Annex 1. Logical framework matrix Strengthening capacities of the Service for Accounting, Reporting and Auditing Supervision in Georgia Programme name and number Technical Cooperation Facility II ENI/2016/039-337/ Service for Accounting, Reporting and Auditing Supervision, Ministry of Finance of Georgia Total budget: 1.250,000. EUR Financing: 100% 1,250,000. EUR Overall objective (impact) Objectively Verifiable Indicators Source of Verification Assumptions The overall objective of the project is to support fulfillment of the commitments of Georgia in the context of the Association Agreement AA which will lead to further support and enhancement of effective economic decision making through transparent and reliable reporting systems. The relevant legislation amended in accordance with the EU provisions; The necessary operational/procedural documentation for quality control, inspection and investigation in place by 2019; Number of quality audits, inspections and investigations increased by 20% by 2020; Number of recognized disciplines per certification programmes increased by 50% by 2020; SARAS/MoF Reports; Monitoring/assessment reports by international organizations; Statistics; AA implementation report; Specific Objective(s ) (outcome) Objectively Verifiable Indicators Source of Verification Assumptions The specific objective of the project is to support SARAS to establish solid system of audit quality control and inspection, to enforce corporate reporting requirements and application of accounting standards, as well as to implement proper recognition process for professional certification programs and examination processes and to increase human resource management capacity. Corporate reporting requirements in place by 2020; A long term strategy document for quality control, inspection and inspection of corporate reporting in place till the end of the project; Institutional and human capacity of the SARAS enhanced in line to the responsibilities and requirements of the Law till the end of the project; Operational Manual, Guidelines; Lists of participants from various meetings (workshops, trainings, discussions) Project documentation (analysis reports, training programmes, materials, recommendations and etc.). Project interim and final reports; Strong support and commitment from the senior management of SARAS Strong support and commitment from twinning partner(s) Relevant staff of SARAS available and involved in the process
Mandatory Results (outcomes) Objectively Verifiable Indicators Source of Verification Assumption Component 1 – Advanced Approximation of Georgian Legal Framework on Accounting Reporting and Auditing with the EU acquis in the relevant area Result 1.1 – Georgian Legal Framework on Accounting Reporting and Auditing and related secondary legislation revised in accordance with the provisions of the Association Agreement Amendments to the primary and secondary Georgian legislation on Accounting, Reporting and Auditing drafted in an inclusive process, accompanied by a sound RIA if required and using unified LA methodology and initiated by SARAS in 12 months from the start of the Project; Public consultations held on a newly drafted Strategy Document in 12 months from the start of the project. Project documentation, interim and final reports; Project activity reports (consultations, discussion); STE mission reports; Assessment reports; Long- term strategy; Legislative amendments and explanatory note; Government commitment on fulfillment of AA requirements continued; Strong support and commitment from the senior management of SARAS/MoF; Twinning MS partner commitment; Availability of local staff; All relevant documentation/information available; Component 2.- Enhanced Capacity Building of SARAS in accordance with its mandate and tasks entrusted Result 2.1 – SARAS' ability in fulfilling its functions to conduct audit quality inspection and investigation strengthened SARAS conducted inspections of approximately 40 audit firms on a risk-based till the end of the project; Dispute resolutions performed without any delay in accordance with the existing procedures (average timing for dispute resolution at SARAS Board level comprise 2 months); Report on gap/needs analysis; Operational Manual for inspections; Project documentation (working procedures, activity reports and etc.); Reports of inspection findings; Project activity reports; Strong support and commitment from the senior management of SARAS/MoF; Availability of local staff; Good communication between the Beneficiary and other stakeholders; All relevant documentation/information available.
Result 2.2 – SARAS' statements review capacity and corporate reporting requirements enforced 40% of PIEs, 20% percent of large and medium sized financial/non-financial statements reviewed at high level until the end of the Project (approximately 150-200 in total); Financial/non-financial Statements Review Operational Manual; Project documentation (relevant training materials, training reports, training evaluation and checklists , list of participants); STE mission reports; Strong support and commitment from the senior management of SARAS/MoF; Availability of local staff; Good communication between the Beneficiary and other stakeholders; All relevant documentation/information available. Result 2.3 – SARAS' capacity to assess and recognize certification programs and examination processes of Professional Accounting Organizations (PAOs) enforced At least 3 certification programmes together with examination processes recognized and monitored till the end of the project; Assessment /Analysis reports; Project documentation (relevant training materials, training reports, training evaluation and checklists , list of participants); Monitoring reports STE mission reports; Recognised certification programmes; Strong support and commitment from the senior management of SARAS/MoF; Availability of local staff; Good communication between the Beneficiary and other stakeholders; All relevant documentation/information available. Result 2.4 – Administrative and human resources capacity of SARAS enhanced SARAS staff performance goals set and appraisals made according to new systems till the end of project; SARAS new structure designed and agreed with relevant authorities till the end of the project; Assessment /Analysis reports; Project documentation (relevant training materials, training reports, evaluation and checklists , activity reports, list of participants); Work process map; Guidelines; Code of Conduct; STE mission reports; and requirements; Strong support and commitment from the senior management of SARAS/MoF; Availability of local staff; Good communication between the Beneficiary and other stakeholders; All relevant documentation/information available.