Development of Standard Operating Procedure (SOP) for Provincial Ministry of Finance (MOF)

USAID Public Financial Management (PFM) Project

Terms of Reference for Short-Term Technical Consultant

1.  Background

Deloitte Consulting and WSP, together with Georgia State University and the Niti Foundation are implementing a five-year USAID funded Public Financial Management Program (USAID PFM) whose purpose is to provide technical assistance and strengthen Public Financial Management (PFM) functions, performance, and accountability of targeted agencies at the federal, provincial, and local levels of government, and to provide targeted assistance to the Government of Nepal (GON) aimed at strengthening national PFM institutions and systems to sustainably advance PFM.

The project commenced in October 2022 and will run for a five-year period to October 2027. The major stakeholders of the project are selected Federal Agencies including Ministry of Finance (MOF), Ministry of Federal Affairs and General Administration (MOFAGA), Financial Comptroller General’s Office (FCGO), PEFA Secretariat, National Natural Resources and Fiscal Commission (NNRFC), National Planning Commission (NPC), Office of the Prime Minister and Council of Minsters (OPMCM), Public Procurement Monitoring Office (PPMO), Provincial Governments of Madhesh and Lumbini Province, and Local Governments located in these two provinces.

The objectives of the Project are to provide technical assistance and strengthen PFM functions, performance, and transparency and accountability of targeted agencies at the federal, provincial, and local levels of government, and to provide targeted assistance to the GON aimed at strengthening national PFM institutions and systems to sustainably advance PFM. The Project’s two objectives and key activities are: 

In general, the expected outcomes of the Project are to enhance transparency and accountability by accomplishing: 

• Selected PFM related laws or policies or regulations or standards or norms or guidelines or tools or manuals developed.
• Selected local governments have increased their own resource revenue.
• Elected and Government officials trained on public financial management system.
• Selected PFM institutions, governments and agencies adopted improved public financial management system.
• Selected local governments have improved gender-responsive budgeting. 
• Coordination mechanisms for coordination are established.
• Standardized training modules in the PFM disciplines are developed. 

2.  Purpose

The purpose of this assignment is to engage a Consultant to work with the provincial Ministries of Finance of Madhesh and Lumbini Province and the USAID PFM Project to develop a well ordered and structured Standard Operating Procedure (SOP) for the Provincial MOF focusing on functional and procedural requirements of the Ministry in order for improving its proficiency in carrying out its functions, for incorporating all appropriate functions which should be carried out by the Ministry, and for harmonizing the functionalities of the finance ministries based on the existing legal frameworks and best practices.

(Please note that the ToR is subject to change slightly per the Government Counterpart’s requirements which will be informed to the applicants prior to selection)

3.  Rationale

Nepal transformed from a unitary system to federal system of governance with three tiers of governments namely federal at central, provincial at 7 provinces and local levels of 753 municipalities six years ago. There are altogether 761 governments in the country having 761 separate fiscal and treasury systems. The new Constitution and other relevant legal frameworks established grounds for fiscal federalism based on the federal system of governance. For carrying out governmental functions and service delivery, organizations of federal and provincial governments are almost identical in nature and structure, whereas local governments have different organization structures. In this context, provincial governments have established the Ministry of Finance to carry out functions related to economic affairs, budgeting and MTEF, revenue administration, and other PFM topics. In some provinces, it is also named as Ministry of Economic Affairs, e.g., Lumbini Province. Since all provincial entities have been established not long ago, they are trying to identify and determine their roles and scope of work appropriately and in complete manner based on federal entities' functions, and the Ministry of Finance is not an exception. In view of this, a standard operating procedure is needed to enable the finance ministry's officials to carry out their function proficiently, and to capture all relevant and appropriate function related to economic affairs, revenue administration, and other PFM associated functions. 

4.  Methodology

The methodology to be undertaken for this assignment shall be as follows:

i.  Consultation meetings with concerned officials of federal Ministry of Finance, Office of the Chief Minister and Council of Minister (OCMCM), provincial Ministry of Finance, provincial planning commission, Financial Comptroller General Office (FCGO), Provincial Treasury Comptroller Offices (PTCOs), and others.

ii.  Collect relevant data, information, and views from concerned agencies through primary sources such as questionnaires, interview and secondary sources i.e. published documents through appropriate sources. The Consultant should prepare the minutes of meeting / interview and include the photographs of consultation meetings.

iii.  Triangulate the collected data, information, views, feedbacks with the consultation meetings and published materials collected from the concerned sources as well as validation workshops with concerned officials or representatives of provincial government, professional institutions, and development partners.

5.  Tasks

This work assignment is to develop Standard Operating Procedure (SOP) for the Provincial MOF focusing on functional and procedural requirements of the Ministry. The Consultant shall carryout the following tasks in order to achieve the objective: 

i.   Review of Literature: The consultant should review the related literature of the federal and the concerned Provincial Government. The consultant should mainly review the SOP of Federal Ministry of Finance, Provincial Government (Division of Work) Regulation, Appropriation Act, Finance Act of concerned Province and the applicable laws and regulations of GON, PGs and LGs. Similarly, the Consultant should review the Fiscal Responsibility and Financial Procedure Act, 2076 and Regulations 2077, Intergovernmental Fiscal Transfer Act, 2074 of the federal government and that of the PGs. Likewise, the Consultant should also review the relevant laws, directives, progress reports, PFM related publications, annual budget and budget laws, economic survey and appropriation provisions under the Financial Procedure and Fiscal Responsibility Act of GON and PG’s. Similarly, the Consultant should study the workflow and decision-making steps followed by the provincial Ministry of Finance. The Consultant should have a thorough understanding of Medium-Term Expenditure Frameworks (MTEF), Budget and Program Templates, guidelines, circulars and the yearly program/s prepared by the respective Ministry of Finance. The Consultant should be able to extract reasonable activities and summary of the relevant law, document and reports that is useful in preparation of SOP through these reviews.

ii.    Conduct consultation meetings and discussions with concerned officials as appropriate and dig into the issues, problems and reform measures that the agency authorities are willing to address. The Consultant should prepare brief outline of the respective officials' inputs and incorporate the relevant issues and measures that is useful for the assignment.

iii.   Conduct study on the best practice on functionalities of the finance ministries.

iv.   Identify relevant/appropriate functions and define the process and procedures for carrying out these functions in a well ordered and structured approach.

v.   Prepare a draft report for comments and suggestions from the provincial Ministry of Finance and USAID PFM Project. 

vi.  Manage and conduct workshops in order to validate, qualify, and finalize the developed SOP; and 

vii. Develop and submit the concluding SOP in the form of Final Report incorporating the comments from the concerned Government Counterparts and USAID PFM Project and/or as stated in the deliverables.      

6.  Deliverables

The Consultant shall submit the following reports:

• Submit an Inception Report with detailed work plan in English language within 7 days of signing the agreement. The Consultant should clearly mention sequence and flow of key activities of ToR with the start time and completion within the duration of this ToR. The Consultant should also describe the methodology for carrying out the assignment and precisely mention how the outputs and deliverables will be achieved. The formats of the report will be as agreed and shall be in line with the scope of work of this ToR. 
• Submit the First Draft Report in Nepali within 20 days of the agreement. The report should include, but should not be limited to, the following contents:
  • Introduction, organization and management of Provincial Ministry of Finance
  • Detail explanations of the task to be performed by the Ministry of Finance
  • Roles and responsibilities of each divisions/sections of the ministry
  • Concerned Acts, Regulations and Guidelines
  • Documents processing steps of each task
  • Descriptions of what needs to be done to complete each step/task 
  • Timeline for completion of each task
  • Discussion of decisions making process and decisions to be made
  • Communication of decisions to concerned agencies
  • Check lists, annexes and templets as required
• Conduct Validation workshops / meetings within 7 days of the submission of the First Draft Report, utilizing presentations and/or other methods to facilitate discussion. Nepali materials shall be used to facilitate clear discussions.
• Submit the Final Report in Nepali within 45 days of the agreement incorporating the comments / suggestions received from the workshops/meetings.
• Summary Consultant's Work Completion Report describing actions taken to fulfill the above deliverables and provide observations/recommendations for any additional next steps in the process of rolling out of the Guidelines/manuals in English.

All deliverables shall be submitted in editable Microsoft documents, in electronic format. The final report shall also be provided in at least two hard copies and PDF format.

7.  Period of Performance: 

The duration of this assignment will be 45 days. The estimated start date of this assignment is May 08, 2023 with a completion date of July 31, 2023. 

8.  Technical Directions/Supervision:

i.  The Consultant will work under the direction and supervision of the Secretaries of provincial Ministry of Finance and Objective 1 Lead (Lead PFM Expert) 

ii.  The Project COP/DCOP will also monitor the Consultant’s work as and when required

iii.  The Consultant shall carry out her/his tasks in close collaboration and coordination with the officials of provincial ministries of finance and the Project team

All deliverables required hereunder will be reviewed and approved by Secretaries of provincial ministries of finance. 

9.  Required Qualifications and Experience of the Consultant:

The Consultant should at a minimum have the following qualifications:

• Master’ Degree in Business Administration or Management or Economics or in relevant subject;
• Have general experience of working in the Ministry of Finance Government of Nepal in the field of  budget and program, revenue management, policy analysis, planning and monitoring, foreign aid management, financial sector management, tax administration and financial management for at least 15 years;
• Experience in the field of preparing / execution /monitoring and evaluation of the budget, revenue policy, macroeconomic policy will be given high priority;
• Good communication skills (oral and written) in Nepali and English languages;
• Good report writing skills;
• Proficiency in Microsoft Office software (Word, Excel, PowerPoint, etc.); and
• Ability to work in a multi-cultural environment and exhibit good inter-personal skills.

10.  Facilities/Utilities and Logistics to be provided: 

The Consultant shall be expected to spend time at the Project Office and from home.  As deemed necessary, the Project will provide working space, internet connection, printing and photocopy facilities as required to complete the assignment. The consultant must provide her/his own computer, including Microsoft Office software to produce compatible documents for review.

All the required field visits, consultative meetings and workshops shall be arranged in coordination with the concerned Government, whereas logistics and allowances shall be managed by the Project

11.  Contractual Amount and Payment Terms:

This will be a fixed price assignment awarded in Nepali Rupees. Payments shall be made in Nepali Rupees in the following manner.

i.  25 percent payment upon submission and acceptance of the inception report, including a detailed work plan for the assignment; (Deliverable 1)

ii.  40 percent payment upon submission of first draft Guidelines/Manuals which is ready to be presented at validation workshop; (Deliverable 2), and

iii.  35 percent payment after completion of the validation workshop, submission and acceptance of final report (Guidelines/Manuals for Audit Irregularities Settlement for Local Governments) and the Consultants’ Work Completion Report (Deliverables 3, 4.and 5).

Travel costs, including the number of trips and length of trips should be estimated. Travel will be arranged and approved in advance by the Project, and actual costs will be reimbursed based on the Project’s standard practices and rates for hotel, per diem, and other billable costs (e.g. meeting costs). 

Workshop costs shall be borne directly by the Project. Necessary arrangements for workshop costs (To Be Decided/Determined) if necessary, will be arranged by the project.

12.  Application Instructions:

Only individual consultants will be considered for this opportunity. 

Interested and qualified individuals should email the following documents to recruitment@pfm-nepal.com with subject line “TOR-OBJ1-2023-02 Development of Standard Operating Procedure (SOP) for Provincial Ministry of Finance (MOF).”

(a) Cover letter

(b) Recent CV 

(c) Dates of availability 

(d) Contact information of three professional reference, and

(e) Daily rate.  A biodata form may be asked of the successful candidate in order to verify the daily rate.

Application deadline: May 4, 2023

Only shortlisted candidates will be contacted. The organization reserves the right to reject any/all applications without assigning any reason.