ASIAN DEVELOPMENT BANK

PROJECT PROCUREMENT-RELATED REVIEW REPORT

Loan 2096-SRI(SF): SECONDARY EDUCATION MODERNIZATION PROJECT II

This report has been redacted in accordance with the Asian Development Bank’s Public Communications Policy (PCP). In particular, it excludes confidential and other information in accordance with paragraph 126 of the PCP, items 9, 11, 12, 14 & 15.

Office of Anticorruption and Integrity 30 July 2010

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A Project Procurement-Related Review (PPRR) is

a review undertaken by OAI on ongoing ADB-financed projects, to confirm compliance with applicable ADB’s policies, guidelines, and the loan agreement, with a focus on preventing and detecting integrity violations (http://www.adb.org/Integrity/integrity-violations.asp) involving ADB-related activities or ADB staff as defined under ADB’s Anticorruption Policy as amended (http://www.adb.org/Anticorruption/policy procedures.asp) and ADB’s Integrity Principles and Guidelines (http://www.adb.org/Documents/Guidelines/Integrity-Principles-Guidelines/2010/integrity-guidelines-procedures-2010.pdf). ADB’s Anticorruption Policy requires all parties, including staff, borrowers, beneficiaries, bidders, consultants, suppliers, and contractors to observe the highest ethical standards when participating in ADB-related activities. The Policy supports ADB’s obligation, in accordance with Article 14(xi) of the Agreement Establishing the Asian Development Bank, to ensure that the proceeds of ADB financing are used only for intended purposes. The PPRR assesses internal controls in place, identifies irregularities and instances of noncompliance, inspects the project outputs, and recommends enhancements to mitigate or eliminate opportunities for fraud, corruption, or abuse of resources and to help improve development effectiveness of future projects.

A Project Procurement-Related Review is not an evaluation to assess development effectiveness of ADB-funded projects. It does not review project outcomes or development impact, which can only be assessed after the finalization of a project.

CURRENCY EQUIVALENTS (as of 31 December 2008)

Currency Unit = Sri Lanka rupee/s (SLRe/SLRs) SLRe1.00 = $0.0088183420

$1.00 = SLRs113.400002

ABBREVIATIONS

ADB - Asian Development Bank CLC - computer learning center DC - direct contracting EA - executing agency ICB - international competitive bidding LIB - limited international bidding MOE - Ministry of Education OAI - ADB Office of Anticorruption and Integrity PAM - project administration memorandum PCSS - procurement contract summary sheet PMO - project management office PPC - project procurement committee PPMO - provincial project management office QCBS - quality- and cost-based selection SOE - statement of expenditures TEC - technical evaluation committee

NOTE

In this report, $ refers to US dollars.

CONTENTS

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EXECUTIVE SUMMARY I I. PROJECT BACKGROUND 1 II. REVIEW OBJECTIVES, SCOPE, AND METHODOLOGY 2 III. REVIEW FINDINGS AND RECOMMENDATIONS 4

A. Procurement 4 B. Asset Verification 10 C. Financial Management 13 D. Internal Control Weaknesses 15

IV. CONCLUDING COMMENTS 16

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EXECUTIVE SUMMARY

1. The Office of Anticorruption and Integrity (OAI) conducted a project procurement-related review (PPRR) of Asian Development Bank (ADB) Loan 2096-SRI(SF): Secondary Education Modernization Project II (Project) in Sri Lanka (SRI) from April to July 2009.1 This report documents findings and makes recommendations as a result of the PPRR. 2. The overall goal of the Project is to help establish a secondary education system that is equitable and more responsive to labor market requirements. The specific objectives are to increase equity of access to quality secondary education, and to improve efficiency of the secondary education system. The Project will upgrade approximately 1,100 target schools not supported by earlier projects, and provide system-wide support to all 2,300 (1AB and 1C) secondary schools. The Project comprises three components:

• Component 1: Improving quality of and equity of access to secondary education; • Component 2: Strengthening the capacity of provincial and zonal offices; and • Component 3: Supporting the implementation of government policies and

reforms in education. 3. Sri Lanka has achieved universal primary education, high literacy rates, and gender equity in basic education. Performance at junior and senior secondary level has improved since 2001 as a result of the Government’s efforts and external support such as that provided by ADB. An important challenge is to increase the equity of access to quality secondary education in key subjects – across regions, gender and ethnic groups. Though science streams have better employment perspectives, there is lack of science teachers and laboratories, especially in rural areas. Access to information and communication technology in education was limited to larger schools in the urban areas. As such, regional disparities in access to quality education persist, with the unequal distribution of school facilities, teachers, and teaching-learning resources. Conflict-affected Northern and Eastern provinces and resource-starved rural and plantation areas particularly suffer. The ADB supports the Government’s effort to reconstruct the education system in the conflict-affected areas of Sri Lanka. The ADB’s Country Partnership’s Strategy for 2009-2011 indicated that education will be supported primarily by ADB through ongoing assistance in Iine with ADB’s Strategy 2020.2 4. The PPRR Team (Review Team) examined the Project’s procurement and disbursement documentation, inspected selected small-value civil works and goods, and performed a review of the financial management system. The main PPRR objective is to identify and reduce internal control weaknesses that may allow integrity violations to occur in ADB-financed projects as defined under ADB’s Anticorruption Policy as amended and ADB’s Integrity Principles and Guidelines, and impair development effectiveness.3 Major Recommendations 5. The key recommendations are for:

1 OAI staff members, representative from Sri Lanka’s Auditor General’s Department and consultants comprised the

Review Team. 2 ADB. 2008. Country Partnership Strategy. Sri Lanka 2009-2011. 3 ADB. 1998. Anticorruption Policy. Manila. para. 67.

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• ADB South Asia Department (SARD), Ministry of Education (MOE), and Project Management Office (PMO) to revisit the methodology used in updating the cost estimates for their appropriateness, and ensure that these cost estimates are properly supported;

• MOE to reinforce the evaluation process to ensure conformity with ADB’s Procurement Guidelines;

• MOE, in coordination with SARD establish and/or strengthen required internal controls and financial management systems over project funds across all levels of project implementation;

• SARD, ADB Sri Lanka Resident Mission (SLRM) and MOE/Government of Sri Lanka establish and implement an effective monitoring mechanism between the different stakeholders in project implementation for this project and for future decentralized projects in Sri Lanka to ensure transparent procurement and financial management capacity at all levels; and

• SARD, SLRM and the Government of Sri Lanka to work together to ensure that procurement integrity and transparency are established at the commencement of every development project, and observed throughout implementation.

6. Strong procurement, financial management and internal controls mitigate the risk of improper use of Project funds and assets, maximize development effectiveness4, and deter fraud and corruption. The Government is encouraged to continue taking the lead in addressing this promptly, and collaborate with ADB to strengthen Sri Lanka’s capacity to manage for development results. Results in Brief 7. Procurement. The Review Team examined the procurement documentation and processes at PMO for 30 contracts awarded as of 31 December 2008, amounting to a total of $11.94 million, representing 99% of total contracts in terms of amount. The Review Team determined that the Project generally complied with ADB’s Procurement Guidelines, Guidelines on the Use of Consultants, and the Loan Agreement except for a few areas for improvement on among others, cost estimates methodology, and evaluation criteria and process documentation. The absence of documentation to support cost estimates and changes/adjustments thereon, including support for the evaluation reports reflects weak internal controls within the PMO, and raises concerns on the capacity of the PMO to ensure that sound administrative procedures are in place. 8. Asset Inspection. The Review Team inspected 33 small-value civil works projects reimbursed through statement of expenditure procedures, comprising construction of computer learning centers, multi-media units, science rooms, advanced level and ordinary level laboratories, toilets and water services amounting to approximately SLR40 million (or US$0.36 million); and samples from 9 of the 26 supply of goods contracts for computers, equipment and furniture amounting to about SLR30 million (or US$0.26 million) through site visits in 6 of the 8 provinces5. These covered 28 schools and 3 zonal offices. The Review Team concluded that the assets seen were determined to be generally in line with defined specifications and were

4 Note that comments on development effectiveness throughout this report are limited to and based on review

observations as to how recommendations made here with respect to anticorruption measures, strong internal controls and compliance with applicable guidelines – can increase development effectiveness, and are not intended as comments on the overall development effectiveness of the Project.

5 Site visits covered Western, Sabaragamuwa, Eastern, Northwestern, Central and North Central Provinces.

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utilized as intended. The Review Team provides recommendations to strengthen internal controls over asset management. 9. Financial Management. The Review Team examined the financial management system at the PMO and provincial level, and concluded that Project funds were generally disbursed properly and used for their intended purposes. However, weaknesses were identified specifically in the controls over financial and cash management at the provincial offices, which may leave the Project vulnerable to loss and/or misuse of its funds. Concluding Comments 10. The Review Team recognizes the challenges faced by MOE and PMO inherent in decentralized projects implemented in conflict-affected provinces. Greater collaboration may be required between SARD, SLRM and MOE/Government of Sri Lanka to ensure transparent procurement and financial management capacity at all levels. 11. Despite the weaknesses noted, there were positive indications that the Project delivered expected outputs to improve the efficiency of the secondary education in Sri Lanka. Project assets were found to be generally used as intended for targeted beneficiaries. Implementation of recommendations in this report can only augment results achieved to date. 12. The Review Team thanks the Project management and staff, especially the PMO, provincial project management offices, provincial offices of MOE as well as SARD for their cooperation and assistance to the PPRR requirements, and ADB Sri Lanka Resident Mission for the valuable inputs to the PPRR Team. ADB values the courtesy and support that Project officials extended to the Review Team, including the contribution from the Auditor General’s Department who jointly conducted this PPRR and shared their experience and insights.

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I. PROJECT BACKGROUND 1. Asian Development Bank (ADB) Loan No. 2096-SRI(SF): Second Education Modernization Project (the Project) was designed to help establish a secondary education system that is equitable and responsive to labor market requirements. It aims to increase equity of access to quality secondary education by upgrading approximately 1,100 target schools to an acceptable quality standard, and thus will improve the efficiency of the Sri Lankan secondary education system. 2. The Project supports the Government’s strategy to improve the quality and efficiency of secondary education and modernize the secondary school curriculum and teaching-learning methodologies by equipping some schools with science laboratories, computer facilities, and multimedia units. Capacity of school personnel to manage and sustain these facilities and improve teaching-learning activities will be developed through teams of zonal trainers/facilitators. The Project will support implementation of the Government’s policies and reforms in education such as decentralization of education and introduction of school-based management, and integration of school-based assessment in the national examination. The Project will contribute to social equity and building of social cohesion by minimizing disparities across regions and ethnic groups, and by promoting inclusive curriculum content and teaching methodologies.6 3. ADB approved the Project loan on 25 October 2004, and the loan became effective on 19 May 2005. The Project costs approximately $47.0 million of which ADB financed $35 million equivalent (74% of total project cost) from its Special Fund Resources, the Government of Sri Lanka financed $10.3 million (22% of total project cost), and the Project beneficiaries financed $1.7 million equivalent (4% of total project cost). The Project is scheduled for completion on 31 October 2010, and the loan is scheduled to close on 31 December 2010. The loan allocation as of 31 December 2008 (the review cut-off date) was as follows:

Percentage of ADB Financing Category Name

Loan Allocation

In US$ % FX

Financing % Local

Currency Financing

Civil Works 4,254,036 40Equipment* 10,910,712 100 100Furniture and Vehicles* 1,755,449 100 100Materials* 2,321,789 100 100Consulting Services* 2,267,234 100 100Staff Development* 3,256,308 100 100Surveys and Studies* 98,980 100Stipends/Scholarships* 4,714,936 100School Development Grants* 2,152,227 100Incremental Recurrent Costs 4,306,246 66Interest Charge** 949,832Unallocated 24,765Imprest Account 36,490Total 37,049,006

Basis: ADB Loan & Grant Financial Information System * Exclusive of tax ** Financing is 100% of amount due

6 ADB 2004. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the

Democratic Socialist Republic of Sri Lanka for the Secondary Education Modernization Project II. Manila.

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4. The Ministry of Education (MOE) is the Project executing agency (EA) and is responsible for the Project’s overall coordination and implementation. The project management office (PMO) established under the Secondary Education Modernization Project within MOE oversees day-to-day operations of the Project, including in particular, procurement, planning, budgeting, monitoring, and coordinating with provincial project management office (PPMO), Zones, and consultants. The PMO is managed by a Project director. An inter-ministerial Steering Committee, chaired by Secretary, MOE provides overall policy guidance to the Project, coordinates and liaises with other government agencies and departments, monitors the Project activities and outputs, and provides feedback to the PMO and each PPMO. 5. The ADB education strategy in Sri Lanka is consistent with the Government’s overall strategies for poverty reduction and economic growth. It supports the targeted interventions to raise educational attainment of low-income groups and helps influence the advancement of curricula design to reflect the needs of a modern labor market. It promotes decentralization of education and institutional development at all levels to improve planning, monitoring, and service delivery of education. It builds upon progress and achievements of the Secondary Education Modernization Project7, with a goal of maintaining the momentum of innovation and modernization occurring in the secondary education system.8 6. For decades, investment in education has been a central pillar of Sri Lanka’s development policy to promote equity and social mobility, to enhance human development, and contribute to economic growth. Sri Lanka was an early achiever of the Millennium Development Goals for universal primary education as the net primary enrollment rate was nearly 100% in the early 1990s, a target to be achieved by 2015 in most developing countries.9 An important challenge is to increase the equity of access to quality secondary education in key subjects – across regions, gender, and ethnic groups. Regional disparities in access to quality education persist, with the unequal distribution of school facilities, teachers, and teaching-learning resources. Conflict-affected Northern and Eastern provinces and resource-starved rural and plantation areas particularly suffer. Consistent with the Government’s priorities, ADB sector strategy aims to raise the quality and relevance of education, increase equity of access, and enhance employability of graduates.10

II. REVIEW OBJECTIVES, SCOPE, AND METHODOLOGY 7. The overall PPPR objective is to help prevent and detect fraud and corruption as defined under ADB’s Anticorruption Policy11 to maximize development results and benefits to the poor. Corrupt behavior is a serious impediment to the development process, severely reducing development effectiveness and jeopardizing successful delivery of development benefits. The Anticorruption Policy, along with Procurement Guidelines12 and Guidelines on the Use of Consultants by Asian Development Bank and its Borrowers13 require all parties to ADB-financed 7 ADB. 2000. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the

Democratic Socialist Republic of Sri Lanka for the Secondary Education Modernization Project. Manila. 8 ADB. 2004. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the

Democratic Socialist Republic of Sri Lanka for the Secondary Education Modernization Project II. Manila. 9 ADB. 2007. Development Effectiveness Country Brief – Sri Lanka. Sri Lanka. 10 ADB. 2008. Country Partnership Strategy. Sri Lanka 2009-2011. Manila. 11 Paragraph 67, ADB’s Anticorruption Policy (2 July 1998). Manila. 12 Paragraph 1.06, Guidelines for Procurement Under Asian Development Bank Loans (November 2004); Paragrah

1.14, Procurement Guidelines (February 2007). Manila. 13 Paragraph 1.23, Guidelines on The Use of Consultants by Asian Development Bank and Its Borrowers (February

2007). Manila.

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activities (including borrowers, beneficiaries, bidders, suppliers, and contractors) to maintain the highest ethical standards for ADB-financed activities.14 8. Under the Anticorruption Policy and the Integrity Principles and Guidelines (2010) the following are considered integrity violations:

• corrupt practice, which is the offering, giving, receiving or soliciting, directly or indirectly, anything of value to influence improperly the actions of another party;

• fraudulent practice, which is any act or omission, including a misrepresentation, that knowingly or recklessly misleads, or attempts to mislead, a party to obtain a financial or other benefit or to avoid an obligation;

• coercive practice, which is impairing or harming, or threatening to impair or harm, directly or indirectly, any party or the property of the party to influence improperly the actions of a party;

• collusive practice, which is an arrangement between two or more parties designed to achieve an improper purpose, including influencing improperly the actions of another party.

• abuse, which is theft, waste or improper use of assets related to ADB-related activity, either committed intentionally or through reckless disregard;

• conflict of interest, which is any situation in which a party has interests that could improperly influence that party’s performance of official duties or responsibilities, contractual obligations, or compliance with applicable laws and regulations;

• obstructive practice, which includes (i) deliberately destroying, falsifying, altering or concealing of evidence material to an ADB investigation; (ii) making false statements to investigators in order to materially impede an ADB investigation; (iii) threatening, harassing or intimidating any party to prevent it from disclosing its knowledge of matters relevant to the investigation or from pursuing the investigation; or (iv) materially impeding ADB’s contractual rights of audit or access to information;

• violations of ADB sanctions; • other violations of ADB’s Anticorruption Policy, including failure to adhere to the

highest ethical standards; and • retaliation against whistleblowers or witnesses, which is any detrimental act,

direct or indirect, recommended, threatened or taken against a whistleblower or witness or person associated with a whistleblower or witness in a manner material to a complaint because of the report or cooperation with an ADB investigation by the whistleblower or witness, which shall be investigated in accordance with Administrative Order 2.10.15

9. The PPRR is intended to:

• identify whether the procurement of project goods and services complied with ADB’s Procurement Guidelines, Guidelines on the Use of Consultants and the Loan Agreement;16

• determine whether project contracts were implemented according to the terms; 14 Paragraph 14(iii), ADB’s Anticorruption Policy (2 July 1998). Manila. 15 Paragraph 2, Integrity Principles and Guidelines (2010). Manila; and ADB Administrative Order 2.10: Whistleblower

and Witness Protection. 16 The Project’s Loan Agreement between the Democratic Socialist Republic of Sri Lanka and Asian Development

Bank was dated 7 December 2004.

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• ensure ADB’s funds were used for their intended purposes; and • recommend improvements to internal controls that mitigate opportunities for

fraud, corruption or abuse in this project and future ADB-financed projects. 10. PPRRs are conducted in line with ADB’s efforts to manage for development results. PPRRs identify internal controls that should be in place or strengthened to mitigate or eliminate instances of fraud and corruption, or abuse of resources. Effectively applied internal controls give assurance that project funds are directed towards intended uses for intended beneficiaries. PPRRs thus contribute to ensuring ADB-financed projects are managed to produce intended development results. 11. To achieve the review objectives, the Review Team conducted fieldwork at the PMO, PPMOs, and provincial offices of MOE:

• reviewed the Project’s procurement and disbursement documents; • evaluated the Project’s procurement processes, internal controls, and financial

management practices; and • inspected the Project’s goods procured and works performed at selected Project

sites. 12. The Review Team examined the procurement documentation and processes for 30 contracts awarded as of 31 December 2008, amounting to a total of $11.94 million (or 91% and 99% of individual contracts in terms of number and amount, respectively).17 These comprised 5 international competitive bidding (ICB) contracts, 16 limited international bidding (LIB) contracts, 6 direct contracting (DC) contracts, and 3 quality- and cost-based selection (QCBS) contracts. 13. The Review Team also examined disbursements amounting to a total of $12.4 million (or 69% of total disbursements of $18 million as of 31 December 2008). This pertained to (i) all the 30 individual contracts covered by the procurement review plus disbursement of a direct contracting contract not covered by such review, aggregating $8.7 million, and (ii) documentation for small-value contracts and liquidation of advances/reimbursement of SOE-related expenditures, amounting to $3.7 million. 14. During site visits to 28 schools and 3 zonal offices in 6 of the 8 provinces, the Review Team inspected 33 small-value construction projects and 9 of the 26 supply of goods contracts, aggregating to a total of approximately $0.60 million.

III. REVIEW FINDINGS AND RECOMMENDATIONS

15. The PPRR findings pertain primarily to the Project procurement, asset verification, and financial management system, as highlighted below. A. Procurement 16. Based on the review of the Project’s procurement procedures and documents, the Review Team determined that the Project generally complied with ADB’s Procurement

17 As of 31 December 2008, the Project awarded contracts amounting to a total of $22.43 million, covered by 71

procurement contract summary sheets (PCSS). Of this 33 PCSS pertained to individual contracts amounting to $12 million, and 38 PCSS pertained to small value contracts and liquidation of advances/reimbursement of SOE-related expenditures amounting to $10.33 million.

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Guidelines, Guidelines on the Use of Consultants and Loan Agreement except for a few areas for improvement.

1. Contract split

17. Contracts for supply, delivery, installation, networking, commissioning and maintenance of computers and accessories for about 400 computer learning centers (CLCs) were procured through ICB under 3 lots in 3 separate exercises that were relatively close to each other. These contracts, aggregating to a total of SLR532.97 million were advertised in October 2006, December 2006 and January 2007, respectively. These were awarded to the same bidder in May 2007, July 2007, and September 2007, respectively. 18. Considering the proximity of the procurement schedules of these 3 lots, it might have been worthwhile in terms of economy, efficiency and effectiveness to have procured the 3 lots under one ICB exercise. Splitting the procurement in 3 separate lots and 3 individual procurement exercises appeared to have avoided referral of the award of the contract to the Cabinet appointed Procurement Committee which is required to approve purchases above SLR300 million.18 19. PMO explained that procurement of computers into three packages was done to accommodate minimum of 100 schools in a package to align with construction completion, provision of electricity, installation of air conditioners and supply of furniture, and training of teachers. Procurement of computers had to be done in stages according to construction and completion of infrastructure facilities. Furthermore, all computer equipment purchased under Secondary Education Modernization Project phases I and II were packaged similarly to ensure smooth and effective post warranty maintenance by the supplier. 20. PMO failed to seek approval from the procurement committee that would have been vested with due authority to carry out the procurement prior to the split, a requirement of Sri Lanka’s Procurement Manual, and therefore weakens the internal control system in the Government’s procurement process.

2. Lack of documentation to support cost estimates and changes/adjustments

to cost estimates 21. The detailed cost estimates and financing plan by component and item of expenditures for the Project are appended to the Report and Recommendation of the President to the Board of Directors19 on the proposed loan to Sri Lanka for this Project, and to the Project Administration Memorandum (PAM).20 The PAM lists the Project’s indicative procurement packages, which contain the quantity and unit prices of each type of item for each category. The PMO computes the total cost estimate for each procured item based on the PAM’s unit rates. The unit rates are updated based on prevailing rates at the time of the procurement exercise. 18 Sri Lanka Government’s Procurement Manual Section 2.14.1 (2006). Page 68 of the Procurement Manual

indicates that among others, if splitting up is deemed necessary for legitimate reasons, it should be approved by the procurement committee that would have been vested with due authority to carry out such procurement prior splitting.

19 R189-04, 4 October 2004. 20 The PAM contains project data and information provided to the Government that allows the Borrower, EA, PMO,

other stakeholders and ADB to monitor project implementation and evaluate project impact.

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22. During the PPRR, the Review Team only found total cost estimates per procurement package. The updated itemized cost estimates to support the total cost estimates were not seen. The PPRR Team was made to understand that documentary evidence of updates to the unit cost estimates had not been kept. The PMO agreed to keep these in subsequent procurement processes. 23. The Review Team also noted that inconsistent cost estimates were reflected in the bid data sheet, Technical Evaluation Committee (TEC) minutes, Project Procurement Committee (PPC) minutes and minutes establishing the TEC for 8 contracts (2 ICBs and 6 LIBs). However, the Review Team did not see any documentation to justify the changes to the cost estimates, and hence, could not validate their reasonableness. PMO clarified that the adjustments to cost estimates were results of US$ fluctuations. The PMO agreed that justifications on future adjustments to cost estimates shall be documented and kept for audit trail purposes.

3. No negotiations for quoted prices substantially higher than cost estimates 24. The ADB Procurement Guidelines requires the borrower, after consultation with ADB to negotiate with the lowest evaluated bidder for a reduction of the bid price where all bid prices substantially exceed the cost estimates.21 The PAM reinforces this requirement. The Review Team noted four LIB contracts that were significantly higher than the cost estimates by 60% - 70%, and no negotiations were made to reduce the bid price. The Review Team was made to understand by the PMO that due to rapid devaluation of the Sri Lankan rupee against the US dollar and other foreign currencies, as well as the rapid inflation of the Sri Lankan rupee locally in 2007-2009, MOE and PMO did not consider negotiations with the lowest substantially responsive bidder meaningful. 25. Conversely, five contracts (i.e., two ICB and three LIB) were 25% to 54% lower than the cost estimates. These observations question the appropriateness of methodology in determining the cost estimates for the Project. There may be a need for MOE and PMO to revisit the methodology used in determining cost estimates to appropriately allocate Project funds, and be able to negotiate with the lowest responsive bidder in case the bid price substantially exceeds the cost estimate. 26. The Review Team also observed that the report of the TEC recommending acceptance of the lowest evaluated bidder, and the minutes of the PPC approving award of the TEC recommendation did not indicate the cost estimate of the procurement. As a result, it could not easily be determined whether or not the recommended contract price was within the cost estimate. The PMO agreed to indicate the cost estimate in the recommendation portion of future TEC reports to facilitate comparison with the quoted price. 4. Evaluation inconsistent with criteria in the bid document 27. The ADB Procurement Guidelines require the bidding documents to specify the relevant factors, in addition to price, to be considered in bid evaluation, and the manner in which they will be applied for the purpose of determining the lowest evaluated bid.22 This is similar to the provision in Sri Lanka’s National Procurement Guidelines.23

21 ADB Procurement Guidelines (February 2007), paragraph 2.63. 22 ADB Procurement Guidelines (February 2007), paragraph 2.52. 23 Sri Lanka’s National Procurement Guidelines (2006), paragraph 5.3.19(a).

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28. For ICBs, the bid document’s Section III – Evaluation and Qualification Criteria, item B – Qualification Criteria provides the detailed requirements to be taken into account to post-qualify the lowest evaluated bidder in terms of financial situation, experience, and supply capacity criteria. The bid document indicated a point system evaluation method for each qualification criteria, namely financial (40 points), installation (10 points), experience in terms of contract value (20 points), experience as authorized dealer/supplier of reputed brands (10 points), and technical capacity (20 points). In addition, the bid document also required evaluation of the litigation history and supply capacity of the bidders. 29. The Review Team noted that the actual evaluation method applied by the TEC is inconsistent with that in the bid document. The identified scores in the bid document were not applied in the evaluation. In particular, financial criteria were evaluated based only on submission of audited accounts for the last two years (Yes/No), instead of evaluating the acid ratio and inventory turnover for the last three years, as required. In addition, experience was evaluated only based on the number of successfully executed contracts of similar scope over two years instead of value of similar contracts in the last two years and experience as authorized dealer/supplier for a reputed branded product offered in the tender, as required. Technical capacity and installation were also not assessed. 30. The use of an evaluation method that is inconsistent with that in the bid document indicates questionable evaluation processes. This may result in complaints from losing bidders on the appropriateness of the evaluation process and more importantly, contracts being awarded to unqualified bidders.

5. Insufficient documentation to support the evaluation report

31. The Review Team was not able to validate accuracy and appropriateness of the Technical Evaluation Report in the absence of documentation/spreadsheet showing the comparison of each bid against the evaluation criteria that should form the basis of the Technical Evaluation Report for ICB and LIB contracts. In addition, in a QCBS contract the Review Team had not seen the documentation on evaluation of the originally proposed expert’s replacement, PMO’s endorsement of the replacement, and ADB’s approval for such replacement. 32. The Review Team emphasizes the importance of appropriate documentary support for all procurement-related decisions to ensure transparency and good governance in the procurement process.

6. Bidders did not fulfill bid qualification requirements but declared

substantially responsive and awarded contracts 33. In the examination of bids, the ADB Procurement Guidelines require the borrower to ascertain whether the bids (a) meet the eligibility requirements specified by the Procurement Guidelines, (b) have been properly signed, (c) are accompanied by the required securities or required declaration signed, (d) are substantially responsive to the bidding documents, and (e) are otherwise generally in order. If a bid is not substantially responsive, that is, it contains material deviations from or reservations to the terms, conditions, and specifications in the bidding documents, it shall not be considered further.24 24 ADB Procurement Guidelines (February 2007), paragraph 2.48. Specific requirements are contained in item 2.3 of

the ADB Guide on Bid Evaluation (October 2009).

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34. The Review Team noted that the winning bidders of seven LIB contracts did not provide certain required data/information to establish experience criteria or financial capability but were declared substantially responsive and awarded the contracts. For one of these contracts, the lowest evaluated bidder was disqualified for non-submission of translated ISO certificate, scope of supply, consignee’s certificate, and banker’s certificate, which should have been obtained by the TEC during the clarification stage. The Review Team was made to understand by the PMO that even if these were required in the evaluation criteria the TEC does not look for these documents if bidders are reputable or established, and had previous successful contracts for the Project. This not only contravenes the ADB Procurement Guidelines but jeopardizes the conduct of fair evaluation. 35. The Review Team also noted that the PMO requested a donation of six computer tables from one of the seven suppliers mentioned to donate to a college unrelated to the Project. The supplier who was the winning bidder for two contracts accepted the request and delivered the same. Despite that the request for donation may have been for a worthy cause, it raises concerns that the Project may have favored the supplier during the bid evaluation process, OAI reminds PMO to refrain from requesting for donations/favors from bidders/suppliers to safeguard the Project from potential reputational risk.

7. Reports on sample testing and inspection not prepared 36. The Review team noted that not all sample testing results of goods procured were documented to support the TEC report. For instance, in the procurement of photocopiers, the TEC report indicated that sample copiers of bidders were examined and such report detailed the results. No sample testing report was, however, found to validate the TEC report. 37. In the procurement of furniture contract, the Review Team found a report on inspection of sample furniture submitted by the lowest bidder only. In its report, the TEC recommended that in respect of the winning bidder, the furniture should be inspected during the manufacturing process after the “completion of bulk quantity”25 but prior to delivery. This was the first contract of the supplier to deliver furniture for the Project in 47 O/L Science Laboratories in schools in various districts. 38. There were also cases of quality inspection where reports of the results were not seen. These pertain to two LIB contracts for procurement of photocopiers and fax machines, and an LIB contract for procurement of furniture. 39. Based on these observations, the Review Team could not validate whether the reported results of sample testing presented in the TEC reports were accurate or if quality inspections were conducted as recommended. The Review Team was made to understand that reports on sample testing and quality inspections are prepared only in cases where deviations are observed by the TEC conducting the testing/inspections.

8. Bid validity extension without ADB approval

40. The ADB Procurement Guidelines provide that if the borrower requires an extension of bid validity to complete the process of evaluation, obtain necessary approvals and clearances,

25 The term “completion of bulk quantity” used in the TEC report means that majority of the ordered manufactured

furniture has been completely manufactured.

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and to make an award, it should seek ADB’s prior approval for the first request for extension, if it is longer than four weeks, and for all subsequent requests for extension, regardless of the period.26 41. The Review Team noted that extensions of bid validity for four LIB contracts did not have ADB approvals. The bid validity of one of these contracts was extended twice. The PMO agreed to comply with the ADB Procurement Guidelines in regard to future bid validity extensions.

9. Publication of awards inconsistent/not compliant with ADB Procurement Guidelines

42. The ADB Procurement Guidelines require the following information to be published within two weeks from contract award, or no later than the date of contract award if the contract is subject to post review, in an English language newspaper or a well-known and freely accessible website: (i) bid and lot numbers, (ii) bid prices read out at bid opening, (iii) names of bidders whose bids were rejected and reasons for rejection, (iv) name of the winning bidder and price offered, and (v) duration and summary of scope of the contract award.27 43. The Review Team noted that awards for ICB and LIB contracts were published at the MOE website. However, these lack information on (i) bid prices read out at bid opening and (ii) names of bidders whose bids were rejected and reasons for rejection. While the publication meets Sri Lanka’s National Procurement Guidelines (2006) which includes bid number, description, number of bidders, name of successful bidders, and bid price,28 the Project should comply with ADB’s Procurement Guidelines by publishing all required data for transparency. 44. For direct contracting contracts, the ADB Procurement Guidelines also provide that after the contract signature, the name of the contractor, price, duration and summary scope of the contract should be published in an English language newspaper or in English on a well-known and freely accessible website.29 The Review Team noted that this was not done. Full transparency of the procurement process, which ADB advocates was therefore not achieved. Recommendations 45. The conduct of separate procurement exercises for similar goods gives the appearance of splitting contracts for reasons of avoiding elevating approvals to higher authorities. This not only weakens the internal control system in the procurement process, but also entails higher costs for the procurement exercises. It is recommended that MOE

• in coordination with SARD assess the reasonableness of the procurement plan, and consider procuring similar goods under one bidding package in order to gain the maximum benefit from observing cost economy, efficiency and effectiveness; and

• ensure approval by the procurement committee that would have been vested with due authority to carry out such procurement prior to splitting contracts for legitimate reasons in compliance with Sri Lanka’s Procurement Manual.

26 ADB Procurement Guidelines (February 2007), paragraph 2.57 and Appendix 1, paragraph 2(d). 27 ADB Procurement Guidelines (February 2007), paragraph 2.60. 28 Sri Lanka’s National Procurement Guidelines (2006), paragraph 8.10.1. 29 ADB Procurement Guidelines (February 2007), paragraph 3.7.

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46. Unsupported or inappropriate cost estimates may lead to inflated costs for the Project. It is recommended that

• MOE and the PMO, in coordination with SARD revisit the methodology used in updating the cost estimates for their appropriateness, and ensure that these cost estimates are properly supported;

• PMO, in consultation with ADB (SARD) negotiate with the lowest responsive bidder in case all bid prices substantially exceed the cost estimate in compliance with the ADB Procurement Guidelines; and

• consider indicating the cost estimate in future evaluation reports to facilitate comparison with the proposed contract price and thereby properly inform the Procurement Awards Committee.

47. The use of an evaluation method that is inconsistent from the bid document may lead to questionable evaluation process, and awarding contracts to technically unqualified bidders. In addition, the absence of supporting documentation to the evaluation reports may also lead to questionable procurement decisions. It is recommended that MOE

• ensure the evaluation committee exercises due diligence in evaluation of the bid proposals and quotations, and consistently observes applicable evaluation procedures; and

• maintain appropriate documentation to support all procurement-related decisions to ensure transparency and good governance in the procurement process. This should include, among others, documentation showing the comparison of each bid against the evaluation criteria; evaluation, endorsement and approval of expert’s replacement; and report on sample testing of goods of participating bidders.

48. The Review Team recommends MOE strengthen control procedures and ensure the procurement process is transparent and conforms to ADB Procurement Guidelines. Specifically, it is recommended that the evaluation committee

• ensure extensions of bid validity have the ADB approvals, as required; • consider including all information required by the ADB Procurement Guidelines in

the publication of the contract awards; and • ensure publication of direct contracting contracts.

49. It is also recommended that MOE identify and augment training on procurement matters directed toward key procurement staff including relevant staff in the PMO and provincial offices, evaluation committee members at the project commencement in the future. B. Asset Verification 50. The Review Team inspected 33 small-value civil works projects reimbursed through statement of expenditure procedures, comprising construction of computer learning centers, multi-media units, science rooms, advanced level (A/L) and ordinary level (O/L) laboratories, toilets and water services amounting to approximately SLR40 million (or US$0.36 million); and samples from 9 of the 26 supply of goods contracts for computers, equipment and furniture

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amounting to about SLR30 million (or US$0.26 million)30 through site visits in 6 of the 8 provinces31. These covered 28 schools and 3 zonal offices. Small-value civil works 51. The Review Team determined that the civil works projects were in their appropriate locations as specified in the contracts, and the actual designs were according to contract specifications. The assets were being used for the purposes intended, except for two civil works projects that were significantly delayed, and not yet completed during the site visit of the Review Team’s quantity surveyor in mid-2009. 52. One of these pertained to a water service construction at Sabaragamuwa Province, where the contract of 3 months only had less than 10% progress after 20 months. The Review Team was made to understand by the Project Engineer that the contractor had dug a well but found no water, and could not give any assurance that if they dig deeper, water will be found. The provincial engineers did not, however, communicate the problem to the PMO until the asset inspection, and hence, no action was taken. In another instance, the balance of works for construction of toilets at the Eastern Province could not be completed as the people in the neighborhood demanding for a roadway through the school premises, would not allow them to proceed with the works. The Review Team was informed that the problem had been brought by the school’s principal to the attention of the authorities of the Department and Ministry of Education of the Eastern Province and appropriate actions would be taken to ensure the works are completed. The Review Team was not able to validate actions taken subsequent to the PPRR. Furniture and Equipment 53. The Review Team inspected furniture, computers, laboratory equipment and air conditioners in sites visited. It was determined that these were generally in line with contract specifications and used as intended, except for the following where assets had not been used:

• laboratory equipment in 2 schools (PE 43 microscope venire) not working from the time of delivery, and broken glasses during delivery not replaced by the supplier,

• computer not in operation in a CLC, still under warranty, • defective air conditioner in a CLC, and air conditioners not in operation since

installation due either to misconfiguration, incomplete installation, broken spring or shutter not properly working, still under warranty in 2 CLCs,

• defective printer in a zonal office since delivery date but was not returned to supplier for replacement,

• damaged chairs in 3 CLCs as these are of low quality, and • inadequate space in a CLC to accommodate all the furniture and computers

delivered.

54. The Review Team noted that the anti-virus software included in the computer package purchased out of the Project funds was not installed in the personal computers, and downloaded unlicensed antivirus software instead was installed in most personal computers in 30 This excludes the amounts for computers and airconditioners inspected in 3 schools in the Eastern Province on

account of the suppliers not having provided the goods delivery or job completion details to PMO. 31 Site visits covered Western, Sabaragamuwa, Eastern, Northwestern, Central and North Central Provinces.

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most CLCs visited. For most CLCs, updates to the anti-virus software and operating system were not made due to either non-availability of internet connection, mis-configuration of the antivirus software or non-awareness of the CLC in-charge personnel about antivirus and operating system patch updates. 55. Frequent power disruptions/unstable power distribution due to CLC distribution trip switches not being able to handle the load in a CLC not only disrupts CLC operations, but can cause damage to the electrical equipment. This was noted in the CLC visited in the Eastern Province. 56. In 3 zonal offices visited, the supplier of computers delivered the goods to these offices without appropriate acknowledgment of these deliveries by the respective zonal offices representatives. Delivery and acknowledgment receipts for these goods were not available. Out of the 9 computers inspected in one of the zonal offices, only 2 serial numbers of computers matched with the serial numbers from PMO’s list of equipment. In another zonal office only 3 of the 9 serial numbers of computers matched those in PMO’s list. Alternatively, related information on computers and air conditioners delivered to 3 CLCs in the Eastern Province were not available at the PMO as the suppliers did not provide the delivery or job completion details to the PMO. 57. The Review Team noted suggestions from teachers in A/L and O/L laboratories to have sliding sashes instead of casement type sashes in cupboards under the work benches for convenience of usage and saving space, and a provision of preparation room for efficiency in conducting of practical classes, respectively. These may have to be considered by the MOE, PMO and PPMO in future designs of the A/L and O/L laboratories. Recommendations 58. To ensure problems during progress of small-value civil works are appropriately acted upon, it is recommended that PMO require the provincial offices to submit on a periodic basis, a listing of works in progress, including status of their progress, and related issues if any. PMO should accordingly advise the provincial offices of appropriate actions to take to remedy the situation and document the same in progress reports submitted to ADB. 59. To ensure the physical existence of the assets for the Project and that the assets are effectively utilized for the purposes intended, it is recommended that the PMO, and provincial offices:

• conduct periodic inventory of the assets, and document the appropriate information in the asset register. PMO should also ensure that provincial offices provide copies of the delivery and acknowledgment receipts to facilitate actual verification of goods received;

• ensure that the suppliers exercise their warranty or maintenance obligations, if this is the case for defective goods delivered by reporting these and diligently following-up requests for replacements/repairs;

• ensure that defective assets are accordingly repaired; • ensure CLC personnel are made aware of the effectiveness of antivirus

softwares, and computers and operating systems are installed with licensed antivirus softwares, and with capacity for updates;

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• resolve frequent power disruptions/unstable power distributions to avoid potential damage to electrical equipment; and

• adequately plan and seek inputs from other CLCs and A/L and O/L laboratories in future constructions to ensure effective use of the assets.

C. Financial Management System 60. The Review Team examined the financial management system at the PMO and provincial level, including the Project’s financial accounting, internal controls, and disbursement processes. The Review Team concluded that the Project funds were generally disbursed properly and used for their intended purposes. However, weaknesses were identified as summarized below.

Retention money paid to supplier prior to completion of warranty period 61. The ADB Procurement Guidelines provide that retention money will be withheld until the expiration of the warranty or maintenance period. However, after completion of the works, but before the expiration of the warranty or maintenance period, the retention money may, at the option of the borrower, be replaced with a suitable bank guarantee or other appropriate security.32 62. The Review Team noted that in two LIB contracts for the same supplier, retention monies were claimed by the supplier prior to completion of the warranty period without any suitable bank guarantee as replacement, and these were paid. The lack of diligent compliance to Procurement Guidelines and relevant contract provisions, such as in this case, may lead to unnecessary expenditures for maintenance should the contractor default on its warranty or maintenance obligations. Retention money not yet released to contractors were included in SOE claims by provincial offices

63. The Review Team noted that retention monies aggregating to SLR2,390,509, which have not been paid out to the contractors, but remain deposited to the provincial offices accounts were included in the replenishment of expenditures by 3 provinces, namely Sabaragamuwa, Eastern and North Western provinces. This means replenishments were being requested for expenditures that were not yet incurred. Ineligible expenditures

64. The residential monthly telephone bills amounting to SLR3,000 of the retired Government official, the Provincial Project manager of one of the provinces at the time of the review were being claimed from ADB since March 2006. Questionable encashment of checks

65. Review of the bank statements and issued checks disclosed that checks “payable to cash” were withdrawn in various instances by the Provincial Chief Accountant of the Department of Education in one of the provinces in 2007 and 2008. The aggregate value of the “pay to cash” checks negotiated and endorsed by the Chief Accountant amounts to SLR 785,260.20. While 32 ADB Procurement Guidelines (February 2007), paragraph 2.39.

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the Chief Accountant informed the Review Team that these were utilized for the training program expenditures, there is no evidence to support outlay of advances to defray these expenditures or supporting documents of related expenditures incurred for the training program. Apart from the use of funds that could not be accounted for, the GOSL Financial Regulation also prohibits issuance of “pay to cash’ checks. Delayed payments to contractors

66. The Review Team observed instances of delayed payments to contractors of small-value civil works contracts, ranging from 2 to 7 months from the date of certification of the works in the Western, North Western and North Central provinces. Expenditures claimed by the provinces not supported by original source documents

67. The Review Team noted that expenditures in the provinces, specifically pertaining to electricity bills and connection charges, including travel expenses in Northwestern, Central and Eastern provinces were not supported with original source documents. The Review Team emphasizes the importance of original supporting documents to establish propriety of expenditures, and to prevent possible use of these documents for future claims. 68. The Review Team also observed instances in the Central Province where payment was made without approval, and payment made was not acknowledged as received. This constitutes weak controls in financial management. Duplicate reimbursement by the provincial office 69. The Review Team noted that the cost of construction for the computer learning center of a school in the Central Province, amounting to SLR479,000 was reimbursed twice under withdrawal application numbers 021 and 024. Weak controls over accounting and cash management in provincial offices 70. The Eastern Province maintains an average balance of SLR 5.0 million in its current bank account which is relatively high. Short-term actual cash requirements should be determined and tracked in order to avoid keeping excess funds which can be allocated to interest-bearing placements or financial instruments. Other internal control weaknesses noted on recording and cash management are as follows:

• accounting ledgers are not maintained in provincial offices; • three cash books are maintained for the Project account in Eastern Province,

which does not facilitate easy reconciliation with the bank statement. An unaccounted difference since 2007 remain outstanding during the PPRR fieldwork in mid-2009.

71. Lack of basic controls over financial management may have exposed the Project to situations where funds were not optimally used for intended purposes and intended beneficiaries, and leaves the Project vulnerable to loss and/or improper use of its funds. There is a need to strengthen and strictly implement fiduciary controls at all levels of funds management to ensure transparency and accountability, especially in a decentralized project such as this one, and to minimize risks of misuse.

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Recommendations 72. It is recommended that MOE, in coordination with SARD strengthen oversight function over the provinces, and require provinces to

• prepare periodic reconciliations of their bank accounts, monitor/resolve unreconciled items, and report disposition of long outstanding accounts in the reconciliation statements to PMO;

• consider to maintain one cash book only to ease reconciliation but continue to track individual expenditures in the same cash book;

• determine short-term cash requirements, track balances and ensure to place excess funds in interest-bearing placements to maximize benefit from available cash resources;

• ensure original documents to support claims; • review and act on claims to ADB with noted ineligible expenditures, and in future

claim only for eligible expenditures and only those that were incurred; • maintain accounting ledgers; • determine causes of delays in payment to contractors; • discontinue drawing checks payable to cash; and • liquidate expenditures within an appropriate period.

73. MOE should also consider requiring its internal audit department to conduct periodic reviews of this Project and other ADB-funded projects to strengthen fiscal controls. 74. It also recommended that CTL recover from succeeding withdrawal applications duplicate payments and ineligible expenditures reimbursed from the Project funds. 75. For future decentralized projects, MOE in coordination with SARD should ensure that relevant staff in provincial offices are trained to manage and account for the Project funds, and clearly understand their role. D. Internal Control Weaknesses 76. The Review Team also assessed the Project’s internal controls and identified the following areas for improvement. Strong internal controls significantly reduce the risk of undetected fraud and corruption, and are vital in ensuring Project funds are directed towards stated objectives, for intended beneficiaries.33 Insufficient detailed review of information in the bid documents and contracts 77. The Review Team noted that there were instances when the bid documents issued to suppliers for three LIB contracts contained inadequate/erroneous information (e.g., quantities, bid security or lacked certain relevant sections). While these may have been genuine lapses, the Review Team stresses the importance of detailed and careful review of bid documents prior to their release in order to deter unnecessary complaints from bidders or delays in the procurement process.

33 Note that this section does not include controls already referred to previously in this report.

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78. In one of the three LIB contracts above, the Review Team also noted that the bid opening sheet did not reflect the actual bid opening date. PMO explained that the error was caused by using the bid opening sheet of a previous procurement through a cut and paste function and not updating the same with relevant information. 79. In another instance, the contract with a supplier lacked the signature of a witness on the purchaser’s behalf. The observation was acknowledged as lapse on the part of the Procurement Specialist, PMO who signs as witness in Project contracts. Financial bid of technically unresponsive bidder under QCBS not returned 80. The ADB Consulting Guidelines provide that under QCBS, after the technical quality is evaluated, firms whose technical proposals did not meet the minimum qualifying score of 750 points out of a possible 1,000 points, or were considered as non-responsive to the invitation requirements, will be advised and their financial proposals will be returned unopened.34 The Review Team noted that in a QCBS where there were only two participating bidders, the financial proposal of the technically non-responsive firm was not returned. Inadequate segregation of duties and responsibilities 81. The Review Team observed that a TEC member, who was part of the evaluation process and awarding of the contract, also conducted the inspection of the delivered goods. Therefore, there appears an inadequate segregation of duties. The Review Team was made to understand that the TEC member, being knowledgeable on the technical specifications, together with another Provincial staff inspected the goods after delivery. The inspection reports, however, were signed only by the TEC member. Recommendations 82. The Review Team recommends the following to strengthen controls relating to the procurement processes:

• PMO and the evaluation committee to appropriately review procurement-related documentation to ensure accuracy and completeness;

• PMO to implement procedures/ticklers to ensure compliance with ADB’s Procurement Guidelines in regard to returning of unopened financial proposals of non-responsive firms under QCBS; and

• PMO and the evaluation committee to implement segregation of duties and responsibilities in regard to evaluation, awarding, and conducting inspection of delivered goods. The delivered goods should be inspected and the report should be signed by both the TEC member and the accompanying Provincial staff.

IV. CONCLUDING COMMENTS

83. The Review Team recognizes the challenges faced by the EA and PMO inherent in decentralized projects and in conflict-affected provinces. Greater collaboration may be required between SARD and MOE/Government of Sri Lanka to establish and implement an effective monitoring mechanism between the different stakeholders in project implementation for this 34 ADB Guidelines on The Use of Consultants by Asian Development Bank and Its Borrowers (February 2007),

paragraph 2.13.

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project and for future decentralized projects in Sri Lanka to ensure transparent procurement and financial management capacity at all levels. 84. The Review Team reiterates the importance of maintaining sufficient and appropriate documentation of the procurement process and evaluation process decisions, and good financial record management. It is important that procurement, financial management, asset management, and internal control weaknesses identified here do not recur in this project and similar projects in Sri Lanka. Bidding integrity and transparency should be established at project commencement, and observed throughout project implementation in order to maximize development effectiveness. 85. There were positive indications that the Project delivered expected outputs to improve the efficiency of the secondary education in Sri Lanka. A case in point is that project assets were found to be generally used as intended by targeted beneficiaries. Implementation of recommendations in this report can only augment results achieved to date. 86. OAI encourages the ADB Operations Department, in coordination with Sri Lanka Resident Mission to conduct limited compliance reviews (spot reviews) of their respective projects during review missions to ensure bidding integrity and transparency in the procurement process. OAI is planning to conduct seminars to assist Operations Departments on this type of review in 2010. 87. The Review Team thanks Project management and staff, especially the PMO, PPMOs, provincial offices of MOE as well as SARD for their cooperation and assistance to the PPRR requirements, and ADB Sri Lanka Resident Mission Procurement Officer for the valuable inputs to the PPRR Team. ADB values the courtesy and support that Project officials extended to the Review Team, including the valuable participation of the Auditor General’s Department who jointly conducted this PPRA and provided the Review Team with valuable inputs and insights.