPC;
(g) Supervising the execution of service contracts under participatory management procedures,
with the assistance of the Financial Controller;
(h) Coordinating the Project’s implementation at sub-Zoba level and liaising with the line
ministries and agencies, and UN agencies and NGOs, as the case may be; and
(i) Understudy of the PC in order to take over his/her responsibilities during his/her absence

and budgeting;
 Good advocacy, communication and negotiation skills and ability to work as a team leader;
supervision.
- 15 -

Zoba Planning Officer
Reporting directly to the ZPC, the Planning Officer (PO) supervises and coordinates the planning
functions and activities of the Programme.
(a) Supervising and guiding the preparation of the AWPB by the Project coordination offices and
(b) Preparing the consolidated AWPB of the Project in accordance with the timeframe agreed for
the planning process;
(c) Guiding the planning process to ensure that the AWPB are prepared following the
participatory planning approach of the Project;
(d) Providing technical support including training on planning to implementing agencies operating
within the Zoba;
(e) In collaboration with Planning Officer at the NPO, reviewing progress made in implementation
and proposing amendments required with respect to Project components and activities for
consideration by the ZPCC;
(f) Monitoring implementation of Project activities to ensure that they are in line with the AWPB;
(g) Assisting subject matter specialists in the preparation and appraisal of projects to be financed
by the Project;
(h) Providing support to external reviews and evaluations of the Project;
(i) Preparing periodic reports on planning activities of the Project;
(j) Any other duties (related to NAP activities) as may be assigned by the PC.

and budgeting;
 Good computer skills;
supervision.
- 16 -

Zoba Monitoring and Evaluation Officer
Reporting directly to the Zoba PC, the M&E Officer ensures the smooth operation of the M&E system
established for the Project. The M&E officer co-ordinates with implementing bodies and other
agencies to ensure that verifiable data is supplied, analyzed and reported.

(a) Ensuring that the M&E system designed for the Project is operational;
(b) Assisting in the training needs assessment study on M&E to be conducted by the M&E officer
at national to assess the training requirements of the staff of participating agencies and other
stakeholders;
(c) Providing support to implementing agencies and service providers in using the M&E systems
to ensure that the monitoring of the Project is carried out in accordance with the Project’s
guidelines and procedures.
(d) Coordinating the baseline survey at the Zoba level in line with requirements of the Project;
(e) Contributing to the proper execution of the annual beneficiary impact assessments;
(f) Facilitating Project reviews, monitoring, evaluations, supervisions and other studies;
(g) Preparing and submitting quarterly reports to the Zoba PC highlighting areas of concern and
prepare the documentation for review at PCC meetings;
(h) Preparing consolidated periodic reports of the Project to be submitted to the PC; and
(i) Any other duties (related to NAP activities) as may be assigned by the Zoba PC.
 A Bachelor’s degree in Economics from a recognized university;

and budgeting;
supervision.
Duty Station: The six Zoba capitals with regular travel throughout the Project area.
- 17 -
Zoba Financial Controller

Reporting to the Finance Head of the Zoba Administration, the Zoba Financial Controller has the
overall responsibility for overseeing the management of the Programme finances including
disbursement and financial reporting.

(a) Assisting in the preparation of the AWPB including its consolidation;
(b) Ensuring the financial procedures described in the FA and PIM are strictly adhered to by the
Proect Coordination Offices and implementing agencies;
(c) Ensuring that the financial procedures are in conformity with GoE’s financial directives and
circulars;
(d) Supervising all billing and disbursement activities of the Project;
(e) Reviewing procurement requests to ensure that they are correct and are supported with all
necessary documents;
(f) Advising the PC on the Project financial status and trends and provide support to the
accountant on financial management;
(g) Supervising all billing and disbursement activities of the Project;
(h) Ensuring that accounting records are maintained in accordance with the sound accounting
practices and operations;
(i) Compiling the Statements of Expenditure (SOEs) for the cost centres to be submitted to the
NPCO;
(j) Carrying out budgetary control and advising the PC on the Project’s financial situation;
(k) Preparing monthly, quarterly, semi-annually, and annual financial reports for submission to
the PC and ZPCC;
(l) Facilitating and ensuring that external auditors are availed all necessary documents during
the audit;
(m) Making sure that an effective financial control systems are instituted to prevent misuse of
funds; and
(a) Any other duties (related to the Project activities) as may be assigned by the PC.

 A minimum of 8 years experience in donor-funded agricultural/rural development Programme s.
budgeting, accounting, banking, and financial control procedures;
 Strong computer skills (able to apply financial management packages);
 Working knowledge of GoE accounting procedures and guidelines; and
Duty Station: The six Zoba capitals.
- 18 -

Zoba Accountant
Reporting to the Financial Controller, the Accountant is responsible for performing the day-to-day
accounting functions of the Project.

(a) Assisting the Financial Controller with the preparation of AWPBs;
(b) Ensuring the timely disbursement of funds to implementing agencies at the Zoba level based
on the approved budget;
(c) Processing payments based on Project financial procedures and guidelines;
(d) Preparing the replenishment report submitted by the implementing agencies to be forwarded
to the FC for review;
(e) Maintaining and keeping up-to-date the Project’s accounts;
(f) Maintaining records of receipts, expenditures, assets, liabilities, and fund balance;
(g) Supervising the use and reconciliation of local accounts at Zoba level;
(h) Preparing all routine financial statements and Statements of Expenditures and Withdrawal
Applications on a timely basis;
(i) Filing all financial source documents and fund receipts;
(j) Preparing bank reconciliation statements for Project accounts; and
(k) Any other duties (related to the Project activities) as may be assigned by the FC.

 Working knowledge of banking and financial control procedures;
 Good advocacy, communication and negotiation skills and ability to work both as a team member;
 Working knowledge of GoE accounting procedures; and
Duty Station: Barentu/Mendefera.
- 19 -

Zoba Procurement Officer
Working under the Administration and Finance Department of the Zoba admnsitration, the
Procurement Officer is responsible for overseeing all Zoba level procurements under the Project.

(a) Ensuring the timely preparation of the Zoba consolidated list of procurement items for the
Zoba AWPB;
(b) Ensuring that all procurements are in compliance with IFAD guideline and procedures and
government requirements;
(c) Conducting, assisting, supervising all procurement activities of the Project at Zoba level;
(d) Ensuring that all procurement activities are carried out in an orderly and timely manner;
(e) Facilitating the timely procurement of goods, works and services required by implementing
agencies;
(f) Processing and submitting procurement payment requests to the FC for appropriate action;
(g) Receive purchased goods from suppliers and dispatching them to the requisitioning parties;
(h) Providing advice and technical support to the ZPCO and implementing bodies on
procurement procedures and activities;
(i) Serving as the chair of the Bid Evaluation Committee;
(j) Cooperates with internal and external auditors by furnishing all necessary documents and
clarifying queries related to procurement;
(k) Preparing and submitting routine procurement reports to be submitted to the ZPCO; and
(l) Any other duties (related to NAP activities) as may be assigned by the ZPC.

 A Bachelor’s degree in Procurement Management and Business Administration from a
recognized university;
 A minimum of 8 years experience out of which 4 years in donor-funded Programmes;
 Strong computer skills (able to apply basic financial management pacdkage);
 Good advocacy, communication and negotiation skills and ability to work as a team member; and
 Working knowledge of GoE procurement directives and procedures;
- 20 -

Zoba Cashier
Reporting to the Zoba Financial Controller, the cashier effects and records cash disbursements in the
ZPCO.

 Preparing and effecting cash payments against approved documents;
 Preparing cash on hand positions;
 Ensuring the safety of cash on hand;
 Establishing and maintaining proper bookkeeping records; and
 Any other duties (related to the NAP activities) as may be assigned by the FC.

 A diploma/certificate in Accounting from a recognized university;
 A minimum of 4 years experience preferably in donor-funded Programme s;
 Computer literate;
 Capable of communicating in English both written and oral;
 Ability to work as a team member; and
 Working knowledge of GoE financial directives and procedures.
Duty Station: Barentu/Mendefera.
- 21 -
Zoba Secretary
The Secretary is answerable to the Zoba Project Coordinator and is responsible for providing
secretarial support to the ZPCO.

(j) Providing reception services to internal and external visitors;
(k) Organizing the day-to-day meeting schedules for the ZPC and briefing him/her on the same;
(l) Receiving visitors, findings out their needs and directing them to the relevant officer(s);
(m) Receiving incoming telephones and directing them to relevant officers;
(n) Receiving and dispatching mails/posts to relevant offices;
(o) Typing correspondence and management reports for the ZPC and other Project staff.
(p) Maintaining the correspondence and reports register and files;
(q) Keeping stationary and other materials of the ZPCO and ensuring their timely replacement to
ensure the smooth operation of the office; and
(r) Any other duties (related to the Project activities) as may be assigned by the ZPC.

 A diploma/certificate in Secretarial Science;
 A minimum of 4 years experience as a secretary;
 Strong computer skills (able to apply basic software); and
- 22 -

Subject Matter Specialists
In addition to these members, the NPO and ZPCOs are to be assisted by subject matter specialists
seconded to the Project by their respective departments (AED, RSD and NARI) to assure the
provision of technical backstopping to the Project. The Subject Matter Specialists, as individuals or
under the umbrella of their respective departments, will be requested by the NPO and ZPCOs to
provide technical backstopping. These subject matter specialists consist of:
 Livestock development expert;
 Dairy development expert;
 Beekeeping and poultry development expert;
 Irrigation development expert;
 Seed expert;
 Seed Breeder;
 Regulatory service expert;
 Extension experts.
Duties and responsibilities of the Subject Matter Specialists, in general terms, are:
(a) Contribute to the preparation of AWPB for the Project;
(b) Prepare project proposals to be financed by the Project;
(c) Assist Zoba staff screen proposals forwarded by MoA sub-zoba offices in order to
assess their technical and financial feasibility and, where necessary, propose
modifications.
(d) Provide training and TOT to Zoba-based subject matter specialists and sub-zoba
based intermediate extension officers.
(e) Develop and/or adapt appropriate technical packages and preparation of extension
manuals, pamphlets and videos.
(f) Preparation of curriculum and training of Zoba-based MOA staff in technical
packages and their dissemination.
(g) Monitor and supervise the works and performance of Zoba-based subject matter
specialists and intermediate extension officers.
(h) Provide rapid response to field problems as and when they arise, and
(i) Prepare required reports on Project implementation and achievements.
It should be noted that at the Zoba and Sub-Zoba levels, the subject matter specialists will assure the
linkage and coordination between the Project Facilitation process and the planning of Project
interventions under the MoA offices.
- 23 -
Annex IV: Monthly Budget Execution Report
Monthly Budget Execution Report

ACTUAL PLANNED VARIANCE
Cummul Cummulat Cummulat Commitments
Current Year - to- Current Year - to- Current Year - to-
ative To ive To ive To entered (Not
Quarter Date Quarter Date Quarter Date
Date Date Date paid to date)
Cash Payments per Component
Agriculture Water Resources

1
Development
hydrology systems
development
2 Integrated Agriculture
Production
Development of National Seed
System
Input Supply
dissemination
Livestock support
3 Project Support Services and

Capacity Building
Total
Cash Payments per Expenditure Category
Civil Works
Vehicles, Motorcycles, Equipment
and Materials
Technical Assistance, Training
maintenance
- 24 -

Annex V: SOE-Withdrawal Application Statement
5. Statement Of Expenditures Withdrawal Application Statement

By category of Expenditures in Local Currency
WA submitted to IFAD
WA WA
WA n.. WA n.. n.. n.. Total
Category Category Description
I. Civil Works xx xx xx xx xx
II. Vehicles, Motorcycles, Equipment and
Materials
xx xx xx xx xx
III. Agricultural and Livestock Inputs
xx xx xx xx xx
IV. Technical Assistance, Training
xx xx xx xx xx
V. Recurrent costs- operations and
maintenance
xx xx xx xx xx
Total xx xx xx xx xx
In USD equiv/ xx xx xx xx xx
Rejected from IFAD xx xx xx xx xx
Net Reimbursed xx xx xx xx
WA pending submission to IFAD

WA WA
WA n.. WA n.. n.. n..
Category Category Description
I. Civil Works xx xx xx xx
II. Vehicles, Motorcycles, Equipment and xx xx xx xx

Materials
III. Agricultural and Livestock Inputs xx xx xx xx
IV. Technical Assistance, Training xx xx xx xx

V. Recurrent costs- operations and xx xx xx xx xx

maintenance
Total xx xx xx xx
Withdrawal applications are submitted for reimbursement to IFAD using the historical exchange rate of the transfers
to the Operating Account.
Expenditures partially or totally rejected by IFAD (if any) should be detailed here.
This statement should be reconciled with the Statement of Receipts and Payments
- 25 -
Annex VI: Recovery plan
Recovery Plan Designated Account
IFAD Grant No: IFAD Grant Amount (SDR)

Loan closing XX/XX/20XX
Project Completion Date: XX/XX/20XX date:

Unjustified balance USD
Particulars SDR
Reporting WA No. Date USD SDR
period

1 xx/xx/201x
Authorized
0.00 xxxx
Allocation
Exchange Rate:
Justification:
Cumulati
Estimated Proposed ve Cumulative
Ref. Estimated WA Recovery
WA No. Date WA vslue Recovery Recovery Unjustified
No. vslue (USD) Amount (USD)
(SDR) % Amount balance (USD
(USD)
1 1 XX/XX/20XX XXX XXX X% XXX XXX XXX
Total XXX XXX XXX XXX XXX XXX

In accordance with IFAD procedures, any amount unjustified at the time of the grant closing date will be promptly refunded to IFAD

Prepared by: XX/XX/20XX
Date

Conformed
by: Date
- 26 -
Annex VII: Signed Contract Listing
6. Signed Contract Listing

Reporting period: Contract Information
Disbursement Contract Contract Contract Supplier/ Contract Total Total Total Total Undisbursed
Contract Contract Disbursed on Amount
Category Description Start End Contractor No. Value Amount
Invoiced to Contract
Name
date
Description

I. Civil Works

II. Vehicles, Motorcycles,

III. Agricultural and Livestock
Inputs

IV. Technical Assistance, Training

V. Recurrent costs- operations
and maintenance

Total
- 27 -
Annex VIII: Fixed Asset Register
Fixed Asset Register

ASSE DATE
T ASSET FINANCI BENEFICA TAG SUPPLI PMT/INV. DATE OF OF PURCHA
REF. DESCRIPTI COMPONE NG RY LOCATI ASSIGN NUMB ER REFEREN PURCHA RECEI SE REMAR
NO. ON NT SOURCE AGENCY ON ED TO ER NAME CE SE PT VALUE KS

Total
- 28 -
Annex IX A: Petty Cash Request Form
Date: _________________ Requested by : _______________________
Name
Mode of payment _______________________
Signature
¤ Reimbursement
¤ Advance
Description of purchases Unit Quantity Total Budget/ Explanation / Comments

(goods/services) price cost**
Activity
code
TOTAL AMOUNT*
________________ ____________________________ _________________
Approved by Processed by Payment received by
Financial Controller Accountant
* Total amount cannot exceed xxxxx.
** Attach supporting document (invoice, receipt, etc.).


Annex IX B: Petty Cash Reconciliation Form
Project ________________________ Date of reconciliation ______________________
Part i. Petty cash reconciliation
Petty cash balance brought forward (a) ______________
Replenishments during the current month (b) ______________
Total petty cash balance (c = a + b) ______________
Disbursements during the current month (d) ______________
Petty cash book balance (e = c – d) ______________
Cash count balance (f) – see part ii. below ______________
Difference (G = E – F) ______________
Explanation Of
Difference________________________________________________________________________
_
__________________________________________________________________________
Part Ii - Cash Count
Description Quantity Total amount
bank notes
500
1 000
2 000
coins
10
20
50
total in local currency
Counted/reconciled by (Accountant)___________ Reviewed by (FC) __________________

Date _________________
- 30 -
Annex X A: Vehicle Log
Vehicle registration number _____________________ Assigned driver_________________
Dat Time Mileage Trip Fuel purchase Driver Responsi

e signat ble staff
Departi Arriv Departi Arriv Destinat Purpo Milea Quant ure
ng al ng al ion se ge ity
Annex X B: Vehicle History Record
Vehicle registration number ______________________________________ Assigned driver

____________________
Date Repairs Service & maintenance Insurance Fitness tests
Description of Garage Cost Description Garage Cost Type Period Cost Checked Cost
repair of service covered by
Report accidents in the space below, providing all relevant details for each occurrence:
Date:
Place:
Name of driver:
Circumstances:
Damage to PIU vehicle:
Damage to other vehicles:
Injuries (indicate name of victims and describe injuries):
Insurance settlement:
- 32 -

Annex XI: Terms of Reference for the Audit of NAP
The following are the terms of reference (‘ToR’) on which the MOA agrees to engage audit firm ‘the
Auditor’ to perform an Audit and to report in connection with the Agreement with the International
Fund for Agricultural Development (IFAD) concerning the NAP where in these ToRs the
‘Contracting Authority’ is mentioned this refers to IFAD which has signed the Agreement with the
GOE and finances the services. The Contracting Authority is not a party to this engagement.
1.1 Responsibilities of the Parties to the Engagement
Recipient/Borrower refers to the entity that provides the services and that has signed the Agreement
with the Contracting Authority.
 The NPO is responsible for providing a Financial Statements for the services financed by the
Loan/ Grant and for ensuring that these Financial Statements can be properly reconciled to
the NPO records and accounts in respect of these services.
 The NPO accepts that the ability of the Auditor to perform the procedures required by this
engagement effectively depends upon the NPO providing full and free access to its staff and
records and accounts.
 The NPO shall provide the auditors with all the necessary documentation to perform the
assignment properly; in particular the following information shall be provided to the auditors
before the beginning of the assignment:
a) Project Agreement;
b) Annual Progress Report;
c) Project Implementation Manual;
d) Financial Management Manual;
e) Organizational charts along with names and titles of senior managers;
f) Names and qualifications of officers responsible for financial management,
accounting and internal audit.
g) Description of information technology facilities and computer systems in use and
h) Copies of the minutes of negotiations, the project design document, the annual work
programme and budget and the letter to the borrower if available.
‘The Auditor’ refers to the Auditor who is responsible for performing the agreed-upon procedures as
specified in these ToR, and for submitting a report of factual findings to the NPO/moa
The Auditor shall provide:
 A separate opinion on Project Financial Statements (PFS)
Minimum content of the PFS:
a) Yearly and cumulative statements of sources and application of funds, which should
disclose separately IFAD’s funds, other donors funds and beneficiaries funds;
b) Statement of sources and application of funds.
c) Yearly and cumulative SOEs by withdrawal application and category of expenditures;
reconciliation of the SA.
d) Reconciliation between the amounts shown as received by the project and those shown
as being disbursed by IFAD should be attached as an annex to the PFS. As part of that
reconciliation the auditor will indicate the procedure used for disbursement (SA funds,
letters of credit, special commitments, reimbursement or direct payment) and indicate
- 33 -

whether the expenditure is fully documented or uses the Summary of Expenditures
format.
e) Notes accompanying the Financial statements
f) Cumulative status of funds by category
g) A statement of comparison between the actual expenditures and the budget estimates
h) Full disclosure of cash balances and
i) Other statements or disclosures relevant to the project .e.g. financial monitoring reports,
credit lines etc.
 A separate opinion on the use of the Designated Accounts/Special Accounts (DA/SA);

The auditor is also required to audit the activities of the DA/SA associated with the project
including the initial advance, replenishments, interest that may accrue on the outstanding
balances, and the year-end balances. The auditor must form an opinion as to the degree of
compliance with IFAD procedures and the balance of the DA/SA at year end. The audit
should examine: (i) the eligibility of withdrawals from the DA/SA during the period under
review; (ii) the operation of the DA/SA in accordance with the relevant financing agreement;
(iii) the adequacy of internal controls within the project appropriate for this disbursement
mechanism; and (iv) the use of correct exchange rate(s) to convert local currency
expenditures to United States dollars.
 A separate opinion on Withdrawal Application Statement / Statement of expenditures /

Summary of Expenditures (SOEs); the audit will include a review of SOEs used as the
basis for submitting withdrawal applications. The auditor will carry out tests and reviews as
necessary and relevant to the circumstances. SOE expenditures will be carefully compared
for eligibility with relevant financial agreements, and the disbursement letter, and with
reference to the project appraisal report for guidance when necessary. Where ineligible
expenditures are identified as having been included in withdrawal applications and
reimbursed, auditors will note these separately. A schedule listing individual SOEs withdrawal
applications by reference number and amount should be attached to the PFS. The total
withdrawals under the SOE procedure should be part of the overall reconciliation of IFAD
disbursements described above. The auditor’s opinion should deal with the adequacy of the
procedures used by the project for preparing SOEs and should include a statement that
amounts withdrawn from the project account on the basis of such SOEs were used for the
purposes intended under the agreement.
 A separate management letter addressing the adequacy of the accounting and internal
control systems of the Programme, including compliance with IFAD’s Procurement
Guidelines and such other matters as IFAD may notify the NPO to include in the audit.
The auditor is requested to:
a) Comment on economy, efficiency and effectiveness in the use of project resources;

b) Comment on achievement of planned project results;
c) Comment on legal and financial obligations and commitments of the project and the
extent of compliance or non-compliance thereof;
d) Comment on systems and procedures such as improvements in accounting, information
technology or computer systems, and operations that may be under development, on
which the auditor’s comments are necessary to ensure effective controls;
e) Comment on other activities on which an auditor may consider it appropriate to report
 Auditors shall certify :
- 34 -

a) Whether the PFS are drawn up in conformity with IPSAS cash basis
b) Whether the PFS are accurate and are drawn up from the books of accounts maintained
by the Project.
c) Whether the provisions of the Project Agreement are adhered to.
d) Whether Procurement has been undertaken by the Project in accordance with Article VI
of the Project Agreement,, IFAD’s Procurement Guidelines
e) Carry out a physical verification of any significant assets purchased and confirm their
existence and use for project purposes.
f) Whether the project has an effective system of financial supervision or internal audit at all
levels.
g) Whether the expenditure claimed through SOEs are properly approved, classified and
supported by adequate documentation.
1.2 Subject of the Engagement
The subject of this engagement is the audit of the financial statements of the year’s 20XX, 20XY, and
20XV for the IFAD Grant. The information, both financial and non-financial, which is subject to
verification by the Auditor, is all information which makes it possible to verify that the expenditures
claimed by the NPO in Financial statements have occurred, and are accurate and eligible.
1.3 Reason for the Engagement
The NPO Service Provider is required to submit to the Contracting Authority an Audit report
produced by an external auditor.
1.4 Engagement Type and Objective
This constitutes an engagement to perform specific agreed-upon procedures following the IFAD
Guidelines on Project Audits provided to the Auditors by the NPO in Annex 1 of these TOR. The
objective of this audit is for the Auditor to verify that the expenditures claimed by the NPO in the
financial statements for the services covered by the Agreement have occurred (‘reality’), are accurate
(‘exact’) and eligible and to submit to the PSMU/MOA a report of factual findings with regard to the
agreed-upon procedures performed. Eligibility means that expenditure have been incurred in
accordance with the terms and conditions of the Agreement.
1.5 Scope of Work
1.5.1 The Auditor shall undertake this engagement in accordance with these Terms of Reference
and:
- in accordance with the International Standard on Audit (ISA) to perform Agreed-upon Procedures
regarding Financial Information as promulgated by the IFAC;
- In compliance with the Code of Ethics for Professional Accountants issued by the IFAC. Although
ISRS 4400 provides that independence is not a requirement for agreed-upon procedures
engagements, the Contracting Authority requires that the auditor also complies with the
independence requirements of the Code of Ethics for Professional Accountants.
- In accordance with International Standards on Auditing and in line with IFAD’s Guidelines for
Project Audits.
- 35 -

1.5.2 The Terms and Conditions of the Agreement
The Auditor verifies that the funds provided by the Agreement were spent in accordance with the
terms and conditions of the Agreement.
1.5.3 Planning, procedures, documentation and evidence
The Auditor should plan the work so that effective audit can be performed. For this purpose he
performs the procedures specified the IFAD Guidelines on Project Audits and he uses the evidence
obtained from these procedures as the basis for the report of factual findings. The Auditor should
document matters which are important in providing evidence to support the report of factual findings,
and evidence that the work was carried out in accordance with ISA and these ToR.
1.6 Reporting
The report on this audit should describe the purpose and the agreed-upon procedures of the
engagement in sufficient detail in order to enable the PSMU/MOA and the Contracting Authority to
understand the nature and extent of the procedures performed by the Auditor. Use of the financial
and audit reporting is compulsory.
1.6.1 Periods covered
The reports on this audit should cover the following:
a) IFAD Grant NO I-DSF-8107-ER for the years 20XX
Reports covering items a must be delivered no later than 120 calendar days as of the date of signing
the agreement.
Reports covering items b and c must be delivered within months after the end of the respective fiscal
year .
- 36 -

Annex XII: Checklist for Withdrawal Application
IFAD Financing No. ---- WA No. --- Reporting period [from --- to ---]
FORM 100 - APPLICATION FOR WITHDRAWAL Yes or No

1. Sequential numbering of withdrawal application
2. Withdrawal application amount tallies with sequentially numbered summary sheets
3. Categories/subcategories charged according to schedule 2 of financing agreement
4. Percentage of financing applicable for each category or subcategory
5. Availability of funds in categories and the overall financing amount
6. Currency of payment
7. Completeness and accuracy of banking instructions
8. Complete name and address of correspondent bank
9. WA is signed by Authorized Representative
STATEMENT OF EXPENDITURE
1. Eligibility of expenditures claimed
(a) Within SOE financial ceiling
(b) Expenditures under specific category [-----] eligibility
2. Form 102 signed by designated Project Accountant, Project Director, Authorized Representative
3. Form 102 supported by signed Form 101 (for items reported in 2, but over the financial ceiling)
DESIGNATED ACCOUNT – REPLENISHMENT REQUESTS
1. Amount within ceiling figure agreed as a reasonable limit [-- US$ or --]; or per AWP/B period
2. Amount at least equal to 20 per cent of the agreed limit; or per AWP/B projected requirements
3. Amount agreed sufficient to cover a specific reporting period (revolving fund option)
4. Exchange rate used
5. Completeness of designated account banking and account details
6. Enclosed designated account reconciliation and bank statements
SUPPORTING DOCUMENTATION (attached when/if required)
1. Copy of contract
2. Copy of invoice, certified by Project Director
3. Copy of bank guarantee and performance guarantee (for advance payment)
4. Copy of delivery receipt
5. Copy of evidence of payment
6. Completed Form 101
7. Completed Form 102 (A or B)
PROCUREMENT
1. Copy of ‘no objection(s)’ provided by IFAD (attached)
2. Copy of Contract Payment Monitoring Form(s) (attached)
COMPLIANCE WITH CONDITION(S) FOR DISBURSEMENT
1. In accordance with terms in section E of the Financing Agreement
2. In accordance with terms in the Letter to the Borrower/Recipient
EXPENDITURE INCURRED/COMMITTED BEFORE PROJECT COMPLETION DATE
1. Expenditure verified as eligible:
(a) contract signed before project completion date
(b) goods delivered before project completion date
(c) services completed and/or rendered before project completion date
Remarks:
____________________ _____________________
Prepared by: Project Accountant/Financial Controller Certified by: Project Director
Dated: ____________________ Dated: _____________________
- 37 -

Annex XIII: National Agricultural Project’s Financial Statements
Eritrea : National Agricultural Project (NAP)
STATEMENT OF RECEIPTS AND PAYMENTS (BY CATEGORY OF EXPENDITURES)
FOR THE YEAR ENDED December 30, 201X
Cumulative
Notes 20XX 20XX to date
ERN ERN ERN
Balance B/F 4 XXX XXX
FINANCING
Receipts from IFAD

Initial Deposit XXX
Replenishments to SA XXX XXX XXX
IFAD Direct Payments 5 XXX XXX XXX
Government Funds 6 XXX XXX XXX
Other Donors 7
Other Receipts 8
TOTAL FINANCING XXX XXX XXX
PROJECT EXPENDITURES:
(BY CATEGORY OF EXPENDITURES)
IFAD Financed
I. Civil Works 9 XXX XXX XXX

II. Vehicles, Motorcycles, Equipment and XXX XXX XXX
Materials
III. Agricultural and Livestock Inputs XXX XXX XXX
IV. Technical Assistance, Training XXX XXX XXX
Workshops and
V. Recurrent costs- operations and XXX XXX XXX
maintenance
XXX XXX XXX
Government Funds
II. Vehicles, Motorcycles, Equipment and XXX XXX XXX
Materials
III. Agricultural and Livestock Inputs XXX XXX XXX
Workshops and
maintenance
XXX XXX XXX
TOTAL PROJECT EXPENDITURES XXX XXX XXX
BALANCE C/F 4 XXX XXX XXX
- 38 -

STATEMENT OF RECEIPTS AND PAYMENTS (BY COMPONENT OF EXPENDITURES)
FOR THE YEAR ENDED December 30, 201X
Cumulative
Notes 201X 201X-1 to date
ERN ERN ERN
Balance B/F 4 XXX XXX
FINANCING
Receipts from IFAD

Initial Deposit XXX
IFAD Direct Payments 5 XXX XXX XXX
Government Funds 6 XXX XXX XXX
Other Donors 7 XXX XXX XXX
Other Receipts 8 XXX XXX XXX
(BY COMPONENT OF EXPENDITURES)
IFAD Financed

Development
1.1 Watershed Characterisation XXX XXX XXX
1.2 Improvement of meteorology and hydrology XXX XXX XXX
systems
1.3 Agriculture Infrastructure development XXX XXX XXX
XXX XXX XXX
2.1 Development of National Seed System XXX XXX XXX
2.2 Input Supply XXX XXX XXX
2.3 Technology generation and dissemination XXX XXX XXX
2.4 Livestock support XXX XXX XXX
XXX XXX XXX
XXX XXX XXX

Government Funds
Development
1.1 Watershed Characterisation XXX XXX XXX
1.2 Improvement of meteorology and hydrology XXX XXX XXX
systems
1.3 Agriculture Infrastructure development XXX XXX XXX
XXX XXX XXX
2.1 Development of National Seed System XXX XXX XXX
2.2 Input Supply XXX XXX XXX
2.3 Technology generation and dissemination XXX XXX XXX
2.4 Livestock support XXX XXX XXX
XXX XXX XXX
TOTAL PROJECT EXPENDITURES XXX XXX XXX
- 39 -
BALANCE C/F 4 XXX XXX XXX

STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS
FOR THE YEAR ENDED DECEMBER 31, 201X

201X 201X
Budget Actual Variance
Notes ERN ERN ERN
FINANCING
IFAD Credit
IFAD Direct Payments XXX XXX XXX
Government Funds XXX XXX XXX
(BY CATEGORY OF EXPENDITURES)
Cat IFAD Financed

II. Vehicles, Motorcycles, XXX XXX XXX
III. Agricultural and Livestock XXX XXX XXX
Inputs
Workshops and
maintenance
XXX XXX XXX
Government Funds
II. Vehicles, Motorcycles, XXX XXX XXX
III. Agricultural and Livestock XXX XXX XXX
Inputs
Workshops and
maintenance
XXX XXX XXX
TOTAL PROJECT
EXPENDITURES XXX XXX XXX
- 40 -

STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS

201X 201X
Budget Actual Variance
Surplus/Deficit for the

period 4 XXX XXX XXX

STATEMENT OF DESIGNATED ACCOUNT ACTIVITIES
Account No: ___________
Bank: ________________
Address:_______________
USD ERN
Opening Balance Notes
XXX XXX
Add:
IFAD Replenishments:
Date WA No XXX
Date WA No XXX
XXX XXX XXX
Bank Interests XXX XXX
Total XXX XXX
Deduct:
Transfers to Operating Accounts:
Date XXX
Date XXX
XXX XXX XXX
Bank Charges XXX XXX

Exchange Rate Difference XXX
Closing Balance as at
31/12/201X XXX XXX
- 41 -
- 42 -
- 43 -
STATEMENT OF DESIGNATED ACCOUNT RECONCILIATION
Account No: ___________
Bank: ________________
Address:_______________
USD ERN
Notes
1 Initial Deposit Eritrea : National Agricultural Project (NAP))
XXXX XXXX
SOEs-WITHDRAWAL
2 Less amount(s) recovered: APPLICATION STATEMENT
XXXX XXXX
3 Outstanding Amount advanced XXXX XXXX
by Category of Expenditures in Local Currency
Represented by: Rejected
Category
Special Account Balance as at Category In USD from Net
Notes description description Total Equivalent IFAD Reimbursed
4 31/12/201X XXXX XXXX
Cat
No 1
Plus amounts
WA claimed but not yet
5 creditedNo:
as at 30/6/201X:

WA XXX XXX XXX Date
XXX XXX XXX XXX
WA XXX XXX XXX Date
XXX XXX XXX XXX
XXX XXX XXX XXX XXX XXX
XXXX XXXXXXX
XXX XXX XXX XXX XXX XXX
Plus amounts
Total withdrawn
not yet XXX
claimed,WAcomposed
Pending of: for Submission:
WA
No:
Was Prepared XXX
not yet submitted:XXX XXX XXX XXX XXX
WA XXX XXX XXX XXX XXX XXX XXX
WA XXX XXX
TOTAL XXX XXX XXX XXX XXX XXX XXX
Withdrawal Applications are submitted for reimbursement to IFAD using the historical
WAs not yet prepared: XXX
exchange rate of the transfers to the Operating Account. Expenditures partially or totally
rejected by IFAD (if any) should be detailed here. This statement should be reconciled
Total
with theamount withdrawn
Statement not yetand Payments.
of Receipts
6 claimed XXXX XXXX
Less Interest earned and/or plus

Bank charges (if included in the
7 Special Account) NOTES TO THE FINANCIAL STATEMENTS XXXX XXXX
Total Designated Account Advance
1. FINANCIAL REPORTING UNDER INTERNATIONAL PUBLIC SECTOR ACCOUNTING
8 as at 31/12/201X XXXX XXXX
STANDARDS (IPSAS)
In accordance with International Public Sector Accounting Standards (IPSAS), notes to the financial
statements of an entity should:
Difference
 Present between Line 3 and
any information line the
about 8 basis of preparation of the financialXXXX
statementsXXXX
and the
specific accounting policies selected and applied for significant transactions and other events,
and
Notes:
 Provide additional information which is not presented on the face of the financial
a Explain any difference betweenforlines 3 and line 8
statements but is necessary a fair presentation of the entity’s cash receipts, cash
b Indicate if amount in line 6 is eligible for
payments, cash balances and other statements asfinancing bystatement
IFAD and of
provide reasons
financial for not
position
claiming
2 SIGNIFICANT ACCOUNTING POLICIES
The principle accounting policies adopted in the preparation of these financial statements are set out
below:
A Basis of Preparation: The financial statements have been prepared in accordance with
International Public Sector Accounting Standards (IPSAS) with particular emphasis on Cash Basis
Financial Reporting under the Cash Basis of Accounting
- 44 -
B Cash Basis of Accounting: The cash basis of accounting recognizes transactions and events
only when cash is received or paid by the entity.
C. Foreign Currency Transactions: Foreign currency translation for the income and expenditure
account items are converted using the actual historic exchange rate at the conversion from
designated to local account. Where part of the expenditures has to be met from the proceeds of
subsequent draw downs from designated to local account, this is done on First in First out (FIFO)
basis. All local expenditures paid from the local accounts/currency are translated back to the USD
at the actual rate used for the transfer from designated to local account. Cash balances held in
foreign currency are reported using the closing rate. Gains/Losses on foreign currency
transactions/balances are dealt within the Statement of Designated Account Activities.
3 BUDGET:
The budget is developed on the same accounting basis (cash basis), same classification and for the
same period as the financial statements. Material variances (above XXX) have been explained as
notes to the financial statements
4 DIRECT PAYMENTS
These payments were made directly by IFAD from the Loan/Grant account to the specified
supplier/service provider in accordance with the terms and conditions of the financing Agreement
Include here details of direct payments
WA, Date, currency and amount received, amount in local currency
4. CASH/FUND BALANCES
Reconciliation
201X 201X-1
ERN ERN
Cash Accounts XXX XXX

Advances XXX XXX
XXX XXX
Analyses of aging of advances to be included detailing and providing reasons for long
outstanding advances
4-a CASH DETAILS

200X 200X-1
ERN ERN
A/c No______ Project Operating/ Holding Account XXX XXX

A/c No_______ IFAD Designated Account (as per SA
Statement) XXX XXX
Petty cash XXX XXX
XXX XXX
- 45 -
5 GOVERNMENT COUNTERPART FUNDS
Details here. Cumulative contributions, yearly contributions (compared to budget). For

information only Include details of tax treatment and counterpart contributions as tax
exemption.
Note 7: OTHER DONOR FUNDS
200X 200X-1
ERN ERN
List of Donors XXX XXX

XXX XXX
XXX XXX
XXX XXX
Add details of cumulative and expected contributions
Note 8: OTHER RECEIPTS
200X 200X-1
ERN ERN
Interest Income XXX XXX

other income (specify) XXX XXX
XXX XXX
XXX XXX
Note 9: NON-CURRENT ASSETS (this is for disclosure purposes only since under IPSAS
Cash basis fixed assets should have be expensed but controlled through assets register)
Financial Statement Currency

Vehicles Motorcycles Equipment
201X 201X-1 201X 201X-1 201X 201X-1

Opening Balance XXX XXX XXX XXX XXX XXX
Additions (Statement
of Receipts and
Payments) XXX XXX XXX XXX XXX XXX
Disposals XXX XXX XXX XXX XXX XXX
Closing Balance XXX XXX XXX XXX XXX XXX
This schedule includes all assets acquired from the commencement of the Project.
These assets are stated at cost. Existence and beneficial ownership to be verified by
the auditors. Apart of the summary schedule, details schedules for yearly changes to
be included.
Note 10: YEARLY PROCUREMENTS
Include here a list of the yearly procurements including methods
- 46 -
Note 11: ALLOCATION AND USE OF THE FUNDS OF THE GRANT
Available
Allocated Disbursed Balance
Category SDR USD SDR USD SDR USD

I. Civil Works XXX XXXX XXXX XXXX XXXX XXXX
II. Vehicles,
Motorcycles,
Equipment and
Materials XXX XXXX XXXX XXXX XXXX XXXX
III. Agricultural
and Livestock
Inputs XXX XXXX XXXX XXXX XXXX XXXX
IV. Technical XXX XXXX XXXX XXXX XXXX XXXX
Assistance,
Training
Workshops and
V. Recurrent XXXX XXXX XXXX XXXX XXXX XXXX
costs-
operations and
maintenance
XXXX XXXX XXXX XXXX XXXX XXXX
Note 12: RECONCILIATION OF FUNDS DISBURSED BY IFAD AND FUNDS RECEIVED BY

THE PROGRAMME
Reconciliation here
- 47 -

PIM For NAP From Davis - 2013

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GOVERNMENT OF THE STATE OF ERITREA

NATIONAL AGRICULTURE PROJECT

PROJECT IMPLEMENTATION MANUAL

I. INTRODUCTION AND BACKGROUND 10

ADDA Agricultural Division of District Administration

NUEW National Union of Eritrean Women

I. INTRODUCTION AND BACKGROUND

4. The provision of a PIM to help guide Project implementation is a Financing Agreement

B. Contents of the PIM Manual

II. PROJECT FRAMEWORK

A. Project Goal and Objective

16. Streamlined Policies and Formalization of Stakeholder Participation – Various informal

C. Project Area, Target Group and Targeting

20. Specific target groups of the Project are:

24. Component 1: Agricultural Water Resources Development – Due to limited water

a. Subcomponent 1.1: Watershed Characterization – Activities under this subcomponent

i. Production of detailed resource information by watersheds. The information will provide

b. Subcomponent 1.2: Improvement of Meteorology and Hydrometry System – In order to

i. Strengthened Hydrometry and Meteorology systems to provide real time information on

c. Subcomponent 1.3: Agricultural Infrastructure Development – Based on the information

i. Irrigation system improved and expanded covering 539 ha of small-scale pressurized

26. Component 2: Integrated Agricultural Production – The objective of this component is to

a. Subcomponent 2.1: Development of National Seed System – This sub-component builds on

b. Subcomponent 2.2 Intensification of Crop Production – The subcomponent aims at

c. Subcomponent 2.3: Livestock Production Support – The objective of this subcomponent it

i. Small-scale Livestock investments promoted and adopted by low income households;

ii. Animal health services strengthened and sustained;

27. Component 3: Programme Support Services – The objective of this component is to

Development Objective: To raise smallholder agricultural production and

Outcome-1: Sustainable physical Outcome-2: Increased

Comp.1: Agricultural Water Resource Development Comp.2: Integrated Agricultural Production

Output-1.1: Output-1.2: Output-1.3: Output-2.1: Output-2.2: Output-2.3:

Sub-component 1.1: Watershed Characterisation Sub-component 2.1: National Seed System

Comp.3: Project Support Services

III. INSTITUTIONAL AND IMPLEMENTATION ARRANGEMENTS

A. The Collaborative Framework and Implementation Arrangements

Annual Work Plan and Budget Preparation and Approval Schedule

B. Monitoring and Evaluation (M&E)

51. Start-up Workshops – At the beginning of Project implementation, a start-up workshop

54. Performance monitoring will focus on annual implementation performance, by comparing

56. Input/Activity/Output monitoring (relevance, efficiency) is concerned primarily with the

 Review current progress compared to planned activities, and expenditures compared to

64. RIMS is based on a hierarchy of indicators which consist of:

 The % reduction in the prevalence of child malnutrition disaggregated by gender.

IV. ENVIRONMENTAL SCREENING, MITIGATION AND MONITORING

A. Environmental Screening Procedures

B. Environmental Evaluation Procedures

C. Mitigation of Environmental Impacts

PART II - FINANCIAL MANAGEMENT SECTION

NAP: A shared fiduciary interest

Responsibility under the founding documents:

 “make arrangements to ensure that the proceeds of

GoE  Ensure proper management of resources in order to

Treasury Function including

Committi ng Funds- Financial Reports & Withdrawal

AWPB Preparation and Control

V. PROJECTS COSTS AND FINANCING

VI. ADMNISTATION MANAGMENT/ ROLES AND RESPONSIBILITIES OF KEY ACTORS IN NAP

Fig 1. Financia l Ma nagement Players/ Information Flow

Director of Planning and Head of Finance

Project Financial Controller-

Zoba Level (ZPCO) NAP

Reporting National Level Staff