Para 3.17.25 — MSO (Audit)
Original Rule Text
3.17.25 Under the SOE, procedure, the borrower periodically requests withdrawal of loan proceeds through submission of a statement indicating expenditures for certain items referred to in the loan agreements. The SOE procedure simplifies and accelerates the Bank’s loan disbursement process by eliminating the requirement for bank staff to review supporting documentation for many a small expenditures prior to authorising disbursements. The SOEs are not accompanies by supporting documentation. Implicit in the SOE submission by the borrower is the adequacy and veracity of documentation, maintained by the borrower, which supports the disbursements.
What This Means
Under the SOE procedure, the borrower periodically requests withdrawal of loan funds by submitting a statement of expenditures without attaching supporting documents. This speeds up the World Bank's disbursement process by eliminating the need for Bank staff to review every voucher. However, the borrower is implicitly guaranteeing that proper supporting documentation exists and is being maintained.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Borrower submits periodic SOE to request loan withdrawals
- 2SOE is not accompanied by supporting documentation
- 3This simplifies and accelerates Bank disbursement
- 4The borrower implicitly certifies adequacy and accuracy of underlying records
- 5Auditor must verify that supporting documentation actually exists
Practical Example
A state government implementing a World Bank-funded education project submits quarterly SOEs to withdraw loan proceeds. The Bank disburses funds based on these SOEs without reviewing individual vouchers. During local audit, the audit party discovers that for one quarter, the implementing agency cannot produce vouchers for 30% of the claimed expenditure — a serious finding because the SOE procedure relies entirely on the borrower maintaining proper records.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
Does the World Bank ever verify SOE claims directly?▼
What is the risk of the SOE procedure?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.