Good governance is a critical challenge facing Cambodia in its efforts to sustain economic growth, reduce poverty and attain the Cambodia Millennium Development Goals. Accordingly, the Royal Government of Cambodia (RGC) gives prominence to improving governance in its Rectangular Strategy 2004-2008, the Governance Action Plan, and the Decentralization and De-concentration Strategic Framework. One important initiative of RGC in this regard is the planned Demand for Good Governance (DFGG) Project, which will be supported by grant financing from the International Development Association (IDA).

The development objective of the DFGG Project is to promote good governance in Cambodia in order to sustain economic growth and poverty reduction. As elsewhere, efforts to improve governance in Cambodia have focused predominantly on supply-side instruments (e.g., more effective public administration and financial management, delivery of public services, etc,). While these are necessary and useful, better and more lasting results will be achieved if complemented by increased social accountability (i.e., more demand-side pressure).

The DFGG Project shall improve governance quality in Cambodia by building the capacities of institutions, and supporting programs/projects and coalitions, that promote, mediate or address demand for good governance in the context of a few key areas in RGC's reform agenda. This will result in more effective design, implementation and monitoring of key reforms, and more transparency, accountability and responsiveness of the state to citizens.

The Ministry of Interior (MOI) has been assigned by the Royal Government of Cambodia to be the lead agency in the preparation of the DFGG Project. Preparation work, including pre-implementation activities prior to project effectiveness, has been programmed over a 52-week period and is expected to start in early 2008. Overall management of preparation is the responsibility of an MOI Undersecretary of State who has been designated as Project Coordinator. Preparation will involve coordination and supervision of a number of preparatory studies to be undertaken by consultants and, based on their findings, recommendations for eventual project design and institutional arrangements. Project preparation will require systematic engagement of a range of stakeholders from the government (both national and sub-national levels), donors, civil society and World Bank.

The objective of this consulting assignment is to design systems for financial management and disbursement for the DFGG Project, in order to ensure (a) that funds for the Project are used efficiently and for their intended purposes and, (b) that all financial requirements and obligations of the RGC and World Bank are complied with (in particular, the Government regulations, rules and guidelines, the Development Grant Agreement, the Project Appraisal Document, and the World Bank Financial Management and Disbursement Guidelines).

This consulting assignment will be carried out by an International Consultant (“the International Consultant”) and a National Consultant (“the National Consultant”). The scope of work for the Consultants will consist in designing the financial management and disbursement system and arrangements for the DFGG Project.

The financial management and disbursement system and arrangements to be designed should cover all financial relationships and transactions between the different actors in the project, including: the Ministry of Economy and Finance (MEF), the Executing Agency, the state and non-state funding entities, the state and non-state institution grantees and, if necessary, the Project Oversight Committee.

The scope of work of the International and National Consultants will be as follows:

The scope of work of the International Consultant will focus on designing financial management and disbursement system arrangements for the Project. These shall include:

• (a). assessing the financial management and disbursement capacity of MEF, the Executing Agency, the state and non-state funding entities, the state and non-state institution grantees and, if necessary, the Project Oversight Committee
• (b). conducting a review of existing Cambodian financial management and disbursement laws and guidelines (in particular, the government’s Standard Operating Procedures and Financial Management Manual)
• (c). preparing a financial management and disbursement manual, and
• (d). guiding the preparation of quality training materials on financial management and disbursement for use in training courses to be provided to DFGG project management staff and other project actors

3.2 National Consultant

The scope of work of the National Consultant, who will work under the guidance of the International Consultant, will be as follows:

• a) reviewing World Bank and Cambodian government regulations and procedures with respect to the financial management and disbursement of ODA-financed projects including, among others, the harmonized FMM prepared by the Cambodian government
• b) contributing to the design of the financial management and disbursement systems and arrangements for the Project
• c) preparing, under the direction of the International Consultant, training materials for use in training of trainers, and in short courses for representatives and staff of the different project actors
• d) helping to organize and conduct short training courses for project management staff and other project actors
• e) undertaking any other tasks relevant to this assignment as may be requested by the International Consultant

4. REPORTING AND PERIOD OF PERFORMANCE

The International Consultant will be contracted for a period of 120 days, while the National Consultant will be contracted for 120 days. Commencement date is set for March 1, 2007.

The Consultant-team will deliver the following three written outputs:

4.1 Assessment Report of Financial Management and Disbursement Capacity

The assessment will include the Executing Agency, the state and non-state funding entities, the state institution grantees and, if necessary, the Project Oversight Committee. It will cover the following areas:

• (a). general features of the existing financial management and disbursement system
• (b). existing payment procedures for goods and services purchased
• (c). accounting system, including chart of accounts, books of accounts and forms used
• (d). financial management and disbursement unit organization and staffing
• (e). internal controls, review and approval systems
• (f). internal and external audit support systems
• (g). financial reporting and monitoring system and
• (h). general risk assessment

4.2 Financial Management and Disbursement Manual for the DFGG Project

At a minimum, the manual should include the following:

• (a). financial management responsibilities of the different project actors
• (b). organizational structure and staffing pattern for financial management and disbursement
• (c). financial planning and budgeting
• (d). financial policies and standards
• (e). fund flow and disbursement arrangements
• (f). internal controls
• (g). financial accounting policies, systems and procedures
• (h). chart of accounts and books of accounts
• (i). bank accounts
• (j). handling of project expenditures and advances
• (k). financial management reporting and monitoring processes
• (l). internal and external audit systems
• (m). Other financial management and disbursement aspects as elaborated in 3.1 and 3.2

The Manual should differentiate procedures for financial management and disbursement-related activities at different levels of the project, such as: Ministry of Economy and Finance (MEF), Executing Agency, the state and non-state funding entities, the state and non-state institution grantees and, if necessary, the Project Oversight Committee.

4.3 Materials for Financial Management Training

The training materials shall be used for training of trainers seminars and short courses in financial management and disbursement for representatives and staff of the Ministry of Economy and Finance, the Executing Agency, the state and non-state funding entities, the state and non-state institution grantees who shall receive support from the DFGG project, and members of the Project Oversight Committee.

The first draft of the Financial Management and Disbursement Manual and the training materials shall be reviewed by the MOI Preparation Team and the World Bank Task Team. The final versions shall be prepared by the Consultant-team, taking into account the comments and recommendations received. This should be submitted within ten days from the receipt of the comments. Training courses delivered.

5. RESOURCES TO BE PROVIDED BY MOI

The Consultant-team will work with the Project Preparation Team that has been organized by MOI to oversee the preparation of the DFGG project.

Aside from providing office space, MOI will also provide the Consultant with administrative support including technical and communications facilities, and assistance in making appointments and travel arrangements, organizing meetings and workshops, distributing documents, and other provisions necessary to facilitate the work of the Consultants.

6. INSTITUTIONAL ARRANGEMENTS

The Consultants will be based in Phnom Penh at the office of the MOI. She/he will work under the direct supervision of the MOI Under Secretary of State who has been designated as the Project Coordinator for DFGG preparation, and under the guidance of the Project Team Leader.

The Consultants are expected to interact closely with (a) the Procurement Consultants, (b) the Consultant responsible for the Detailed Design of Project Implementation Arrangements and (c) the Project Team Leader, who will prepare the Project Implementation Plan and Operations Manual.

The Consultants will coordinate closely with all the other consultants engaged in preparation and the MOI Preparation Team. They will also, in coordination with the Project Team Leader, interact with the Bank task team as needed.

7. REQUIRED EXPERTISE AND QUALIFICATIONS OF CONSULTANT

7.1 International Consultant.

This position is subject to international recruitment.

The Consultant must be a citizen of a member country of the World Bank, and will have the following qualifications and experience:

A Master’s degree or equivalent in accounting, finance, particularly in the areas of project management and administration, and other relevant disciplines

At least 10 years global professional experience in financial management, accounting and disbursement in ODA-assisted development projects, and extensive experience in public expenditure management and public project financial management

Practical experience in World Bank and RGC project financial management policies and processes

Significant supervisory and team leader experience with demonstrated interpersonal and communications skills. While she/he should be able to work independently, she/he must also be able to provide guidance and transfer knowledge and skills to colleagues and government counterpart staff

Computer literacy, with high proficiency in the use of standard software packages, and excellent written and oral communication skills in English. Understanding of the Khmer language would be an advantage

Work experience in Cambodia and other Southeast Asian countries is preferred

7.2 National Consultant.

This position is subject to local recruitment. The National Consultant will have the following qualifications and experience:

A Bachelor's degree or equivalent in economics, accounting, finance (particularly in the areas of project management and administration), or other relevant disciplines. Specialized training in areas relevant to the project will be an advantage

At least five (5) years of professional experience in the areas of financial management, accounting and disbursement in ODA-assisted development projects

Relevant knowledge of public and project financial management in Cambodia (including the FMM for ODA-assisted projects, and the budget process and the flow of funds in Cambodia). Familiarity with World Bank financial management policies and procesdures

Demonstrated experience in conducting seminars and training workshops on fiduciary subjects

Computer literacy, with high proficiency in the use of standard software packages

Fluency in spoken and written English and Khmer