THE WORLD BANK IBRD • IDA I WOR1DBANKGROUP OFFICIAL __ _J_~ l_t-.y\-\ _ _ _ , 20lj DOCUMENTS Her Excellency Ms. Rocio Tabora Secretaria de Estado en el Despacho de Finanzas - SEFIN Republic of Honduras Re: IDA Credit 6401-HN (Social Protection Integration Project) Additional Instructions: Disbursement and Financial Information Letter Excellency: I refer to the Financing Agreement between the Republic of Honduras (the "Recipient") and the International Development Association (the "Association") for the above-referenced Project. The General Conditions, as defined in the Financing Agreement, provide that the Recipient, through SSIS, may from time to time request withdrawals of Credit amounts from the Credit Account in accordance with the Disbursement and Financial Information Letter, and such additional instructions as the Association may specify from time to time by notice to the Recipient. The General Conditions also provide that the Disbursement and Financial Information Letter may set out Project specific financial reporting requirements. This letter constitutes such Disbursement and Financial Information Letter ("DFIL"), and may be revised from time to time. I. Disbursement Arrangements, Withdrawal and Reporting of Uses of Credit Funds. The Disbursement Guidelines for Investment Project Financing, dated February 2017, ("Disbursement Guidelines") are available in the Association's public website at https://www.worldbank.org and its secure website "Client Connection" at https://clientconnection.worldbank.org. The Disbursement Guidelines are an integral prut of the DFIL, and the manner in which the provisions in the guidelines apply to the Credit is specified below. (i) Disbursement Arrangements The table in Schedule 1 sets out the disbursement methods which may be used by the Recipient, through SSIS, information on registration of authorized signatures, processing of withdrawal applications (including minimum value of applications and processing of advances), instructions on supporting documentation, and frequency of reporting on the Designated Account. (ii) Electronic Delivery. Section 11.01 (c) of the General Conditions. The Recipient, through SSIS , will deliver Withdrawal Applications (with supporting documents) electronically through the Association's web-based portal "Client Connection" at https://clientconnection.worldbank.org. This option will be effected after the officials designated in writing by the Recipient who are authorized to sign and deliver Withdrawal Applications have registered as users of "Client Connection". The designated officials will deliver AppHcations electrorucally by completing the , Form 2380, which is accessible through "Client Connection". By signing the Authorized Signatory Letter, the Recipient confirms that it is authorizing such persons to accept Secure Identification Credentials (SIDC) and to deliver the Application and supporting documents to the Association by electronic means. The Recipient, through SSIS, may exercise the option of preparing and delivering Withdrawal Applications in paper form on exceptional cases (including those where the Recipient, through SSIS , encounters legal limitations), and which were previously agreed with the Association. By designating officials to use SIDC and by choosing to deliver the Applications electronically , the Recipient confirms through the authorized signatory letter its agreement to: (a) abide by the Terms and Conditions of Use of Secure Identification Credentials in connection with Use of Electronic Means to Process Applications and Supporting Documentation, available in the Association's public website at https://worldbank.org and "Client Connection"; and (b) to cause such official to abide by those terms and conditions. II. Financial Reports and Audits (Section 5.09 of the General Conditions). (i) Financial Reports. The Recipient, through SSIS, must prepare and furnish to the Association not later than forty-five (45) days after the end of each calendar semester, interim unaudited financial reports ("IFR") for the Project covering the semester. (ii) Audits. Each audit of the Financial Statements must cover the period of one fiscal year of the Recipient, or any other period agreed with the Association. The audited Financial Statements for each such period must be furnished to the Association, through SSIS, not later than six (6) months after the end of such period. III. Additional Disbursement Instructions (i) Conditional Cash Transfers (Category 2, Component l(b)) Category 2 will finance conditional cash transfers provided to eligible beneficiaries on a grant basis. Credit proceeds under Category 2 will be disbursed to a Designated Account used exclusively for this category as follows: (i) Customized Statement of Expenditure; (ii) Results of the Compliance Review required under Section IV of Schedule 2 of the Financing Agreement; (iii) A forecast of the amount needed to make the next conditional cash transfer; and (iv) The DA activity statement with a copy of the corresponding bank statement. In the case that the Compliance Review identifies instances of ineligible expenditures paid, the SSIS will be responsible for identifying those ineligible expenditures submitted in the customized SOE. These amounts will then appear in the DA activity statement as amounts questioned with the detailed amount and Justification of Expenditures number where the Compliance Review report identifies the ineligible expenditures. If the activity statement of the DA includes ineligibles expenditures from more than one Compliance Review report, those amounts should be segregated by Withdrawal Application number. The SSIS will be responsible for resolving the ineligible expenditures by either: (i) demonstrating the eligibility of the questioned amounts; (ii) presenting other cash transfers made with counterpart funds in lieu of ineligible expenditures; or (iii) refunding the amount to the DA. Any questioned amounts appearing in the DA Activity statement will need to be resolved no later than the second Withdrawal Application submitted after the questioned amounts were first reported. In the case of ineligible expenditures reported in the last and second to last Withdrawal Applications , the amounts will need to be resolved no later than by the closing date of the project. In case there is any remaining unpaid amount at the Financial Institution, the last advance to the DA should deduct any amount not yet transfer to beneficiaries. (ii) Contingency Emergency Response Component (Component 4) This component will finance eligible expenditures required for Honduras' emergency recovery. The list of eligible expenditures and the funds flow arrangements will be defined in the Emergency Response Operations Manual once a disaster is declared in accordance with the conditions established in the financing agreement. The expenditures will be documented through Statements of Expenditures. IV. Other Information. For additional information on disbursement arrangements, please refer to the Loan Handbook available on the Association's website (http://www.worldbank.org/) and "Client Connection". The Association recommends that you register as a user of "Client Connection". From this website you will be able to prepare and deliver Applications, monitor the near real-time status of the Credit, and retrieve related policy, financial , and procurement information. For more information about the website and registration arrangements, or if you have any queries in relation to the above, please contact the Association by email at AskLoan@WorldBank.org using the above reference. Yours sincerely, r') n r ' '029£•~lfu ";ili'.o Auth ~zed Representative Attachments 1. Form of Authorized Signatory Letter 2. Statement of Expenditure (SOE) 3. Customize Statement of Expenditure 4. Sample Designated Account Activity Statement Schedule 1 : Disbursement Provisions Basic Information Country Republic of Honduras Section Ill.B.2. of Schedule 2 to the Closing Date Recipient Ministry of Finance Financing Agreement. Credit IDA 6401-HN Number Disbursement Social Protection Integration Deadline Date Name of the Project Four months after the closing date. Project Subsection 3. 7 ** Disbursement Methods and Supporting Documentation Disbursement Methods Methods Supporting Documentation . Section 2 (**) Subsections 4.3 and 4.4 (**) Direct Payment Yes • Copy of records; Reimbursement Yes • Statement of Expenditure (SOE), in the format provided in Attachment 2 of the DFIL, for expenditures under Category I ; • Customized Statement of Expenditures, in the format provided in Attachment 3 of the DFIL, for expenditures under Category 2; and • CCTs compliance review as refer to in "Section III: Additional Instructions" . Advance Yes • Statement of Expenditure (SOE), in the format provided in Attachment 2 of the DFIL, for (Designated Account) expenditures under Category 1; • Cu stomized Statement of Expenditures, in the format provided in Attachment 3 of the DFIL, for expenditures under Category 2; • CCTs compliance review as refer to in "Section m: Additional Instructions"; and • Des ignated Account Activity Statement in the form provided in Attachment 4 with a copy of the Designated Account Bank Statement. Special Commitments No Not Applicable Designated Account (Sections S and 6 **) Designated Account A (Category 1) Type Segregated Ceiling Fixed Financial Institution - Central Bank of Honduras Currency USD Name Frequency of Reporting Quarterly Amount $1,500,000 Subsection 6.3 (**) Designated Account B (Category 2) Type Segregated Type Variable Financial Institution - Central Bank of Honduras Currency USD Name Frequency of Reporting, Forecast of six (6) months cash flow of Quarterly Amount Subsection 6.3 (**) programmed CCT payments Minimum Valoe of Applications (subsection 3.5) The minimum value of applications for Reimbursements and Direct Payments is USD 500,000 equivalent. Authoriud Signatures (Subsection 3.1 and 3.2 **) Withdrawal and Documentation Applications (Subsection 3.3 and 3.4 **) Authorized Signatures: A letter in the Form attached (Attachment 1) should be furnished to the Association at the address indicated below providing the name(s) and specimen signature(s) of the official(s) authorized to sign Applications: The World Bank 1818 H Street, N.W. Washington, DC 20433, USA Attention: Mrs. Seynabou Sakho, Country Director Applications: Completed Applications for withdrawal, together with supporting documents, shou ld be provided through the Association 's Client Connection, web-based portal, fo llowing the instructions for electronic delivery. In the case the Recipient, through SSIS, does not have internet access, the Assoc iation may permit the delivery of Applications for withdrawal, together with supporting documents, to the following address: Banco Mundial SCN Quadra 02, Lote A Ed. Corporate Financial Center, 7° andar 70712-900, Brasflia, D.F. - Brazil Attention: Loan Operations Additional 1nstmctioD$ ** Sections and subsections relate to the "Disbursement Guidelines for Investment Project Financing", dated February 2017. Attachment 1 [Letterhead] Ministry of Finance [Street address] [City] [Country] [DATE] International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Re: Credit No. - - ([Name of the project]) Attention: Country Director I refer to the Credit Agreement (" Agreement") between the International Development Association (the" Association") and [name of recipient] (the "Recipient"), dated providing the above Credit]. For the purposes of Section 2.03 of the General Conditions as defined in the Agreement, any i[one] of the persons whose authenticated specimen signatures appear below is authorized on behalf of the Recipient to sign applications for withdrawal [and applications for a special commitment] under this Credit. For the purpose of delivering Applications to the Association, including by electronic means, 2[each] of the persons whose authenticated specimen signatures appears below is authorized on behalf of the Recipient, acting 3[individually] 4[jointly], to deliver Applications, and evidence in support thereof on the terms and conditions specified by the Association. This confirms that the Recipient is authorizing such persons to accept Secure Identification Credentials (SIDC) and to deliver the Applications and supporting documents to the Association by electronic means. In full recognition that the Association shall rely upon such representations and warranties, including without limitation, the representations and warranties contained in the Terms and Conditions of Use of Secure Identification Credentials in connection with Use of Electronic 1 Instruction to the Recipient: stipulate if more than one person needs to sign Applications, and how many or which positions, and if any thresholds apply. Please delete this footnote in final letter that is sent to the Association. 2 Instruction to the Recipient: stipulate if more than one person needs to jointly sign Applications, if so, please indicate the actual number. Please delete this footnote in final letter that is sent to the Association. 3 Instruction to the Recipient: use this bracket if any one of the authorized persons may sign; if this is not applicable, please delete. Please delete this footnote in final letter that is sent to the Association. 4 Instruction to the Recipient: use this bracket only if several individuals must jointly sign each Application; if this is not applicable, please delete. Please delete this footnote in final letter that is sent to the Association. Means to Process Applications and Supporting Documentation ("Terms and Conditions of Use of SIDC"), the Recipient represents and warrants to the Association that it will cause such persons to abide by those terms and conditions. This Authorization replaces and supersedes any Authorization currently in the Association records with respect to this Agreement. [Name], [position] Specimen Signature: _ _ _ _ _ _ _ __ [Name], [position] Specimen Signature: _ _ _ _ _ _ _ __ [Name], [position] Specimen Signature: _ _ _ _ _ _ _ __ Yours truly, /signed/ Attachment 2 ASSOCIAC16N INTERNACIONAL DE FOMENTO Certficado de Gasto1 PRESTAMO/CREDITOIDONACION NO.: PAGOS REALIZANDO DURNATE EL PERIODO DE: AL NO. SOLICITUD: LOS PAGOS LISTADOS FUERON INCURRIDOS DURANTE EL PERIODO RETROACTIVO (SI O NOJ: LOS PAGOS LISTAOOS FUERON INCURRIDOS ANTES DE LA FECHA DE CIERRE (SI o NO): I I NO. HOJA: NO. CATEGORIA: HOJA NO.: CUENTA DESIGNADA SOLAMENTE 1 2 3 4 5 6 7 8 g 10 11 12 13 14 15 16 C1ntid1d Contrato Reglotro Moneda Monto Total Monto N6mero Monto % Monto THI Fecha Dtbltlda Nombre del Breve descripc:i6n Codlgo del SuJeto a dtl dtl del acumulado dt 11 Fecha del Pagado al Flnanc. Admiolble dt °'blto Cuenta Proveedor del gasto gasto revl1l6n prevla contrato contrato Contrato del contrato Factura Pago ProvHdor (Col11 X12J Cambia Cuenta De1lgn1da (SloNOJ en C.C. (incluldo en o Recibo Deslgnada (Col 13 / 14) SOEs 1nterior11I 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ·- - - - - - - 0.00 0.00 0.00 0.00 0.00 0.00 TOTAL 0.00 D0CUMENTACl6N DE RESPALDO PARA ESTE CERTIFICADO DE GASTOS ESTA EN: (lndique of local) lnstrucclones: Preparar un Certlflcado de Gastos para cada Cat.goria Columna 1: lnforme ef nombre del proveedor Columno 2: Hacer ooa breve descrlpcl6n del gaslo (ejemplo: honorarlos dic/2012. consUltorla , seritclo de llmpleza. vklticos , servicloo de audltorta. etoJ. Columnl 3: ldentiffear cuaJ lipo de gasto rue hecho (e)ernplo: cs: consUltorla / CW: obras / GO: blenes / OP: costos c,peratlvos I TR: entrenamlento / NCS: oaritcloo de no consoltotla / SP: SubproyectosJ CollJmnll 4: lnformar st el contrato ftJe o no sometido a revisliOn previl de! Banco Mundial. Cofumna 5: lnformar numero de registro del contrato en Client Connection Cotumna I: lnfol'mar moneda def contrato Column• 7: lnfonnar valor del contrato (en lo moneda que rue lndlclda en lo columno 6) Cotumna 8: lnfonnar valor del contrato q1JO ya ful, pagldo, inelUido en SOE• 1nterior,,1. Cotumne I: lnfonnar ef nllmero de la factur, o reclbo ~ proveedor Cotumna 10: lnformar r.tha del pogo al proveedor Cotumna 11 : lnlonner valor pagldo al provetdo<, en la moneda lndlceda en la factura. Cotumna 12: lndlcar el poroentual do financlamlento (de acuerdo al convenlo de prfftamo/donaclon) Columna 13: Calculo del monto ldmisible para ftnonoiamionto (rnultado do la mUltipllcaoi6n do lo cotomna 11 por la 12). Para loo casos en que el pon,ontual do flnanolamionto II de 100"-, los valora, do 111 oouma nrin los mimo, pruontados on la cotumna 11 . e, Column.I 14: lndlcar la tasa de camblo. Favor tener en cuenta que la tau de camblo a .., utlliz.ada debt Hr )a tna dt lnlemalizact6n de lot fondas. dtclr que, et movecto dtbe utillz.ar la rnitma tall aue fl.le utiliz.ada Qffl tr,n,tonnar lot d6iare, 91.tO el Banco •nvi6 al prpyepto en moneda local Eu ounto n mov Important, v• ti Banco no reeonoc, diferencias dt camblo corno oa•to eleaible dt flnanctamiento Columna 15: Feeha queen la cual el proyecto retiro los fondos de le cuenta deslgnada (en d61ares) y los envi6 a la cuenta operatlva (en moneda local). Cotumna 1&: C1Ucukt de la column, 13 / columna 14. Esa clmmna relle}a en monto equtvalente en dolares def gasto reakzado, que ,er6 considef'8do por el Banco para documentation. Attachment 3 ESTADO DE GASTOS JUSTIFICADOS Y DESEMBOLSADOS DES DE _ _ __ HASTA ----- Organismo Financiador Banco Mundial In stitu ci 6 n Sub Secretaria de lntegraci6n Social SSIS/PRAF Gerencia Adm inistrativa Unidad Coordinadora del Proyecto (UCP/SSIS/PRAF) Numero de Convenio Expresado en D61ares de lso Estados Unidos de America (USD) Categorfa de Gasto del Convenio 2 - Transferencias Monetarias Condicionadas (Bono Urbano) Numero de Solicitud GASTOS NO ELEGIBLES Total pagos Pagos TMCs Pagos TMCs - Numero de beneficiario y TMCs pendientes (TMCs/Gastos TMCs del esta Departamento/Municipio de justificar pendientes de periodo justificaci6n autorizar BM) Departamento de Cortes Municipio de Choloma Cantidad de Beneficiarios Monto TM Cs pagadas Municipio de San Pedro Sula Cantidad de Beneficiarios Monto TMCs pagadas Departamento de Francisco Morazan Municipio de Tegucigalpa Cantidad de Beneficiarios Monto TMCs pagadas Departamento de XXXX Municipio de XXX Cantidad de Beneficiarios Monto TMCs pagadas Total de beneficiarios Comision bancaria Total pagos TMCs Total pagos TMCs y Comisi6n Bancaria Nota : adjuntar resumen de pago a beneficiarios por lnstituci6n bancaria Nombre lnstituci6n Cantidad de MontoTMCs Comisi6n bancaria Bancaria/Municipio Beneficiarios pagadas .. Attachment 4 CONCILIACION DE LA CUE NT A DESIGNADA PRESTAMO/CREDITO/DONACION No: NOMBRE DEL BANCO: NUMERO DE CUENTA: USD 1. Total de Dep6sitos 2. Menos Total Documentado 3. Saldo por Recuperar 0.00 4. Saldo al / / de Acuerdo al Estado Bancario Adjunto 0.00 5. Monto de la Solicitud No._ 0.00 6. Mas monto pendiente de Reembolso por el Banco 1/ 0.00 7. Mas retiros efectuados aun no solicitados al Banco 2/ 0.00 8. Menos montos debitados despues de la fecha del Estado Adjunto 0.00 9. Menos intereses generados por la Cuenta Designada 10. Total (4 + 5 + 6 + 7+ 8-9) o.ool 11. Discrepancias entre (3 y 9) o.ool OBSERVACIONES: 1/ Valor pendiente de reembolso por el Banco I No. de Solicitud Monto 2/ Retiros efectuados aun no solicitados al Banco Fecha Desc:ripci6n Monto Aqui se incluira una explicaci6n del del Punto 8), o sea en que fue gastado el dinero que aun no fue solicitado al Banco. Esto es exigido cuando este importe supera el 15% del dep6sito en la Cuenta Designada. 0.00 1. Surra de todos los irrportes adelantados por el Banco a la CUenta Designada 2. Surra de todos los irrportes documentados 3. Linea 1 menos Linea 2 4. Saide igual al estado de cuenta bancario presentado. (Converter para d61ares) 5. lnforrrar el irrporte total a ser documentado en la solicitud que se esta presentando 6. Solo en el caso de tener irrportes pendientes de pagar por el banco de Solic~udes anteriores . 7. Este irrporte es la parte que fue retirada de la CUenta Designada y no corresponde a gastos que se estan incluyendo en el pr6xirro SOE Refiere a nuevos gastos que aun no han sido incluidos en SOE 8. Aqui solo iria alga si hubieran retirado un nuevo irrporte de la CUanta Designada, posterior a la fecha del estado de cuenta bancario que esta siendo presentado