On the signing of a Letter of Agreement between the Republic of Kazakhstan and the International Bank for Reconstruction and Development on the allocation of a grant from the World Bank Foundation for Institutional Development "Strengthening the capacity of the Procurement Audit Department"

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On the signing of a Letter of Agreement between the Republic of Kazakhstan and the International Bank for Reconstruction and Development on the allocation of a grant from the World Bank Foundation for Institutional Development "Strengthening the capacity of the Procurement Audit Department"

Decree of the President of the Republic of Kazakhstan dated September 27, 2010 No. 1073

In accordance with subparagraph 1) of Article 8 of the Law of the Republic of Kazakhstan dated May 30, 2005 "On International Treaties of the Republic of Kazakhstan"

I DECREE:

1. Approve the attached project Letters of agreement between the Republic of Kazakhstan and the International Bank for Reconstruction and Development on the allocation of a grant from the World Bank Foundation for Institutional Development "Strengthening the capacity of the Procurement Audit Department".

2. Authorize Bolat Bidakhmetovich Zhamishev, Minister of Finance of the Republic of Kazakhstan, to sign on behalf of the Republic of Kazakhstan a Letter of Agreement between the Republic of Kazakhstan and the International Bank for Reconstruction and Development on the allocation of a grant from the World Bank Foundation for Institutional Development "Strengthening the capacity of the Procurement Audit Department".

3. This Decree shall enter into force from the date of signing.

President of the Republic of Kazakhstan N. Nazarbayev

APPROVED

By Decree of the President of the Republic of Kazakhstan

dated September 27, 2010 No. 1073

Project

LETTER OF AGREEMENT

between the Republic of Kazakhstan and the International Bank for Reconstruction and Development on the allocation of a grant from the World Bank Foundation for Institutional Development "Strengthening the capacity of the Ministry to conduct procurement audits"

Article I Standard conditions; Definitions

1.01. Standard conditions. Standard Conditions for grants provided by the World Bank from various funds, as amended on July 1, 2008 (hereinafter referred to as the "Standard Conditions") They form an integral part of this Agreement. 1.02. Definitions. Unless the context otherwise requires, the capitalized terms used in this Agreement have the meanings assigned to them in the Standard Terms or in this Agreement.

Article II Project Implementation

2.01. Objectives and description of the Project. The aim of the Project is to improve the quality of leadership and accountability in the implementation of the project and, in particular, to strengthen internal control over procurement management. The project consists of the following components: (a) Independent procurement audit: Provision of consulting services and implementation of a training program for: (i) conducting procurement evaluation within the framework of a World Bank-funded project; (ii) conducting technical expertise of Project results; and (iii) training local staff in procurement evaluation techniques. (b) Institutionalization and implementation of an independent procurement audit procedure: Provision of consultants and training to: (i) conduct a diagnostic assessment of existing procurement evaluation procedures; (ii) develop a strategy to strengthen procurement evaluation capacity; and (iii) assist the Ministry of Finance and other relevant agencies in strengthening and improving procurement evaluation capacity. conducting a procurement audit. 2.02. General conditions of the Project implementation. The Recipient declares his commitment to the goals of the Project. To this end, the Recipient ensures the implementation of the Project through the Ministry of Finance of the Republic of Kazakhstan and the implementation of component (a) (ii) of the Project through the Ministry of Transport and Communications of the Republic of Kazakhstan in accordance with the provisions of: (a) Article II of the Standard Conditions; (b) Guidelines for the Prevention and Combating of Fraud and Corruption in Projects Financed from Loans IBRD and MAP loans and Grants, as amended on October 15, 2006; (c) and this Article II. 2.03. Monitoring, reporting and evaluation of the Project. (a) The Recipient shall monitor and evaluate the progress of the Project and, at the request of the Bank, prepare Project Reports in accordance with the provisions of Section 2.06 of the Standard Terms and Conditions and based on the indicators set out in subparagraph (b) of this Section. Each Project Report must cover the period specified in the Bank's request and must be submitted to the Bank no later than one month after the date of receipt of the request. (b) The performance indicators referred to in subparagraph (a) of this paragraph include the following: (i) Procurement audits and technical expertise of World Bank-funded road construction projects have been conducted. (ii) Procurement audit and technical expertise mechanisms are fully institutionalized. (iii) The Ministry of Finance's capacity to conduct procurement audits for the project has been strengthened and improved. (c) Upon receipt of the World Bank's request, the Recipient shall prepare a Project Completion Report in accordance with the provisions of Section 2.06 of the Standard Conditions. The Project Completion Report must be submitted to the World Bank no later than five months after the Closing Date of the Grant Account. 2.04. Financial management. (a) The Recipient ensures the operation of the financial management system in accordance with the provisions of Section 2.07 of the Standard Conditions. (b) The Recipient shall ensure that interim unverified financial statements on the Project are prepared and submitted to the World Bank no later than one month after the end of each calendar half-year, each such report covering the corresponding half-year, and the form and content of such report must comply with the requirements of the World Bank. (c) The Recipient shall ensure that its financial statements for the Project are audited in accordance with the provisions of Section 2.07 (b) of the Standard Terms and Conditions. Such an audit of the financial statements should cover the entire period during which funds were withdrawn from the Grant account. Audited financial statements for such a period must be submitted to the World Bank no later than six months after the end of the relevant period. 2.05. Procurement (a) General provisions: All Grant-funded services necessary for the implementation of the Project are procured in accordance with the requirements set out or mentioned in Sections I (with the exception of paragraph 1.24) and IV of the Guidelines for the Selection and Recruitment of Consultants by World Bank Borrowers, published by the World Bank in May 2004 and revised in October 2006 (hereinafter referred to as the "Consultant Selection Guide"). (b) Definitions. The capitalized terms used in the following paragraphs of this Section to describe individual procurement methods or the World Bank's review of individual contracts refer to the relevant methods described in the Consultant Selection Guidelines. (c) Selected methods of procurement of advisory services. (i) Unless otherwise provided in subparagraph (ii) (c) of this paragraph, the procurement of consultants' services will be based on contracts concluded based on the selection of consultants based on quality and cost. (ii) The following methods may be used to purchase the services of consultants involved in the performance of assignments agreed by the Bank as meeting the requirements specified in the Consultant Selection Guidelines: (a) Quality selection; (b) Fixed budget selection; (c) Lowest cost selection; (d) Selection based on the qualifications of consultants; (e) Out-of-competition selection; (f) Selection of individual consultants; and (g) Out-of-competition procedures for the selection of individual consultants. (d) Review of procurement decisions by the World Bank. The following contracts are subject to prior review by the World Bank, unless the Recipient is informed otherwise by written notification from the World Bank: (a) the first contract awarded under each procurement method; and (b) each contract for advisory services provided by the firm for the equivalent of USD 100,000 or higher, and each contract for the services of an individual consultant in the amount equivalent to 50,000 US dollars or more. All technical requirements and other contracts are subject to subsequent review by the World Bank.

Article III Withdrawal of Grant funds

3.01 Acceptable expenses. The Recipient may select Grant funds in accordance with the provisions of: (a) Article III of the Standard Terms; (b) this Section; and (c) additional instructions that the World Bank may issue by notification to the Recipient (including the "World Bank Guidelines for Project Disbursements" as amended in May 2006, periodically reviewed by the World Bank and applicable to this Agreement based on such instructions) to finance eligible expenditures set out in the following table. The table shows the categories of eligible expenditures that can be funded from the Grant (the "Category"), the amounts allocated to each category from the Grant, as well as the percentages of expenditures to be funded as eligible expenditures for each Category.:

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