Madagascar - Accounting and Audit Organization and Training Project

Document of The World Bank FOR OFFICIAL USE ONLY FILE COPY Report No. P-2903-MAG REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE DEMOCRATIC REPUBLIC OF MADAGASCAR FOR AN ACCOUNTING AND AUDIT ORGANIZATION AND TRAINING PROJECT May 13, 1981 This document has a restricted distribution and may be used by recipients only In the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authoriztion.  CURRENCY EQUIVALENTS Calendar 1980 January 1981 Unit = Malagasy Franc (FMG) Malagasy Franc (FMG) US$1.00 = FMG 212.72 = FMG 209.98 FMG 1,000 US$4.70 = US$4.76 FMG 1,000,000 = US$4,701 - US$4,762 (The cost estimates are based on US$1 = FMG 200) ABBREVIATIONS CFC - Centre de Formation en Comptabilite Charter - Charter of Socialist Enterprises CSR - Supreme Council of the Revolution CUR - University Regional Center, University of Madagascar INPF - Institut National de Promotion - Formation RINDRA - Malagasy National Audit Company FISCAL YEAR January 1 - December 31 (Government) July 1 - June 30 (RINDRA)  FOR OFFICIAL USE ONLY MADAGASCAR ACCOUNTING AND AUDIT TRAINING PROJECT Credit and Project Summary Borrower: Democratic Republic of Madagascar Beneficiaries: Centre de Formation en Comptabilite (CFC) (Accounting Training Center); Malagasy National Audit Company (RINDRA); and Malagasy Management Consulting Firms. Amount: SDR 9.4 million (US$11.5 million equivalent) Terms: Standard Relending Terms: SDR 3.0 million (US$3.7 million equivalent) would be relent to RINDRA at an interest rate of 12 percent, with repayment over 10 years including three years of grace. Project (i) Objective: The project would assist the Government to Description: establish an appropriate instructional program to provide qualified professionals in accounting and auditing; to provide to industry management consulting and audit services through existing national companies; and to create a suitable legislative framework for the sector. (ii) Main Project Components: The project components are: (a) Preparation of appropriate legislation, which would require enterprises to prepare audited accounts in accordance with specified standards under a national accounting code (20 man-months); (b) Establishment and operation of an accounting training center, to be called Centre de Formation en Comptabilite (CFC) and the provision of books, supplies, equipment, etc. (279 man-months); (c) Training and supervisory services to assist the Malagasy National Audit Company (RINDRA) (156 man-months); and (d) Training and technical assistance for Malagasy management consulting firms, and a feasibility study for the establishment of a public management consulting firm (65 man-months); (iii) Benefits: The project would provide the legal basis for requiring commercial enterprises to prepare accounts and financial reports in accordance with specific accounting and auditing standards, and help redress the shortage of skilled accountants, auditors and specialists in financial systems and procedures that persists due to the lack of adequate teaching and train- ing facilities for professionally-qualified persons. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  - ii - (iv) Risks: The physical risks of the project are negligible, but enactment of appropriate legislation and timely appointment of technical assistance and training staff are important. Delays would be minimized by requiring that CFC-s Director and RINDRA's Director General be appointed before the credit be declared effective. Estimated Costs: Local Foreign Total