Solar Rooftop Investment Program - Tranche 1

Customizing the terms of reference of auditors to project requirements and ensuring that they are properly oriented on these requirements are critical to promoting project compliance with ADB financial management procedures. There were gaps in complying with the financial management conditions of the loan agreement, including the need to timely submit audit reports and auditor’s management letters and opinions. The project engaged supreme audit institutions during the first 2 years of implementation, then changed to a private auditor in FY2020, and then to a different private auditor in FY2021 and FY2022. The gaps could have been prevented if the auditors were oriented on the requirements specifically during the changes in appointed auditors, and if a customized auditor terms of reference was in place to ensure continuity of engagement of new auditors. Communicating the annual audit requirement to the auditors early on, and preparation of a timetable would have helped mitigate the delays.