Monthly Narrative Report on Cumulative Implementation Progress UNDP

Monthly narrative report on cumulative implementation progress

UNDP STAR project management and the Amalgamation Team

2nd PROGRESS REPORT

To: United Nations Development Programme in Albania Grant Thornton Sh.p.k Rr.Skenderbej, Gurten building, Kati I II Rr: Sami Frasheri Kompleksi T.I.D, Shk. B, Floor 1 Tirana, Albania 10 000 Tirana Albania

T +355 422 74832 F +355 422 56560 [email protected] www.granthornton.al

6 November 2015

Dear Sirs,

In accordance with the Contact for Professional Services No. #07/2015 signed between Grant Thornton sh.p.k. and UNDP Albania "Provision of technical assistance services for replication of Due Diligence Developed Model for LGUs in Albania in the framework of Territorial and Administrative Reform Implementation" (‘the Project’) and the activities predefined within the scope of the project, herewith we provide you with the second Progress Report for the Project.

The Report comprises the accomplished activities under the project for the month of October 2015, a list of the main issues identified, the results achieved under the project, the plan of the activities for the next months and an assessment of whether the deliverables will be issued in accordance with the project deadlines.

With respect,

Kledi Kodra, FCCA Managing Partner

Chartered Accountants Member firm of Grant Thornton International Ltd Monthly narrative report on cumulative implementation progress to UNDP STAR project management and the Amalgamation Team 6 November 2015

Important Notice

The Progress Report (‘‘the report’’) on the realization of the Project "Provision of technical assistance services for replication of Due Diligence Developed Model for LGUs in Albania in the framework of Territorial and Administrative Reform Implementation" (‘‘the Project’’), is prepared by Grant Thornton Sh.p.k on behalf of the Consortium of firms (“Grant Thornton” or “The Consultant”) according to the Contact for Professional Services No. #07/2015 signed between Grant Thornton sh.p.k and UNDP Albania. Grant Thornton Sh.p.k, on behalf of the Consortium Firms, is not accepting any kind of responsibility or obligation to any other party, but UNDP Albania (“the Client” or “UNDP Albania”) or the concerned parties whom are entitled to the content of the Report, as specified in the Agreement. Anyone relying on this document, with exception of the Client or the concerned parties who are entitled to the content of this Report, entirely or partially, undertakes the risk completely regarding the results shown in this document or its content on any grounds whatsoever.

In the execution of this services and the preparation of this document, Grant Thornton does not undertake any kind of responsibility for the decisions of the Client, regarding the undertaking or not of any strategy or direction of activities. The Report and the expressed opinions are based on information obtained by the local government units working groups. Not limited to the above, Grant Thornton will not have any responsibility or obligation regarding the submitted information or explications on which this Report is based upon, if these are incorrect, incomplete or untrue.

The Report is submitted only to UNDP Albania and should not be used, reproduced or distributed, directly or indirectly, to any other party, for any kind of purpose, without prior written consent from Grant Thornton.

The results expressed in this Report can be completely understood only after reading the Report and the other documents, data, assumptions and limitations.

Chartered Accountants Member firm of Grant Thornton International Ltd

Monthly narrative report on cumulative implementation progress to UNDP STAR project management and the Amalgamation Team 6 November 2015

Content

1. Accomplished activities under the project for the month of October 2015 1 2. Main issues identified 4 3. Results achieved under the project during the second month of activities 8 4. Plan of the activities for the next months 10 5. Assessment of whether the deliverables will be issued in accordance with the projects deadlines 13 6. Appendix A 14

Accomplished activities under the project for the month of October 2015 In accordance with the signed Contract, The Consultant during the realization of the Project for "Provision of technical assistance services for replication of Due Diligence Developed Model for LGUs in Albania in the framework of Territorial and Administrative Reform Implementation", has realized the activities as described below.

The team of consultants has dedicated support and administrative resources at the Central Coordination Team level and Qark Team level. The project support and administration staff at both levels has and will be continuously liaising with field experts and projects management, thus facilitating the due diligence model execution in the field and timely reporting. The consultant is providing assistance to local working groups in their carrying out of the due diligence with respect to financial and operational aspects through the Help Desk implemented in the initial stages of the project. During the current month, The Consultant has been continuously reviewing the reported information with respect to financial and operational annexes. A more complete list of activities carried out in the 2nd month of the project follows:

Activities realized in 2st month of the Project 1. Extensive review of the financial and operational information in each 384 Units. 2. With respect to review of the existing legal framework and assessing necessary amendments that allow the undertaking of measures for consolidating the systems, practices and different resources of local governments we have provided guidance to field experts to clarify issues encountered in the reporting process. 3. Continued providing assistance via Helpdesk to local working groups in their carrying out of the due diligence with respect to financial and legal operations including materials, report templates and pilot project work, answer to their questions, etc. 4. Continued providing oversight and progress monitoring on the region experts from the central level experts. 6. Continued providing field experts with operational, financial models and with relevant laws and legislation to adhere and refer to during the fieldwork. 7. Continued availing answers to frequently asked questions on help desk separately with respect to financial and operational issues in order to ensure the use of a consistent approach on the deliverables. 8. Monitored progress status with respect to gathering of financial statements of each LGU, Notes to the financial statements, controls and adjustments, financial models, financial control report vis-a-vis deadlines. 9. Monitored progress status with respect to gathering information of existing human resources of each LGU and their organizational structure, vis-a-vis deadlines. 10. Obtained summarized identified issues with respect to notes to the financial statements, controls and adjustments, financial model for LGUs and financial control report provided in the individual regions 11. Obtained summarized identified issues with respect to organizational structure, business processes and operational control reports provided in the individual regions 12. Enquired with treasury directory on the financial statements reported from the legal units, specifically on liabilities of LGUs and summary of available treasury amounts reported and guided the field experts to ensure reconciliation of figures reported. 13. Summarized liabilities reported to date from all units that have submitted the financial data in the financial model for LGUs. 14. Performed a quality review with respect to data reported in the organizational

Monthly narrative report on cumulative implementation progress to UNDP STAR project management and the Amalgamation Team 6 November 2015

structure, business processes and operational control reports. The quality review consisted not only in the contents reported therein but also in ensuring a consistent and appropriate presentation in line with model patterns. This activity was performed at central level. 15. Performed a quality review with respect to the data reported in the financial, statements, notes to the financial statements and ensured completeness, accuracy and appropriateness of the date reported therein. 16. Mobilized a team of experts which is currently analyzing the functions and human resources, reported in organizational structure and business process annexes and is contemplating organizational structures for the new municipalities. The team is focusing on a functional gap analyses, including job descriptions, code of conduct and the development of a generic manual of policies and procedures. 17. Mobilized a team of IT experts to develop a business continuity plan. The experts are currently analyzing the information reported in business processes. 18. Mobilized a team of valuation experts from Grant Thornton in Macedonia and UK for the preparation of valuation methodology of land and buildings of the LGUs.

The review process during October is being carried out on the operational aspects and financial aspects.

On the operational reports of 384 Units: Regarding the annexes of the organizational structure the team of consultants performed a quality review focusing on the content and the presentation of annexes containing information on of the identification of the description of responsibilities, availability of public services and administrative functions, executive roles and organizational chart provided by the field experts and the working groups.

Regarding the annexes of the business processes the team of consultants performed a quality review focusing on the content and the presentation of annexes of the identification of the personnel inventory, IT inventory, general information technology controls, communication systems, archiving control, assets management, projects inventory, public services contracts, legal cases, third parties contracts and observations and recommendations provided by the field experts and the working groups.

Regarding the report of the operational control report the team of consultants is performing a quality review control focusing on the content and the presentation of annexes reported therein consistently with organizational structure and business process.

On the financial reports of 384 units:

Regarding the financial reports the team of consultants performed a quality review focusing on the content and reasonableness of the financial data gathered and reported in the annexes by the field experts and the working groups.

To ensure consistency in financial reporting we have liaised with treasury directory to understand the financial data reported in this directory. We obtained an understanding of information reported therein and communicated with field experts to ensure that reconciliation of data reported in the financial model with respect to cash balances agrees with treasury amounts and to assess also the reasonableness of the liabilities reported therein.

Monthly narrative report on cumulative implementation progress to UNDP STAR project management and the Amalgamation Team 6 November 2015

Main issues identified Many issues were identified varying from organizational issues to incompetence in completing the required annexes, uncovered position, disorganized information and documentation. Such issues have slowed down the reporting process. A listing of the main issues identified is summarized in the table below:

Main issued identified by the consultants Issues Frequency of the matter 1. Lack of availability of complete information. Frequently encountered 2. Trained people in each LGU have left the Frequently encountered Units. 3. Proper handover of documentation and Frequently encountered information has not been done. 4. Documentation is not organized and cannot Frequently encountered be traced promptly. This issue mainly relates to archives and it is a pervasive issue. 5. Resistance of employees to collaborate with Sporadically encountered experts. This issue is sporadic. (Tropoja,Memaliaj,Baldushk) 6. Inability of people to use technology. Mainly Frequently encountered related to remote LGUs. 7. Old Inventory of hardware. Frequently encountered 8. Missing data on IT hardware inventory. Frequently encountered. 9. Uncovered positions. Frequently encountered 10. Lack of segregation of duties. Frequently encountered 11. Finance specialists in the LGUs have not Frequently encountered provided information in time. Frequent issue. 12. Predecessor finance specialists have not Frequently encountered prepared the financial reports. 13. Newly appointed finance specialist does not Sporadically encountered sign the financial statements. (Perondi) 14. Lack of sufficient resources in the LGUs to Sporadically encountered prepare financial reports. (Peshkopi) 15. Lack of willingness from the finance specialist Sporadically encountered to provide financial data. (Hocist,Cerrave,Shenkoll, Armen,Vllahine,Kote, Konsipol, Xarre,Markat) 16. Finance specialist ask for additional time and Frequently encountered still does not comply with it 17. People that have left the units have not been Sporadically encountered replaced (Servaster, Brataj) 18. People have not been participated in the Sporadically encountered meetings (Zejmen) 19. Inaccurate information provided from the Frequently encountered LGUs. 20. Lack of experience of LGUs employees. Frequently encountered 21. Some of the units have submitted to the Frequently encountered treasury directory their accounts up to 7 July 2015. This has created problems in reconciliation of financial statements reported on 31 July 2015. 22. The financial model does not have a section Technical issue for including the consolidation entries. In many cases the municipalities have settled liabilities on behalf of the other units.

Monthly narrative report on cumulative implementation progress to UNDP STAR project management and the Amalgamation Team 6 November 2015

23. Misalignment between instruction number 14 Technical issue and clause 61 of law 9936 on the recognition of revenue. 24. Inconsistent reporting of liabilities Frequently encountered 25. With respect to the transfer of assets LGUs Frequently encountered does not have complete assets registers including proper assets tagging with serial numbers, assets in use, ownership numbers, proper, amortization records, useful life, ownership details etc.

The above issues identified in the second month of the project might affect the ongoing activities planned for the next months as summarized in the table below:

Impact on the LGUs activities as well as in the amalgamation process 1. Lack of availability of complete information can create problems in stocktaking of assets, issues in evidencing the business process and functions of the units and delays in processing of investments according to the identified need. It might also result in delays in availing complete information for the amalgamation process. 2. Trained people in each LGU have left the Units. New hires need training which can provide to be costly in terms of time and monetary terms. It might also results in delays in processing the business process and functions of the units. It may also affect the amalgamation process. 3. Proper handover of documentation and information has not been done. This has created issues and delays not in the processing of the activities of the LGUs but also in processing the information for the stocktaking process. 4. Documentation is not organized and cannot be traced promptly. This has created delays availability of information needed for amalgamation process. 5. Resistance of employees to collaborate with experts. Unclear job description creates problems in gathering information with the respect to stocktaking of assets and identification of clear responsibilities of each position. In many situations people are reluctant to provide information and collaborate mainly due to lack of understanding of the stocktaking process. 6. Inability of people to use technology. The LGU are widely spread covering remote geographical areas where people are not up to date with the technology. This has created problems and delays in data processing of activity of the LGU and in availability of information for the stocktaking process. 7. Old Inventory of hardware creates the risk that hardware and software defaults might result in losing electronic data which can facilitate the LGUs activities. 8. Missing data on IT hardware inventory, This has created problems in stocktaking of IT Hardware. Problems which have been encountered by the consultants team relate also to the fact the people using the pc cannot identify specifics of the computers in use such as; Year of production, hardware model etc. 9. Uncovered position. During the process it was identified the need for covering of various position such finance specialist, IT specialist etc. This leads to difficulties in processing the unit’s activities as well difficulties in gathering data for the amalgamation process. 10. Lack of segregation of duties has created issues with respect to undefined responsibilities in the respective positions in the LGUs as well as lack of proactivity for collaboration of amalgamation process. 11. Information provided in delay from the finance specialists has leaded to delays in the review process. Furthermore delayed information creates also difficulty on quality reporting. 12. In the cases were finance specialist have left the units and have not reported the new hires are obliged to work on higher time pressure. This can lead to delays and not

Monthly narrative report on cumulative implementation progress to UNDP STAR project management and the Amalgamation Team 6 November 2015

appropriate time allocated to the quality review. 13. Not signing and submitting the financial statements creates also problems for submissions of the coming reports. 14. Lack of sufficient resources in the LGUs to prepare financial reports leads to overcharging of the people responsible for reporting, risking the timely reporting and the quality of information to be reported. 15. Negligent attitude of financial specialists would create problems not only for the information to be reported but also for the whole review process and the forthcoming reports. 16. In the cases when finance specialists ask for additional time and still do not comply with it create problems in report planning and quality review. 17. It is very difficult for the expert to gather the necessary information when no replacement of people who left the units has taken place. 18. When people do not participate in the meetings they do not consider the importance of communicated guidelines and reporting deadlines hence creating delays in reporting information. 19. At the review process in many cases information is not accurate and not reasonable. In these cases experts have to liaise back to the LGUs staff and ensure that correct data is reported. This creates delays in reporting. 20. In many cases employees in the LGUs are not experienced and have shown lack of competences in providing relevant information in the forms required. In these cases delays have taken place at the review stage due to the fact that experts have to organize the information by themselves. Furthermore in these cases liaising back with the LGUs employees has not provided to be good approach. 21. Inconsistence of reported date between financial statements submitted to treasury and the date of financial statements submitted from LGUs increases difficulty in assessing of the validity and reasonableness of the data reported. 22. This issue creates problems in elimination of interunit balances during consolidation. 23. This can lead to inconsistence of the data reported amongst the LGU and difficulties of proper assessment of revenue and liabilities reported. 24. This increases the difficulty of proper identification and assessment of liabilities according to their nature. 25. Not having proper assets registers in place might impact the valuation process of the asset. A proper valuation process cannot be performed without accurate data on assets registers.

Recommendations 1. Increased focus of the working groups suggestions on obtaining the information required. Their findings should be considered and actioned upon, immediately. 2. This will have to be remediated throughout a clear defined job description for each position and organized training of employees following a needs identification process. Field experts hired by the consortium to spend time in additions to what was planned to support the working groups. 3. Municipalities should provide for restriction in case of undelivered handover when employees leave their position. 4. Documentation should be organized in orderly manner, considering timing, purpose and sub-unit and function in each identifiable separate sections. Appropriate focus is provided by the working groups to develop and share orderly files for the Amalgamation Process. 5. LGUs must ensure that employees have understood the process and ensure that they should be very proactive in availing the information to experts in accordance to their scope of responsibilities. 6. LGUs must ensure that their people which are familiar with technology and ensure proper training those who encounter problems in using technology.

Monthly narrative report on cumulative implementation progress to UNDP STAR project management and the Amalgamation Team 6 November 2015

7. The LGUs must ensure that proper back up files are in place in order to preserve the information contained in the electronic devices. 8. LGUs should ensure that proper data is kept with respect to IT inventory in order to properly project investment in the network. 9. In the absence of uncovered position the new LGUs should properly plan vacancies to be fulfilled by adequate and appropriate hires. LGUs must ensure that employees are hired through transparent hiring process. Working Appropriate focus is provided by the working groups to develop and share transparent hiring process 10. The LGUs should ensure proper segregation of duties. 11. The LGUs should increase awareness of providing information on time in order to avoid delays in the process. This can be done by investigating assessing the reasons on non-compliance with deadline in order to properly plan of work and avoiding further delays. 12. In these cases more resources can be allocated in the LGUs in order to assist the new hires to comply with the deadlines. 13. LGUs must ensure that reports prepared by the finance specialists that left the company are signed by them. In the cases where this is not possible the new hire should make a review of the relevant data and the reasonableness of the information included in the financial statements and ensure his/her signature. 14. Additional assistance must be provided to those LGUs which do not have sufficient resources. This can be done by hiring more people in the finance department. 15. Specific attention must be payed to those LGUs where people have shown negligent attitude. 16. An assessment must be done with respect to the LGUs where the finance specialists ask for additional time for submitting information. It must be assessed whether additional resources are required or it is a matter of negligent attitude. 17. Immediate replacement of people of who left the units should take place otherwise the LGUs can assign these responsibilities to their existing employees if they are confident that they can provide the necessary information within the deadline. 18. Specific attention must be payed to those units where the people do not participate in the meetings with experts. 19. LGUs must ensure that data reported there is relevant accurate and reasonable. Furthermore LGUs must action immediately the comments coming from experts. 20. Considering lack of experience of LGUs employees experts will have to spend additional time to bring the reports in the form required. 21. The team of expert should only reconcile with treasury account when the date is the same. Cash should be reconciled with treasury report at 31 July 2015. With respect to other accounts where differences are noted deeper investigation should take place to ensure the accuracy and completeness of the data reported. 22. In relation to this issue our recommendation is that LGUs can choose one account in the assets list which has to be the same in the consolidator account and the consolidated party account. In the consolidated party the balance should be entered as negative figure in the assets account. Alternative recommendation is to perform the consolidation entries outside the financial model. 23. In relation to this issue proper guidance should be given to clarify the matter. 24. Increased focus on working groups to comply instructions given in relation to this mater. On the other hand at the central level the experts are making identification analyses of liabilities reported in the financial models. 25. We recommend that assets data should be collected in standardized templates which can be provided by the experts in order to increase efficiency in assets identification and valuation process. Instruction of creating these templates can be provided by the consultants. The implementation of the recommendations for the upgrade of the management information system will significantly depend on the managerial decisions that have to be taken by each LGUs’s management.

Monthly narrative report on cumulative implementation progress to UNDP STAR project management and the Amalgamation Team 6 November 2015

Results achieved under the project during the 2nd month

The central and field consultants have been continuously monitoring the field expert work and have provided assistance to them by availing necessary guidelines of process on the Help Desk and by way of creating communication lines via Help desk for frequently asked question, conference calls and meetings.

Furthermore the central and field consultants have performed a quality review on the units that have delivered the reports and increased focus on units that have not delivered the reports.

Financial Reporting Results.

The team of consultants engaged with financial reporting has gathered financial statements from each LGU and the notes of financial statements, Adjustments and Controls and Financial Model for LGUs, and Report on Financial Control.

The majority of financial statements have been submitted. 15 LGUS out of 384 LGUs have not yet reported their financial statements.

The realization rate of submission of the notes to the financial statements and the submission of financial models reported including controls and adjustments is 60%. 153 LGUs out of 384 have not submitted the notes of the financial statements and the financial models.

We are reviewing the submitted reports and have increased focus on the LGUs which have not reported yet. We have been liaising with them on a daily basis via telephone calls, emails, meetings and imposing several deadlines to conclude reporting within the month.

We have provided with reasons for delays throughout the month. The latest summary of reasons reported for the delays on submission of reports is presented in the table below

Reasons for not reporting on time No. of LGU Staff movements 2 Delays on delivering the required documentation and the FS 89 Lack of sufficient resources in the LGUs to prepare financial reports 1 Errors are identified in the FS and the notes 10 Negligent staff 2 Lack of willingness to collaborate 24 Lack of work facilities and of professional knowledge 2 Lack of work facilities and internet 5 Newly assigned staff is not properly trained 4 No staff assigned 5 Staff overloaded with several assignments 1 Supporting evidence is not provided 7 Staff personal problems/health issues 1

Monthly narrative report on cumulative implementation progress to UNDP STAR project management and the Amalgamation Team 6 November 2015

Total 153

A breakdown of information identifying each unit in delay with specified reasons for non- reporting is included in appendix A.

The consultants suggest that perhaps it would be appropriate to formally communicate with the highest authorities of these LGUs for a final call for the submission of the Financial Statements and relevant notes. National Coordinators and staff at Ministry level can be included in delivering formal letters to these units.

Operational Reporting Results.

The team of consultants engaged with operational reporting has gathered information with respect to the existing organizational structure and business processes books and is in the process of finalizing reports on the business process books and Operational Control Report.

The realization rate of submission of organizational structure is 100%.

The realization rate of the of the submission of business processes is 97%

In the table below there is a list of units that have not submitted the business process.

LGUs Reason for non-reporting Kukes Tropoje Bajrram Curri Lack of sufficient resources and willingness to collaborate. Fierze Lack of sufficient resources and willingness to collaborate. Lekbibaj Lack of sufficient resources and willingness to collaborate. Margegaj Lack of sufficient resources and willingness to collaborate. Llugaj Lack of sufficient resources and willingness to collaborate. Bujan Lack of sufficient resources and willingness to collaborate. Bytyq Lack of sufficient resources and willingness to collaborate. Fsh Tropoje Lack of sufficient resources and willingness to collaborate. Tirana High volume of workflow mainly due to big number of associated institutions Baldushk Lack of sufficient resources and willingness not to collaborate.

We have performed a quality review in all reports with respect to content and presentation in all reporting levels of the project.

Monthly narrative report on cumulative implementation progress to UNDP STAR project management and the Amalgamation Team 6 November 2015

Plan of activities for the next month

The table below presents the plan of activities for the next month following the finalization of the Project with proposal time frame for completion of each separate activity.

Activity Proposed time frame 1. Providing continues assistance via help desk and other Throughout the month on established communication lines to field experts. daily basis 2. Monitoring progress status for delivering of reports Throughout the month on which are due including delivering of previous month daily basis reports for those LGU who struggled to meet deadlines. 4. Finalization of operational control report 8 November 2015 5. Finalization of notes of the Financial Statements (Notes 1-12) 8 November 2015 6. Finalization of controls and adjustments 8 November 2015 7. Finalization of financial model for LGUs 8 November 2015 8. Finalization of financial control report 13 November 2015 9. Preliminary draft of new organizational chart 8 November 2015 10. Tailoring the preliminary new organization chart into 15 November 2015 three types of preliminary organizational charts according to the size and specifics of the LGU. 11. Consolidated financial control reports 30 November 12. Providing templates of valuation of assets End of November – Start of December

On top of the above activities, teams of experts are working on job descriptions and rules and procedures, assessment of the situation on IT and ICT and the preparation of templates for the valuation of assets.

Monthly narrative report on cumulative implementation progress to UNDP STAR project management and the Amalgamation Team 6 November 2015

Plan of activities for the remaining months Activities to be performed during the realization of the remaining months of the Project are presented in the table below.

Period of main Deadline of activities to be Activities Status deliverables accomplished Aug - Oct ’15 Provide oversight to the preparation of In process September- 384 due diligences for all LGUs and 61 until final November consolidated due diligences for each reports are municipality issued for all LGUs Legal Description of Reports per month Book Data - Organizational Structure Accomplished September 21, 2015 October Book Data - Business Processes In process October 31, 2015 Operational Control Report In process November 15, 2015 November Consolidated Control Report To be November accomplished 20, 2015 Operational summary report of the To be November Expert accomplished 25, 2015 December New Organization chart To be December 7, accomplished 2015 Final Report To be January 11, accomplished 2016 Nov – Dec ‘15 Develop a detailed set of templates for In process the application of the practical guidance for valuation of fixed assets, recommend improvements changes in the guidance, and help develop local capacities for carrying out the valuation a) Set of templates for land and To be November buildings and other fixed assets accomplished 30, 2015 b) Develop local capacities for To be November carrying out the valuation accomplished 30, 2015 Jan – Mar ‘16 Support the completion of LGUs’ To be January 30, financial reporting for FY 2015 and the accomplished 2015 development of the first consolidated budget for 2016. Financial Reports Description of Reports per month September Submission of FS LGUs (1-11 formats) In process September 14, 2015

Monthly narrative report on cumulative implementation progress to UNDP STAR project management and the Amalgamation Team 6 November 2015

Plan of activities for the remaining months – continued

October Notes to the financial statements (note In process November 1-12) 13, 2015 Controls and Adjustments Financial Model for LGUs Financial Control Report November Consolidated Financial Model To be November accomplished 30, 2015 Consolidated Financial Control Report To be November accomplished 30, 2015 Summary report of the Financial Expert To be December 5, accomplished 2015 December The Budget for 2016 To be December accomplished 20, 2015 January - March Financial Statements 2015 To be March 1, accomplished 2016 Financial Expert Report for FS 2015 To be March 7, accomplished 2016 April Final Report To be April 4, 2016 accomplished

Monthly progress reports: Monthly Report November 2015 To be December 2, Monthly Report December 2015 accomplished 2015 January 2016 Monthly Report January 5, Monthly Report February 2016 2016 February 2, 2016 March 2, 2016 Jan ‘15–Mar ‘16 Review a sample of valuation of fixed To be January – assets, at least one of each kind, using accomplished February, the practical guidance and provide 2015 recommendations for legal amendments enabling the carrying out of the valuation exercise.

Monthly narrative report on cumulative implementation progress to UNDP STAR project management and the Amalgamation Team 6 November 2015

Plan of activities for the remaining months – continued

Aug - Nov ’15 Examine the optimization of the human In process November, resources and propose specific 2015 organizational charts for each of the 61 new LGUs along with job descriptions and objective for every position, department and directorate within the 61 LGUs as prescribed in the Albanian legislation and international best practices. Aug ’15 – Mar Based on the governing legal framework In process November – ‘16 including international best practices December, develop a generic manual of 2015 internal/external policies and procedures, code of conduct, functional analysis, job descriptions and business continuity plan, to be followed by all elected and non-elected officials, other employees and contractors of the respective LGUs as per the new organization and functions of the LGUs after the amalgamation. Aug ’15 – Mar Recommend new standards and To be December, ’16 practices for building up, safeguarding accomplished 2015 and operating the ICT systems. Aug ’15 – Mar Recommend the specific organization of To be January- ‘16 services provision in the new LGUs. accomplished February, 2016

Monthly narrative report on cumulative implementation progress to UNDP STAR project management and the Amalgamation Team 6 November 2015

Assessment of whether the deliverables will be issued in accordance with the project deadlines

The accomplishment of the activities of the next month up to the finalization of the Project is closely related with the realization of each individual task undertaken by the Working Groups set up in the Municipalities.

The speed of implementation of activities by such Working Groups will be key to the timely issuance of the main deliverables by the Consultant. The Consultant is already investing time in addition to the planned level of efforts at the beginning of the Project.

Considering all the issues listed in the main issues section and the status of financial and operating reports disclosed in the results achieved under the project section we believe that operational control reports are expected to be issued within 15 November 2015 and the financial control reports are expected to be issued within 30th of November 2015.

We are confident that our close attention to the WG as well as the renewed efforts and emphasis by the Government, the Ministry of Local Affairs and the STAR project staff will enable us to report under the project in accordance with the expected timeline referred above. The commitment of the mentioned stakeholders is a must.

We commit to notify you promptly in the event that we notice that the agreed project timeline will not be met.

Monthly narrative report on cumulative implementation progress to UNDP STAR project management and the Amalgamation Team 6 November 2015

Appendix A

Annexes not Reasons for not No. LGU Municipality reported Comments reporting on time up to 31.10.2015 1 Berat Berat A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 2 Velabisht Berat A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 3 Polican Polican A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 4 Poshnje Ura vajgurore A4 and A5 Annex 4 - Notes No staff is assigned and supporting evidence is not reported 5 Kozare Kucove A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 6 Perondi Kucove A4 and A5 Annex 4 - Notes Lack of sufficient and supporting resources in the evidence is not LGUs to prepare reported financial reports 7 Peshkopi Diber A4 and A5 No information Staff overloaded with provided several assignments 8 Bulqize Bulqize A4 and A5 Annex 4 - Notes No staff is assigned and supporting evidence is not reported 9 Durres Durres A4 and A5 Annex 4 - Notes, Delays on delivering supporting the required evidence and documentation and information the FS regarding associated institutions is not reported 10 Katund i ri Durres A4 and A5 Annex 4 - Notes Newly assigned staff and supporting is not trained evidence is not properly reported 11 Kruje Kruje A4 and A5 Annex- Delays on delivering Supporting the required evidence and documentation and information in the FS relation to

Monthly narrative report on cumulative implementation progress to UNDP STAR project management and the Amalgamation Team 6 November 2015

inventories is not reported

12 Fushe Kruje Kruje A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 13 K.Thumane Kruje A4 and A5 Annex 4 - Notes Staff movements and supporting evidence is not reported 14 Cudhi Kruje A4 and A5 Annex 4 - Notes Staff movements and supporting evidence is not reported 15 Elbasan Elbasan A4 and A5 No information Delays on delivering provided the required documentation and the FS 16 Lushnje Lushnje A4 and A5 No information Delays on delivering provided the required documentation and the FS 17 Divjake Divjake A4 and A5 No information Delays on delivering provided the required documentation and the FS 18 Fier Fier A4 and A5 No information Delays on delivering provided the required documentation and the FS 19 Ballsh Mallakaster A4 and A5 No information Delays on delivering provided the required documentation and the FS 20 Q.Mallakaster Mallakaster A4 and A5 Annex 4 - Notes Delays on delivering – Dukas and supporting the required evidence is not documentation and reported the FS 21 Greshice Mallakaster A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 22 Aranitas Mallakaster A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 23 Hekal Mallakaster A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 24 Ngracan Mallakaster A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS

Monthly narrative report on cumulative implementation progress to UNDP STAR project management and the Amalgamation Team 6 November 2015

25 Kute Mallakaster A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 26 Fratar Mallakaster A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 27 Selite Mallakaster A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 28 Gjirokaster Gjirokaster A4 and A5 Annex 4 - Social Delays on delivering and economical the required aid liabilities have documentation and not been reported the FS 29 Korce Korce A4 and A5 No information Delays on delivering provided the required documentation and the FS 30 Voskop Korce A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 31 Lekas Korce A4 and A5 Annex 4 - Notes Supporting evidence and supporting is not provided evidence is not reported 32 Pustec Pustec A4 and A5 No information Newly assigned staff provided is not trained properly 33 Pogradec Pogradec A4 and A5 No information Delays on delivering provided the required documentation and the FS 34 Udenisht Pogradec A4 and A5 Annex 4 - Notes Supporting evidence and supporting is not provided evidence is not reported 35 Cerrave Pogradec A4 and A5 Annex 4 - Notes Negligent staff and supporting evidence is not reported 36 Dardhas Pogradec A4 and A5 Annex 4 - Notes Errors are identified and supporting in the FS and the evidence is not notes reported 37 Trebinje Pogradec A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 38 Velcan Pogradec A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS

Monthly narrative report on cumulative implementation progress to UNDP STAR project management and the Amalgamation Team 6 November 2015

39 Maliq Maliq A4 and A5 No information Delays on delivering provided the required documentation and the FS 40 Libonik Maliq A4 and A5 Annex 4 - Notes Supporting evidence and supporting is not provided evidence is not reported 41 Gore Maliq A4 and A5 Annex 4 - Notes Supporting evidence and supporting is not provided evidence is not reported 42 Moglice Maliq A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 43 Vreshtas Maliq A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 44 Pirg Maliq A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 45 Erseke Kolonje A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 46 Mollas Kolonje A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 47 Bilisht Devoll A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 48 Qender Devoll A4 and A5 Annex 4 - Notes Delays on delivering bilisht and supporting the required evidence is not documentation and reported the FS 49 Hocisht Devoll A4 and A5 Annex 4 - Notes Negligent staff and supporting evidence is not reported 50 Proger Devoll A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 51 Kukes Kukes A4 and A5 Annex 4 - Notes Lack of willingness and supporting to collaborate evidence is not reported 52 Malzi Kukes A4 and A5 Annex 4 - Notes Lack of willingness and supporting to collaborate evidence is not reported

Monthly narrative report on cumulative implementation progress to UNDP STAR project management and the Amalgamation Team 6 November 2015

53 Bicaj Kukes A4 and A5 Annex 4 - Notes Lack of willingness and supporting to collaborate evidence is not reported 54 Ujmisht Kukes A4 and A5 Annex 4 - Notes Lack of willingness and supporting to collaborate evidence is not reported 55 Terthore Kukes A4 and A5 Annex 4 - Notes Lack of willingness and supporting to collaborate evidence is not reported 56 Shtiqen Kukes A4 and A5 Annex 4 - Notes Lack of willingness and supporting to collaborate evidence is not reported 57 Zapod Kukes A4 and A5 Annex 4 - Notes Lack of willingness and supporting to collaborate evidence is not reported 58 Shishtavec Kukes A4 and A5 Annex 4 - Notes Lack of work and supporting facilities and internet evidence is not access reported 59 Gryke Caje Kukes A4 and A5 Annex 4 - No Lack of work supporting facilities and internet evidence have access been reported 60 Topojan Kukes A4 and A5 Annex 4 - No Delays on delivering supporting the required evidence have documentation and been reported the FS 61 Kalis Kukes A4 and A5 Annex 4 - Notes Lack of work and supporting facilities and internet evidence is not access reported 62 Surroj Kukes A4 and A5 Annex 4 - Notes Lack of work and supporting facilities and internet evidence is not access reported 63 Arren Kukes A4 and A5 Annex 4 - Notes Lack of work and supporting facilities and internet evidence is not access reported 64 Krume Has A4 and A5 Annex 4 - Notes Lack of willingness and supporting to collaborate evidence is not reported 65 Fajze Has A4 and A5 Annex 4 - Notes Lack of work and supporting facilities and evidence is not professional reported knowledge 66 Golaj Has A4 and A5 Annex 4 - Notes lack of work facilities and supporting and professional evidence is not knowledge reported

Monthly narrative report on cumulative implementation progress to UNDP STAR project management and the Amalgamation Team 6 November 2015

67 Bajram Curri Tropoje A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 68 Fierze Tropoje A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 69 Lekbibaj Tropoje A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 70 Margegaj Tropoje A4 and A5 Annex 4 - Notes Staff personal and supporting problems/health evidence is not issues reported 71 Llugaj Tropoje A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 72 Bujan Tropoje A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 73 Bytyq Tropoje A4 and A5 Annex 4 - Notes Errors are identified and supporting in the FS and the evidence is not notes reported 74 Fsh.Tropoje Tropoje A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 75 Balldren I ri Lezhe A4 and A5 Annex 4 - Notes Errors are identified and supporting in the FS and the evidence is not notes reported 76 Kolsh Lezhe A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 77 Orosh Mirdite A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 78 Kacinar Mirdite A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 79 Lac Kurbin A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 80 Mamurras Kurbin A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS

Monthly narrative report on cumulative implementation progress to UNDP STAR project management and the Amalgamation Team 6 November 2015

81 Milot Kurbin A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 82 Fushekuqe Kurbin A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 83 Koplik Malesi e A4 and A5 No information Lack of willingness madhe provided to collaborate 84 Gruemire Malesi e A4 and A5 Annex 4 - Notes Newly assigned staff madhe and supporting is not trained evidence is not properly reported 85 Kastrat Malesi e A4 and A5 Annex 4 - Notes Delays on delivering madhe and supporting the required evidence is not documentation and reported the FS 86 Kelmend Malesi e A4 and A5 Annex 4 - Newly assigned staff madhe Financial is not trained Statements do not properly reconcile with the notes. Supporting evidence is not reported 87 Shkrel Malesi e A4 and A5 Annex 4 - Notes Delays on delivering madhe and supporting the required evidence is not documentation and reported the FS 88 Shkoder Shkoder A4 and A5 No information Delays on delivering provided the required documentation and the FS 89 Ana e malit Shkoder A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 90 Berdice Shkoder A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 91 Dajc Shkoder A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 92 Guri I zi Shkoder A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 93 Postribe Shkoder A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS

Monthly narrative report on cumulative implementation progress to UNDP STAR project management and the Amalgamation Team 6 November 2015

94 Pult Shkoder A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 95 Rethinat Shkoder A4 and A5 Annex 4 - Delays on delivering Financial the required Statements do not documentation and reconcile with the the FS notes. Supporting evidence is not reported 96 Shale Shkoder A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 97 Shosh Shkoder A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 98 Velipoje Shkoder A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 99 Vau i dejes Vau i dejes A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 100 Bushat Vau i dejes A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 101 Vig-Mnelle Vau i dejes A4 and A5 Annex 4 - Delays on delivering Financial the required Statements do not documentation and reconcile with the the FS notes. Supporting evidence is not reported 102 Hajmel Vau i dejes A4 and A5 Annex 4 - Delays on delivering Financial the required Statements do not documentation and reconcile with the the FS notes. Supporting evidence is not reported 103 Temal Vau i dejes A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 104 Shllak Vau i dejes A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS

Monthly narrative report on cumulative implementation progress to UNDP STAR project management and the Amalgamation Team 6 November 2015

105 Puke Puke A4 and A5 Annex 4 - Notes Lack of willingness and supporting to collaborate evidence is not reported 106 Gjegjan Puke A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 107 Rrape Puke A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 108 Qelez Puke A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 109 Qerret Puke A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 110 Fushe arrez Fushe arrez A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 111 Fierze Fushe arrez A4 and A5 Annex 4 - Delays on delivering Financial the required Statements do not documentation and reconcile with the the FS notes. Supporting evidence is not reported 112 Qafe mali Fushe arrez A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 113 Iballe Fushe arrez A4 and A5 Annex 4 - Notes No staff is assigned and supporting evidence is not reported 114 Tirane Tirane A4 and A5 Annex 4 - Delays on delivering Information in the required relation to documentation and associated the FS institutions is not reported 115 Njesia 10 Tirane A4 and A5 Annex 4 - Notes Errors are identified and supporting in the FS and the evidence is not notes reported 116 Kashar Tirane A4 and A5 No information No staff is assigned provided 117 Petrele Tirane A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS

Monthly narrative report on cumulative implementation progress to UNDP STAR project management and the Amalgamation Team 6 November 2015

118 Farke Tirane A4 and A5 Annex 4 - Notes Errors are identified and supporting in the FS and the evidence is not notes reported 119 Zall basatr Tirane A4 and A5 Annex 4 - Notes Errors are identified and supporting in the FS and the evidence is not notes reported 120 Berzhite Tirane A4 and A5 Annex 4 - Notes Lack of willingness and supporting to collaborate evidence is not reported 121 Krabe Tirane A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 122 Baldushk Tirane A4 and A5 Annex 4 - Notes Lack of willingness and supporting to collaborate evidence is not reported 123 Shengjergj Tirane A4 and A5 Annex 4 - Notes Lack of willingness and supporting to collaborate evidence is not reported 124 Vaqar Tirane A4 and A5 Annex 4 - Notes Lack of willingness and supporting to collaborate evidence is not reported 125 Peze Tirane A4 and A5 Annex 4 - Notes Lack of willingness and supporting to collaborate evidence is not reported 126 Ndroq Tirane A4 and A5 Annex 4 - Notes Lack of willingness and supporting to collaborate evidence is not reported 127 Zallherr Tirane A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 128 Paskuqan Kamez A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 129 Vore Vore A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 130 Preze Vore A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 131 Berxulle Vore A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS

Monthly narrative report on cumulative implementation progress to UNDP STAR project management and the Amalgamation Team 6 November 2015

132 Kavaje Kavaje A4 and A5 Annex 4 - Notes Lack of willingness and supporting to collaborate evidence is not reported 133 Synej Kavaje A4 and A5 Annex 4 - Notes Lack of willingness and supporting to collaborate evidence is not reported 134 Luz I vogel Kavaje A4 and A5 Annex 4 - Notes Supporting evidence and supporting is not provided evidence is not reported 135 Golem Kavaje A4 and A5 Annex 4 - Notes Supporting evidence and supporting is not provided evidence is not reported 136 Helmes Kavaje A4 and A5 Annex 4 - Notes Supporting evidence and supporting is not provided evidence is not reported 137 Rogozhine Rrogozhine A4 and A5 Annex 4 - Errors are identified Financial in the FS and the Statements do not notes reconcile with the notes. Supporting evidence is not reported 138 Kryevidh Rrogozhine A4 and A5 Annex 4 - Errors are identified Financial in the FS and the Statements do not notes reconcile with the notes. Supporting evidence is not reported 139 Sinaballaj Rrogozhine A4 and A5 Annex 4 - Errors are identified Financial in the FS and the Statements do not notes reconcile with the notes. Supporting evidence is not reported 140 Gose Rrogozhine A4 and A5 Annex 4 - Errors are identified Financial in the FS and the Statements do not notes reconcile with the notes. Supporting evidence is not reported 141 Vlore Vlore A4 and A5 Annex 4 - Social Delays on delivering and economical the required aid liabilities have documentation and not been reported the FS 142 Sarande Sarande A4 and A5 Annex 4 - Social Delays on delivering and economical the required aid liabilities have documentation and not been reported the FS

Monthly narrative report on cumulative implementation progress to UNDP STAR project management and the Amalgamation Team 6 November 2015

143 Ksamil Sarande A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 144 Selenice Selenice A4 and A5 Annex 4 - Notes Lack of willingness and supporting to collaborate evidence is not reported 145 Armen Selenice A4 and A5 Annex 4 - Notes Lack of willingness and supporting to collaborate evidence is not reported 146 Sevaster Selenice A4 and A5 Annex 4 - Notes Lack of willingness and supporting to collaborate evidence is not reported 147 Himare Himare A4 and A5 No information No staff is assigned provided 148 Lukove Himare A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS 149 Horre- Himare A4 and A5 Annex 4 - Notes Delays on delivering vranisht and supporting the required evidence is not documentation and reported the FS 150 Konispol Konispol A4 and A5 No information Lack of willingness provided to collaborate 151 Xarre Konispol A4 and A5 Annex 4 - Notes Lack of willingness and supporting to collaborate evidence is not reported 152 Markat Konispol A4 and A5 Annex 4 - Notes Lack of willingness and supporting to collaborate evidence is not reported 153 Mesopotam Finiq A4 and A5 Annex 4 - Notes Delays on delivering and supporting the required evidence is not documentation and reported the FS