A. BACKGROUND 

Mongolia received a credit from the International Development Association (IDA) for the Strengthening Fiscal and Financial Stability (SFFS) Project. The Objective of the SFFS Project is to contribute to the Government of Mongolia’s efforts to strengthen fiscal and financial stability and improve the quality of expenditure. The project is designed into five components: (i) Strengthening Macroeconomic and Fiscal Management; (ii) Improving the Efficiency of Public Financial Management; (iii) Enhancing Financial Sector Stability; (iv) Strengthening the Social Protection System; (v) Project Management and Monitoring. The objectives are to strengthen fiscal responsibility and implement relevant policy measures, improve fiscal discipline, strengthen the resiliency of the banking system, improve public expenditure quality in social protection, provide support for Project implementation, coordination, monitoring, and evaluation, including, inter alia, audit arrangements, reporting requirements, procurement, and financial management activities respectively. For more details, please refer to the Project Appraisal Document Report No. PAD2269 . 

Subcomponent B2 of the SFFS project aims to increase budget comprehensiveness and transparency through better control, reporting and expansion of the government’s integrated financial management information capabilities. Under the subcomponent, the Accounting Policy Department (APD) and the Treasury Department of the Ministry of Finance (MOF) have been undertaking an agenda towards improving public sector accounting and reporting.

Good accounting and financial reporting practices, which meet international standards, can serve as the basis for good governance and the provision of high-quality financial information to users of financial statements (government, citizens, development partners, international investors, etc.). Mongolia has been working for the last 20 years with the support from international donor organizations to achieve compliance with the international accounting and auditing standards since the requirements were legalized in 1993. The most recent amendments to the Accounting Law in 2015, as well as the approval of the Integrated Budget Law in 2011, reinforced the requirement to comply with the international standards.

Even though efforts to improve accounting and reporting for public sector entities have been successful in certain areas, the following issues still remain: (i) the government’s accounting basis is not yet full accrual, (ii) IPSASs are not fully implemented, and (iii) the quality and importance of the Government’s consolidated financial statements are undermined because SOEs with less than 51% ownership, but are material to the financial statements, are not consolidated into the Government’s consolidated financial statements in accordance with the IPSASs.

In addition, the MOF recognizes the need to improve and update the Chart of Accounts (CoA) for it to fit the reporting requirements under the IPSAS and GFS and addressing this need would be a critical priority for fully transitioning to accrual based financial and statistical reporting in accordance with both the IPSAS and GFSM 2014. Furthermore, in connection with the improved COA, the associated guidelines and regulations followed in public sector accounting need to be revised as these documents have not yet been revised since 2017 in accordance with the most recent IPSASs due to capacity constraints of accounting professionals as well as the state central administrative body in charge of finance and accounting. 

Also, the MOF recognizes that the needed accounting and reporting improvements in the public sector entities would benefit from an overall roadmap and an action plan for the transition toward full implementation of accrual based IPSAS. 

B. OBJECTIVE OF THE ASSIGNMENT 

The objective of this assignment is to provide support to the MOF’s efforts in improving the quality of public sector accounting through i) creating a roadmap and an action plan toward full implementation of accrual based IPSAS; ii) improving and updating the Chart of Accounts for it to fit the reporting requirements of the IPSAS and GFS; and iii) revising guidelines and regulations to be followed in budget entities’ accounting on the accrual basis in accordance with the most recent IPSASs.  

C. SCOPE OF THE WORK

The consultant will undertake tasks including, but not limited to, the following in close cooperation with another national consultant (team member) and officials of the MOF and in consultation with the World Bank team:

Task # 1: Create a roadmap and an action plan toward implementation of accrual based IPSAS for the public sector accounting and reporting. 

• Provide support to the MOF in establishing an interdepartmental working group to work on creating a roadmap as well as an action plan toward implementation of accrual based IPSAS in public sector accounting and reporting.

• Lead the planning and organization of the working group’s activities in an effective and efficient manner including, but not limited to, the following:

• Make a work plan and allocation of tasks among the members of the working group;
• Ensure the implementation of the activities are in line with the plan;  
• Report monthly work progress of the working group to the APD;

• Conduct a review of the existing technical assistance reports and other relevant documentations on strengthening accounting and financial reporting in Mongolia, prepared by other international and national consultants;

• Organize consultations with the MOF and other relevant stakeholders to receive their inputs and suggestions for creating a roadmap toward implementation of accrual based IPSAS for the public sector accounting and reporting;

• On issues concerning creation of the roadmap and action plan as necessary, collaborate with an international consultant of the World Bank;

• Based on the above-mentioned reviews and consultations conducted and their findings, create a draft roadmap that addresses athe practical, systems, change management, regulatory and policy aspects of such reforms;

• Develop a draft action plan for the above-referenced roadmap; and  

• Present the draft roadmap and action plan to the MOF and other relevant stakeholders to receive their comments and suggestions; and  

• Based on the findings of the studies and consultations with stakeholders, revise and improve the roadmap and the action plan on implementation of accrual based IPSAS for the public sector accounting and reporting.

Task #2: Improve and update the Chart of Accounts for public sector accounting to fit the reporting requirements of the IPSAS and GFS. 

• Conduct a study on the implementation status and compliance with international standards of the existing regulations concerning chart of accounts;

• Conduct a study on international best practice examples/models on public sector chart of accounts particularly in countries that have fully transitioned to the accrual basis accounting; 

• Based on the above-mentioned studies and their findings, develop recommendations for further improving the relevant regulations concerning chart of accounts for public sector accounting;

• Present the report findings and recommendations and organize consultations with the MOF and other relevant stakeholders to receive their comments and suggestions;  

• Based on the findings of the studies and consultations with stakeholders, revise and improve the chart of accounts for the public sector accounting. 

Task # 3: In accordance with the improved chart of accounts under Task # 2 and the most recent IPSASs, revise the guidelines and methodology documents previously approved by the Ministerial Order no. 388 of November 27, 2006. Those include namely: i) Instructions on accounts to be followed for budget entities, ii) Templates for financial statements and notes to the financial statements, iii) Methodology for preparing financial statements, iv) Instruction for estimating product costs, and v) Regulation for preparing report on product supply.

• Conduct a study on the implementation status of the above-mentioned existing regulatory documents and guidelines to identify pros and cons and challenges faced in implementation;
• Conduct a study on the compliance of these regulatory and methodology documents with the IPSASs and relevant international good practices;  
• Based on the above-mentioned studies and their findings, develop recommendations for further revising the regulatory and methodology documents;
• Present the report findings and recommendations and organize consultations with the MOF and other relevant stakeholders to receive their comments and suggestions;  
• Based on the findings of the studies and consultations with stakeholders, revise and improve the set of regulatory and methodology documents and guidelines including: i) Instructions on the accounts to be followed for budget entities, ii) Templates for the financial statements and notes to the financial statements, iii) Methodology for preparing the financial statements, iv) Instruction for estimating product costs, and iv) Regulation for preparing report on product supply - all to be followed for budget entities in Mongolia. 

D. DELIVERABLES 

Based on the contracted assignment and detailed contract implementation plan approved by the client, the consultant’s deliverables will be as follows:

Under task # 1:

• A work plan of the working group;
• Monthly progress report on the working group activities until after the roadmap is developed;
• A report on the review conducted on the existing technical assistance reports and other relevant documentations on strengthening accounting and financial reporting in Mongolia, prepared by other international and national consultants;
• A draft roadmap and the action plan on implementation of accrual based IPSAS for the public sector accounting and reporting;  
• Notes and other supporting documents from the consultations organized among relevant stakeholders; and
• Revised and improved final roadmap and action plan on implementation of accrual based IPSAS for the public sector accounting and reporting, which have incorporated the comments/inputs from the MOF and other relevant stakeholders.

Under task # 2:

• A report on the study conducted on the implementation status and IPSAS compliance of the existing regulations concerning chart of accounts;
• A report on the study conducted on international best practice examples/models on chart of accounts particularly in countries that have fully transitioned to the accrual basis accounting;
• A report with findings and recommendations for further improving the relevant regulations concerning chart of accounts for the public sector accounting;
• Notes and other supporting documents from the consultations organized among relevant stakeholders; and
• Revised and improved final chart of accounts for public sector accounting, which have incorporated the comments/inputs from the MOF and other relevant stakeholders.

Under task # 3:

• A report on the implementation of the existing regulatory documents and guidelines to identify pros and cons and challenges faced in implementation as well as on the compliance of these regulatory and methodology documents with the IPSASs and relevant international good practices;
• Revised and improved final set of regulatory and methodology documents and guidelines to be followed by budget entities as listed below:

            o Instructions on the accounts; 

            o Templates for the financial statements and notes to the financial statements;

            o Methodology for preparing the financial statements;

            o Instruction for estimating product costs; and  

            o Regulation for preparing report on product supply. 

The Consultant will receive formal feedback and comments on each deliverable within 2 weeks after submission from the APD.

E. CONSULTANT’S QUALIFICATIONS/SELECTION CRITERIA

Education and Knowledge:

• A suitable candidate must have a master’s degree in accounting and/or other relevant fields;
• Professional qualifications such as ACCA/CPA/CIMA or similar will be required; and
• Proven knowledge of the IPSASs and IFRSs.

Experience: 

• Incumbent should have at least 6 years of direct relevant experience in the accounting and finance field;
• Previous experience in a similar capacity of developing accounting policy documents and other metholdogy and guidance will be required; 
• Research experience in accounting and/or other relevant fields for 4 years at the minimum will be required;
• Previous experience of leading and organizing a team at least 2 years will be an advantage; and 
• Previous experience of providing consultancy services to government entities and international organizations will be an advantage.

Language skills: 

• Fluent written and spoken skills in both English and Mongolian are required.

Other skills: 

• Excellent interpersonal skills with the ability to function effectively and collaboratively in a team environment and high integrity and accountability; and
• Be proficient in PC-based applications such as Word, Excel and data management, and have excellent web research and navigation skills.

F.  INSTITUTIONAL ARRANGEMENTS

The MOF will provide an office space and equipment for the consultant as deemed necessary. The Consultant will have access to all the necessary data/information that the MOF could provide for this assignment. The Consultant will work in close cooperation and coordination of the APD, MOF and supervise tasks and outputs of the national consultant (team member).  On issues concering the chart of accounts and GFS, the Consultant will work in close cooperation of the Treasury Department (TD) of the MOF and the Fiscal Policy and Planning Department (FPPD) of the MOF.  

The Client will appoint officials to monitor the contract implementation. Appointed MOF officials will be responsible for the coordination of activities under the Contract, for reviewing and accepting Deliverables to be submitted by the Consultant.

G. SUPERVISION AND REPORTING 

The Consultant will report to the Director-General of the APD of MOF and will work on a daily basis with officials appointed by the APD and, as required, with officials from the TD and the FPPD on technical matters relevant to the assignment.  

H.  CONTRACT DURATION 

The consultant’s assignment is expected to commence in March 2022. The assignment’s expected input is 10 months on a full-time basis. 

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