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 management. The project is designed with 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 the relevant policy measures; improve fiscal discipline; strengthen the resiliency of the banking system; improve public expenditure quality in social protection; and 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 project aims to increase budget comprehensiveness and transparency through better control, reporting and expansion of the government’s integrated financial management information capabilities.

The Government of Mongolia (GOM) has undertaken reforms to gradually bring about fiscal discipline and strengthen the PFM system. The first phase of reforms between 2003 and 2008 established the basic elements of the system, including strengthening internal controls, cash management introducing single treasury system, and accounting and reporting. The second phase of reforms between 2008 and 2012 contributed to enhancement of fiscal legal framework with enforcement of the Fiscal Stability Law and revised edition of the Integrated Budget Law (IBL) establishes the principles, systems, composition and classification of the budget, defines the roles and responsibilities of bodies that participate in the budget process, and regulates relations that arise in connection with budget preparation, budget approval, execution, accounting, reporting and auditing. The law requires the government to prepare a set of consolidated financial statements, and budget entities to maintain accounts on a full accrual basis in accordance with international and national accounting standards. Complementing the IBL, the Accounting Law, enacted in 2015, requires the government to adopt the International Public Sector Accounting Standards (IPSAS). 

Even though efforts to improve accounting and reporting for public sector entities have been successful in certain areas, the MOF recognizes the need to improve state and local budget revenue recording and reporting to fit the reporting requirements under the IPSAS and GFSM 2014.

In addition, The PFM Reform Action Plan for 2018-2022 defines the transition from the MTFF to MTBF as one of the key agendas on budget reform policy in Mongolia. Hence, within the framework of strengthening PFM and implementing the Action Plan, Mongolia is aiming to introduce results-quality-performance-based medium-term budgeting shifting from traditional input-based budgeting. Results-quality-performance-based financing reform has been implemented in the health sector since 2021 and, building on the experience, starting from 2022 MOF is to expand the scope of this reform to other social sector services such as education, culture, public sports, child protection, vocational education and employment services. In particular, MOF is planning to enhance and update key elements of the PFM in line with international best practices. Currently, these elements are not in line with the international best practices as evidenced by the 2021 PEFA Assessment Report of Mongolia with lower scores on PI-4 Budget Classification, and PI-21 Annual Financial Reports. There is a need to review and analyze the current practice of financial reporting in the health sector, particularly the experience in implementing results-quality-performance-based financing reform in order to improve the existing guidelines in accordance with the most recent IPSASs.

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) improving the state and local budget revenue recording and reporting to fit the reporting requirements under the IPSAS and GFSM 2014; ii) reviewing and analyzing the current practices in financial reporting of the health sector, noting their experience in implementing results-quality-performance-based budgeting; and iii) developing reporting guidelines to promote compliance with GFSM 2014 and IPSAS through the E-tailan and GFMIS v7 systems.

C. SCOPE OF WORK

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

Task#1: Improve state and local budget revenue recording and reporting to fit the requirements of the IPSAS and GFSM 2014:

1.1.   Review the current practice of recording state and local budget revenues at the central treasury;

1.2.  Review the existing technical assistance reports and other relevant documentation on strengthening treasury accounting and financial reporting in Mongolia, previously prepared by other international and national consultants, and provide recommendations for improving local budget revenue recording and reporting practices;

1.3.  Review the current practices of recording customs and tax revenues of the Mongolian Customs General Administration and the General Department of Taxation and identify pros and cons of and challenges to implementation of the IPSAS-23;

1.4.  Liaise with the Accounting Policy Department regarding the current and planned accounting policies related to revenue accounting and reporting;

1.5.  Examine the requirements of the IPSAS and GFS and the potential for achieving compliance in the reporting via E-tailan and GFMIS v7;

1.6.  Provide recommendations on the possibility of recording tax and customs revenue directly from the accounting systems of the Mongolian Customs General Administration and the General Department of Taxation into the central treasury accounting system;

1.7.  Develop functional requirements for sharing and reconciling of and customs revenue data between  the accounting systems of the Mongolian Customs General Administration and the General Department of Taxation and the central treasury’s accounting system; and

1.8.  Support the development of guidelines and other relevant documents necessary for integrating tax and customs revenue data between the accounting systems of the Mongolian Customs General Administration and the General Department of Taxation and the central treasury accounting system, including processes for reconciliation of these systems and banking records.

Task #2:  Review and analyze the current practice of financial reporting of the health sector that supports implementing performance-based approaches to budgeting and funding of service delivery:

2.1. Conduct a study on the implementation status and the current practice of financial reporting in the  health sector of implementing results-quality-performance-based financing;

2.2. Based on the study and it’s findings, develop recommendations for further improving the relevant guidelines and their broader application in other sectors;

2.3. Consult with colleagues at the MoF regarding the planned scope, timing and needs regarding reporting to support performance budgeting;

2.4. Consult with the Accounting Policy Department regarding any existing and planned future policies and standards regarding performance reporting;

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

2.6. Based on the findings of the studies and consultations with stakeholders, revise guidelines including templates for the financial statements and notes to the financial statements; and

2.7. Undertake such other tasks related with the systems as reasonably requested and/or assigned by the Director-General of the TD or Project Coordinator of the SFFSP.

D. DELIVERABLES 

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

Under task # 1:

1.1. Review report on the current practice of recording state and local budget revenue at the central treasury;

1.2. Recommendation report on budget revenue recording and reporting practices in compliance with the most recent IPSASs; 

1.3. Report with findings on the current practices of recording customs and tax revenues of the Mongolian Customs General Administration and the General Department of Taxation that identifies, among others, pros and cons and challenges faced in implementation of IPSAS-23;

1.4. Report with findings on the current practices of recording customs and tax revenues of the General Department of Taxation with pros and cons in and challenges to implementation of the IPSAS-23;

1.5. Review report on the current practices of recording custom and tax revenue of Mongolian Customs General Administration with pros and cons in and challenges to implementation of the IPSAS-23;

1.6. Recommendation report on the possibility of recording tax and customs revenues from the accounting systems of the General Department of Taxation into the central treasury’s accounting system;

1.7. Functional requirements for recording tax and custom revenues from the accounting systems of the Mongolian Customs General Administration and the General Department of Taxation into the central treasury’s accounting system; and

1.8. Final draft guidelines for integrating tax and customs revenues from the accounting systems of the Mongolian Customs General Administration and the General Department of Taxation into the central treasury’s accounting system;

Under task # 2:

2.1.  Study report on the implementation status and current practice of financial reporting in the health sector of implementing results-quality-performance-based financing;

2.2.  Recommendation report for further improving the relevant guidelines and their broader application in other sectors;

2.3.  Notes, comments and suggestions from the MOF and other relevant stakeholders during consultations;  

2.4.  Revised draft guidelines including templates for the financial statements and notes to the financial statements.

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

E. CONSULTANT’S QUALIFICATIONS/SELECTION CRITERIA

Education and Knowledge:

• A suitable candidate must have a master’s degree in finance and/or business administration with a bachelor’s degree in accounting;
• Professional qualifications such as ACCA/CPA/CIMA or similar will be required; 
• Proven knowledge of the International Public Sector Accounting Standards (IPSAS) and the International Financial Reporting Standards (IFRS);
• Excellent technical skills as a lecturer and a researcher would be an advantage;
• Proven knowledge of GFS principles will be desirable;

Experience: 

• The incumbent should have at least 10 (ten) years direct relevant experience in the accounting and finance field, preferably in the public sector.
• Previous experience in a similar capacity of developing an accounting policy document and other policy and guidance documents will be considered a plus; 
• Previous experience in a working on fiscal reporting documents and other policy and methodology documents will be considered a plus; 

Language skills: Fluent written and spoken Mongolian and English;

Other skills: 

• Excellent interpersonal skills with the ability to function effectively and collaboratively in a team environment and high integrity and accountability;
• Be proficient in PC-based applications such as Word, Excel and data management, and have excellent web research and navigation skills;
• Familiarity with IT system particularly, with the financial management system is essential; and
• Be able to work overtime if required.

F. SUPERVISION AND REPORTING 

The consultant will report directly to the Director General of the TD, MOF and will work under direct supervision with the head of Financing, Accounting and Reporting Division. On a day-to-day basis the consultant should consult and cooperate with the TD specialists and consultants on functional matters related to the assignment. The Director General of the TD will meet regularly with the consultant to review progress with the work program and to resolve any outstanding issues.

The consultant will work closely with respective officials of central and local budget entities.

The consultant will be required to carry out his/her tasks in line with the approved WP which will serve as a basis for measuring progress on desired outcomes and goals for the entire consultancy service.

The consultant will prepare monthly progress reports detailing the achievements and impediments in executing the entire WP effectively. These progress reports will be discussed with the Director General of the TD.

G. CONTRACT DURATION 

The consultancy is expected to commence in September 2022. The assignment’s expected input is 8 months on a full-time basis.

H. INSTITUTIONAL ARRANGEMENTS

MOF will provide office space for the consultant. The Consultant will have access to all the necessary data/information that the MOF could provide for this assignment. All information provided to the consultant will be regarded as confidential and information shall not be shared with any outside individuals or organizations.

MOF will appoint officials to monitor the contract implementation. Appointed MOF officials will be responsible for the coordination of activities under the Contract. The Consultant will work in close cooperation and coordination of the TD, MOF and supervise tasks and outputs of the national consultant (team member). On issues concerning the output-based budgeting, the Consultant will work in close cooperation of the Fiscal Policy and Planning Department (FPPD) of the MOF.

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