Proposed grant from the global environment facility trust fund
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ReportingThe administrative unit will be responsible for the preparation of project financial statements in line with the Bank requirements. The UEPEX system will be used to produce the requisite financial statements following Public Sector Accounting standards in Argentina. The public sector accounting rules are comprehensive and consistent with public international standards. Said standards are set by the Accountant General Office, Contaduría General de la Nación (CGN). A draft format of the annual financial statements to be prepared by the project and acceptable to the Bank will be part of the Operational Manual. In addition, the administrative unit shall also prepare semiannual Financial Monitoring Reports (FMRs) comprising at least:
An agreement on FMR’ s formats will be reached by the administrative unit and the Bank and these formats shall also be part of the Administrative OM. Adjustments to the current project’s AOM are needed so as to include FMR requirement, external audit TOR and Chart of Accounts for the new project as well. External Auditing ArrangementsProject financial statements will be subject to an annual financial audit under Terms of Reference and by an auditor acceptable to the Bank within six months of each fiscal year. Argentina’s Supreme Audit Institution, Auditoría General de la Nación (AGN) has been proposed to carry out the GEF project external audit. The annual audit will cover all funding and expenditures reported in the project financial statements. For audit purposes the fiscal year will be the calendar year. Acceptable audit reports were submitted to the Bank in previous project implemented by the SAGPyA while Bank requirements were generally complied with. Since 1999 project’s audit reports have been reviewed in the CMU by Regional FM Team. The following chart shows audit results of previous Bank-financed project implemented by the implementing unit of the proposed GEF.
** Source: own reviews 1. Most of the auditors’ qualification arose in relation to some accounting errors but did not indicate material Financial Management issues. The other point raised by the auditors was a claim against SAGPyA presented in courts by a former employee and did not involve the loan funds and was reported in 2002 and 2003 audits as well. 2. Incorrect exchange rate applied for reimbursing pre-financed expenditures: in first years of implementation the project with its own resources pre-financed the Bank’s share of expenditures. Then the PIU reimbursed itself from the Special Account but assuming an incorrect exchange rate to convert pesos into dollars which of course generated ineligible expenditures. This issue was raised during supervision and is being properly addressed by SAGPyA although it is pending the submission to the Bank of a Withdrawal Application with other eligible expenditures. 3. Some accounting differences between expenditures in the Statement of Cumulative Investment and the Bank disbursement records as well as some errors in the application of percentages for expenditures claimed in SOE # 58. 4. Some minor accounting differences between expenditures in the Statement of Cumulative Investment and the Bank disbursement records and some immaterial reporting errors. 5. Qualified opinion mainly because cash advances to subprograms were registered in Investment accounts causing a $63.900 credit under estimation. SOE St., the auditors reported that an amount of $70,690.73 has been given as cash advances which were justified in SOE No. 16 as expenditures under category 3(a) The following chart identifies the audit reports that will be required to be submitted by the project and the due date for submission.
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