SELF-FINANCING, ECOLOGICAL, SUSTAINABLE, LOCAL INTEGRATED DEVELOPMENT PROJECTS FOR THE WORLD’S POOR
FOR DIPLOMA IN
"Money is not the key that opens the gates of the market but the bolt that bars them"
Gesell, Silvio The Natural Economic Order
Revised English edition, Peter Owen, London 1958, page 228
Edition 13: 07 February 2010
The project is based on separation of powers between the controlling party (the project NGO) “the parliament” and the executive project coordinator “the government” nominated by the NGO to execute the project.
Financing parties have two structures to ensure on-going audits of the project works are carried out.
1. The project NGO fronts for the project and maintains on-going auditing powers to ensure correct project execution. It nominates an auditing commission with 5 (7) members. The statute of the project NGO allows the financing parties to nominate executive auditors to the auditing commission. Commission members nominated by the NGO may be paid salaries by the NGO. Commission members nominated by the financing parties may be paid salaries by the financing parties. For practical purposes commission members should be resident in or near the project area. Neither the auditing commission nor NGO may intervene directly in the execution of the project, as this is the responsibility of its nominee project coordinator. The auditing commission answers to the financing parties and to the independent auditor. The auditing commission has full rights of inspection of all project activities and documents.
2. An independent auditor nominated by the project NGO and approved by the financing parties reports every six months to the financing parties with copy to the project NGO. The independent auditor also submits a final audit at the close of the two years’ executive period of the project, and after each following 12 months’ period. The independent auditor has full rights of inspection of all project activities and documents, including the activities and documents of the auditing commission. The independent auditor is paid by (the external financing party, the project NGO).
3. The auditing commission may nominate one or more of its members as executive auditors to co-sign with the project coordinator payment authorisations concerning:
a) Transfers of funds from a (Euro or US$) project account with the external bank, to a formal currency account in the local currency of (host country).
b) Transfers of funds from a (Euro or US$) project account with the external bank to foreign consultants contractors and suppliers.
c) Transfers from the formal money account in the local currency of (the host country) to consultants contractors and suppliers of (host country), in excess of (amount in national currency). Smaller payments are made by the Project Coordinator from the Cooperative Local Development Fund, subject to full registration and accountability.
d) Transfers from the formal money account in the local currency of (the host country) into the Cooperative Local Development Fund.
To avoid conflict of interest, neither the project coordinator nor the independent auditor may be members of the project NGO. They project coordinator answers through the on-going auditing commission to the project NGO. The auditing commission answers to the project NGO and the independent auditor. The independent auditor answers to the external financing parties with copy of the report to the project NGO.
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