Health infrastructure project in Lesotho completed
At the end of 2014, the Lesotho Millennium Development Agency (LMDA) completed a five-year health sector project worth 122 million US Dollars as part of an MCC-financed Compact for which GFA and CKP provided Fiscal Agent services.
The Government of Lesotho (GoL) and the US Government’s Millennium Challenge Corporation (MCC) had signed a Compact over 362 million US Dollars in July 2009 that aimed at reducing poverty in the Kingdom of Lesotho. A Compact is a multi-year agreement between MCC and an eligible country to fund specific programs targeted at reducing poverty and stimulating economic growth. The five-year Compact under the auspices of the Millennium Challenge Account Lesotho (MCA-L) covered the water, health, and private sector development sectors.
A 2004 survey estimated that 24 per cent of the adult population in Lesotho was HIV positive, which could severely hamper the country’s efforts in reducing poverty and promoting economic growth. Consequently, a health sector project worth 122 million US Dollars was set up in 2009 as part of the mentioned MCA-L Compact. The project aimed at infrastructure development and capacity building through the construction or rehabilitation of 138 health centers throughout Lesotho. This played a crucial role in the provision of primary health care. The construction of the health centers was based on lump-sum design-build contracts with sources of funding from GoL and MCC.
GFA partnered with CKP as the project’s Fiscal Agent (FA) providing broad financial management services required by MCA-L to implement all aspects of the Compact. The FA introduced Payment Authorisation Forms to ensure that there was no commingling of funds during payment processing. Detailed verification of invoices through the preparation of an additional internal checklist safeguarded compliance with MCA-L’s Fiscal Accountability Plan and the terms of the contract. The FA also established a Payment Tracking System for payment terms of all contracts, including information on all amendments and variation orders as well as performance and advance guarantees. An additional element of complexity was set up in the contract administration when MCC decided to swap the completed assets funded by GoL with incomplete assets funded by MCC, which resulted in MCC compensating GoL. Highly streamlined communication protocols were established that assisted in the speedy resolution of queries and ensured that FA made payments to the contractors within the 30-day payment period.
