The objective of the project is to support the office of the C&AG in their efforts to consolidate the government's accounting and reporting system in order to reach a level matching international auditing and accounting best practice. Principally the project aims to strengthen institutional capacity of the Foreign Aided Project Audit Directorate (FAPAD), and establish a standardized software system for conducting project accounting and reporting.

The project has the following three components addressing particular issues. The three components are:

• Component 1: Develop modern audit monitoring technique and reporting standards in the Foreign Aided project Directorate (FAPAD) of the Comptroller and Auditor General's Office (C&AG).
• Component 2: Develop a computerized Project Accounting Manual System (PAMS) and the introduction of the necessary training and implementation, through piloting in a specific Ministry.
• Component 3: Establish a methodology and standards for asset management system and testing on a pilot basis of an asset management system.

The key activities being undertaken under each of the three components and their corresponding tasks are as follows:

Component 1:

• Improvement of auditing skills of FAPAD auditors:
• Revisit the existing FAPAD manual to effect updating and upgrade the manual to address performance audit, environment and IT audit.
• Pilot audit on above subjects should be concluded and field-­tested model report should be prepared using samples of donor funded projects.
• Design training module for trainers based on revised FAPAD manual.
• Prepare training module for the FAPAD auditors based on recommendation of the appraisal report of the consultant.
• Provide training to FAPAD auditors using above training modules.
  • Develop computerized Audit Monitoring System:
• Review existing Audit Monitoring System (AMS) and the findings and recommendations made in the appraisal report. Determine the implication of the recommendations of appraisal report and suggest appropriate action.
• Develop software platform for application development and upgrade the existing software for monitoring and follow up of audit activities. The new software, Project Audit Monitoring System (PAMS) shall be able to meet the requirements of the Public Accounts Committee (PAC), the C&AG and the Development Partners by providing updated information on audit status.
• Operationalize the system in respect of some ongoing projects and document the experience for future reference.
  • Training on PAMS:
• Train the relevant officials of FAPAD as well as identified officials on PAMS operation.
• Suggest maintenance of the PAMS, including trouble-shooting arrangements.
  • Training on IT and English Language:
• Provide training on basic IT skills and English language.

Component 2:

• Development of computerized version of the project accounting manual (PAMS):
• Develop new software in line with GOB software. The new software should be able to meet the present problem of project accounting.
• New computerized system should be able to produce Statement of Expenditure (SOE), which will help DG FAPAD to produce its report automatically and inputs for the MACS system at the FMU or CAO.
  • Pilot testing of software:
• The new software should be tested on a pilot basis in a particular Ministry and all its development projects.
  • Training of users and rollout in pilot Ministry:
• Design training module for the trainers based on new software of project accounting. Training should be conducted for trainers of users of the system.
• Prepare training module for relevant officials of CGA, Ministry and its projects. Training should be conducted for the relevant officials.
  • Review and disseminate recommendations through workshops for further rollout:
• Arrange workshops for further rollout of the new system across the GOB.
• Prepare a comprehensive plan for further implementation by the government.

Component 3:

• Study of existing asset management process:
• Examine the existing Govt. policy on asset management system.
• Main focus of the review will be on: Procurement, distribution and recording system of assets procured under Government and donor funds; Whether there is any valuation system of assets; Whether there is any disposal and write off policy; Whether there is any physical verification system exists for assets including their tracking system.
• Identify knowledge gap and training need of the officials responsible for above-mentioned work.
• Examine the possibility of maintaining a database (software) of physical assets procured under Government and donors' fund.
  • Development of asset management principles:
• Study the report on existing asset management system and identify findings and recommendation that would be useful for development of asset management principles.
• Develop principles about asset management including valuation, disposal and physical verification keeping in mind the peculiarity of cash basis of accounting followed in the Govt. system.
• Suggest how the value of an asset should be used to budget for its maintenance taking into account the class and type of asset.
• Feasibility of the use of depreciation method needs to be evaluated and suggestion should be given about its introduction.
• In the absence of accrual method, how salvage value of an asset will be determined and some guidelines should be given.
• Examine existing international accounting standards applicable for public sector asset management and suggest steps for their implementation in the Government system.
  • Creation of pilot asset management system:
• Develop software reflecting asset management principles and procedures.
• Apply and test the software on a pilot basis in Ministry of Health and Family Welfare.
  • Review and disseminate the experience through workshops and demonstrating the assets management system for further rollout in other Ministries:
• Prepare a report with recommendations to be followed by the Government for further rollout of the new system.