Development of electronic domestic arrears profiling – Sierra Leone

The objective of developing an arrears profiling database system is to capture all categories of arrears outlined in the updated Spending Arrears Clearance Strategy 2023-2028 that expanded the coverage of arrears to include new definitions for the various categories of arrears including: EFT/cheques payable, arrears pending at the MDA/not yet conveyed to the PDMD, arrears conveyed to the PDMD/not yet verified, arrears at the verification stage, arrears verified, and verified outstanding stock of arrears.

The new arrears profiling database system would also capture more liquid arrears (payables) that poses high cash pressure on the budget especially at the start of every fiscal year to deal with (i.e., carryover transactions that includes payables pending) at the MDA/not entered into the IFMIS for payment, payables entered into the IFMIS /not approved by the MoF/AGD, payables approved by the MoF/AGD and payment has not been released. Republic of Sierra Leone Ministry of Finance REQUEST FOR EXPRESSION OF INTEREST (REOI) INDIVIDUAL CONSULTANT SERVICE EXTENSION OF RECRUITMENT OF INTERNATIONAL CONSULTANT FOR THE DEVELOPMENT AND DEPLOYMENT OF AN ELECTRONIC ARREARS PROFILING DATABASE FOR MANAGEMENT OF DOMESTIC ARREARS IN THE PUBLIC DEBT MANAGEMENT DIVISION, MINISTRY OF FINANCE, GOVERNMENT OF SIERRA LEONE.

COUNTRY: Sierra Leone NAME OF PROJECT: Enhancing Efficiency in Public Debt Management Institutional Support Project (EEPDMIS) Insert sector: Debt Management Financing Agreement reference: 5900155018308 Project ID No.: P-SL-KF0-013 The Ministry of Finance, Government of Sierra Leone has received funds from the African Development Bank (AfDB) to recruit an international consultant or an international consultancy firm to develop and deploy an arrears profiling database system that is capable to track the current level of all categories of domestic arrears, report on payments made and provide the outstanding balances at any point in time.

The accumulation of domestic arrears and its management is amongst the challenges of Public Financial Management in Sierra Leone. Determination of the current stock of domestic arrears at any point in time, tracking of new accumulation and payment of arrears across all Ministries, Departments and Agencies (MDAs) is critical to address the challenge of debt management and fiscal sustainability. While substantial work has been done by the Audit Service Sierra Leone, Internal Audit Department, Accountant General’s Department and Public Debt Management Division to verify and track arrears payment, there remain the challenge of new accumulation and reconciliation of arrears pay-down, due to manual processes or lack of automation of various stages of arrears management.

From the initial stage of identification of unverified arrears, cataloguing of documentation for arrears audit, consolidation of audited arrears, tracking of pay-down and reporting on the current stock of arrears at any point in while. An initial work was done to determine the stock of arrears as at Pre-April 2018 by Audit Service Sierra Leone who presented a report in July 2020 that formed the basis of the first Arrears Clearance Strategy and Principles 2020-2025. Implementation of the first Arrears Clearance Strategy and Principle 2020-2025 faced an initial setback in 2020 associated with the economic challenges of CoVID-19 and rejection of the discounts proposed in the settlement strategy and erosion of revenue base that was needed to settle the verified obligations as funding from partners declined and domestic revenue narrowed.

This resulted in the accumulation of new arrears that warranted the revision of the -- 1 of 2 -- Spending Arrears Clearance Strategy and Principles of 2023-2028 that is aimed at addressing the remaining unpaid arrears and broader coverage of arrears under a more rational clearance strategy that is acceptable to the domestic creditors/vendors. The objective of developing an arrears profiling database system is to capture all categories of arrears outlined in the updated Spending Arrears Clearance Strategy 2023-2028 that expanded the coverage of arrears to include new definitions for the various categories of arrears including: EFT/cheques payable, arrears pending at the MDA/not yet conveyed to the PDMD, arrears conveyed to the PDMD/not yet verified, arrears at the verification stage, arrears verified, and verified outstanding stock of arrears.

The new arrears profiling database system would also capture more liquid arrears (payables) that poses high cash pressure on the budget especially at the start of every fiscal year to deal with (i.e., carryover transactions that includes payables pending) at the MDA/not entered into the IFMIS for payment, payables entered into the IFMIS /not approved by the MoF/AGD, payables approved by the MoF/AGD and payment has not been released. The anticipated start date for this role is November 2026. The assignmen