Title: Operational audits
Client: Ministry of Labour and Social Security
Country: Jamaica
Year: October 2003 to date
Financing: The World Bank
Description of project and services rendered
The World Bank will finance 75% of amounts disbursed to family representatives of eligible children (Child Assistance Transfers). As a condition of disbursement, from the World Bank, the Ministry of Labour and Social Security prior to the presentation of each withdrawal request of loan proceeds for grants, must furnish to the Bank, evidence of the effect that independent operational auditors have audited the list of eligible poor children and the list of eligible family representatives. To fulfill this requirement, the Ministry of Labour and Social Security has engaged P.A. Services Conseils Inc. that, over the life of the project, will carryout periodic operational audits prior to replenishment of the special account.
Two types of operational audits will be conducted. One will be conducted prior to first payment of grants and the other will be conducted for subsequent payments.
a) Audits Prior to First payment
These operational audits will be done using a parish sample with a 95% confidence level. The audits will:
- Verify the validity of application data
- Determine whether based on this data, recipients were eligible for benefits as set out in the operational manual. Eligibility should be determined by visiting the homes of beneficiaries and gather information using the targeting form. The information should be entered in the MIS system and scoring formula rerun using the same reference date as the original score. If the score is higher than the prior one and is over the cut-off point, then the family will be deemed no longer eligible. The information gathered for re-scoring should be based on the situation of the family at the time of application as a familyýs score is kept for 2 years when a formal re-certification is done. However, the number of individuals in the family benefiting from the program may change because of changes in the family structure.
- If the score is higher than the prior one and is over the cut-off point, then the family will no longer be eligible. In order to determine the World Bankýs transference percentage to be discounted, the auditors will take eligible families with differences over the cut-off point and divide them over the total sample families selected.
- The ýnon-beneficiaries indexý ý calculated by auditors-plus the respective report is sent to the World Bank and copy to the MLSS.
b) Audits done for subsequent payments
These audits will be done using an island-wide stratified household sample by school and health center with a 95% level of confidence. The audits will:
- Determine level of non-compliance among children aged 0-17.
- Determine whether other key operational procedures in relation to the cash transfers (e.g. Denial of benefits when school attendance is below the threshold/condition set by program) are being followed.
- Determine whether family representatives have complied with the requirements set forth in schedule 5 of the loan agreement and in the operational manual and has properly been identified through an accepted form of identification as set forth in the operational manual.
- Estimate based on professional sampling techniques, the percentage of total amounts disbursed that had been paid to ineligible beneficiaries. This percentage would be projected to the total population and deducted from the amounts to be drawn by the project from the Special Account, thus facilitating the smooth processing of the Bankýs replenishment of the Special Account.
- The number of listed non-beneficiaries is established as if they would have complied with the conditionalities of the JUBP, but who after verification, did not comply with the program conditionalities. This number is used to determine the non compliance index.
It is expected that the Operational auditor will audit the beneficiary payment listings three times per year for 4 years beginning just before the first request for withdrawal that includes payment for child assistance grants. The Operational Auditor will conduct approximately 24 (twenty-four) operational audits on the PATH between 2003 and the close of the project in 2007: 13 parish operational audits during the first year before first payment and thereafter 3 audits per year.
