ACCREDITATION National Disaster Risk Management Fund SEQUENCE OF

ACCREDITATION National Disaster Risk Management Fund

SEQUENCE OF PRESENTATION Objectives Assessment Areas Accreditation & Risk Assessment Tools Organizational Structure Regulatory & Legal Regime Financial Management & Internal Controls Procurement Management Environment & Social Saferguards Gender Risk Mitigation

OBJECTIVES • Non-Government Organizations shall be accredited through assessment of their respective capacity as to whether they can implement projects before signing the project agreement and releasing the funds. • Objective of the capacity assessment is to only engage with organizations that meet the minimum capacity requirements at least and to establish the need for development of a risk mitigation plan before releasing the funds to address the gaps. • Accreditation criteria will be applied to all nongovernment entities before receiving their proposals. • For public sector entities and statutory authorities who follow standard government rules, a tailored risk evaluation will be undertaken in tandem with their proposal evaluation

ASSESSMENT AREAS The broad areas to be assessed during the accreditation include the following: ± Organizational Structure; ± Regulatory & Legal regime ± Financial Management & Internal Controls; ± Procurement Management; ± Environment & Social Safeguards; and ± Gender

Accreditation & Risk Assessment Tool

DOCUMENTATION List of Completed Projects in Last Three Years Core Competences List of Donors Institutional Strength Legal Registration, Manuals, Guidelines, Policies

ELIGIBILITY Registration Status: ± Companies Ordinance 1984 or Companies Act 2017, ± Societies Registration Act 1860, ± Voluntary Social Welfare Organizations Ordinance 1961, ± Economic Affairs Division, Government of Pakistan, ± By means of treaty or other agreement that acts as a charter with Government of Pakistan.

ELIGIBILITY (Cont’d) Financial Management: ± Registered with Taxation Department, ± Last three (03) years audited financial statements, ± Audit carried out by a CA Firm from State Bank of Pakistan’s Panel of Auditors under Category ‘A’ and having ‘Satisfactory’ rating under the Quality Control Review Programme managed by ICAP, ± Commitment of availability of counterpart financing i. e. 30% for the proposed project.

ORGANIZATIONAL STRUCTURE Whether the Organization have: ± Organizational & reporting structures? ± Defined roles departments? & responsibilities of various ± Compliance with statuary requirements? ± Defined vision statement, mission statement and statement of values? ± legally registered authority(ies)? with respective registration

REGULATORY & LEGAL REGIMES Governing or Advisory Board Whether the Organization have: ± Governing and/or Advisory Board? ± Clearly defined Terms of Reference (TORs) for Board(s)? ± Distinguished roles & responsibilities of Board(s) and Executive/Management? ± Document criteria for selecting, electing or replacing any Board Member? ± Term limit for a person to complete/remain as Board Member? ± Board Members are involved in strategic planning resource mobilization, developing & approving organizational policies, budget and annual financial statements

REGULATORY & LEGAL REGIMES Financial Management & Internal Controls Whether the Organization have: ± ± ± Accounting system(s) & implementation procedures? Any accounting software(s)? Approved financial manuals & their documentation? Systems & frequencies for updating manuals & procedures? Separate accounts for each programme & use of separate codes to assign transactions to a specific project/donor? ± Policies for Internal Controls? ± Systems & periodicity to review financial risks? ± Procedure for handling possible instances of fraud or theft?

REGULATORY & LEGAL REGIMES Financial Planning, Reporting & Documentation Whether the Organization have: ± Master budget? ± Mechanisms for Budget Review & Variance Analysis? ± Income-generating activities or other sources of unrestricted funding? ± A cash flow that allows it to meet its financial obligations? ± Guidelines & procedures for documenting all types of financial transactions? ± Systems for organizing secure & separate financial record? ± Process for dissemination of financial reporting? ± Systems for preparation & approval of financial statements?

REGULATORY & LEGAL REGIMES Procurement Management Whether the Organization have: ± ± ± ± Policies, rules, regulations, procedures, guidelines that govern the procurement processes & responsibilities? Systems & processes for achieving Value for Money through procurement management? Institutional capacity for complying with Principles of Procurement? Deployed mechanisms for extending equal opportunity to all the prospective bidders by extending fair competition? Defined standard bidding documents and contract agreement templates covering legal framework? Processes for transparent evaluations? Appropriate policies for; (i) Dissemination of evaluation results, (ii) complaint redressal, (iii) avoiding Conflict of Interest, (iv) detection of fraud & corruption?

REGULATORY & LEGAL REGIMES Environment & Social Safeguard Whether the Organization have: ± An approved Environment & Social Risk Management Policy? ± An approved Environment & Social Management System (ESMS)? ± ESMS is disseminated at all levels of staff and publically disclosed? Whether the organization is fully implementing ESMS for: ± ± ± Project screening & categorization? Assessment of Impacts? Due diligence monitoring? Implementation of Grievance Redressal Mechanism? Capacity development of staff?

REGULATORY & LEGAL REGIMES Gender & Inclusiveness Whether the Organization have: ± Gender Policy & Strategy in place and implemented? ± Gender inclusive governing & management structures? ± Gender responsive and inclusion mainstreamed organizational policies & standard operating procedures? in ± Institutional capacity to implement gender responsive and inclusive programmes?

RATING • Score ranging from 0 -3 will be given, in following manner, to each question and that would determine the overall rating: • The minimum threshold to qualify for the accreditation ranges from an overall score of 2. 01 to 3. • An organization once qualified for the accreditation will be further assessed for risk identification in weak areas and development of a risk mitigation plan before releasing the funds to address the gaps.

PROCEDURE FOR RISK MITIGATION PLAN ACTIONS Assessment of Strengths and Weaknesses PROCESSES The accreditation criteria is segregated into five broad categories. The category with a score of 2 or 3 on average is termed as strength and category having a score of 0 or 1 on average, is termed as weakness. The potential weaknesses shall be further examined to determine Risk Identification the extent of those weaknesses which could pose risk to NDRMF financed projects HIGH : likely to occur, likely to have high impact if occurs Risk Assessment SUBSTANTIAL: unlikely to occur, but likely to have high impact if occurs MODERATE: likely to occur, but unlikely to have high impact if occurs LOW: not likely to occur, not likely to have high impact if occurs

LIKELY MODERATE RISK Monitoring UNLIKELY LIKELIHOOD OF OCCURRENCE Risk Mitigation and Management LOW HIGH IMPACT

RISK MITIGATION PLAN Risk Description Risk Assessment Mitigation Measures Major actions planned for mitigation with responsible departments/persons/ entity and timeliness for implementation shall be agreed Identified risk shall be listed Rating such as High, Substantial, Medium, or Low shall be assigned Overall rating shall be specified.