Approved by:

Head of Main state Tax Inspectorate

______________________ Serghei PUȘCUȚA

“______”_________________________ 2016

Main State Tax Inspectorate

Ministry of Finance

REPUBLIC OF MOLDOVA

Tax Administration Modernization Project (TAMP)

P127734

PROJECT OPERATIONS MANUAL

Developed by MSTI
May be reviewed and adjusted only with World Bank’s approval

September 2016
Document Control
Version History
Date Version Change made Updated by
21 April 2016 0.0 Initial draft Olga Babanschi
Version after an initial review by the procurement and
29 April 2016 1.0 financial management specialists of the local office of Dorin Corcimaru
the World Bank.
30 June 2016 2.0 Changes in the art. 6.5 related to accounting policies. Dorin Corcimaru
Changes in the art. 2.3. Project results and art. 3.1.
Institutional implementation arrangements.
20 July 2016 3.0 Dorin Corcimaru
Improvements to Chapters 4, 5 and 6.
Previous Annex 4 deleted – not relevant to TAMP
08 August 2016 4.0 Annex 7 with ToRs for PMU staff added Dorin Corcimaru
Added the ToR for the Project Manager to the Annex 7,
16 August 2016 5.0 Anastasia Movilă
minor changes in the text

Approvals
Name Position Signature Date

Revisions
Nume Position Signature Date
 TABLE OF CONTENTS
1. LEGAL BASIS AND CONSTITUTIVE DOCUMENTS ......................................................................... 5
2. DESCRIPTION OF PROJECT ACTIVITIES ......................................................................................... 6
2.1. OBJECTIVES AND MAIN INDICATORS.................................................................................................. 6
2.2. PROJECT COMPONENTS ...................................................................................................................... 6
2.2.1. Component 1: Tax legislation reform ........................................................................................... 6
2.2.2. Component 2: Institutional development ...................................................................................... 7
2.2.3. Component 3: Operational Development...................................................................................... 8
2.2.4. Component 4: IT Infrastructure and System Modernization..................................................... 10
2.2.5. Component 5: Project Management and Change Management................................................ 11
2.3. LENDING INSTRUMENT ...................................................................................................................... 11
2.4. CONDITIONS OF EFFECTIVENESS OF THE FINANCING AND LOAN AGREEMENTS. ........................... 12
3. IMPLEMENTATION ............................................................................................................................... 13
3.1. INSTITUTIONAL AND IMPLEMENTATION ARRANGEMENTS .............................................................. 13
3.1.1. Project Steering Committee (PSC) ............................................................................................... 13
3.1.2. Project Coordinator ...................................................................................................................... 13
3.1.3. Project Managers and Specialist Consultants for the PMU........................................................ 14
3.1.4. Private Sector Advisory Panel (PSAP)......................................................................................... 14
3.1.5. Administrative regulations ........................................................................................................... 14
3.2. RESULTS MONITORING AND EVALUATION ....................................................................................... 14
PROCUREMENT ....................................................................................................................................... 16
4.1. BACKGROUND .................................................................................................................................... 16
4.2. PROCEDURES AND THRESHOLDS ...................................................................................................... 17
4.3. PROCUREMENT ARRANGEMENTS ..................................................................................................... 21
4.4. PROCUREMENT PLAN ........................................................................................................................ 22
4.5. FREQUENCY OF PROCUREMENT SUPERVISION ................................................................................ 22
5. DISBURSEMENT PROCEDURES ......................................................................................................... 23
5.1. DESIGNATED ACCOUNT ..................................................................................................................... 23
5.2. DISBURSEMENT ARRANGEMENTS ..................................................................................................... 23
5.3. WITHDRAWAL OPERATIONS ............................................................................................................. 23
5.4. REPORTING ON USE OF FINANCING PROCEEDS ............................................................................... 25
6. FINANCIAL MANAGEMENT, ACCOUNTING AND REPORTING................................................ 27
6.1. INTRODUCTION .................................................................................................................................. 27
6.2. FINANCIAL MANAGEMENT ACTION PLAN ........................................................................................ 27
6.3. PLANNING AND BUDGETING .............................................................................................................. 27
6.4. FLOW OF FUNDS AND STEP SEQUENCING .......................................................................................... 28
6.5. NATIONAL ACCOUNTING POLICY FRAMEWORK.............................................................................. 31
6 .6 . FINANCIAL REPORTING TO IDA AND IBRD (IFR)........................................................................... 32
6 .7 . FINANCIAL MANAGEMENT STAFF ..................................................................................................... 33
6 .8 . ACCOUNTING SOFTWARE .................................................................................................................. 34
6 .9 . PERIODIC PROCESSING SCHEDULE ................................................................................................... 34
6 .1 0 . INTERNAL CONTROL PROCEDURES ............................................................................................. 35
6 .1 1 . EXTERNAL AUDIT ......................................................................................................................... 36
7. ANNEXES .................................................................................................................................................. 38
ANNEX 1. LIST OF LEGAL ACTS GOVERNING PROJECT ACTIVITIES ..................................................................... 38
ANNEX 2. MSTI ORGANIZATIONAL STRUCTURE CHART ................................................................................... 39
ANNEX 3. RESULTS FRAMEWORK AND MONITORING ........................................................................................ 40
ANNEX 5. SAMPLES OF PROJECT REPORTS ........................................................................................................ 46
ANNEX 6. TORS FOR THE PROJECT STAFF ......................................................................................................... 53
ANNEX 7. TOR FOR THE AUDIT FIRM ................................................................................................................. 74
ABBREVIATIONS AND ACRONYMS

APD Authorization and Payments Department

BD Bidding Documents
COTS Commercial off-the-shelf
CPS Country Partnership Strategy
CQ Consultant Qualifications
DA Designated Account
DPA Department for Payments Accounting
DPI Development Policy Implementation
ECA Europe & Central Asia Region
e-Gov e-Givernment Center
EU European Union
FMS Financial Management Specialist
FSI I.S. FiscServInform
GDP Gross Domestic Product
GPN General Procurement Notice
GRM Government of the Republic of Moldova
IBRD International Bank for Reconstruction and Development
IC Individual Consultant
ICB International Competitive Bidding
IDA International Development Association
IFR Interim Financial Report
IPS Intermediary Status Report
IT Information Technologies
ITMS Integrated Tax Management System
MDL Moldovan Leu
MoF Ministry of Finance
MSTI Main State Tax Inspectorate
MTBF Medium-term budgetary framework
OECD Organization for Economic Cooperation and Development
ONB Open National Bidding
PAD Project Appraisal Document
PDO Project Development Objective
PMU Project Management Unit
PRAMS Procurement Risk Assessment Management System
PS Procurement Specialist
PSC Project Steering Committee
SBD Standard Bidding Documents
SDR Special Drawing Rights
SIL Specific Investment Loan
SOP Standard Operations Procedures
SPE Special Procurement Endorsement
STS State Tax Service
TAMP Tax Administration Modernization Project
ToR Terms of Reference
UNDB United Nations Business Development Portal
WB World Bank
1. LEGAL BASIS AND CONSTITUTIVE DOCUMENTS

The legal basis for the present manual is the Financing Agreement between the Republic of
Moldova and the International Development Association (IDA) and the Loan Agreement
between the Republic of Moldova and the International Bank for Reconstruction and
Development (IBRD) both dated June 28, 2016. The Financing Agreement and the Loan
Agreement were ratified by the Parliament of Moldova by the law no. ____ of September ___,
2016 and promulgated by the President of the Republic of Moldova. The Laws on the
Ratification of the Financing and Loan Agreements have been published in the Official
Gazette of the Government of Moldova no. ___ , art. ___ , and entered into force on ___
October 2016.

The Project was declared effective by the International Development Association and
International Bank for Reconstruction and Development on October __, 2016. (All relevant
legal documents are attached to the Operations Manual, and any eventual legal amendments
affecting them will be included in a legal acts’ folder to be maintained by the project staff.)

The list of legal documents which are directly governing, or may be relevant to, the Project
activities is presented in Annex 1. This list may be amended and adjusted by the
implementation team, without prior approval by the Project Steering Committee and the
Bank, if necessary.

The project is implemented based on a Project Operational Manual (POM), which layouts the
project’s overall operating, fiduciary, and decision making procedures; and results monitoring
arrangements.
2. DESCRIPTION OF PROJECT ACTIVITIES

2.1. Objectives and Main Indicators

The development objective of the TAMP project is to improve revenue collection, tax
compliance and taxpayer services.
The long-term vision supported by the project is a tax administration with streamlined
business processes supported by risk-based compliance management, effective use of
electronic communication with taxpayers, skilled and professional staff, contributing to an
efficient, client-oriented tax administration. The modernized tax administration will improve
the business environment and improve the country's competitiveness.
The immediate beneficiaries are the employees of the State Tax Service who will benefit from
an improved working environment based on streamlined operations and working
methodologies as well as extensive training and access to international best practice provided
by the project. The Government of Moldova and its public finance institutions will benefit
from improvements in the administrative efficiency of tax administration. The ultimate
beneficiaries are Moldovan taxpayers and citizens. Moldovan taxpayers—business
community and individuals—would benefit directly from lower compliance costs and
indirectly through more revenues collected to finance important social and infrastructure
expenditures.
The following indicators have been agreed to evaluate the development impact of the project:
(a) improve revenue collection:
(i) C-efficiency of VAT;
(ii) Domestic gross VAT collection over final consumption net of imports
(b) improve tax compliance:
(i) Additional tax assessments per audit;
(ii) Share of active taxpayers filing income declarations in total registered taxpayers;
(c) improve taxpayer services:
(i) Time required to comply with taxes as reported by Doing Business.

2.2. Project Components

2.2.1. Component 1: Tax legislation reform

This component strengthens the legal framework to facilitate effective and efficient tax
administration and to comply with requirements of the EU-Moldova Association Agreement.
This component consists of three subcomponents:
Sub-component 1.1: Review of Tax legislation compliant with EU-Moldova Association
Agreement. This subcomponent will finance:
(a) A comprehensive revision of tax legislation including based on comparison with
appropriate examples of EU member states to ensure that revised legislation reflects
best practices including those of the EU and is in line with EU-Moldova Association
Agreement requirements. This will include harmonization of VAT and Excise Duties
legislation to European Union (EU) legislation according to clauses and terms settled
in the Republic of Moldova - EU Association Agreement. The consultancy under this
activity will deliver a draft Tax Code.
Sub-component 1.2 Strenthening national legislation and administrative practice to
counter risks of profit shifting and base erosion for the Moldovan tax base This
component includes a risk and needs assessment to determine sources (transactions,
sectors,etc) of base erosion and profit shifting in Moldova. The review will include a
comprehensive assessment of national legislation, available data-sources and provide detailed
recommendations based on international practice. The consultancy would also provide
support to drafting legislative changes where requested.
(b) The sub-component also supports capacity development, including training for MSTI
representatives on specific changes in legislation and development of a training
program to be incorporated in the Training Center’s schedule and delivery of initial
training for trainers.
Sub-component 1.3: Strengthening national tax legislation in order to increase its
effectiveness and the efficiency of tax administration. This subcomponent will provide
analysis for increasing voluntary tax compliance by improving the consistency of primary and
secondary tax legislation, timeliness of access to tax rulings and taxpayers’ access to
information on tax rules. The project will also support improvements in administration of
local taxes and fees.
(c) Review of national legislation to address inconsistencies in primary and secondary
legislation; this will include a comprehensive review of all regulations, normative acts,
by-laws (inventory) to identify bottlenecks and the provision of recommendations and
drafting options to address these.
(d) Analysis of current tax ruling practice from the client satisfaction point of view.
Recommendations on improvement of tax ruling system in terms of institutional
structures and processes, and the development of practical guidance for the the
implementation of tax rulings.
(e) Administration of local taxes and fees. Comprehensive analysis of local budgets’ own
revenues, including efficiency analysis of each local tax and its administration,
analysis of legal and institutional framework of administration of the local taxes and
fees.Recommendations, including cost-benefit analysis, on local tax administration
system in a centralized way by State Tax Service vs by local government based on
applicable international experience.
2.2.2. Component 2: Institutional development
This component focuses on strengthening MSTI as an institution for tax service delivery
through sub-components on organization restructuring, management capacity, human
resources development and communications capacity as it relates to taxpayer service.
Sub-component 2.1: Organization Restructuring. The activities within this main sub-
component will focus on supporting changes in organizational structure, i.e. unification of
current model with 35 independent legal authorities as Territorial Offices into single legal
entity. The sub-component will finance analysis and recommendations on implementation
plans for the new structure of headquarters and local offices. The sub-component will include
transition communication and implementation plans to address the impact of the restructuring
on the staffing needs of the MSTI.
Sub-component 2.2: Strengthening Management Capacity. This sub-component will
strengthen the capacity for strategic management and performance assessment within the
MSTI. It will provide:
(a) development and implementation of performance management system including
performance indicators for MSTI by function/process;
(b) workload and workforce analysis and recommendations for implementation;
 (c) training on strategic management, strategic planning, and leadership.
Sub-component 2.3: Strengthening HR Development Capacity. The sub-component will
finance
(a) training needs assessment, development of a training strategy and curriculum for tax
administration management and staff (in addition to the tax operational training
covered in component 3);
(b) building capacity of the MSTI training center including trhough purchase of technical
and training equipment for the training center and distance learning;
(c) building capacity of MSTI through study tours, managerial/HR training, and language
training;
(d) staff survey and assessment of HR policy, and development of HR policy;
(e) development of carier management framework
Sub-component 2.4: Strengthening Taxpayer Service and Communications Capacity.
The sub-component will finance comprehensive needs assessment of taxpayer service
function, including
(a) analysis of taxpayer services including taxpayer journey mapping and
recommendations on their improvement with an objective of reducing time required to
comply with taxes;
(b) update of taxpayer service and communication strategy and support to its
implementation;
(c) recommendations on development of e-services for taxpayers, website improvements,
and taxpayer aid publication.
Sub-component 2.5: Strengthening Internal Audit Capacity The sub-component will
finance a diagnostic of current capacity for internal audit and best practices and internal audit
including recommendations for strengthening institutional capacity and will offer training in
these areas.

2.2.3. Component 3: Operational Development

This component strengthens MSTI’s operational efficiency by modernizing all key tax
collection operational functions including, filing declarations, tax payment, risk management
and tax audit, collection of tax debts, dealing with tax appeals, and enforcement. Component
activities will streamline business processes, define business requirements and strengthen the
capacity in MSTI staff to implement the new information systems to support the integrated
business functions. The component will include the following sub-components:
Sub-component 3.1: Modernization of tax collection operational functions. The sub-
component will work alongside business process reengineering embedded in the proposed
COTS revenue management system to drive best practices and business process reengineering
within MSTI, especially in reference to the key tax collection functions. It will provide
technical assistance on:
(a) Review and recommendations for procedure manuals and processes for collection
function;
(b) Promotion of electronic filing of tax returns, payments and other communications with
taxpayers (e.g. taxpayer portal, MSTI web site);
(c) Improvements in procedures for payment processing, matching, and attribution to
taxpayer sub-accounts to eliminate manual processing;
 (d) Analysis of the training needs of the returns and payment processing units,
development of a permanent training program for the staff and deliver initial training
in processing, including training of the unit's trainers and study tour of modern tax
administrations operations.
Sub-component 3.2: Strengthening of risk based compliance management across the
MSTI, including the Large Taxpayers Office. This sub-component will provide technical
assistance and capacity development in:
(a) Development of an integrated database of taxpayers (legal entities and individuals)
with data and information inputs from other third party sources; strengthening systems
for information collection from third parties and internal dissemination and use of the
data collected; creation of a central data warehouse that can support all MSTI
operational activities in assessing risks; and development of a protocol for information
exchange with other agencies and procedures for use of third party information by the
MSTI; update of tax gap estimation methodology.
(b) Revision of operating procedures for enforcement and compliance activities to
incorporate international best practices; development of methodologies to evaluate risk
of non-compliance by taxpayers and potential taxpayers for the risk-based tax
administration across taxpayer registration, services, filing, payment and audit. This
would include preparation of algorithms for the ranking of risk of non-compliance and
enforcement priority (e.g. potential value of revenue at risk, probability of failure to
comply or follow-up on commitments to pay outstanding amounts); development of
manuals for industry-specific audits in coordination with the relevant authorities with
interest in the economic sector and in relevant topics such as international taxation and
e-commerce. The component will cover development of compliance management
methodologies for the LTO, e.g., horizontal monitoring.
(c) Development of a permanent training program for auditors and deliver extensive
training including: (i) develop curriculum and training materials to take full advantage
of the audit software and (ii) training in audit techniques covering general audit,
forensic audit, specialized economic sectors and specialized audit techniques
Sub-component 3.3: Tax debts, arrears collection and non-filer. This subcomponent will
focus on improving capability of the MSTI to collect and manage tax debt through:
(a) Review of current regulations, rules, and procedures for the management of arrears
and enforced collection and preparing recommendations to improve the effectiveness
of enforcement and compliance operations.
(b) Development of manuals for tax debt management, arrears collection, and gap
filer/non-filer enforcement.
(c) Development of a permanent training program for the staff and deliver initial training
in recovery of arrears and arrears management along with enforced return filing,
including training of the unit's trainers.
Sub-component 3.4: Strengthening the Capacity of the Legal and Appeals Function.
This component will improve the transparency and streamline the appeals process, ensuring
greater consistency in rulings and reducing transaction coMSTI for tax payers and the tax
administration through:
(a) Development and delivery of a training program for current Legal Department staff
covering training on MoF and MSTI’s business processes and computer systems for
the Legal Department, including on issue of tax resolutions and rulings, and tax
appeals
 (b) Development of methodology and capacity to implement multi-lateral and bi-lateral
tax treaties.
Sub-component 3.5 Tax Fraud. This subcomponent will help the MSTI build auditor
capacity to identify, investigate, and document (in preparation for criminal prosecution) cases
of tax fraud or other economic by financing:
(a) Identification of tax fraud training needs and course delivery;
(b) Technical assistance on rules of evidence and chain of evidence procedures and
relevant training.

2.2.4. Component 4: IT Infrastructure and System Modernization

This component will acquire and implement an Integrated Tax Management Solution (ITMS)
that will unify IT support for all business functions for all taxes administered by the MSTI.
The procurement strategy for the ITMS solution is to tender for a Commercial Off the Shelf
tax solution (COTS) to be configured, customized, tested and implemented by the selected
solution provider based on technical specifications finalized by the MSTI under preparation
grant. Within the project and procurement strategy, it has been recommended that the ITMS
tender include an option for the data center hardware and software provisioning (procurement,
installation, and testing) as part of the vendor bids to ensure all integration and supply issues
are managed by the vendor in case there are any issues with capability of e-GOV Center to
provide for all platform needs as currently envisioned. Installation and testing would be done
in collaboration with the MSTI IT service provider (state owned enterprise FiscServInform
and the e-Government Center under the State Chancellery) and if the option of hardware and
software product selection by the vendor be executed, it would be done in alignment with the
e-Gov architecture and technical specifications within the tender documents. The specified
architecture is a browser based implementation with centralized transaction processing and
data storage under a virtual server environment (M-Cloud – Government Shared Computing
Infrastructure) with data managed by a relational database management system. The tender
would include the option of provisioning hardware devices to replace existing devices in
MSTI that do not meet the minimum technical requirements to support the ITMS applications.
The component will finance procurement of network equipment or services in support of the
restructuring or new COTS solution.
The chosen ITMS solution will include a security access layer that supports configurable role
based system access by staff, transaction audit trails and logging, and support for security
monitoring and investigations. The solution will include business continuity recovery tools
and capability as well as automated fail over for key public facing components.
Vendor implementation will include a data cleansing and conversion to load the operational
databases as well as the data warehouse. This work will require close collaboration with the
MSTI IT service provider FiscServInform as will implementation planning and workload
transition from old systems to the new ITMS. The ITMS will also provide if needed a bi-
directional links to other systems that share data with the MSTI including Customs Service,
Registru, National Social Insurance Chamber and National Health Insurance Company.
The COTS tax application provisioning will deploy modern tax operations functionality
consistent with international good practices for: taxpayer registration, tax declaration
processing, accounting, payment processing, collections and enforcement, objections and
appeals, audit, risk assessment profiling, management reporting, case work flow management
and execution solutions for collections and enforcement, audit, tax rulings, and appeals, and a
document management solution. It also will deploy a taxpayer portal to improve self-service
channels for taxpayers for both electronic filing and tax information enquiries.
Implementation will support risk profiling through the creation of a data warehouse and
provisioning, configuring, and training in use of business intelligence tools and potentially
creation of dependent data marts (a subset of the data warehouse but including other 3rd party
data).
The solution provider will provide training modules, material and training delivery for all tax
functions and the business intelligence, management reporting, and document management
tools. It has been recommended that the tender include ongoing options for application
maintenance.
ITMS will use the GoM’s shared computing infrastructure M-Cloud data center virtual server
environment. It will reuse appropriate existing GoM’s platform e-services provided by the e-
Government Center and will replicate data to the e-GOV business continuity center.
During the gap fit assessment done by the ITMS solution provider, the MSTI may opt to
adopt some good practices included in the vendor solution rather than customize to their
existing business processes..
MSTI will require consulting assistance in project management, management training on the
role of the functional business owner in developing business requirements and user
acceptance testing, system development lifecycle for major IT projects, project management,
and management of change. They would also benefit from periodic reviews of project
implementation and management of change plans, progress against plans, risks, and issues.

2.2.5. Component 5: Project Management and Change Management

Sub-component 5.1: Project Management
Funds under this component will be used to support the functioning of the project
management unit within the MSTI, which will carry out day-to-day project management
including: procurement, financial management, and organization of audit activities; help the
MSTI coordinate project activities and interact with all local and international entities
involved in the project. In addition the subcomponent will finance audit and operational
expenses.

Sub-component 5.2: Change Management

Change management and communications will be financed under this Component as well as
by communications activities in component 2. Emphasis will be on TAMP management of
change strategy, communications plan, and content to address MSTI management and staff
concerns as well as those of both public and private sector stakeholders. The sub-component
will support establishing a private sector advisory panel for consultation to allow a significant
level of citizen engagement in the design and monitoring of reforms.

2.3. Lending Instrument

The lending instrument for the TAMP project is a IPF. Selection of the lending instrument
followed considerations of the technical needs of the STS in managing a comprehensive
institutional reform. The project is financed through IDA credit in an amount equivalent to
five million three hundred thousand Special Drawing Rights (SDR 5,300,000) and IBRD loan
in amount of twelve million five hundred eighty thousand United States Dollars
(US$12,580,000), both totaling to US$20.00 millions. The disbursements are scheduled for a
period of five years, however as the bulk of the project will finance IT system for STS, the
disbursements under the project will be concentrated the in final two years of implementation.
2.4. Conditions of effectiveness of the Financing and Loan Agreements.

Conditions of Effectiveness of the Financing and Loan Agreements consist of the following:

(a) The Recipient has adopted a legal instrument governing the organization of the STS,
in form and substance acceptable to the WB, and said legal instrument is in full force
and effect.

(b) The Project Operational Manual has been adopted by the IFPS.

(c) The Financing and Loan Agreements have been executed and delivered and all
conditions precedent to its effectiveness (other than the effectiveness of these
Agreements) have been fulfilled.

The Effectiveness Deadline is the date one hunfred twenty (120) days after the date of the
Financing and Loan Agreements.
3. IMPLEMENTATION

3.1. Institutional and Implementation Arrangements

The Main State Tax Inspectorate (MSTI) under the auspices of the Ministry of Finance is
responsible implementing agency for the project. MSTI shall ensure appropriate coordination
internally within the MSTI as well as with the Ministry of Finance to achieve project
objectives.
3.1.1. Project Steering Committee (PSC)
A Project Steering Committee was formed during the Preparation for TAMP project to
oversee the project implementation. The Committee is composed of the Project Director –
Head of MSTI, Heads of MSTI departments, Head of I.I. “FiscServInform”, representatives of
the Ministry of Finance, e-Governement Center, Swedish Tax Agency and the Delegation of
the EU in the Republic of Moldova.
A PSC with similar functions and scope of activity is created within the TAMP project. The
PSC is responsible for making key strategic decisions, monitor overall project implementation
progress, and resolve high level implementation and coordination issues as they arise. The
composition of the new PSC will be approved upon the initiation of the TAMP project.
The PSC shall ensure project implementation effectiveness and quality by:
a. understanding the project’s strategic importance;
b. approving the project strategy and work plan developed by the project team;
c. ensuring that the project activities are aligned with the organization’s strategy;
d. understanding and providing support to the achievement of project objectives and
deliverables;
e. providing the resources required for the project;
f. submitting proposals for overcoming difficulties and risk management with regard to
the implementation of project activities;
g. reviewing and approving, on a periodic basis, the project implementation reports, as
well as the progresses made towards achieving the project’s specific objectives, based
on the documents submitted by the management team and by partners;
h. staying up-to-date with regard to the on-site verification and documentation missions
carried out by World Bank representatives and other important stakeholders relating to
project implementation activities, as well as to implementation of recommendations
made;
i. staying up-to-date with respect to the information and publicity actions undertaken and
the media used to promote the project;
j. analyzing the cases of PSC members’ unauthorized/unmotivated absence and
recommend membership revocation for persons concerned;
k. approving and amending its own Charter on organization and operation.

In order to make the decision making process at the overall TAMP project level simplier, if
necessary, MSTI will constitute Project Steering sub-Committees for separate components of
the TAMP project with a specific pool of key stakeholders, distinct of the stakeholders for
other components, and or specific activities to be implemented (scope, complexity, number of
stakeholders, risks, significant budgets, etc.)
3.1.2. Project Coordinator
The MSTI Head or Deputy Head will serve as a Project Coordinator. The Project Coordinator
will oversee daily project implementation, ensure the proper communication with and
decision making processes with the organization within the project sope are in place, monitor
progress and ensure timely completion of the project activities. The Project Coordinator isthe
focal point for the communication of the organization with the World Bank team on project
related issues. The Project Coordinator will work closely with a resident high-level adviser
from US Treasury who will provide technical support to MSTI in support of its tax reforms
over a period of two to three years.
3.1.3. Project Managers and Specialist Consultants for the PMU
The Project Coordinator will be assisted by a Project Manager. The Project/Program Manager
will be hired within the scope of the TAMP and will head the Project Management Unit
(PMU) that assist MSTI with project implementation, including procurement, financial
management, contract management, monitoring and evaluation, and project reporting.
An IT Project Manager will be hired in the PMU to assist MSTI during the procurement
process and contract implementation of the ITMS system (Component 4 of the TAMP
Project).
The Project Manager is hired for specific term similar to major phases of the TAMP project
term, as the requirements towards their competencies may vary from one project phase to
another one depending on the scope of the TAMP components implemented.
The PMU is staffed with a Project Manager Assistant, Procurement and Financial
Management Specialists, hired as consultants. This provides MSTI with required capabilities
and contributes to the project risks mitigation.
3.1.4. Private Sector Advisory Panel (PSAP)
No later than ninety days after the Effective Date, MSTI shall establish and operate,
throughout project implementation, a Private Sector Advisory Panel vested with the
responsibility to facilitate citizen engagement in the implementation of TAMP project
activities, with terms of reference and membership acceptable to the Bank.
3.1.5. Administrative regulations
The implementation of TAMP project is governed by:
 Provisions of the Financing Agreement between the Republic of Moldova and the
International Development Association (IDA);
 Provisions of the Loan Agreement between the Republic of Moldova and the
International Bank for Research and Development (IBRD);
 Moldovan legal framework provisions, if applicable;
 TAMP Project Assessment Document, including the general implementation and
procurement plans;
 Regulations of Project Management Unit;
 TAMP Project Operations Manual;
 Project initiation documents and project plans for entire project and each component.

3.2. Results Monitoring and Evaluation

The project results framework is presented in Annex 3. MSTI is responsible for monitoring
and evaluation of the project outcomes and intermediate indicators. The monitoring system
will maintain records on implementation and generate mid-year project progress reports and
annual reports prepared within four months of the end of the financial year, focusing on
results-based accountability and accomplishments against performance expectations.
Progress reports will be prepared by the PMU, approved by the Project Coordinator,
presented to the MSTI Director, and forwarded to Bank and PSC before implementation
support missions to guide the discussion of key issues impacting project implementation.
The project will finance the implementation of surveys to assess MSTI’s taxpayer services.
The surveys will provide gender-disaggregated data (where feasible as in the case of
individual taxpayers) and also monitor any gender differences in the feedback provided. The
first survey will be completed in the first year of implementation of the project and will be
used to establish a baseline for improved satisfaction of taxpayers.
World Bank implementation support missions will be undertaken at least twice yearly. The
progress assessed during these missions will be reported by the World Bank team to its
management through implementation status and results reports (ISRs) which will include a
review of key implementation issues and performance indicators. A mid-term review is
scheduled for the third year of implementation. Given the comprehensive nature of these
reforms, there are many areas that the project will likely tackle but which cannot be predicted
in advance. The results framework could be revised and updated during the mid-term review.
PROCUREMENT

4.1. Background

The procurement for the TAMP project is performed in accordance with:

 World Bank’s Guidelines “Procurement of Goods, Works, and Non-Consulting
Services under IBRD Loans and IDA Credits & Grants”, published in January 2011,
revised in July 2014 (Procurement Guidelines); and
 World Bank’s Guidelines "Selection and Employment of Consultants under IBRD
Loans & IDA Credits & Grants by World Bank MSTIs”, published in January 2011,
revised in July 2014 (Consultant Guidelines), and
 latest Guidelines on Preventing and Combating Fraud and Corruption in Projects
Financed by IBRD Loans and IDA Credits
 provisions stipulated in the Legal Agreement - Financing Agreement between the
Republic of Moldova and the International Development Association (IDA) and the
Loan Agreement between the Republic of Moldova and the International Bank for
Reconstruction and Development (IBRD) both dated June 28, 2016.

The various items under different expenditure categories are described in general below. For
each contract financed by IBRD and IDA, different procurement methods or consultant
selection methods, need for pre-qualification, estimated costs, prior review requirements, and
time frame are agreed between the Recipient and the Bank in the Procurement Plan. The
Procurement Plan will be updated at least annually or as required to reflect the actual project
implementation needs and improvements in institutional capacity.

The General Procurement Notice (GPN) will be published in the on-line edition of
Development Business (UNDB Online) announcing goods and consulting services to be
procured and inviting interested eligible suppliers and consultants to express interest and to
request any complementary information from MSTI. The GPN will contain information
concerning the MSTI, amount and purpose of the financing, scope of procurement reflecting
the Procurement Plan, and the name, telephone (or fax) number, and address(es) of the MSTI
as the agency responsible for procurement, and the address of a widely used electronic portal
with free national and international access or website where the subsequent Specific
Procurement Notices will be posted.

Specific Procurement Notices (SPN) will be published in the on-line edition of the
Development Business for all International Competitve Biddings (ICB) contracts, and in the
printed edition at the option of MSTI. For goods to be procured through ICB, individual
bidding opportunities would also be advertised in a major local newspaper on the same (or
within 5) day(s) of the on-line publication.

The local advertisements will be in the English language and, at the option of the MSTI, will
also be in the local language. For consultants’ contracts above US$300,000, Request for
Expression of Interest will be advertised in on-line edition of the Development Business and
in at least one major national newspaper/publication of wide circulation (in the national and
English languages). The notices should also be published on the STS web site.

The contract award publication will include the following information: the names of all
Bidders who submitted a bid, the bid prices as read out at the public bid opening, the name of
the bidder and the evaluated price for each bid that was evaluated, the name of bidders who
were rejected and the reasons for rejection, the name of the winning bidder and the price
offered. Information about all contracts awarded through direct contracting, irrespective of
price shall be published. For all ICB contracts and contracts awarded through selection of
consultant firms for contract exceeding US$300,000 the information should be posted on the
World Bank site and in UNDB Online. The procurement procedures and SBDs to be used for
each procurement method are presented in this Project Operations Manual.

4.2. Procedures and Thresholds

Procurement of goods and non-consulting services. Goods and non-consulting services
procured under the project would include, among others, procurement of the ITMS (including
hardware and training), equipment for the training center, minor equipment for MSTI and
PMU, and logistical services for training activities. Under International Competitive Bidding
(ICB) procedures, procurement will be done using the Bank Standard Bidding Document
(SBD) for Procurement of Goods.
Goods and non-consulting services contracts below US$100,000 may be procured through
Shopping procedure in accordance with the provisions of paragraph 3.5 of the Procurement
Guidelines.
Procurement of ITMS with an estimated value of USD 14.86 million will require the
application of the International Competitive Bidding procedures. Bank’s SBD for Supply and
Installation of Information Systems will be used. Due to the complex nature of this contract
and in order to avoid deviations from the MSTI specifications, the Bank recommended the use
of a two-stage bidding procedure. First, unpriced technical proposals will be invited, subject
to technical as well as commercial clarifications and adjustments, to be followed by amended
bidding documents and the submission of final technical and priced bids in the second stage.
Procurement of logistical and organizational services for various events organized under the
project would be done using Shopping procedures provided the contract value does not
exceed USD 100,000. Training activities in the form of study tours, or participating in
national or international workshops shall be procured in accordance with the procedures
agreed with the Bank. MSTI will develop a Training Plan which will be prior reviewed by the
Bank. Each request to attend an event listed in the Training Plan or other events not listed in
the plan will be submitted to the Bank together with the proposed list of participants, agenda
of the event and the estimated budget with the breakdown of costs.
The thresholds for the procurement and selection methods are prezented in the Annex no.6.

Methods to be applied fot procurement of Goods and non-consultancy services:

(i) International Competitive Bidding (ICB). ITMS system, IT equipment and other
systems, as well as procurement under the Componen 4 of the Project for contracts
above US$1,000,000 equivalent per contract for goods will be procured using ICB
procedures in accordance with the Bank’s Procurement Guidelines.
Procedures for the Bank’s Prior Review will include the steps below, where the boxes
indicate a point where the Bank must issue its “no objection”.
 Chart 1. ICB Steps and Process Sequences

a) preparation of the detailed

description of the technical
specifications of the goods

b) preparation of the Specific

Procurement Notice and Bidding
Documents
No objections
from the Bank

c) advertising of the Specific

Procurement Notice in the UNDB
online + local newspaper

d) issuing of BDs and receipt of

bids

e) public bid opening and

evaluation of bids, and selection
of lowest evaluated technically
responsive bidder.
No objections
from the Bank
f) contract signing and execution

(ii) Shopping (SH) procedure will be used for readily available off-the-shelf goods,
including office and computer equipment. In line with regional policy, all items would
have standard specifications, estimated to cost less US$100,000 equivalent per
contract. This procedure will be based on obtaining and comparing price offers from at
least three suppliers in accordance with paragraph 3.5 of Procurement Guidelines. .

(iii) National Competitive Bidding (NCB). Goods estimated to cost less than $1,000,000
equivalent per contract will be procured according to NCB procedures in accordance
with paragraphs 3.3 and 3.4 of the Bank’s Procurement Guidelines using documents
agreed with and acceptable to the Bank;

(iv) Direct Contracting. Where certain goods are available only from a particular supplier
or in cases where compatibility with existing equipment so requires goods may be
procured under Direct Contracting (in accordance with para. 3.6 of the Procurement
Guidelines). For contracts exceeding the value of USD 50,000 Bank’s prior approval
should be obtained..
Procurement of consulting services. Consulting services under the project are of various size
and complexity. These would include, among others: review and drafting of the tax code,
including tax ruling review, tax administration issues, and local taxes and fees administration
reform; implementation plans for restructuring of STS including workload and workforce
analysis and strengthening human resources development capacity; fiduciary and technical
consultants. Selection will be done using the Bank Standard Request for Proposals (SRFP).
Contracts for Consulting Services will be packaged to combine related skills and services in
order to make them attractive for competition and reduce the number of contracts to be
administered taking into consideration the implementation arrangements. To the extent
practicable, training activities would be incorporated with consulting services contracts.
The employment of fiduciary and technical experts will be conducted through the selection of
individual consultants in accordance with the provisions of the Section V of the Consultant
Guidelines.
In case the service is required from a consultancy firm, Quality- and Cost-Based Selection
(QCBS) method will be applied in accordance with the Section II of the Bank’s Consultants
Guidelines. For the contracts below US$300,000 equivalent Selection Based on Consultants’
Qualification method may be used in accordance with paragraph 3.7 of the Consultants’
Guidelines. The short list can comprise entirely national consultants, if the contracts with the
firms are below US$300,000 equivalent.
For consulting assignments exceeding US$300,000 equivalent per contract, expressions of
interest will be obtained by advertisement in the Development Business (on-line),
supplemented with notices issued in the national press.

Government officials and civil servants can be hired as individual consultants or as members
of a team with financing under the IDA and IBRD Financing, provided they meet the
eligibility requirement as per paragraph 1.13 (d).

Short lists of consultants for services estimated to cost less than US$300,000 equivalent per
contract may be composed entirely of national consultants in accordance with the provisions
of paragraph 2.7 of the Consultant Guidelines.
The following selection methods will be used for selection of consultant services:
(i) Quality and Cost Based Selection (QCBS) – procedure would be used for selection
of consulting companies for technical assistance assignments for the Project where
the contract value exceeds USD 300,000;
(ii) Chart 2. QCBS Steps and Process Sequences

a) drafting of the Terms of

Reference and cost estimate for
the services to be provided

b) drafting of the General

Procurement Notice and Bidding
Documents (Request for
Expression of Interest)
No objections
from the Bank
c) advertising of the General
Procurement Notice and (for
contracts more than $200,000)
Requests for Expression of
Interest in the UNDB online +
local newspaper

d) receipt of the Expressions of

Interest

e) Opening and evaluation of

Expressions of Interest. Short list
of Consultants.
MINUTES AND EVALUATION
REPORT SENT TO THE BANK
No objections
from the Bank
f) drafting of the Request for
Proposals, ToR and draft of the
contract

No objections
from the Bank

g) sending the RfP to the

shortlisted Consultants

h) receipt of the Technical and

Financial Proposals

i) Opening and evaluation of the

Technical Proposals.
MINUTES AND TECHNICAL
EVALUATION REPORT SENT
TO THE BANK
No objections
from the Bank
k) Opening and evaluation of the
Financial Proposals.
MINUTES AND TECHNICAL
AND FINANCIAL
EVALUATION REPORT SENT
TO THE BANK
No objections
from the Bank
l) Negotiations and Contract
 award. Minutes and final draft of
the Contract sent to the Bank

No objections
from the Bank

m) Signing of the Contract

n) publishing of the Notice of

Award in the UNDB online

(ii) Least Cost Selection (LCS) procedure would be used for selection of consultants for
assignments of standard or routine nature (audits, and others).
(iii) Selection Based on Consultants’ Qualifications (CQS) will be used for contracting
firms for certain assignments under all components of the project for which the value
of the assignments is estimated to cost less than US$300,000 equivalent per contract
and where it is considered that a small team of specialists would be more beneficial
than a single individual.
(iv)Individual Consultants (IC) will be used for the employment of fiduciary and
technical experts and for the hire of individual consultants (both foreign and
national) for specialized activities where specific skills are needed for short period of
time at scattered intervals and which would not be practical to package with the
assignments for consulting firms described above.
(v) Single Source (SS) The method will be used for certain individuals or training
institutions (in accordance with para 3.8 and Section V). Contracts with of a value
exceeding USD 2,000 will require the prior approval of the Bank.

4.3. Procurement Arrangements

Similarly to other projects, fiduciary functions (including Procurement) are the responsibility
of MSTI. A recent assessment reviewed MSTI’s organizational structure for implementing the
project as adequate. Overall responsibility for procurement management and coordination is
with MSTI, being assisted by PMU staff.

Selection and evaluation committees are established separately for each of the project
components. The evaluation committees shall include representatives from the STS, MSTI
departments representing the key stakeholders, representatives from FSI and/or Ministry of
Finance (for Component 1) and will be responsible for the evaluation of proposals or CVs for
consultant services, and bids/quotation for goods. PMU shall provide assistance to the
selection committees in drafting of bidding documents, advertising, collection of
bids/proposals/CVs, drafting of evaluation reports, drafts of contracts and their submission to
the Bank for preview.
Filing of procurement related documents, and records keeping under the project, is done by
PMU. Procurement progress reports will be submitted to the Bank as per Financing/Loan
agreements provisions.
According to the providions of the Loan and Financiang Agreements, MSTI shall prepare and
furnish to the Bank no later than December 31 of every year during the implementation of the
Project, starting with December 31, 2017 a procurement progress report (Procurement Report)
in form and substance acceptable to the Bank, which shall include, inter alia:
(a) a description of the issues which arose during the full procurement cycle under the
Project during the twelve months preceding the date of presentation of each
Procurement Report, from design through planning, bidding, contract implementation
and completion;
(b) a list of proposed measures and actions to be taken to resolve the issues identified
under (i) above; and
(c) a proposed timeline for the implementation of the said measures and actions and
thereafter implement, or cause to be implemented, the proposed measures and actions under
each Procurement Report in accordance with its terms and in a manner acceptable to the
Bank.

4.4. Procurement Plan

The Procurement Plan contains all the relevant procurement information, including prior
review thresholds for Bank financed contracts. For procurement under the IDA and IBRD
Financing, the MSTI will use the Bank’s latest Standard Bidding Documents (SBD), Standard
Form of Consulting Contracts and Request for Proposals (RFP), and Standard Bid Evaluation
Report Forms. For International Competitive Biddings (ICB) procedures, acceptable Bidding
Documents are agreed. These will comprise Supply and Installation of Information Systems -
Single or Two Stage Bidding and installation of Information Systems - Two Stage bidding
(for both - March 2008 or a more recent version). Also, the sample procurement documents
and forms developed in ECA Region for small value procurement would be adapted to suit
the Project needs for procurement as outlined in the POM.

Major Procurement Packages:

No. Description Estimated Review Procurement/Sele Date of IFB/REoI
Cost ($ mln) Status ction Method
1 TA on reviewing and drafting of the 1.4 Prior QCBS November, 2016
tax code, including tax ruling review,
tax administration issues, local taxes
and fees administration reform
2 TA on implementation plans for 0.6 Prior QCBS September, 2017
restructuring of MSTI including
workload and workforce analysis and
strengthening HR development
capacity
3 TA on procedures for payment, 1.1 Prior QCBS October, 2018
processing and accounting of tax
obligations
4 TA on compliance management, arreas 1.3 Prior QCBS January, 2019
management and anti-fraud
5 Integrated Tax Management Solution 15 Prior ICB November, 2016

MSTI developed a procurement plan for project implementation, which provides the basis for
the agreed procurement methods. This plan has been agreed between MSTI and WB and is
available at MSTI. The plan will also be available in the project’s database and in the Bank’s
external website. The Procurement Plan will be updated in agreement with the Project Team
annually or as required to reflect the actual project implementation needs and improvements
in institutional capacity.

4.5. Frequency of Procurement Supervision

The Procurement Specialist will conduct routine procurement reviews and supervision. In
addition to the prior review supervision to be carried out from Bank offices, one supervision
visit is expected to take place per year during which ex-post reviews will be conducted. The
project team recommends to post-review at least 20 percent of contracts subject to post
review. Procurement documents will be kept readily available for Bank’s ex-post review
during supervision missions or at any other point in time. A post review report will be
prepared, shared with MSTI and filed in the procurement post review system.

5. DISBURSEMENT PROCEDURES

All disbursement arrangements will be based on standard documentation as described in the

Bank's Disbursement Handbook (May 2006). Disbursements are administrated by MSTI
(processed by the accounting department and signed off by the authorized persons) with the
assistance of PMU.

Bank funds will be disbursed under the Bank’s standards procedures as described below.
Supporting documentation for Statements of Expenditures and Interim Financial Reports,
approved by the Bank, including completion reports and certificates, will be retained by PMU
and MSTI and made available to the Bank during project supervision.

5.1. Designated Account

The State Treasury shall open two Designated Accounts (DA) for MSTI in the National Bank
of Moldova. The designated accounts will be opened and maintained under conditions
acceptable to IDA and IBRD. The type of Designated Account: Segregated. An authorization
from the Ministry of Finance is needed before the DA can be opened. Together with the DA
in US$ a transit MDL account is opened in the State treasury, so that the payments to local
suppliers could be made on the same day as US$ are converted into MDL. The Treasury will
open and manage these Designated Accounts specifically for this Project, to which the IDA
and IBRD funds will be transferred.

5.2. Disbursement Arrangements

(i) Disbursement Methods. The following Disbursement Methods may be used under the
Credit and Loan:
 Advances
 Direct Payment
 Reimbursement
 Special Commitment

(ii) The closing date for disbursements is 31 December 2021, as specified in the Financing
and Loan Agreements.

(iii) The conditions for disbursement are described in the Financing and Loan Agreements.

5.3. Withdrawal Operations

Withdrawal of Financing Proceeds

The withdrawals from the DA will be made for eligible expenditures as indicated in the tables
below:

For the financing provided by IDA under the Financing Agreement:

Category Amount of the Financing Percentage of

Allocated (expressed in Expenditures
SDR) to be Financed
(inclusive of
Taxes)
(1) Goods, non-consulting services, 5,300,000
consultants’ services, Training and Operating
Costs for the Project 100%

TOTAL AMOUNT 5,300,000

For the financing provided by IBRD under the Loan Agreement:

Amount of the Loan Percentage of

Allocated Expenditures
Category (expressed in USD) to be financed
(inclusive of
Taxes)

(1) Goods, non-consulting services, 12,580,000 100%

consultants’ services, Training and Operating
Costs for the Project
TOTAL AMOUNT 12,580,000

The Closing Date of financing is December 31, 2021.

The Disbursement Deadline Date is four months after the Closing Date specified in the
Agreements.

Authorized signatures for withdrawal applications will be given for funds managed by MSTI
to the Head of MSTI, Head of Economic and Finance Department from MSTI, Deputy Head
of Economic and Finance Department from MSTI.

The authorized signatory letter (ASL) should be furnished to the Bank at the address indicated
below providing the name(s) and specimen signature(s) of the official(s) authorized to sign
Applications:

The World Bank

1 Dniprovskiy Uzviz
Kyiv, 01010
Ukraine
Attention: Country Director, ECCU2
The completed and signed applications for withdrawal, together with supporting documents,
and applications for special commitments, together with a copy of the commercial bank letter
of credit, shall be provided to the address indicated below:

The World Bank

Radnicka cesta 80, 9th floor
Zagreb, HR - 10 000
Croatia
Attention: Loan Department

Electronic Delivery The Bank may permit the MSTI to electronically deliver to the Bank
Applications (with supporting documents) through the Bank’s Client Connection, web-based
portal. The option to deliver Applications to the Bank by electronic means may be effected if:
(a) the MSTI has designated in writing, pursuant to the terms of subparagraph (i) of this
Section, its officials who are authorized to sign and deliver Applications and to receive secure
identification credentials (“SIDC”) from the Bank for the purpose of delivering such
Applications by electronic means; and (b) all such officials designated by the MSTI have
registered as users of Client Connection. If the Bank agrees, the Bank will provide the MSTI
with SIDC for the designated officials. Following which, the designated officials may deliver
Applications electronically by completing Form 2380, which is accessible through Client
Connection (https://clientconnection.worldbank.org). MSTI may continue to exercise the
option of preparing and delivering Applications in paper form. The Bank reserves the right
and may, in its sole discretion, temporarily or permanently disallow the electronic delivery of
Applications by the MSTI.

Minimum Value of Applications. The Minimum Value of Applications for Reimbursements,

Direct Payments and Special Commitments is USD 100,000 for each DA.

Advances to Credit and Loan

 Type of Designated Accounts:
o Designated Account A - Segregated for the IDA Credit managed by MSTI
o Designated Account B - Segregated for the IBRD Loan managed by MSTI
 Currency of Designated Accounts: USD
 Financial Institution at which the DAs will be opened: National Bank of Moldova.
 Ceilings:
DA A USD 800,000
DA B USD 2,000,000

5.4. Reporting on Use of Financing Proceeds

Supporting documentation should be provided with each application for withdrawal as set out
below:

- For requests for Reimbursement:

 Records evidencing eligible expenditures (e.g., copies of receipts, supplier invoices)
for payments against contracts valued more than prior review threshold.
 Statement of Expenditure in the form attached for contracts not subject to prior
review;
 List of payments against contracts that are subject to the Association’s prior review,
in the form attached
 - For reporting eligible expenditures paid from the Designated Accounts:
 Records evidencing eligible expenditures (e.g., copies of receipts, supplier invoices)
for payments against contracts valued more than prior review threshold.
 Statement of Expenditure in the form attached for contracts not subject to prior
review;
 List of payments against contracts that are subject to the Association’s prior review,
in the form attached

- For requeMSTI for Direct Payment: Records evidencing eligible expenditures, e.g.,
copies of receipts, supplier invoices

- For requeMSTI for Special commitments

Copy of Letter of Credit

Frequency of Reporting Eligible Expenditures Paid from the Designated Account: Monthly

To monitor disbursement information the Project will be using secure website “Client
Connection” at http://clientconnection.worldbank.org, download Applications, monitor the
near real-time status of the Funding, and retrieve related policy, financial, and procurement
information.

All the disbursements shall be made in accordance with the Financing Agreements for the
Project and the corresponding sources of funds.
 6. FINANCIAL MANAGEMENT, ACCOUNTING AND REPORTING

6.1. Introduction
MSTI is responsible for carrying out the financial management function of the project,
including planning and budgeting, accounting, flow of funds, financial reporting, internal
control and auditing, being assisted by the PMU staff.
Organizational Arrangements

Under the given project arrangements, PMU will provide support to MSTI for fiduciary and
technical activities necessary for the implementation and management of the TAMP project,
including:
 preparation of withdrawal applications for financing the project activities;
 management of the project Designated Accounts;
 keeping record and maintenance of project accounts and organizing their auditing;
 preparation of financial reports for the project;
 participation in administration of bidding procedures and of contracts under the
project;
 development of consolidated quarterly progress reports and submitting them to the
attention of the World Bank not later than forty-five (45) days after the end of each
quarter, submitting the first such report to the Bank no later than the end of the quarter
when the first disbursement takes place.

6.2. Financial Management Action Plan

MSTI will perform the following actions to adjust the financial management procedures for
the Project.

Action Responsibility Due Date/condition

1 Projects Operations Manual. Develop a MSTI Condition of
manual to fully document the procedures (with support from PMU) Effectiveness
for accounting and internal control,
including disbursement and flow of funds
(including flow chart), financial reporting,
including IFR, annual reports and audit,
acceptable to the World Bank.

2 Adjust the 1C software to reflect the MSTI First disbursement

particularities of the Project specific (with support from PMU)
categories and activities

6.3. Planning and Budgeting

Budgeting is the basic tool for financial planning, monitoring and analysis of the project
activities. The budgeting process is to be handled by the accounting staff of the Economic and
Finance Department of MSTI with the support of PMU staff, with further submission of
project-related information to the Ministry of Finance.

MSTI prepares its annual budget in accordance with the architecture of Moldova’s budget
classification system. As Bank financed Projects are included in the overall State budget
framework, the project budget will follow the established procedure for approval, budget
execution reporting and monitoring at the Government level.

These include budget formulation, monthly distribution of allocations through financing

plans, and monthly, quarterly and annual reporting on budget execution (separately for credits
and grants). All activities that need to be covered are listed below:
1. Preparation of 3 years expenditure and disbursement forecasts for purposes of the
Medium-term budget framework (MTBF);
2. Preparation of the draft Project Procurement Plan by the PMU Procurement Specialist;
3. Coordination of the Procurement Plan with the Bank and MSTI;
4. Annual Preparation of Expenditures Forecast by the MSTI and PMU finance staff;
5. Preparing by MSTI and PMU finance staff of the Annual Budget for the Project
Expenditures under expenditure categories and project activities;
6. Approval of the Annual Budget by MSTI through the PSC;
7. Approval of monthly distribution of allocations (for credits and grants);
8. Adjustments of annual budgets and financing plans based on project implementation
progress;
9. Preparing the monthly Aggregate budget execution reports to be submitted to the
Ministry of Finance (MoF) separate for Credits and Grants (according to formats
approved by MoF);
10. Preparing the quarterly and annual budget execution reports to be submitted to the
Ministry of Finance (MoF) (according to formats approved by MoF);

Budget execution will be monitored through the regular budget reports submitted to the
Ministry of Finance. Once reviewed and endorsed by the Ministry of Finance, the Project
budget will be included in the state budget. The approved annual budget will be entered into
the accounting system and used for periodic comparison with actual results as part of the
interim reporting.

6.4. Flow of funds and step sequencing

The designated accounts of MSTI shall be opened in the State Treasury, separately for each
source of financing within the limits established in the Project Disbursement Letter. At the
same time, transit accounts shall be opened for payments in national currency (MDL).

The request for funds may be made online using “Client Connection” database. Before the
first disbursement, MSTI shall submit to the World Bank the specimen of authorized
signatures for disbursement of project funds and will request access to Client Connection
through the World Bank’s local coordinator.

While executing the payments in local currency, the Treasury shall ensure the transfer of
funds to local suppliers on the day when payment orders are submitted and shall submit bank
statements and a copy of the payment order as confirmation that the funds reached the
beneficiary's account.
The following chart reflect the general framework of documents and funds flows.

Chart 3. Sequence and flow of documents and funds under MSTI

MSTI
1. Withdrawal request
WORLD BANK
11. Direct payment request

Management

Accounting
STATE TREASURY
R. MOLDOVA
4. Payment order,
2. Disbursement
foreign currency
of funds, USD

Validated Invoices

12. Direct Payment to an

International Supplier,
7. Payment Order, MDL КОРПОРАЦИЯ МАЙКРОСОФТ
foreign currency

Project Management
Unit Designated Account (DA), USD

5. Funds conversion in MDL

6. Payment to
International Supplier,
foreign currency
8. Payments to local КОРПОРАЦИЯ МАЙКРОСОФТ

bank accounts in MDL

Tranzit Account, MDL

3. Invoice
9. Cash payment or
payment to the card account, MDL

3. Invoice

Local Consultants
Local Suppliers/Service Providers International Suppliers/Service Providers
 Table to Chart 3
SEQUENCE AND FLOW OF DOCUMENTS AND FUNDS – DESCRIPTION

Step Description
1-2 Replenishment of the Designated Account.
As required, the MSTI Accountant prepares a withdrawal application [the latter is
incorporated in the automated process with the project accounting software] together with
relevant supporting information – Statement of Expenditure, List of payments against prior
review contracts, copies of invoices, bank statements and any other documents as requested
by finance providers. The withdrawal application is then reviewed and approved by MSTI
Head before it is sent to the WB Loan Department for the replenishment of the Designated
Account. The first application for the initial deposit into the DA will be submitted as soon as
the project is declared effective.

3 -13 Procurement
1. Contracts are signed and Invoices from suppliers and consultants are approved by MSTI, as
appropriate, and then are directed for payment.
2. Other invoices (i.e. project operating costs) are approved and paid by MSTI.

Note 1: Invoices from suppliers and consultants are matched by the Procurement Specialist, Project
Manager and Project Coordinator, as well as by Head of Economic-Financial Department to an
approved goods delivery note, or similar document, and to the original purchase order, and
contract, if necessary. The Procurement Specialist, the Project Manager as well as Project
Coordinator approves the invoice. Payments are effected in one of the following two ways,
depending upon the source of financing: (i) from WB funds – a bank payment order from the
relevant DA is prepared and funds are transferred from the DA either directly to the foreign
supplier or via the Transit account to the local supplier/consultant. All goods procured by the
project will be received directly by MSTI (with PMU’s participation).

Note 2: IDA and/or IBRD funds are not used to pre-finance other sources of funds.

Note 3: Local consultant’s/PMU staff remuneration – these are computed monthly by the MSTI
accounting staff on a single spreadsheet for all employees (all projects administrated), verified by
the Head of Economic-Financial Department. Individual employee calculations and payment orders
are prepared and again signed by the MSTI Head of Economic-Financial Department and the MSTI
Head; sufficient cash in MDL (if payments are made in MDL) is withdrawn from the DA (via the
Transit Account); and payments are made to relevant employees/consultants via transfer to a
banking account (card or simple bank account).

Note 4: Transit Account – the Transit Account is used for converting US$ funds from the
designated financing account into MDL, and therefore WB funds are not kept in the Transit
Account except for very brief periods of time.

Note 5: If the small petty cash transactions are required – the reimbursement to employee is made
through a debit card account. Cash is used in cases of training abroad for logistical support costs
(travel expenses, etc.)

14-15 World Bank Direct Payments. Direct Payment requests are sent from MSTI to the World Bank
Loan Department when necessary. The payment request is prepared on Form 2380 and authorized
as for normal Withdrawal Applications (see above). The World Bank makes direct payment to the
suppliers as directed.
6.5. National Accounting Policy Framework

The MSTI accounting policy is developed according to the provisions of the Law on
Accounting no. 113-XVI from 27 April 2007, Chart of accounts and Methodological norms
on accounting and financial reporting in the institutions part of the state budgetary system
(approved by the Order of the Ministry of Finance no. 216 from 28th of December 2015),
Budget classification (approved by the Order of the Ministry of Finance no. 208 from 24th of
December 2015) and other normative acts issued by the Ministry of Finance, as well as
according to the Internal Regulations of the Economic-Financial Department from MSTI.

Accounting records are produced in the language of the state and transactions value is
expressed in the national currency. The transactions made in foregn currency are recorded in
both – the local and foreign currencies. The transactions made in foregn currency are recorded
at the official exchange rate set by the National Bank of Moldova. Double entry accounting is
used for accounting records. MSTI records the accounting elements using both principles –
cash based and accruals. The cash based principle is applied for records related to the budget
execution and the accruals principle is applied for records off revenue and actual
expenditures, financial and non-financial assets, liabilities and results.

Basic accounting definitions

Non-financial assets are non-monetary, tangible and intangible assets.
Intangible assets - assets that are not physical in nature, controlled by the entity and having a
useful life greater than one year in production, distribution and any other activity, as well as
for administrative purposes or rent to physical or legal entities.
Tangible assets – assets that have a physical form (fixed assets, land, natural resources, etc.).
Financial assets – stocks, bonds, receivables, cash and bank deposits.
Revenue – transactions increasing the net value of assets
Expenses – transactions reducing the net value of assets
Net assets value – the value of an entity's assets minus the value of its liabilities.
Fixed assets – tangible assets with an useful life exceeding 1 year.
Financial instruments - assets not used in the production or for consumption purposes and
held for appreciation of the cost over time.

Basic accounting principles

The basic principles of accounting are as follows:
 going concern – an assumption that financial statements are prepared assuming that the
public authority will continue to operate in the foreseeable future;
 accruals - concept of accounting which requires that the accounting elements must be
recognized in the accounting periods to which they relate rather than on cash basis;
 comparability - comparability of financial statements over different accounting periods
can be ensured by the application of similar accountancy policies over a period of time;
 dual aspect concept - a fundamental convention of accounting that necessitates the
recognition of all aspects (assets and liabilities) of an accounting transaction;
 non-compensation - any compensation of debt by asset elements, or revenue by expense
elements is not allowed, except the compensations provided by the law;
 consistency – the way of presentation of the elements and their classification in the
financial statements must be consistent from one accounting period to another one.
Accounting of Revenue and Expenditures
The expenditures represents the actual expenses made by the institution, confirmed by
corresponding documents, including expenses for unpaid Invoices and accrued remunerations.

The revenues reflects the payments received from the sale of the standardized forms of
primary documents with special regime and payments from rental of the public property.

6.6. Financial Reporting to IDA and IBRD (IFR)

General provisions
MSTI prepares its statutory financial statements based on the provisions of the Law on
Accounting and according to terms and requirements set by the Ministry of Finance. The
financial statements (except the Cash Flows Statement) provides information on previous
transactions on payments made and received and are prepared based on the accrual principle.
the Cash Flows Statement, as compared to other financial statements, is prepared on a cash
basis principle.
The financial statements shall comply with the following qualitative characteristics:
a) understandability - transactions and events must be presented in the financial
statements in a manner that is easily understandable by users;
b) relevance - information should be relevant to the assessemnet of past, current and
future events;
c) reliability - information is reliable and faithfully represents the transations, events,
value of the assets, liabilities, revenues and expenditures and the information
presented in the financial situations is complete;
d) comparability/consistency - the information presented by different
authorities/budgetary institutions or financial statements of one accounting period
must be comparable to another.

Project management-oriented Interim Un-audited Financial Reports (IFRs) will be prepared

under the project. MSTI will produce a full set of IFRs every quarter throughout the life of the
project. The format of IFRs includes: (i) Project Sources and Uses of Funds, (ii) Uses of
Funds by Project Activity; (iii) Project Balance Sheet, (iv) Designated Account Statement;
and (v) Statement Of Expenditures Withdrawal Schedule. These financial reports will be
submitted to Bank within 45 days of the end of each calendar quarter for the quarter. The first
quarterly IFRs will be submitted after the end of the first full quarter following the initial
disbursement.
TAMP project Interim Financial Reports are compiled on a cash basis method, as long as
these are mostly related to the actual disbursements made under the Designated Accounts, and
no much difference in timing appears from the due payment date until the actual payment, as
well as from the date of generation of the revenue and the actual receipt of funds. As a result,
no material differences would appear between financial and disbursement reports. (Note. The
information produced by IFRs is used for monthly, quarterly and annual budget execution
reports submitted to Ministry of FInance). The Financial reports for statutory purposes,
excluding cash flow statements, are prepared based on the accrual method.
Currency
The functional currency of the project is US Dollars and the accounting records for the Project
are maintained in US Dollars (USD) and Moldovan Lei (MDL). As the part of project
financing is provided in Special Drawing Rights, MSTI shall periodically reconcile the
USD/XDR differences that might appear.
Fixed assets and capital items
The fixed assets held by MSTI are shown in the financial statements (IFRs) at cost at the
moment of purchase. Since the organization does not have any commercial revenues, the
accrual of depreciation does not have sense for their reconciliation with the corresponding
revenues; thus depreciation is not shown in the corresponding reports.
Foreign currency
Transactions denominated in currencies other than US Dollar are translated at the National
Bank of Moldova rates in effect on the date of such transactions. Foreign currency monetary
assets and liabilities are translated at the rates in effect on the last day of the reporting period.
Foreign currency non-monetary assets and liabilities are translated at historical rates.

Revenue recognition
Revenues are recognized upon receipt of funds in the designated account.

This section also summarizes agreed formats of financial reports (e.g. Project Management
Reports, government reports, reports to tax authorities), information relating to the submission
of the reports (specifying to whom, when and where the reports should be delivered):

A) Tax returns:
- Information of individual tax for the year;
- Report on the health insurance premiums;

B) Reports to national social insurance house on social charges:

- Report on social charges accrued and paid;
- REV forms on individual contributions paid for each employee;

C) IFRs. The following basic IFRs are to be produced by MSTI (templates are attached in the
Annex 6):
- Balance sheet;
- Project sources and uses of funds;
- Use of sources by project components/activities, details on expenditures
- Designated account statement
- Project cash forecast
- Report on execution of funds under each component and/or sub-component
- Report on monitoring of the procurements

6.7. Financial Management staff

The MSTI Economic-Financial Department is responsible for statutory accounting, planning
and financial analysis within MSTI, and it will undertake the Financial Management function
of the project with the support of the Financial Management Specialist from the PMU.

MSTI has an adequate internal control system in place for implementation of the project,
including adequate segregation of duties among its accounting staff. The division of
tasks is performed according to the four eyes principle and the principle of tasks’ segregation.
Thus, the procedures of issuing payment orders and preparing accounting formulas are made
by two different persons. At the same time, each payment document is reconciled with the
grant agreement by the person making the payment order and the Head of Department.

The Head of MSTI Economic-Financial Department will hold primary responsibility and
accountability for maintaining reliable financial arrangements for the project, including
performing data import-export, monitoring use of funds, reporting, development of record
keeping methodology, training of employees and implementation of internal control
measures, planning and organizing for external audit, provide overall guidance on project-
related issues to the rest of staff.

The Head of MSTI Economic-Financial Department will be responsible for

preparing financial plans and monitoring their implementation, provision of financial reports
and statements to the Bank, organizing the financial audit. The Deputy Head of MSTI
Economic-Financial Department will replace the head of the department during the absence of
the latter.

The PMU Financial Management Consultant will provide support in planning and monitoring
the use of funds under the project, drafting payments documents, project financial statements
and their submission to the Bank, in planning and organizing of the external audit of the
project financial statements.

6.8. Accounting Software

The MSTI Economic-Financial Department shall keep records both on paper, as well as using
the automated 1C accounting software, version 8.1, developed and maintained
by IS ,,Fintehinform", subordinated to the Ministry of Finance, ensuring permanent and
timely renewal of the database with the new financial and accounting provisions.

The 1-C system capabilities will be adapted to use analytical accounts and additional signd
(additional classifications related to specific accounts), and all the payments for the project
related transactions will be refelected using:
A) Categories of expenditures,
B) Levels of project components and sub-components,
C) Sources of funds.

Thus the system will have the capability to generate the required information for the
statements to be presented for discursements, as well as for the IFRs. The system shall be
adapted to use the information on each specific category, component or sub-component, and
source of funding for budgeting purposes. The forms of the reports and statements are
provided in the Annex 6 of this manual.

At least once a week the a back-up of the files containg data shall be made and stored aut the
office according to a set procedure. If necessary, the 1-C accounting system maintainance
services will be provided by a company having the capacity to provide such services.

6.9. Periodic Processing Schedule

The following table indicates the periodic procedures for the software operation (e.g. backup
of data, maintenance of data), for manual procedures (e.g. formal reconciliation of bank
account statements to project accounting records, reconciliation of IDA and IBRD
disbursement records), agreed project reporting schedules.
 Table 4. Periodic Processing Schedule
Frequency Responsible Process
Weekly MSTI and PMU FM Back up of data files
specialists and IT
administrator
Periodically, upon MSTI and PMU FM Checking the processed data in the
processing of each specialists Client Connection system with the
Withdrawal Application Project records
Monthly (3 working days MSTI and PMU FM Submission of aggregate budget
after end of the month) specialists execution reports to the MoF
Monthly (25 days after end MSTI FM specialists Submission of income tax return,
of the month) reports to the Social Insurance
House, including detailed reports on
individual social charges paid for
each employee (REV forms)
Quarterly or more frequently, MSTI and PMU FM Preparation of withdrawal
upon use of funds specialists applications
Quarterly MSTI FM specialists Submission of reports on health
insurance premiums
Quarterly (within 10 days) MSTI FM specialists Submission of detailed budget
execution reports to MoF
Quarterly (within 45 days) MSTI and PMU FM Submission of IFRs to the WB
specialists
Annually MSTI FM specialists Submission of the information on
Income tax withheld for each
employee.
Annually MSTI FM specialists Following up on auditing
and PMU staff, arrangements (bidding, contracts,
including Project TORs)
Manager,
Procurement and FM
Specialist
Annually 6 months after the MSTI FM specialists Sending the auditing reports to the
year end WB

6.10. Internal Control Procedures

A) Control Environment – MSTI has the competence and organization methods to

ensure a proper control environment.

B) Risks – The overall project financial management staff comprises the financial
management consultant from the PMU and the financial management staff of the
MSTI Economic-Financial Department, therefore internal checks and reconciliation
can be ensured by employees from these two organizational structures. In addition, the
approval procedures of contracts, invoices and other relevant source documents by the
Procurement Specialist, Project Manager and Project Coordinator can be put in place.

C) Control activities –
- Authorization procedures: all transactions related to procurement of works and
services shall be authorized by MSTI.
 - Segregation of duties: the main segregations should be performed between the Project
Coordinator, the Project Manager, the Procurement Officer, Financial Management
Specialist and Head of MSTI Economic-Financial Department. The PMU
Procurement Specialist will be responsible for the support to MSTI in planning and
administering project procurements, including monitoring the delivery of goods and
services. The PMU Financial Management Specialist will be responsible for providing
support to MSTI Economic-Financial Department staff with all project financial
management and reporting. The Project Manager, Project Coordinator and the Head of
the MSTI Economic-Financial Department – will approve all transactions, monitor
activity of the subordinated project staff, monitor their reports, etc.

D) Information and communication – timely and appropriate information reporting

about the project implementation, projects expenditures, and sources of funds should
be in place. Information should be delivered to all relevant stakeholders (WB team,
MSTI, Ministry of Finance, project beneficiaries, etc.).

E) Monitoring – The proper monitoring of the project shall be organized by the WB

supervision team as well as by PMU and MSTI specialists who shall report on any
weaknesses that may appear. MSTI and PMU will then be responsible for elimination
of the identified weaknesses.

External Control

The activity of the MSTI and PMU is checked and monitored by external institutions:
1. The Court of Accounts performs total and thematic controls of the use of funds both
from budget allocations and project sources;
2. The Ministry of Finance continuously monitors the situation of expenditures,
presentation of financial reports, financing plans and operating information;
3. The World Bank verifies the use of project funds, payment procedures and reporting.

6.11. External Audit

MSTI is responsible for regular audit of the project financial statements. The annual audits of
the project financial statements will be provided to the Bank within six months of the end of
each fiscal year, and also at the project closing. MSTI has agreed to disclose the audit reports
for the project within one month of their receipt from the auditors, by posting the reports on
the STS Website. Following the Bank's formal receipt of these reports from the MSTI, the
Bank will make them publicly available according to World Bank Policy on Access to
Information. If the period from the date of effectiveness of the loan to the end of the MSTI’s
fiscal year is no more than six months, the first audit report for the project may cover financial
statements for the period from effectiveness to the end of the second fiscal year. The contract
for the audit awarded during the first year of project implementation may be extended from
year to year with the same auditor, subject to satisfactory performance. The cost of the audit
will be financed from the proceeds of the project.
The ToRs for the project audit have been developed during the project preparation and are
part of negotiation package. The sample of ToR for financial audit is attached in Annex 8.
Before an auditor is contracted, the TORs shall be agreed with the WB country Financial
Management Specialist, and “No–objection” is to be received from the TAMP Project Task
Team Leader (TTL), in accordance to procurement procedures. The audit arrangements
(selection and contracting of auditor, etc.) are organized by MSTI with PMU support, both
being required to provide necessary support to the auditors in conducting their duties related
to the audit and to sign their part of financial reports for which preparation they are
responsible for. The project audit will cover the calendar year, beginning with the year when
the first disbursement takes place. Each audit report is to be submitted within six months after
the end of that calendar year. The list of eligible auditors is provided by the WB country
Financial Management Specialist before the selection of project auditors.

In accordance with "The World Bank Policy on Access to Information" dated July 1, 2010,
which requires that the audited financial statements are made publically available, the project
financial audit reports would be published within sixty days after submission of the audit
report to the Bank on its external website. The reports will be published at the same time on
the web sites of MoF and MSTI: www.mf.gov.md and www.fisc.md .
7. ANNEXES

Annex 1. List of legal acts governing Project activities

The following legal documents (project files) are governing or affecting in a way or another
Project’s operation:
1. Provisions of the Financing Agreement between the Republic of Moldova and the
International Development Association (IDA);
2. Provisions of the Loan Agreement between the Republic of Moldova and the
International Bank for Reconstruction and Development (IBRD);
3. TAMP Project Assessment Document, including the general implementation and
procurement plans;
4. Law on ratification of the Financing and Loan Agreements
5. Moldovan legal framework provisions, if applicable;
6. Regulations of Project Management Unit;
7. TAMP Project Operations Manual;
8. Project initiation documents and project plans for entire project and each component.
 Annex 2. MSTI Organizational Structure Chart12

1
This is the current MSTI organization chart. Any changes may incur as a result of the new law on the STS.
2
The PMU will report to Project Coordinator, who may be the Head or any Deputy Head of MSTI
 Annex 3. Results Framework and Monitoring
Project Name: Tax Administration Modernization Project (P127734)
Project Development Objectives
.

PDO Statement
To improve revenue collection, tax compliance and taxpayer services
These results are at Project Level
.

Project Development Objective Indicators

Cumulative Target Values
Indicator Name Baseline YR1 YR2 YR3 YR4 YR5 YR6 YR7 YR8 YR9 End Target
Time required
to comply with
186.00 186 186 186 175 165 165.00
taxes
(Hours)
Increase in
25822
additional tax
MDL per
assessed per 10 15 21 27 34 34
audit in
audit
2015
(Percent)
Share of active 19.35 20 21 22 23 24
taxpayers filing
income
declarations in 24
total registered
taxpayer
(Percentage)
Overall 52.3 52.4 52.7 53.3 54.2 54.7
efficiency of
54.7
VAT collection
(Percentage)
Efficiency of
VAT collection
11.06 11.16 11.34 11.70 12.20 12.54 12.54
by the STS
(Percentage)

Intermediate Results Indicators

Cumulative Target Values
Indicator Name Baseline YR1 YR2 YR3 YR4 YR5 YR6 YR7 YR8 YR9 End Target
Share of income
tax returns filed
39.60 40.00 45.00 50.00 55.00 60.00 60.00
electronically
(Percentage)
Share of large
taxpayer audits
which includes
related parties
0.00 0.00 10.00 20.00 30.00 35.00 35.00
in cases when
related parties
exist
(Percentage)
Number of hits 3,570,004 3,900,000 4,300,000 4,600,000 5,200,000 5,700,000
to the STS web-
5,700,000
site
(Number)
Decrease in tax
arrears 8.50 8.50 8.50 8.00 7.50 7.00 7.00
(Percentage)
The Training The list of The list of The The technical The 100% of 100% of
Center capacity training training identified capacity, permanent appropriate appropriate
in permanent programs programs is training including IT training STS staff have STS staff have
training is not identified programs solutions of the program is been trained in been trained in
program identified are Training Center fully use of business use of business
(Text) developed is developed functioning functions and functions and
new tools, data new tools, data
disaggregated disaggregated
by gender by gender

Satisfaction in - Satisfaction in Satisfaction in

crease - 0% crease - 10% crease - 20%
(compared to (compared to
Baseline survey
baseline) baseline)
conducted with
data
disaggregated
Mid-project Final survey
by gender,
survey conducted with
results and
Taxpayer Satisfactio conducted with data Satisfaction in
suggests actions
satisfaction n not data disaggregated crease - 20%
of the STS to
(Text) measured disaggregated by gender,
address
by gender, results and
weaknesses are
results and suggests actions
published on
suggests actions of the STS to
the STS website
of the STS to address
address weaknesses are
weaknesses are published on
published on the STS website
the STS website
.
 Indicator Description
Project Development Objective Indicators
Responsibility for Data
Indicator Name Description (indicator definition etc.) Frequency Data Source / Methodology
Collection
Time required to comply The indicator measures improved taxpayer Annual Doing Business World Bank
with taxes services part of the PDO, as taxpayer
services would lead to less time required
to prepare, file and pay (or withhold) CIT,
VAT, labor taxes, including payroll taxes
and social contributions (in hours per
year).
Increase in additional tax The indicator measures improved enforced Annual STS management reports STS
assessed per audit compliance part of the PDO. Increased
additional assessment (i.e., monetary
amount assessed during audit) as a result
of audit will measure improved efficiency
of audit planning process and quality of
audit. Better audits will lead to reduced
non-compliance
Share of active taxpayers The indicator measures improved Annual STS Management Reports STS
filing income taxes out of voluntary compliance part of the PDO.
registered taxpayers Ratio of active taxpayers-economic agents
filing income taxes (legal entities and
individual entrepreneurs) to all registered
taxpayers.
Overall efficiency of VAT The indicator measures improved revenue Annual Statistical data and STS’s STS
collection collection based on the c-efficiency of estimates
VAT (Ratio of VAT revenue to the
product of the standard rate and
consumption). Increases in the C-
efficiency will be used as an indicator of
reducing revenues losses as a result of
issues with administering VAT.
Efficiency of VAT The indicator measures efficiency of VAT Annual Statistical data and STS’s STS
collection by STS collection by the STS domestically, estimates
netting out performance of Customs. It is
calculated as actual VAT collection over
consumption net of imports
.
 Annex 4. Thresholds for procurement
Prior Review Thresholds:
Procurement Type Prior Review Threshold (USD Million)
1 Works, Turnkey and S&I of Plant & Equipment ≥5.0
2 Goods ≥0.5
3 IT Systems and Non-Consulting Services ≥0.5
4 Consultant (Firms) ≥0.2
5 Consultant (Individuals) ≥0.1

Procurement/Selection Method Thresholds:

Procurement /Selection Method Prior Review Threshold
1 Direct Contracting (Goods, Works & Non-Consulting Services) 50,000
2 Single Source Selection 2,000
3 Selection of Individual Consultants Only key positions, long term consultants
(irrespective of the cost estimate)
4 Negotiations with lowest bidder, cancellation of procurement/selection process and/or rebidding All

5 Terms of References All (irrespective of the threshold and review

status)
Procurement Method Thresholds
ICB NCB Shopping National Consultant Ceiling
Goods Works Goods Works Goods Works
≥1 ≥5 <1 <5 ≤$0.1 ≤$0.2 ≤0.3
 Annex 5. Samples of Project Reports
Tax Administration and Modernization Project
Project Sources and Uses of Funds

As of: _______________________

Actual Planned Variance (Over) Under

Current Current Current Life of
Quarter YTD CTD Quarter YTD CTD Quarter YTD CTD Project
Opening Cash Balance(s)
Designated Accounts (by accounts)
Other accounts (if any)
Total opening cash balance(s)

Add: Sources of Funds (by financiers and

implementing agency)
Designated Account
Direct payments
Other accounts (if any)
Total Sources
Less: Uses of Funds (by expenditure
category for each financier in accordance
with Financing Agreement and by each
implementing agency)

Total Uses
Closing Cash Balance(s)
Designated Account and other accounts (for
each account)
Other accounts (if any)
Total closing cash balance(s)
 Tax Administration and Modernization Project
Uses of Funds by Project Component/Activity (Statement of Expenditure Detail)
As at: __________________________

Actual Planned Variance (Over) Under

Current Current Current Life of

Project components/activities Quarter YTD CTD Quarter YTD CTD Quarter YTD CTD Project

Consolidated Agricultural Projects Management Unit (PMU)

Component 1. Tax legislation reform

Component 2: Institutional development

Component 3: Operational Development

Component 4: IT Infrastructure and System Modernization

Component 5: Project Management and Change

Management

Overall Total
 Tax Administration and Modernization Project
Designated account statement
MSTI
(for the quarter ended XXXX.)
Designated Account № ____________ in USD
Bank:
USD
Designated Account opening balance as at _______20xx 0

Total Credits (add):

Advance to DA during the period 0
0
0 0

Total debit (less): Refund to IDA from DA during the period 0

Amount of eligible expenditures paid from DA during the
period 0
Funds transferred to the project account in MDL 0
0 0

Designated Account closing balance as at______20xx 0

 Tax Administration and Modernization Project
Designated account statement
MSTI
(for the quarter ended XXXX.)
Designated Account № ____________ in USD
Bank:
USD
Designated Account opening balance as at _______20xx 0

Total Credits (add):

Advance to DA during the period 0
0
0 0

Total debit (less): Refund to IBRD from DA during the period 0

Amount of eligible expenditures paid from DA during the
period 0
Funds transferred to the project account in MDL 0
0 0

Designated Account closing balance as at______20xx 0

 Tax Administration and Modernization Project

IBRD - Statement of Expenditures (SOE)

Payments made during the period from ________________ to ______________ Loan No.:
Application No.:
Category No.:

SOE No.:

1 2 3 4 5 6 7 8 9 10 11

Supplier’s WB Type of Good or Currency and Total Currency and % Financed Amount Currency and Exchange Date of Remarks
Name Contract Service / Brief Amount of Contract Total Amount by Eligible Amount Paid Rate Payment
Number in Description of Invoice IBRD/IDA for from
Client Covered by Financing Designated
Connection Application (5 x 6) Account (if
Applicable)

TOTALS

Supporting documents for this SOE retained at ___________________________________________

(location)
 Tax Administration and Modernization Project

Payments Made during Reporting Period

Against Contracts Subject to the Association’s Prior Review

Date of WB’s Share of

WB’s Non Amount Paid to Amt Paid to
Contract Contract Contract Objection Supplier during Supplier during
Number Supplier Date Amount to Contract Period Period
 Tax Administration and Modernization Project

Balance Sheet

Period ended ______________

ASSETS

Total cash 0.00

Cash under the Agreement xxx 0.00
Undisbursed balance 0.00

Cumulative expenses 0.00

Project expenses 0.00

TOTAL assets 0.00

EQUITY AND LIABILITIES

Funding 0.00
Agreement xxxx 0.00
TOTAL equity and liabilities 0.00
 Annex 6. TORs for the Project staff

Terms of Reference for

Project Manager (PM)

Objectives of the Assignment of the Project Manager (PM)

The main objective of the PM is to ensure the coordination and successful implementation
of the TAMP project from initiation and planning to execution, monitoring, control and
closing, within the approved budget, scope and terms.

The PM is responsible for the management and coordination of the PMU team activities.

The PM will benefit from the support of the PMU team, including the Procurement
Specialist and Financial Management Specialist for all the administrative issues.

1. Scope of Work

1.1. The scope of work and activities of the TAMP Project Manager (PM)
The scope of work and activities of the PM will include the following:
 Manage the TAMP project from start to end throughout its life cycle by coordinating the
efforts of the project team(s) towards the achievement of the project objectives and
realization of the expected benefits for STS and other stakeholders. Coordination of
change management activities to facilitate the smooth realization of the transformations
within STS;
 Develop in close collaboration with other PMU team members of the project
management function and capabilities within STS, including provision of training in
project and program management and change management for the STS employees. To
setup an effective and efficient internal control (for goods, works, services, fixed assets);
 Ensure the fulfillment of the provisions of the Financing and Loan Agreements, and if it
will be necessary to coordinate the activities related to the amendment of these
agreements and to all the administrative procedures resulting from such an amendment to
be effective;
 Coordinate the activities related to the inclusion of the TAMP project into the list of
projects with tax exemptions applied for the services and goods delivered within its
scope, according to the applicable legal framework;
 Coordinate and participate to the drafting and updating of the TAMP Project Operations
Manual (POM);
 Ensure TAMP project objectives are aligned to the STS strategic objectives. Coordinate,
align and synchronize the activities related to the TAMP components and / or sub-
components implementation with the purpose:
o to avoid and / or minimize the risks of overlaps by identifying interdependencies
between TAMP components and / or sub-components
o to take into account the STS institutional capacity, and
o to increase the value of benefits realized at the program level;
 Ensure alignment and synchronization of the TAMP project activities with other
initiatives, projects and actions being implemented within STS and, if it’s the case, within
the Ministry of Finance;
 Ensure effective communication and liaison with TAMP Project Coordinator and Project
Owner(s), including for the purpose of strategic and tactical documents and plans
approval and coordination;
 Cooperate and communicate effectively with TAMP key stakeholders (MSTI,
FiscServInform, World Bank, Ministry of Finance, members of the Project Steering
Committee(s) and Private Sector Advisory Panel, e-GOV, consultants and other
stakeholders) with the aim to identify their requirements, needs and expectations and
manage them to ensure the project results will meet the stakeholders expectations;
 Conduct TAMP Project Steering Committee(s) and Private Sector Advisory Panel
meetings;
 Ensure an effective communication and information of the society and taxpayers on the
TAMP project activities already completed and scheduled to be implemented. Promotion
and marketing of the TAMP project within and outside STS;
 Ensure an effective communication and liaison with the IT Project Manager, Procurement
and Financial Management Specialists for all project activities;
 Ensure compliance with World Bank procedures and guidelines related to procurement
and financial management, as well as with POM provisions, MSTI internal procedures,
and Moldovan legal framework requirements within the TAMP implementation;
 Manage effectively and efficiently the TAMP project including the processes of project
initiation, planning, execution, monitoring, control and closing, and inter alia performing
the following project management activities:
o project scope management including project stakeholders requirements
management;
o project stakeholders management, including stakeholder’s identification, analysis
and developing strategies on stakeholder’s management and communication;
o project integration management, including project charter, project and subsidiary
plans development, implementation of an effective and efficient change control
framework;
o project time and scheduling management, including identification of the
interdependencies between the activities, scheduling based on available
capabilities and resources, as well on existing constraints, management of the
project within the agreed terms;
o project human resources management, including the coordinate, allocate tasks,
assign responsibilities and accountability, assess and manage the performance of
the TAMP project implementation team members from MSTI (including PMU
team) and subcontracted service providers;
o project costs management, including costs estimates and analysis, budgeting,
planning and allocation of funds, monitoring and control of approved plans and
budgets;
o project procurement management, including planning, administering and
monitoring procurements;
 o project risks management, including risks assessment and analysis, developing
risk response strategies in order to minimize or exclude any negative impact on
the project;
o project quality management, including identifying and implementing quality
assurance and quality deficiencies remediation activities to ensure compliance to
the requirements set for the deliverables.
 Monitor the compliance to World Bank, MSTI and local legal framework provisions and
guidelines on procurement, financial management and reporting activities within the
project financed by IDA and IBRD;
 Develop and adjust/update the TAMP project plan according to the requirements set by
POM, MSTI project management procedures and best practices for projects of similar
dimension, scope and complexity, and coordinating it with the MSTI Project Coordinator
and Steering Committee;
 Develop TAMP annual plans including any subsidiary plans (for project components and
subcomponents) with a sufficient level of detail to allow a better management,
monitoring and control of current activities;
 Exercise independent judgment by promptly bringing potential problems to the attention
of the TAMP Project Coordinator and PMU team members. Keep others informed as
appropriate, by providing relevant information, reports or status updates;
 Assist and supervise the MSTI Evaluation Committee(s) in defining needs of services and
goods to be subcontracted, administering procurement, selection, negotiation and
subcontracting vendors or consultants to meet the TAMP project needs;
 Schedule and facilitate weekly TAMP project progress meetings and submit weekly
progress reports to key project stakeholders;
 Initiate, review, coordinate and/or approve modifications to project plans.
 Perform any other activities related to the TAMP project as it may be required by the
approved project plans.

1.2. Qualifications and Experience

The most suitable candidate for the Project Manager position, who will be able to provide
support to MSTI in successfully implementing the TAMP project, is expected to
demonstrate specific knowledge and abilities in the following areas:
Knowledge:
a) Administration and Management;
b) Project Management advanced level (Waterfall and Agile methodologies), including
inter alia:
 Project Integration Management
 Project Scope Management
 Project Time Management
 Project Cost Management
 Project Quality Management
 Project Human Resource Management
 Project Communications Management
 Project Risk Management
  Project Procurement Management
 Project Stakeholder Management.
c) Change management
d) Business analysis;
e) Tax administration;
f) World Bank regulations and guidelines related to projects financed by IDA and
IBRD

Specific abilities:
a) Integrity – being honest and ethical
b) Strategic thinking, seeing the big picture without losing details
c) Prioritisation and information ordering
d) Judgement and decision making
e) Critical thinking, system analysis and complex problem solving
f) Negotiation skills
g) Coordination, persuasion and effective communication
h) Stress tolerance and ability to work under pressure
i) Time management
j) Ability to work independently
k) Emotional intelligence

Therefore, the candidates for the Project Manager position will be evaluated against the
following main requirements on qualifications and experience:

Qualifications:
The Project Manager should have the following minimum Qualifications:
a) Internationally recognized professional certification in Project Management (PMP,
Prince2)
b) Degree in business administration and/or finance/accounting/computers or informational
systems;
c) Internationally recognized professional certifications in Business Analysis, Accounting
and Finance would be an advantage;
d) Knowledge of World Bank procedures and guidelines related to project procurement and
financial management;
e) Knowledge of local and regional consulting and IT development services markets would
be an advantage;
f) Excellent written and oral communication skills in English and Romanian, including the
ability to draft memos, messages, letters and internal regulations, documents and reports.
Fluency in Russian would be an advantage;
g) Excellent computer skills in Microsoft Office tools (Word, Excel, PowerPoint),
Microsoft Project, Adobe Acrobat, Microsoft Outlook and Share Point, Internet use.

Experience:
The Project Manager should have proven experience as follows:
a) More than 7 years of project management experience (minimum 1 or 2 referrals);
b) Experience in managing of projects/programs in central public authorities from Republic
of Moldova or the region (South-Eastern, Central or Eastern Europe) (minimum 1 or 2
referrals) would be an advantage;
c) Experience of project management in the World Bank projects of similar scale and
complexity would be an advantage;
 Terms of Reference for
IT Project Manager (ITPM)

1.1. Objectives of the Assignment of the IT Project Manager (ITPM)

The ITPM's will be responsible for the overall management and coordination of the ITMS
project team activities in implementation of the ITMS system.

The ITPM will benefit from the support of the PMU team, including the Procurement
Specialist and Financial Management Specialist for all the administrative issues.

The main its objective is to ensure effective and flexible overall coordination and
implementation of the ITMS solution from initiation, planning, procurement, data migration,
to system step-by-step implementation and adjustment to the user’s requirement, user training
and Go'Live, according to set procedures and within the approved budget, schedule, and scope.

2. Scope of Work

2.1. The scope of work and activities of the ITMS Project Manager (ITPM)
The scope of work and activities of the ITPM will include the following:
 Provide end-to-end project management throughout the lifecycle by directing the efforts of
project team(s) to the successful implementation the ITMS solution and release of expected
benefits;
 In close collaboration with the TAMP Project Manager and other PMU team members, set
up and develop MSTI and PMU project management function and capabilities, including
effective and efficient systems of internal control (goods, works, services, fixed assets, civil
works);
 Contribute to drafting and maintain up to date of the TAMP Project Operations Manual
(POM) in all the aspects that relates to the ITMS project;
 Ensure the alignment of the ITMS project objectives to TAMP project and STS strategic
objectives. Coordinate, align and synchronize the ITMS project activities with other TAMP
components or subcomponents projects activities, thus increasing the benefits realization at
the program level;
 Exercise independent judgment by promptly bringing potential problems to the attention of
the TAMP Project Manager and PMU team members. Keep others informed as appropriate,
by providing relevant information, reports or status updates;
 Ensure adherence during the implementation of the ITMS to World Bank procedures and
guidelines, TAMP POM guidelines, MSTI internal procedures and Moldovan legal
framework requirements
 Ensure the drafting and updating, present to TAMP Project Managemer and Project Steering
Committee for approval procurement and implementation strategies for the ITMS solution
and related components;
 Ensure the effective communication and liaison with the TAMP Project Manager and
Project Coordinator, approve and coordinate with them all the ITMS project plans, strategic
and tactic decisions.
  Ensure the effective communication and liaison with the PMU Procurement and Financial
Management Specialists for all the procurement and financial management activities and
issues from to the ITMS project;
 Effectively coordinate and communicate with TAMP and ITMS project key stakeholders
(MSTI, FiscServInform, World Bank, Ministry of Finance, Steering Committee and Private
Sector Advisory Panel members, e-GOV, consultants and any other stakeholders) in order to
identify requirements, needs and expectations and manage them to ensure the project results
meets the key stakeholder’s expectations;
 Effectively and efficiently manage the ITMS project through the initiation, planning,
execution, monitoring & control and closing group of processes delivering activities related
to main area of project management (scope, stakeholders, integration, costs, human
resources, time, procurement, risks, quality management), including inter alia estimating
costs and budgets, scheduling, coordinating, assigning resources, technical requests,
architecture reviews, network deployment, infrastructure and application deployment, data
migration, development of applications and databases, client management and assisting in
recommending business solutions/alternatives;
 Develop or update ITMS project plans, including annual plans, according to the POM
requirements, MSTI project management procedures and best practices for projects of
similar size, complexity and scope and coordinate these plans with TAMP Project Manager,
MSTI Project Coordinator and Project Steering Committee;
 Assist and supervise the MSTI Evaluation Committee(s) in defining needs of services and
goods to be subcontracted, administering procurement, selection, negotiation and
subcontracting vendors or consultants to meet the ITMS project needs, including provision
of independent opinion on the procurement issues.
 Monitor or track the ITMS project milestones and deliverables;
 Direct or coordinate activities, assign duties, responsibilities, and spans of authority to the
ITMS project team. Confer with the ITMS project team (from MSTI and all subcontracted
Consultants and Suppliers) to identify and resolve problems.
 Monitor the performance of project team members, providing and documenting performance
feedback.
 Prepare and submit ITMS project weekly status reports by collecting, analyzing, and
summarizing information and trends.
 Schedule and facilitate meetings related to the ITMS project.
 Initiate, review, coordinate and/or approve modifications to project plans.
 Perform risk assessments to develop response strategies.
 Perform any other activities related to the ITMS project as it may be set in project plans.

2.2. Timing and Inputs

It is estimated that the ITMS project will be implemented within four years starting with
November 2016. The initial duration of the contract will be 24 months with the possibility
to subsequently extend the term for the next years based on performance appraisal results
and project needs.
The assignment requires a full time involvement for at least 8 hours each day, Monday to
Friday, for a minimum period of 40 hours per week. The ITPM may take up to 4 weeks of
unpaid leave each year (12 consecutive months). The assignment is expected to start in
November 2016.

2.3. Qualifications and Experience

The most suitable candidate for the IT Project Manager position, who will be able to provide
support to MSTI in successfully implementing the ITMS solution, is expected to
demonstrate specific knowledge and abilities in the following areas:

Knowledge:
a) Administration and Management;
b) Project Management advanced-level (Waterfall and Agile methodologies), including
inter alia:
 Project Integration Management
 Project Scope Management
 Project Time Management
 Project Cost Management
 Project Quality Management
 Project Human Resource Management
 Project Communications Management
 Project Risk Management
 Project Procurement Management
 Project Stakeholder Management.
c) IT systems architecture and security

Specific abilities:
a) Integrity – being honest and ethical
b) Strategic thinking, seeing the big picture without losing details
c) Prioritisation and information ordering
d) Judgement and decision making
e) Critical thinking, system analysis and complex problem solving
f) Coordination, persuasion and effective communication
g) Stress tolerance and ability to work under pressure
h) Time management
i) Ability to work independently

Therefore, the candidates for the IT Project Manager position will be evaluated against the
following main requirements on qualifications and experience:

Qualifications:
The IT Project Manager should have the following minimum Qualifications:
a) Internationally recognized professional certification in Project Management (PMP,
Prince2)
b) Degree in business administration or computer science/information systems;
c) An internationally recognized professional certification in Business Analysis, IT systems
architecture and security (CBAP, TOGAF, ITIL, CISA, etc.) would be an advantage;
 d) Knowledge of World Bank procedures and guidelines related to project procurement and
financial management;
e) Excellent written and oral communication skills in English and Romanian, including the
ability to draft memos, messages, letters and internal regulations, documents and reports.
Fluency in Russian would be an advantage;
f) Excellent computer skills in Microsoft Office tools (Word, Excel, PowerPoint),
Microsoft Project, Adobe Acrobat, Microsoft Outlook and Share Point, Internet use.

Experience:
The IT Project Manager should have proven experience as follows:
a) More than 7 years of project management experience (minimum 1 or 2 referrals);
b) Recent experience (last 3-4 years) in managing of at least one complex IT project focused
on the implementation of an integrated IT system (including ERP solutions) in an
organisation from Republic of Moldova or region (South-Eastern, Central or Eastern
Europe) with more than 200 employees (minimum 1 or 2 referrals). Recent experience
with implementing an ITMS system in a tax authority would be an advantage;
c) At lease 5-8 years’ experience with Account team, Infrastructure Delivery team (server,
network, storage, etc), quality testing and 3rd party vendors experience in deployment of
an IT integrated system or ERP;
d) Experience of project management in the World Bank projects of similar scale and
complexity would be an advantage.
 Terms of Reference for
Project Manager Assistant (PMA)

1.1. Objectives of the Assignment of the Project Manager Assistant (PMA)

The PMA's role is to provide support to the whole TAMP implementation team, with an
emphasis of direct assistance to the TAMP and IT Project Managers, Procurement
Specialist and Financial Management Specialist for the everyday project management
activities.

The main objectives of the assignment are the following:

- Provide assistance to the TAMP and IT Project Managers in all administrative and
project management activities to successfully manage the TAMP project;
- Provide assistance to the PMU Procurement Specialist and Financial Management
Specialist in performing administrative activities in accordance to the provisions of the
Credit and Loan Agreements, World Bank’s Guidelines and Procedures, as well as
local legal requirements;
- Ensure the administrative activities are performed timely and facilitates the smooth
project operation of TAMP.

2. Scope of Work

2.1. The scope of work and activities of the Project Manager Assistant (PMA)
The scope of work and activities of the PMA will include the following:
 Assist the PMU Project Manager to set up the TAMP project management function and to
fulfill day-to-day administrative project management activities;
 Provide support to the TAMP and IT Project Managers, Procurement and Financial
Management Specialists in drafting the project management, procurement and financial
documents;
 Work with a high level of discretion in providing comprehensive executive and
administrative assistance in setting and managing priorities and the workflow of the TAMP
and IT Project Managers, as well as administrative coordination and communication with
key stakeholders (MSTI, World Bank, Ministry of Finance, Steering Committee and
Advisory Panel members, consultants and any other stakeholders) and across the PMU to
facilitate a changing business environment (i.e. scheduling appointments, coordinating
travels and study visits, independently resolving scheduling conflicts, screening and
prioritizing incoming calls and correspondence, and monitoring activities to ensure
appropriate follow-up);
 Compose, type, and distribute meeting notes, routine correspondence, or reports, such as
presentations or expense, statistical, or monthly reports.
 Open, read, route, and distribute incoming mail or other materials and answer routine letters.
Mail newsletters, promotional material, or other information.
 Review work done by others to check for correct spelling and grammar, ensure that
organisation format policies are followed and recommend revisions.
  In close collaboration with the TAMP and IT Project Managers and other team members,
monitor deliverables and follow up on key actions as necessary. Exercise independent
judgment by promptly bringing potential problems to the attention of the Project Managers
and team members. Keep others informed as appropriate, by providing relevant information,
reports or status updates;
 Take responsibility for logistical support of the PMU team meetings e.g. prepare agenda,
draft minutes (as needed), and monitor on agreed actions. Ensure that relevant background
materials are available for meetings, deadlines are met and documents are of high quality
and adhere to administrative and operational guidelines as set by the unit. Manage and
monitor communications sent by the team when needed;
 Provide leadership on quality control of electronic and hard copy documents to ensure
consistency and compliance with established standards and procedures; as well as
establish/implement/maintain effective monitoring, tracking, filing and retrieval system for
the Project Manager and other members of the team in compliance with World Bank and
other internal policies. Support preparation of PMU team’s correspondence, including
documents/letters to be sent by the Head of the PMU on behalf of the team, ensuring
adherence to unit’s and institutional guidelines, including appropriate clearances and
distribution;
 Maintain in good order the archive of project documents in hard and electronic copies
according to PMU guidelines. Ensure timely periodic back-up of data files, including emails
database;
 Provide support for the preparation and logistical planning of a wide variety of events within
the TAMP project scope including workshops, seminars, presentations, trainings and
audio/video conferences;
 Help maintain and update contacts lists and distribution databases in SharePoint and Excel,
as well as maintain/update records of the PMU Team’s leave and mission information;
 Process other consultant’s contracts, and follow up on contract details with the relevant
parties, as well as on any issues related to payment requests, travel arrangements, purchase
orders, etc.
 Manage all aspects involved in welcoming new staff or external consultants joining the
team, including organizing internal introductory meetings across the unit; logistical
arrangements for the new staff member’s office and equipment, etc.
 Conduct searches to find needed information, using such sources as the Internet;
 Order and dispense supplies;
 Assist with PMU administrative tasks as assigned by the TAMP and IT Project Managers.

2.2. Qualifications and Experience

The most suitable candidate for the PMU Project Manager Assistant position, who will be
able to provide support to MSTI in successfully fulfilling the project management function,
is expected to demonstrate specific knowledge and abilities in the following areas:

Knowledge:
g) Administration and Management;
h) Project Management intermediate-advanced level (Waterfall and Agile
methodologies), including inter alia:
  Project Integration Management
 Project Scope Management
 Project Time Management
 Project Cost Management
 Project Quality Management
 Project Human Resource Management
 Project Communications Management
 Project Risk Management
 Project Procurement Management
 Project Stakeholder Management.
i) Knowledge of administrative and clerical procedures.

Specific abilities:
a) Integrity – being honest and ethical;
b) Attention to detail;
c) Prioritisation and information ordering
d) Stress tolerance and ability to work under pressure
e) Time management
f) Ability to work independently
g) Communicate effectively
h) Monitoring

Therefore, the candidates for the PMU Project Manager Assistant position will be evaluated
against the following main requirements on qualifications and experience:

Qualifications:
The Project Manager Assistant should have the following minimum Qualifications:
h) Degree in business administration;
i) Degree in philology would be an advantage;
j) Professional certification in Project Management would be an advantage.
k) Excellent written and oral communication skills in English and Romanian, including the
ability to draft memos, messages, letters and internal regulations, documents and reports.
Fluency in Russian would be an advantage;
l) Excellent computer skills in Microsoft Office tools (Word, Excel, PowerPoint), Adobe
Acrobat, Microsoft Outlook and Share Point, Internet use. Skills in using Microsoft
Project would be an advantage.

Experience:
The Project Manager Assistant should have proven experience as follows:
d) At least 3 years of successful experience with administrative project work and assisting
the project managers in performing project management activities (minimum 2 referrals);
e) Experience of project administration in the World Bank projects of similar scale and
complexity in Republic of Moldova or in the region (South-Eastern, Central and Eastern
European countries) would be an advantage ;
f) Experience of performing of administrative activities in projects implementes in central
public authorities from the Republic of Moldova would be an advantage;
g) Experience in event management would be an advantage.
 Terms of Reference for
Procurement Specialist (PS)

1.1. Objectives of the Assignment of the Procurement Specialist (PS)

The Procurement Specialist is responsible for leading the procurement function by providing
support and overseeing all aspects of the procurement processes including market analysis,
procurement strategy, bidding, negotiations, supplier contracting and management within the
scope of the TAMP project. The Procurement Specialist will also be required to provide support
to MSTI Evaluation Committee(s) in the procurement/selection process under the TAMP
project.

The main objectives of the assignment are the following:

- Provide assistance to MSTI to successfully manage and carry out procurement activities
for the TAMP project;
- Ensure the procurement activities are done in accordance to the provisions of the Credit
and Loan Agreements, World Bank’s Guidelines and Procedures, as well as local legal
requirements;
- Ensure the procurement activities are performed timely and facilitates the smooth
project operation of TAMP, and the risks related to procurement and contract
management are minimized or eliminated;
- Develop the procurement capacity of the PMU and MSTI to ensure long-term
sustainability of the project outcomes.

2. Scope of Work
2.1. The scope of work and activities of the Procurement Specialist (PS)
The scope of work and activities of the PS will include the following:
 Set up the TAMP project procurement management function in collaboration with the MSTI
Public Procurements and Property Administration Department and Evaluation
Committee(s) representatives, the TAMP Project Coordinator and Project Manager;
 Establish and enhance, as appropriate, the systems of internal control (goods, works,
services, fixed assets);
 Draft and update the TAMP Project Operations Manual (POM) in terms of procurement
management procedures, so as to ensure the full compliance with the World Bank
procedures, MSTI internal regulations and requirements set by the local legal framework;
 Develop, implement and maintain procurement policies with regular review to ensure
relevance, conformance with World Bank guidelines, best practices and ensure compliance
with all internal and regulatory policies.
 Ensure the effective communication and liaison with the World Bank, MSTI Evaluation
Committee(s) and Public Procurements and Property Administration Department, Public
Procurements Agency on all procurement management and administration issues;
 Analyze and define the needs for procurement, analyze the markets for specific goods and
services, identify and screen potential suppliers, analyze costs and recommend the most
suitable procurement strategy for each procurement exercise;
 Maintain and update, upon request or when it might be necessary, the TAMP project overall
Procurement Plan.
  Draft Annual Procurement Plans for the TAMP project and subsidiary Procurement Plans
for TAMP components and sub-components as part of the Annual Operating Planning
exercise of the procurement of goods, works and services, including consulting services.
 Maintain and regularly update the Annual Procurement Plans (i.e. updating the plan twice a
year and whenever requested by the Bank, MSTI or it might be necessary);
 Provide advice on interpretation of procurement policy, giving expert advice and guidance
to members of the MSTI Evaluation Committee(s), MSTI Public Procurements and
Property Administration Department and PMU team;
 Draft using the World Bank respective formats Bidding Documents (BDs), Terms of
References (ToR), requests of expression of interest (REoI), technical specifications,
Requests for Proposals (RFP), Evaluation Reports and all other relevant documents required
for the procurement of goods, works and services, including consulting services for the
TAMP project and sub-projects;
 Thoroughly review all bidding documentation prior to submission to the World Bank for
‘No Objection’;
 Assist the TAMP Project Manager and the IT Project Manager in the procedure of getting
the World Bank prior or post ‘No Objection’, as it might be required. Where applicable,
ensure the required World Bank “No Objection” relating to a specific expenditure is
available before effecting payment;
 Ensure that the procurement process is conducted in accordance with the Procurement Plan,
Project Operations Manual, in line with provisions the World Bank Procurement Guidelines
and local legal framework;
 Assist the TAMP Project Manager and the IT Project Manager on drafting of the
correspondence with bidders during the bidding process or suppliers during contract
implementation;
 Oversee the opening of Expressions of Interest, Bids and Requests For Proposals in a
timely manner and assist the TAMP Project Manager and the IT Project Manager on
drafting of the minutes of bid (or proposals) opening;
 Assist the Evaluation Committee(s) to ensure that evaluations are conducted in accordance
with the criteria stipulated in the bidding documents and World Bank procedures and
guidelines;
 Draft all necessary evaluation reports and present them to the Evaluation Committee(s)
members, and submit the evaluation reports to the World Bank for ‘No objection’, through
the TAMP Project Manager and the IT Project Manager or Project Coordinator;
 Assist the PMU staff and MSTI Evaluation Committee members to conduct contract
negotiations with suppliers and on preparation of draft negotiated contract; and final drafts
of contracts for award;
 Ensure the contracts for works, goods and consulting services are prepared based on the
draft contracts included in the approved Bidding Documents / Request for Proposals, using
the World Bank formats;
 Draft, coordinate with the TAMP Project Manager and the IT Project Manager, publish and
submit to World Bank notifications for advertising contracts, General Procurement Notices
(GPN), Specific Procurement Notices (SPN) and Contract Award Notices;
 Provide guidance to the TAMP Project Manager and the IT Project Manager on all
procurement related issues;
  Assist the TAMP Project Manager, the IT Project Manager and Financial Management
Specialist on monitoring and control of contracts execution to ensure that all the activities
are conducted according to the Project Schedule and the Procurement Plan, and the
assignments are carried out in accordance with the contract terms and provisions.
 Countersign (jointly with the MSTI' representatives) the acceptance of the goods and
services provided in accordance with the terms of reference, contracts and the relevant
technical specifications;
 Maintain up to date all project procurement records and documents in line with the approved
policies, standards and procedures as set out in the Project Operations Manual;
 Ensure that the filing system of the procurement records and documents are up to date at all
times and that they are easily retrievable for reviews and audit purposes;
 Perform any other procurement related duty as may be requested by the TAMP and IT
Project Managers.
 Initiate corrective measures to address internal financial shortcomings and irregularities as it
might be requested and approved;
 Support and build the capacity in procurement management of PMU and MSTI staff;
 Report to the Project Coordinator and Project Manager on any issue identified with
recommendations on its remediation;
 Submit to the Project Manager a monthly progress report on procurement management and a
final report at the end of the contract period outlining achievements and challenges
pertaining to the procurement management function.

2.2. Qualifications and Experience

The most suitable candidate for the PMU Procurement Specialist position, who will be able
to provide support to MSTI in successfully fulfilling the procurement management function,
is expected to demonstrate specific knowledge and abilities in the following areas:

Knowledge:
j) Administration and Management;
k) Macroeconomics, Marketing and Business Intelligence;
l) Contract law – international aspects and Moldovan legal framework requirements;
m)The World Bank guidelines and regulations as follows:
 World Bank’s Guidelines “Procurement of Goods, Works, and Non-Consulting
Services under IBRD Loans and IDA Credits & Grants”, published in January
2011, revised in July 2014 (Procurement Guidelines); and
 World Bank’s Guidelines "Selection and Employment of Consultants under IBRD
Loans & IDA Credits & Grants by World Bank MSTIs”, published in January
2011, revised in July 2014 (Consultant Guidelines), and
 “Guidelines on Preventing and Combating Fraud and Corruption in Projects
Financed by IBRD Loans and IDA Credits and Grants”, dated October 15, 2006
and revised in January 2011;
n) Legal Agreements’ provisions - Financing Agreement between the Republic of
Moldova and the International Development Association (IDA) and the Loan
Agreement between the Republic of Moldova and the International Bank for
Reconstruction and Development (IBRD) both dated June 28, 2016.
 o) “International Development Association General Conditions for Credits and Grants”,
dated July 31, 2010, with the modifications set forth in Section II of the Appendix;
p) “International Bank for Reconstruction and Development General Conditions for
Loans”, dated March 12, 2012, with the modifications set forth in Section II of the
Appendix;
q) The legal framework applicable to procurement in public authorities in Republic of
Moldova.
r) Project management basic processes and documents.
s) Knowledge of administrative and clerical procedures.

Specific abilities:
a) Integrity – being honest and ethical;
b) Analysing data or information;
c) Attention to detail;
d) Prioritisation and information ordering
e) Problem sensitivity and complex problem solving
f) Negotiation skills
g) Stress tolerance and ability to work under pressure
h) Persistence
i) Time management
j) Ability to work independently
k) Train the others

Therefore, the candidates for the PMU Procurement Specialist position will be evaluated against
the following main requirements on qualifications and experience:

Qualifications:
The Procurement Specialist should have the following minimum Qualifications:
a) Degree in business administration, procurement, marketing and/or macroeconomics;
b) Degree or qualification in law and/or contract management would be an advantage;
c) Internationally recognized professional qualification or certification in Procurement
would be an advantage;
d) Trainings and courses in Procurement management according to World bank procedures
would be an advantage;
e) Professional certification in Project Management or a course certificate would be an
advantage.
f) Excellent written and oral communication skills in English and Romanian, including the
ability to draft memos, letters and internal regulations, bidding documents and reports.
Fluency in Russian would be an advantage;
g) Excellent computer skills in Microsoft Office tools (Word, Excel, PowerPoint),
Microsoft Outlook and Internet use. Skills in using Microsoft Project would be an
advantage.

Experience:
The Procurement Specialist should have proven experience as follows:
a) At least 5 years of successful experience in procurement management (planning,
administration, monitoring and controlling and closing processes) in the World Bank
projects of similar scale and complexity (minimum 1 or 2 referrals) in Republic of
Moldova or in the region (South-Eastern, Central and Eastern European countries);
b) Experience in managing procurement (including drafting bidding documents, conducting
bidding conferences) based on International Competitive Biddings (ICB) procedure
(experience in ICB procurements for IT systems would be an advantage);
c) Experience and knowledge of the trends on local, regional and international markets for
consulting and IT development services;
d) Experience in delivering trainings, coaching others in procurement management;
e) Experience of participation in project management teams would be an advantage;
 Terms of Reference for
Financial Management Specialist (FMS)

1.1. Objectives of the Assignment of the Financial Management Specialist (FMS)

The PMU Financial Management Specialist will provide support in planning and
monitoring the use of funds under the project, ensuring the accounting of project
transactions and events, drafting the payment documents, project financial statements and
their submission to the World Bank and Moldovan Authorities, render assistance in
planning and organizing the external audit of the project financial statements.

The main objectives of the assignment are the following:

- ensure fiduciary safeguards facilitating the smooth project operation, by assisting the
STS in fulfilling its financial management function within the scope of TAMP;
- ensure that the TAMP project financial management, disbursement and administration
of funds, the financial reporting and auditing are performed timely and in compliance
with World Bank procedures and Moldovan legal framework;
- develop the necessary project financial management skills and technical capabilities
within STS.

2. Scope of Work
2.1. The scope of work and activities of the Financial Management Specialist (FMS)
The scope of work and activities of the FMS will include the following:
 Set up the TAMP project financial management function in collaboration with the MSTI
Economic and Financial Department, the TAMP Project Coordinator and Project Manager,
including the setup of the 1C software adapted for project accounting and reporting;
 Establish and enhance, as appropriate, the systems of internal control (goods, works,
services, fixed assets, civil works);
 Draft and update the TAMP Project Operations Manual (POM) in terms of financial
management and disbursement, accounting and financial reporting procedures so as to
ensure the full compliance with the World Bank procedures, MSTI internal regulations and
requirements set by the Ministry of Finance;
 Ensure the effective communication and liaison with the financial management and
payments specialists of the MSTI Finance and Economic Department, Ministry of Finance,
State Treasury and World Bank on all financial management, disbursement, payments,
accounting, financial reporting and auditing issues;
 Maintain up to date all project accounting records and accounts in line with the approved
accounting policies, standards and procedures as set out in the POM;
 Prepare project budgets and cash flow forecasts in consultation with the MSTI Economic
and Financial Department, TAMP Procurement Specialist, TAMP Project Manager and
Project Coordinator;
 Provide assistane to the Procurement Specialist in drafting procurement plans with cost
estimating, payments planning, financial and tax risks assessment and mitigation, drafting
contractual clauses related to payments and taxes;
 Provide assistance to MSTI top management, as well as to MSTI Economic and Financial
Department, in including the TAMP project in the list of technical assistance projects
exempted of specific taxes, and provison to project suppliers of documents confirming the
application of such a specific tax regime;
 Provide assistance to the MSTI Economic and Financial Department in preparing forecasts
for the purposes of Medium Term Budget Framework in terms of project related cash-flows
and expenditures;
 Ensure that disbursements and payments are made in accordance with the approved budgets,
procurement plans, contracts provisions and cash flow forecasts, according to POM and
World Bank procedures;
 Where applicable, ensure the required World Bank “No Objection” relating to a specific
expenditure is available before effecting payment;
 Inform the Procurement Specialist where “No Objection” is not available and follow up on
that issue to ensure that the project expenditures are properly filed as part of the accounting
records;
 Maintain relevant books and records for the Project that reflect transactions by cost
categories, sub-projects and components;
 Ensure that the filing system of the accounting records are up to date at all times and that
they are easily retrievable for reviews and audit purposes;
 Draft and timely submit to the MSTI Economic and Financial Department, TAMP and IT
Project Managers and Project Coordinator the periodic financial reports, (i.e.
monthly/quarterly/annually) in the formats approved by the World Bank and the Ministry of
Finance of the Republic of Moldova and in line with the POM, project documents and
financing agreement;
 Together with the MSTI Economic and Financial Department, TAMP and IT Project
Managers and Project Coordinator ensure strict adherence to MSTI and TAMP internal
control systems and procedures for all areas of project operation;
 Ensure and assist the MSTI Economic and Financial Department staff to liaise with the
external auditors to get project financial statements audited and follow up any audit
queries/management letters;
 Ensure that no project category/component is overspent without proper authorization from
the World Bank;
 Monitor the financial performance of the TAMP and suggest reviews and updates to
budgets, cash-flow forecasts, activities and procurement plans;
 Initiate corrective measures to address internal financial shortcomings and irregularities as it
might be requested and approved;
 Prepare Unaudited Quarterly Financial Reports (IFRs) and Annual Financial Statements for
all Project Funds analyzed according to the categories and project components as
appropriate, and provide timely reporting of any material variances to the PMU and MSTI
Economic and Financial Department;
 Prepare detailed Budget Execution Reports for all Project Funds analyzed according to the
categories and project components as appropriate, and provide timely reporting of any
material variances to the PMU and MSTI Economic and Financial Department;
 Support and build the capacity of financial management staff from the MSTI Economic and
Financial Department;
  Report to the Project Coordinator and TAMP Project Manager on any issue identified with
recommendations on its remediation;
 Present a final report at the end of the contract period outlining achievements and challenges
pertaining to the financial management function.

2.2. Qualifications and Experience

The most suitable candidate for the PMU Financial Management Specialist position, who
will be able to provide support to MSTI in successfully fulfilling the fiduciary and financial
management function, is expected to demonstrate specific knowledge and abilities in the
following areas:

Knowledge:
a) Business and Administration;
b) Accounting and Finance, including cost estimating, forecasting and budgeting,
monitoring and control, financial auditing;
c) World Bank Disbursement Guidelines for Projects, dated May 1, 2006;
d) Terms and Conditions of Use of Secure Identification Credentials in connection with
Use of Electronic Means to Process Applications and Supporting Documentation
(“Terms and Conditions of Use of Secure Identification Credentials”), dated March 1,
2013;
e) World Bank’s Debtor Reporting System Manual, dated January 2000 (DRSM);
f) “Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed
by IBRD Loans and IDA Credits and Grants”, dated October 15, 2006 and revised in
January 2011;
g) “International Development Association General Conditions for Credits and Grants”,
dated July 31, 2010, with the modifications set forth in Section II of the Appendix;
h) “International Bank for Reconstruction and Development General Conditions for
Loans”, dated March 12, 2012, with the modifications set forth in Section II of the
Appendix;
i) Law on Accounting no. 113-XVI from 27 April 2007;
j) Chart of accounts and Methodological norms on accounting and financial reporting in
the institutions part of the state budgetary system (approved by the Order of the
Ministry of Finance no. 216 from 28th of December 2015);
k) Budget classification (approved by the Order of the Ministry of Finance no. 208 from
24th of December 2015)
l) Project management basic processes and documents.

Specific abilities:
a) Integrity – being honest and ethical;
b) Attention to detail;
c) Prioritisation and information ordering
d) Problem sensitivity and complex problem solving
e) Stress tolerance and ability to work under pressure
f) Persistence
g) Time management
h) Ability to work independently
 i) Train the others

Therefore, the candidates for the PMU Financial Management Consultant position will be
evaluated against the following main requirements on qualifications and experience:

Qualifications:
The Financial Management Specialist should have the following minimum Qualifications:
a) Degree in accounting, finance or business administration (accounting);
b) Internationally recognized professional qualification (or part-qualified at an advanced
level) or certification in finance e.g. ACCA, CIPFA, CA, CPA, CMA, CIMA, CFA;
c) Excellent written and oral communication skills in English and Romanian, including the
ability to draft memos, letters and internal regulations, financial documents and reports.
Fluency in Russian would be an advantage;
d) Excellent computer skills in Microsoft Office tools (Word, Excel, PowerPoint),
Microsoft Outlook, 1C Accounting and Internet use. Skills in using Microsoft Project
would be an advantage.
e) Professional certification in Project Management or a course certificate would be an
advantage.

Experience:
The Financial Management Specialist should have proven experience as follows:
a) At least 5 years of successful experience in audit or financial management of the World
Bank projects of similar scale and complexity (minimum 1 or 2 referrals);
b) Experience of financial management in the World Bank projects of similar scale and
complexity in Republic of Moldova or in the region (South-Eastern, Central and Eastern
European countries);
c) More than 5 years of experience in financial management and or accounting in Moldovan
entities (experience in accounting and finance in public authorities would be an
advantage);
d) Experience in delivering trainings, coaching others.
e) Experience of participation in project management teams would be an advantage.
 Annex 7. TOR for the audit firm3
SAMPLE TERMS OF REFERENCE FOR A NORMAL SCOPE FINANCIAL STATEMENTS AUDIT
Introduction
The Government of the Republic of Moldova (GoM) is implementing a comprehensive Tax
Administration Modernisation Project (TAMP), aiming at comprehensive reforming of the Moldovan
State Tax Service (STS, Beneficiary) in terms of the organisational and HR aspects, tax policy and
operational procedures, as well as the profound modernisation of the information technology. The TAMP
implementation coincides with the STS Strategy 2016-2020, and as such it also forms the core of the
Strategy development priorities.
[This section should provide appropriate background information on the project that is subject to
audit, including a brief description of the project; its implementation arrangements, including the
name of the implementing agency/recipient; the sources of financing; and the requirement for
periodic audits.]
Objective
The objective of the audit of the project financial statements is to enable the auditor to express a
professional opinion on the project’s financial position as at the end of [audit reference date] and of the
income and expenditure for the accounting period ending on that date. The project’s books of account
provide the basis for preparation of the financial statements and are established to reflect the financial
transactions in respect of the project.
Responsibility for preparation of financial statements
The organisation’s management is responsible for the preparation of financial statements, including the
maintenance of adequate accounting records and internal controls, the selection and application of
accounting policies, the safeguarding of the assets of the project, and adequate disclosure. As part of the
audit process, the auditor will request from management written confirmation concerning representations
made to us in connection with the audit.
Scope
1. The audit will be conducted in accordance with International Standards on Auditing. Those
Standards require that the auditor plans and performs the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatements. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial statement
presentation.
2. In complying with International Standards on Auditing, the auditor is expected to pay particular
attention to the following matters, including special considerations for public sector entities:
(a) In planning and performing the audit to reduce audit risk to an acceptably low level, the
auditor should consider the risks of material misstatements in the financial statements due
to fraud, as required by International Standard on Auditing 240: The Auditor’s
Responsibilities Relating to Fraud in an Audit of Financial Statements.
(b) When designing and performing audit procedures and in evaluating and reporting the
results thereof, the auditor should recognize that noncompliance by the entity with laws
and regulations may materially affect the financial statements, as required by
International Standard on Auditing 250: Consideration of Laws and Regulations in an
Audit of Financial Statements.
(c) The auditor should communicate audit matters of governance interest arising from the
audit of financial statements to those charged with governance of an entity, as required by

3
Audit TORs will need to be revised to include the actual terms and conditions before
incorporating them in request of proposals.
 International Standard on Auditing 260: Communication with those Charged with
Governance.
(d) The auditor should appropriately communicate to those charged with governance and to
management any deficiencies in internal control that the auditor has identified in an audit
of financial statements, as required by International Standard on Auditing 265:
Communicating Deficiencies in Internal Control to Those Charged with Governance and
Management.
(e) To reduce audit risk to an acceptably low level, the auditor should determine overall
responses to assessed risks at the financial statement level, and should design and
perform further audit procedures to respond to assessed risks at the assertion level, as
required by International Standard on Auditing 330: The Auditor’s Responses to
Assessed Risks.
(f) When certain aspects of an entity’s operations are performed by a third-party service
provider, the auditor is expected to include an understanding and assessment of the
internal control environment of the service provider during the audit process, as required
by International Standard on Auditing 402: Audit Considerations Relating to an Entity
Using a Service Organization.
(g) As part of the audit process, the auditor is expected to obtain written representations from
management and, where appropriate, those charged with governance, as required by
International Standard on Auditing 580: Written Representations.
(h) When the external auditor decides to use the work of an entity’s internal audit function to
modify the nature or timing, or reduce the extent, of audit procedures to be performed
directly by the external auditor, the determination shall be in accordance with
International Standard on Auditing 610: Using the Work of Internal Auditors.
(i) In determining whether to use the work of an auditor’s expert or the extent to which the
work of an auditor’s expert is adequate for audit purposes, the determination shall be
made in accordance with International Standard on Auditing 620: Using the Work of an
Auditor’s Expert.
3. In evidencing compliance with agreed project financing arrangements, the auditor is expected to
carry out tests to confirm that:
(a) All external funds have been used in accordance with the conditions of the relevant
financing agreements, with due attention to economy and efficiency, and only for the
purposes for which the financing was provided. Relevant financing agreements include
[Loan/Credit Agreements].
(b) Counterpart funds have been provided and used in accordance with the relevant
financing agreements, with due attention to economy and efficiency, and only for the
purposes for which they were provided.
(c) Goods, works, and services financed have been procured in accordance with relevant
financing agreements,4 including specific provisions of the World Bank Procurement
Guidelines.5
(d) All necessary supporting documents, records, and accounts have been maintained in
respect of all project activities, including expenditures reported using Statements of

4
Depending on the complexity of procurement activities, the auditor may consider involving
technical experts during the audit engagement. When such experts are involved, the auditor is
expected to comply with provisions of International Standard on Auditing 620: Using the Work of
an Expert. Consideration of using of the work of experts should be brought to the early attention of
the borrower and the World Bank for mutual agreement and appropriate guidance.
5
See Guidelines: Procurement Under IBRD Loans and IDA Credits, Revised July 2014 and
Guidelines: Selection and Employment of Consultants by World Bank Borrowers, Revised July
2014.
 Expenditure (SOE) or Interim Unaudited Financial Statements (IFS) methods of
reporting. The auditor is expected to verify that respective reports issued during the
period were in agreement with the underlying books of account.
Project financial statements
4. The auditor should verify that the financial statements have been prepared in accordance with
International Public Sector Accounting Standards. The financial statements should include:
(a) A statement of financial position;
(b) A statement of financial performance;
(c) A statement of changes in net assets/equity;
(d) A cash flow statement;
(e) When the entity makes publicly available its approved budget, a comparison of budget
and actual amounts either as a separate additional financial statement or as a budget
column in the financial statements; and
(f) Notes, comprising a summary of significant accounting policies and other explanatory
notes.
Review of Statements of Expenditure and Interim Unaudited Financial Statements
5. The auditor is required to audit all SOE submitted to the World Bank in support of requests for
periodic replenishment of the project designated account(s). Expenditures should be examined for
eligibility based on criteria defined in the terms of the financing agreement and detailed in the
Project Appraisal Document. The auditor should report any ineligible expenditures identified as
having been included in withdrawal applications and reimbursed.
Review of designated accounts
6. During the audit of the project financial statements, the auditor is required to review the activities
of the project’s designated account(s). Activities to be examined will include deposits received,
payments made, interest earned, and reconciliation of period-end balances.
Audit Reports
Audit opinion
7. The auditor will issue an audit opinion on the financial statements. The auditor’s opinion shall be
based on an evaluation of the conclusions drawn from the audit evidence obtained and shall be
expressed clearly through a written report that also describes the basis for that opinion. The audit
report shall be prepared in accordance with International Standard on Auditing 700: Forming an
Opinion and Reporting on Financial Statements.
8. A modified audit opinion shall be rendered in the financial statements when the auditor
concludes, on the basis of the audit evidence obtained, that the financial statements as a whole are
not free from material misstatement; or the auditor is unable to obtain sufficient appropriate audit
evidence to conclude that the financial statements as a whole are free from material misstatement.
Modified audit opinions shall be in accordance with International Standard on Auditing 705:
Modifications to the Opinion in the Independent Auditor’s Report.
9. The auditor will include emphasis of matter paragraphs or other matter paragraphs in the audit
opinion where the auditor, having formed an opinion on the financial statements, seeks to draw
users’ attention, when in the auditor’s judgment it is necessary to do so, by way of clear
additional communication in the auditor’s report. The paragraphs will refer to either a matter that,
although appropriately presented or disclosed in the financial statements, is of such importance
that it is fundamental to users’ understanding of the financial statements; or as appropriate, any
other matter that is relevant to users’ understanding of the audit, the auditor’s responsibilities, or
the auditor’s report. This form of opinion will be presented in accordance with International
Standard on Auditing 706: Emphasis of Matter Paragraphs or Other Matter Paragraphs in the
Independent Auditor’s Report.
Other audit reports
10. In addition to the audit opinion, the auditor will also, either in the audit report or in the report to
management:
(a) provide comments and observations on the accounting records, systems, and controls that
were examined during the course of the audit;
(b) identify specific deficiencies and areas of weakness in systems and controls and make
recommendation for their improvement;
(c) report on instances of noncompliance with the terms of the financial agreement(s);
(d) quantify and report expenditures that are considered to be ineligible and either paid out of
the designated account(s) or claimed from the World Bank;
(e) communicate matters that have come to attention during the audit that might have a
significant impact on the implementation of the project;
(f) draw to the borrower’s attention any other matters that the auditor considers pertinent;
and
(g) ask for responses from management, including implemented and proposed remedial
actions.
11. The auditor’s opinion on the financial statements and management letter should be received by
the Bank no later than [three to six] months after the end of [the audit reference date]..
General
12. The auditor is entitled to unlimited access to all information and explanations considered
necessary to facilitate the audit, including legal documents, project preparation and supervision
reports, reports of reviews and investigations, correspondences, and credit account information.
The auditor may also seek written confirmation of amounts disbursed and outstanding in the
Bank records.
13. The auditor is encouraged to meet and discuss audit-related matters, including input to the audit
plan, with the World Bank project task team.
14. It is highly desirable that the auditor reviews the Bank's financial reporting and auditing
requirements contained in Operational Policies OP 10.00 Investment Project Financing. The
auditor should also be familiar with the Bank’s Disbursement Guidelines and Handbook (2006)
and Financial Monitoring Reports for World Bank-Financed Projects: Guidelines for Borrowers,
November 30, 2001; and World Bank Procurement Guidelines.