AFRICA YOUTH DEVELOPMENT ASSOCIATION (AYODA)

Table of Contents

Contents

1INTRODUCTION........................................................................................................

1. INTRODUCTION

1.1Background

Africa Youth Development Association (AYODA) was founded as a Non-Governmental Organization in January 2003, by a group of ambitious youth in Borama, Awdal region in Somaliland. AYODA is fully registered with the Attorney General and Ministry of Planning and National Development. AYODA’s activities are multi-sectorial and integrate relief, recovery and development. Over the past eighteen years, AYODA has built a niche in children, youth and women empowerment, protection, community health, pastoralists, people with disabilities and environmental protection. AYODA will work in collaboration with the Somaliland and Somalia governments’ international development, local organizations, and the civil societies.

This followed the compelling evidence that AYODA’s programs could effectively reduce vulnerability and mitigate the causes and impact of poverty among the most vulnerable people in the organization’s operational areas. Through our participatory approaches, we believe that the communities can create sustainable solutions for the problem that they encounter if empowered.

Visionis a country where the youth, women, children, pastoralists, and people with disabilities respond to the causes and effects of vulnerable and poverty.

Missionis to promote sustainable development through community-based socio-economic empowerment targeting vulnerable youth, women, children, pastoralists, and people with disabilities while responding to environmental and climate change challenges in Somaliland.

1.2Purpose and Scope

This manual outlines (Africa Youth Development Association) AYODAs’ policy and procedures for all procurement activities in all field offices. The manual establishes the minimum required standards for all procurement activity. AYODA offices are expected to comply with the policies and procedures set forth in this manual and are encouraged to seek clarification if necessary.

1.3Making Changes to the Procurement Manual

Authority to alter this manual rests jointly with the board of directors and senior managers of the organization. Field offices are encouraged to provide input, suggestions and corrections, but may not alter or change any part of the manual. Suggestions or requests for changes should be addressed to the board of directors. (info@ayodasl.org).

The manual will be periodically updated to reflect current circumstances and new policies and procedures of the organization..

1.4Executive director Office-Specific Modifications.

The Procurement Manual establishes minimum standards that must be adhered to for every procurement activity. Local policies and procedures may be created in co-ordination with this manual, but may not supersede this manual. Additional field office policies and procedures must be reviewed and approved by the Procurement Administration and Logistics Manager.

2STATEMENT OF PRICIPLES

2.2General Statement

AYODA is committed to implementing and maintaining the highest standards of efficiency and integrity in the purchase of goods and services. The overriding objective for all AYODA procurement activity is the prompt and effective provision of materials and services to AYODA’ beneficiary populations in compliance with donor specifications.

2.3Key Elements

2.3.1Roles and Responsibilities / Segregation of Duties

AYODA operates a system of decentralized purchasing authority under which country programs are responsible for the management of their funding. The executive Director has the ultimate responsibility for ensuring that procurement

Functions are executed in accordance with the policies and procedures outlined in this document. It is also the responsibility of the Executive Director to ensure that an appropriate segregation of duties exists between the functions in the procurement cycle.

Segregation of duties is defined as the division of tasks and responsibilities such that no one person controls a process from beginning to end and that transactions are reviewed independently at various points during the process to prevent errors, discrepancies or fraud. Individuals assigned to the various tasks in the procurement process should be independent of each other both in function and relationship.

To ensure an appropriate segregation of duties in the procurement cycle, the following roles are necessary:

The department requiring goods or servicesoriginates a request to procure a good or service. The management of the department provides pre-approval to purchase based on delegated authority.

TheProcurement Departmentis responsible for the establishment of AYODA standardized operating procedures that:

·Locate sources of supply consistent with AYODA and donor specifications and regulations.

·Avoid the purchase of unnecessary items.

·Meet budgetary constraints and requests of programs.

Procurement is also responsible for the selection of suppliers. For specialized ortechnical purchases, the appropriately qualified program staff should be consulted.

Based on afully approvedPurchase Request (PR) the Procurement Department may Initiate, conduct, and conclude negotiations for the purchase of program goods and services.

·Commit AYODA for the purchase of goods and services subject to AYODA Policies.

In the course of its duties, the Procurement Department has a responsibility to:

·Recommend changes in quality, quantity, or type of material requisitioned and suggest suitable alternatives if it is in the best interests of AYODA.

·Develop and support standard specifications and processes for purchase and contracting of goods and services to provide improved service, quality pricing, and reduce time and administrative costs.

·Maintain adequate documentation of purchase transactions and procurement contracts for archival and audit purposes.

·Ensure that purchase orders and contracts are subject to appropriate reviews and approvals, and contain all necessary information, terms and conditions, and signatures to adequately protect AYODA and comply with applicable AYODA and donor policies and regulations.

·Provide reports to effectively monitor and manage purchasing performance.

The procurement department has no authority to approve purchases. The department may onlyreturnfor correction, documentation for the following (but not limited to) reasons: insufficient information, ineligible goods or service, not feasible, or in violation of donor specifications.

When field offices receive goods, procurement staff are responsible for verifying the receipt of goods and ensuring the goods conform to order specifications.

The Finance Departmentindependently reviews the purchasing documentation to verify that there is a budget and sufficient funds are available. It also ensures that records are complete and comply with AYODAs policies and donor regulations. Finance is responsible for preparing payments and properly recording transactions in the financial records. Finance has no authority to approve purchases. The department may onlyreturnfor correction, documentation for the following (but not limited to) reasons: insufficient information, ineligible goods or service, not feasible, or in violation of donor specifications.

2.3.2Pre-approval

With the exception of small or routine purchases as outlined in this document, all expenditures shall require pre- approval by an individual with the written authority to approve that purchase.

Pre-approval is necessary to:

·ensure that purchases meet the needs of the program or purpose for which it is being made

·avoid the purchase of unnecessary items or items already in stock

·ensure that adequate budget provisions have been made for the purchase

·ensure that the purchase is in compliance with AYODA policies and donor specifications

After-the-fact approvals may be allowed in cases of emergency as outlined in Chapter 12 of this document.

2.3.3Authority of Donor Specific Procurement Regulations

When required by the donor, specific procurement rules and regulations shall be followed as a supplement to AYODA’s policies. In cases when donor requirements are more lenient than the thresholds outlined in this Manual, AYODA’s policies are to be followed. It is the responsibility of both the Program Manager and the Finance Manager in consultation with the executive director to research any specific requirements as new grants are signed and inform all affected staff members of the requirements.

2.3.4Sourcing

As a National relief, recovery and development organization, AYODA seeks to support the communities in which it works and shall consider local as well as international sources in procurement activities. If the requested goods are locally available, local purchasing is preferred when within reasonable limits of price margins. Donor guidelines and regulations concerning the source and/or origin of goods and services (i.e. preference for local procurement, restricted or prohibited source or origin, etc.) shall be followed for procurement activities conducted under donor-funded programs.

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2.3.5Competition

All procurement transactions shall be conducted in a manner providing open and free competition to the maximum extent practical. AYODA personnel shall be alert to organizational conflicts of interest as well as non-competitive practices among contractors that may restrict or eliminate competition. Awards at all levels shall be made to the vendor whose bid or offer is responsive to the solicitation and is most advantageous to AYODA in terms of price, quality and service. Solicitations shall clearly establish all requirements that the bidder must meet for the offer to be evaluated. Solicitations shall be evaluated based on objective criteria established before solicitations are sought.

2.3.6Price and Cost Analysis

An appropriate price and cost analysis shall be performed and documented in connection with every procurement action. Price analysis will generally take the form of a comparison of quotations, market prices or other indices. Cost analysis should ensure that each element of cost is reasonable, allowable under AYODA and donor regulations, and allocable to projects based on relative benefit.

2.3.7Documentation and Transparency

AYODA is committed to maintaining a fair and transparent process in the procurement of goods and services. Accordingly, all steps in the procurement process shall be documented in writing using the forms outlined in this document and signed by the appropriate authorities. The documentation shall provide a clear audit trail and shall be made available as requested by HQ, auditors or donor representatives.

3CODE OF CONDUCT

3.2Conflict of interest

Definition

·A conflict of interest occurs when an employee, officer, or agent of AYODA participates in the selection, award or administration of purchases or contracts where immediate family (parents, children, siblings, wife/husband and wife/husband’s parents and siblings), or partners have a financial interest in the supplier’s organization.

·A conflict of interest occurs when employees, officers, and agents of AYODA solicit or accept cash, gratuities, favors, or anything of monetary value from suppliers or potential suppliers.

·A conflict of interest occurs when suppliers participate in the development of specifications, requirements, requests for quotes, or requests for proposals (that include proprietary knowledge or equipment.

It is the continuing responsibility of AYODA employees to scrutinize transactions, business interests and relationships for potential conflicts and immediately disclosure them. It is possible – upon full disclosure of all relevant facts and circumstances – that conducting business when a conflict of interest exists is not necessarily adverse to the interests of AYODA. AYODA policy requires the existence of any conflicting interests described aboveto be fully disclosed before any transaction is consummated.

Employees, officers, and agents of AYODA who knowingly violate this policy will be subject to such disciplinaryactionas deemed appropriate by the Executive Director.

All disclosures of conflicts of interest shall be made to:

·The Head of Office or executive Director for Country Operations. If the Head of Office or executive Director for Country Operations has a conflict, they shall disclose to the chairperson of the board of Directors, Senior Program manager, and the Chief Finance Officer.

The appropriate officer as noted above shall then determine whether a conflict exists and is material. If it is determined that a conflict of interest exists the same officer will determine if the contemplated transaction may be authorized as just, fair, and reasonable. The decision of the appropriate officer on these matters will be made at their sole discretion. Their first concern must be the welfare of the organization and the advancement of its purposes. If AYODA does engage in transactions with organizations associated with conflicts, the employee with the conflict shall be prohibited from participating in the selection, award, or administration of a contract.

To ensure that every AYODA staff is aware of this crucial operating policy,

Related Items

(Appendix III.1)AYODA Conflict of Interest Statement

3.3Code of Conduct

The AYODA Code of Conduct outlines responsibilities and procedures that promote the highest standards of integrity. Interacting with outside entities engaged in the selling of goods and services is an activity that is potentially vulnerable to fraud. It is necessary to protect AYODA and all members of staff by formulating and adhering to:

·The guidelines outlined in this manual.

·Clearly definedlocal procedures for authorizing requests, expenditure and invoices, obtaining quotations and tenders and disposing of assets.

·A code of conduct that explains and promotes the adoption of ethical behavior during all purchasing activity.

All AYODA employees designated with purchasing or contracting authority should understand and observe the Code of Conduct detailed below.

1.Give first consideration to AYODA’ best interests, objectives and policies.

2.Staff conduct should not foster suspicion of any conflict between professional duty and personal interest.

3.Decline personal gifts or gratuities from current or potential suppliers.

4.Grant all competitive suppliers equal consideration as AYODA and donor specifications permit.

5.Conduct business with potential and current suppliers in an atmosphere of good faith, devoid of intentional misrepresentation.

6.Make every reasonable effort to negotiate an equitable and mutually agreeable settlement of any controversy with a supplier and/or be willing to submit any major controversies to arbitration or other third- party review, insofar as the established policies of AYODA permit.

7.Promote fair, ethical, and legal trade practices.

8.Treat all information received from suppliers in the strictest confidence.

Gifts

No gifts or money should be accepted. The only exception to this rule is gifts of an inexpensive (less than US$20) or seasonal nature such as business diaries, calendars or pens. The offer of small gifts is an accepted part of commercial life and care must be taken not to offend or damage relationships with suppliers when explaining that acceptance is contrary to AYODAs’ normal practice. Any attempt by suppliers to undermine the honesty of staff by the offer of gifts or other inducements should be immediately reported to the Procurement Manager or if it is he/she is under suspicion to the Head of Office. The Procurement Department should maintain a Gift Register where such transactions will be recorded, ensuring the transparency of relations of this nature with vendors.

Hospitality

The provision of hospitality by suppliers may represent an attempt to circumvent the rules on acceptance of gifts. While modest hospitality may be accepted, its frequency and scale should not be significantly greater than that which AYODA would be likely to provide in return. Hospitality should also be registered in the Gift Register.

Travel and Accommodation

All purchasers should be aware that accepting "complimentary" travel or invitations to visit suppliers or other events, particularly to distant or expensive locations, is likely to be regarded as having influenced a particular decision. Offers of this nature should be accepted only in exceptional circumstances and should havepriorapproval of the Executive Director.

The Code of Conduct Statement

The AYODA Code of Conduct statement outlines AYODA policies and procedures with regard to standards of conduct governing the performance of its employees engaged in the procurement of supplies, contracted services, and equipment. All such employees are required to sign this policy statement indicating that they have read and understood this statement.

Exceptions:None.

Related Items

(Appendix III.2) Code of Conduct Regarding Procurement Activities

3.4Confidentiality

The prices, terms and conditions under which many of AYODAs’ suppliers’ trade are the result of negotiations and mutual trust building. It must be understood by all staff (both Program and Support) that strict confidentiality is observed with supplier information.

Under no circumstances should any contractual or pricing information be divulged to external sources or used as a 'benchmark' for independent negotiations. In some cases, such disclosure may constitute a breach of contract, specifically, a breach of confidentiality or such provisions. This behavior undermines AYODAs’ reputation as an honest and responsible organization.

3.5Specific limits to procurement staff authority

Procurement staff authority does not extend to the following:

·Initiating (with the exception of minimal logistics and procurement departmental expenses), verifying appropriateness of goods or services, or approving Purchase Requests.

·Instituting non-Finance approved credit arrangements with suppliers.

·Maintaining bank accounts.

4VENDOR RELATIONS AND SELECTION

4.2Vendor Relations

The following considers responsibilities and procedures involved in establishing and maintaining effective business relationships with existing and potential suppliers.

It is AYODAs’ policy to maintain and practice the highest possible standards of business ethics, professional courtesy and competence in all dealings with past, current and potential suppliers and vendors. In this regard, the following should be observed when dealing with suppliers and their representatives:

·Always accord promptand courteous reception and fair and equal treatment to all vendors/suppliers and their representatives.

·Explain as clearlyand fully as possible to vendors/suppliers the reason(s) for the rejectionof their bids/proposals.

·Remain scrupulously free of obligations to any vendor/supplier.

·Remain informed about sources of supply, methods,services and materialsand encourage vendors/suppliers to test and develop improved or expanded products and services.

·Inform vendors/suppliers about current and anticipated requirements.

·If, for any reason, one vendor/supplier is permitted to re-quote (submit a revised quotation), all competitors should be given the same opportunity. Re-quoting should be kept to an absolute minimum.

·Provide equal opportunity for vendors/suppliers to make price and specification quotations.

·Guarantee the confidentiality of all specifications and price quotations made byvendors/suppliers.

·Decline to take advantage of vendors/suppliers’ errors, and show consideration for vendors/suppliers’ difficulties by

co-operating with them whenever possible.

·Avoid subjecting vendors/suppliers to needless expense or inconvenience when requesting quotations or returning goods.

4.3Vendor Selection

The purpose of evaluation and comparison of quotations, offers, and proposals is to determine which vendor has the lowest price for a given set of acceptable specifications and/or conditions. When determining if a quotation / offer /

/proposal is acceptable, non-price factors (specifications and conditions) must also be considered. Having done so, the lowest acceptable quotation, offer, or proposal should be selected. Non-price factors to be considered in an evaluation for the purpose of determining the best acceptable quotation, offer, or proposal as specified in the Request for Quotations shall include where applicable:

·Compliance with technical specifications, relevant international standards and technicalnorms.

·Compatibility with existing equipment and standardization plans or policies.

·Compliance with required time schedules.

·Delivery times.

·Payment terms.

·Guarantees or warranties, availability of spare parts, after-sales services and training.

·Life-cycle aspects covering maintenance and operating costs.

·Capability, capacity, financial standing, past experience and performance of the vendor and its local representative.

·Compliance with donor regulations (e.g. source and origin issues).

Care should be taken to thoroughly review each supplier or vendor’s quotation, offer, or proposal in order to detect

problems at an early stage.

In the event of a miscalculation in a quotation, offer, or proposal, the unit price will prevail. If it is clear beyond doubt that a mistake has been made, the Procurement Manager may permit the bidder to withdraw, but not alter, the offer or proposal.

Quotations, offers, or proposals for complex goods and services should be submitted to the originator of the Purchase Request for technical evaluation; however, all pricing information should be removed from the offers and proposals prior to the technical evaluation. This can also be done during the quotation analysis meeting.

When considering the award of a high-value transaction to a vendor with whom AYODA has little or no previous experience, a pre-award survey may be performed to obtain information regarding the capability, capacity and financial standing of the vendor under consideration. This can be conducted internally, or by hiring a specialized survey firm.

All steps, arguments, and considerations involved in the decision making process of quotation analysis and vendor selection must be fully justified and documented.

The Purchase Order or Service Contract shall be awarded to the qualified vendor or supplier whose quotation, offer, or proposal is evaluated to be the cheapest and meets the requirements. Any criteria specified in the solicitation documents, such as quality, delivery time, payment terms and compatibility with existing equipment, may be used to evaluate quotations, offers, and proposals.

4.4Ineligibility and Compliance Checking of Vendors

It is AYODAs’ policy to comply with the laws and regulations of the Somaliland Government and the donor requirements concerning the ineligibility of vendors, contractors and suppliers of services for reasons of fraud, corruption or terrorist activity. These laws and regulations prohibit AYODA from doing business with or providing support to any persons or entities that have been found to be engaged in or provide support for any such activities.

EXPENDITURE APPROVAL AUTHORITY

4.5Approval Authority Matrix

The authority to approve purchase requests is defined by theApproval Authority Matrix (AYODA Financial Manual)in effect for each office. The purpose of the matrix is to specifically identify the parties who have approval authority and the levels of their authority. The matrix form and instructions are contained in the Finance Manual, Section 2.5.

4.6Roles and Responsibilities for the Authority Matrix

Executive Director- It is the responsibility of the executive Director to assign approval authorities and levels for each field office. Certain authorities must be reserved for the executive Director or for HQ. These authorities are detailed in the Finance Manual.

It is critical that an employee be informed of their level of approval authority when employment begins and when changes are made to the Authority Matrix. The employee’s supervisor should convey this information, with the ultimate responsibility for informing employees resting with the executive Director.

Finance Manager- The Finance Manager, supported by the executive Director, has responsibility for enforcing approval authority. Requests should not be signed nor payments made until the proper authority has been secured and discrepanciesresolved.

 

 

 

2PROCEDURES FOR PROCUREMENT OFGOODS

 

 

5.2Definition ofgoods

 

The term "Goods” in this manual will be used for merchandise, supplies and commodities that will be purchased by

Mercy Corps for later use through the procurement process described below.

 

5.3How to Initiate a Purchase

 

All procurement will be made following sound purchasing practices regardless of the purchase cost. Procedures and documentary requirements become more stringent as purchase costs increase.

 

Small value purchases

 

Up to the estimated value of USD 100, the Procurement Staff – or in extraordinary circumstances – Administration or Program staff can obtain an operational cash advance for making small value purchases directly or through the Procurement Department. Executive Director may reduce, but not increase the threshold for these types of purchases.

 

Procedure:

Where Admin/Program Staff are authorized to make direct purchases:

·Standard Finance Department policies and proceduresapply.

When the purchase is made by the Procurement Department on behalf of a program:

·Based on a Purchase Request, obtain cash from the Finance department and reconcile the purchase againsta Field or vendor receipt. Standard Finance Department policies and proceduresapply.

 

Regular purchases

 

Purchases with an estimated value of USD 101 or more are initiated by submitting a completed Purchase Request Form to the Procurement Department.

 

Requesting Officers (Originators) have a responsibility to:

 

·FurnishtheProcurementDepartmentwith allinformationandspecificationsnecessarytomakea correctpurchase.

·Ensure the Purchase Requests include full budget and accountinformation.

·State an estimated price for the request (based on prior knowledge, a quotation or a budgetedamount).

·Ensure that Purchase Requests are fully reviewed and approved by the relevantmanagers.

 

Before any request can be executed, it must undergo the following process:

 

·If in doubt of technical details for requested goods, consultation with suitably qualifiedstaff.

·Requirement and technical review by the Project (or suitably qualified)Manager.

·Financial review by the FinanceManager.

·Approval bytheProjectManagerorthenextlevelofapprovalauthoritydependingontheestimatedvalueofthe commitment. NOTE that a PR cannot be approved if there is no estimatedprice.

 

 

The onus is on the staff member initiating the Purchase Request to generate a PR that has all the required information and has been reviewed and approved.

 

A complete and approved PR constitutes the authority for Procurement to begin the procurement process. Therefore,

incomplete PR’s will be returned to the originating staff member.

 

The various procedural steps for different expenditure levels are explained in the process chart below.