Document of The World Bank Report No: ICR00003492 IMPLEMENTATION COMPLETION AND RESULTS REPORT ON A LOAN IN THE AMOUNT OF US$20 MILLION TO THE DOMINICAN REPUBLIC FOR A DOMINICAN REPUBLIC MUNICIPAL DEVELOPMENT PROJECT ( P095863 ) December 8, 2017 Social, Urban, Rural, and Resilience Global Practice Latin America and Caribbean Region CURRENCY EQUIVALENTS (Exchange Rate Effective October 19, 2017) Currency Unit = Dominican Pesos (DOP) DOP 47.875 = US$1 US$1.418620 = SDR 1 FISCAL YEAR July 1–June 30 ABBREVIATIONS AND ACRONYMS CPS Country Partnership Strategy DGODT Dirección General de Ordenamiento y Desarrollo Territorial (General Directorate of Territorial Development) DIGEPRES Dirección General de Presupuesto (General Budget Directorate) ESMF Environmental and Social Management Framework EU European Union FAO Food and Agriculture Organization FM Financial Management IBOG Indicadores Basicos de Organizacion y Gestion (Basic Indicators of Organization and Management) HR Human Resource ISR Implementation Status and Results Report M&E Monitoring and Evaluation NGO Nongovernmental Organization PAD Project Appraisal Document PASCAL El Programa de Apoyo a la Sociedad Civil y Autoridades Locales (Support Program to Local Authorities and Civil Society) PRODEM Proyecto de Desarrollo Municipal (Dominican Republic Municipal Development Project) RPF Resettlement Policy Framework SIGEF Sistema Integrada de Gestion Financiera (Integrated System of Financial Management) SIGEM Sistema Integrada de Gestion Municipal (Integrated Municipal Management System) SISMAP Sistema de Monitoreo de la Administración Pública (Monitoring System for Municipal Public Administration) TABLE OF CONTENTS DATA SHEET ....................................................................... ERROR! BOOKMARK NOT DEFINED. I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES ....................................................... 5 A. CONTEXT AT APPRAISAL ................................................................................................................... 5 B. SIGNIFICANT CHANGES DURING IMPLEMENTATION (IF APPLICABLE) ........................................... 10 II. OUTCOME .................................................................................................................... 12 A. RELEVANCE OF PDOs ...................................................................................................................... 12 B. ACHIEVEMENT OF PDOs (EFFICACY) ............................................................................................... 12 C. EFFICIENCY ...................................................................................................................................... 18 D. JUSTIFICATION OF OVERALL OUTCOME RATING ........................................................................... 20 E. OTHER OUTCOMES AND IMPACTS (IF ANY).................................................................................... 20 III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME ................................ 21 A. KEY FACTORS DURING PREPARATION......................................................................................... 21 B. KEY FACTORS DURING IMPLEMENTATION ..................................................................................... 22 IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME .. 23 A. QUALITY OF MONITORING AND EVALUATION (M&E) ................................................................... 23 B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE ........................................................... 24 C. BANK PERFORMANCE ..................................................................................................................... 26 D. RISK TO DEVELOPMENT OUTCOME ............................................................................................... 28 V. LESSONS AND RECOMMENDATIONS ............................................................................. 29 ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS ........................................................... 31 ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION ......................... 42 ANNEX 3. PROJECT COST BY COMPONENT ........................................................................... 44 ANNEX 4. EFFICIENCY ANALYSIS ........................................................................................... 45 ANNEX 5. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS ... 51 ANNEX 6. INSTITUTIONAL STRENGTHENING ......................................................................... 61 The World Bank Dominican Republic Municipal Development Project ( P095863 ) DATA SHEET BASIC INFORMATION Product Information Project ID Project Name DOMINICAN REPUBLIC MUNICIPAL DEVELOPMENT P095863 PROJECT ( P095863 ) Country Financing Instrument Dominican Republic Specific Investment Loan Original EA Category Revised EA Category Partial Assessment (B) Partial Assessment (B) Organizations Borrower Implementing Agency Ministry of Economy, Planning and Development Ministry of Finance (MEPyD) Project Development Objective (PDO) Original PDO Improve the technical and financial capacity of the Participating Municipalities to program, finance and deliver Minimum Municipality Services. This would be achieved through the provision of: (i) technical assistance in core municipal management functions, such as participatory planning and budgeting, procurement, financial and human resource management; and (ii) matching grants for investment sub-projects identified in the Municipal Development Plan. Revised PDO Improve the technical and financial capacity of the Participating Local Governments to program, finance and deliver MinimumMunicipality Services. Page 1 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) FINANCING Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$) World Bank Financing 20,000,000 17,000,000 16,717,429 IBRD-78360 Total 20,000,000 17,000,000 16,717,429 Non-World Bank Financing Borrower 1,470,000 0 0 Total 1,470,000 0 0 Total Project Cost 21,470,000 17,000,000 16,717,429 KEY DATES Approval Effectiveness MTR Review Original Closing Actual Closing 21-Jan-2010 10-Dec-2010 07-Apr-2014 15-Feb-2016 15-Jun-2017 RESTRUCTURING AND/OR ADDITIONAL FINANCING Date(s) Amount Disbursed (US$M) Key Revisions 08-Jan-2014 3.05 Change in Project Development Objectives Change in Results Framework Change in Components and Cost Cancellation of Financing Change in Financing Plan Reallocation between Disbursement Categories Change in Safeguard Policies Triggered Change in Legal Covenants Change in Implementation Schedule Other Change(s) 05-Feb-2016 10.04 Change in Loan Closing Date(s) Reallocation between Disbursement Categories 12-Oct-2016 13.28 Change in Loan Closing Date(s) Page 2 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) KEY RATINGS Outcome Bank Performance M&E Quality Satisfactory Satisfactory Substantial RATINGS OF PROJECT PERFORMANCE IN ISRs Actual No. Date ISR Archived DO Rating IP Rating Disbursements (US$M) 01 08-May-2010 Satisfactory Satisfactory 0 02 28-Feb-2011 Satisfactory Satisfactory .05 03 11-May-2011 Satisfactory Satisfactory .05 04 06-Sep-2011 Satisfactory Satisfactory .55 05 28-Dec-2011 Satisfactory Satisfactory .55 06 29-Jun-2012 Moderately Satisfactory Moderately Unsatisfactory .97 07 21-Nov-2012 Unsatisfactory Unsatisfactory 1.54 08 13-Apr-2013 Unsatisfactory Unsatisfactory 2.06 09 26-Oct-2013 Unsatisfactory Unsatisfactory 2.74 Moderately 10 16-May-2014 Moderately Unsatisfactory 3.56 Unsatisfactory Moderately 11 15-Sep-2014 Moderately Unsatisfactory 4.36 Unsatisfactory 12 16-Dec-2014 Unsatisfactory Unsatisfactory 5.32 Moderately 13 30-May-2015 Moderately Unsatisfactory 6.27 Unsatisfactory 14 04-Dec-2015 Moderately Satisfactory Moderately Satisfactory 9.11 15 30-Jun-2016 Moderately Satisfactory Moderately Satisfactory 12.65 16 28-Dec-2016 Moderately Satisfactory Satisfactory 14.94 17 09-Jun-2017 Satisfactory Satisfactory 16.18 Page 3 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) SECTORS AND THEMES Sectors Major Sector/Sector (%) Public Administration 100 Sub-National Government 100 Themes Major Theme/ Theme (Level 2)/ Theme (Level 3) (%) Urban and Rural Development 85 Rural Development 85 Rural Infrastructure and service delivery 78 Land Administration and Management 7 Environment and Natural Resource Management 14 Renewable Natural Resources Asset Management 14 Biodiversity 7 Landscape Management 7 ADM STAFF Role At Approval At ICR Regional Vice President: Pamela Cox Jorge Familiar Calderon Country Director: Yvonne M. Tsikata Tahseen Sayed Khan Senior Global Practice Director: Laura Tuck Ede Jorge Ijjasz-Vasquez Practice Manager: Ethel Sennhauser Ming Zhang Task Team Leader(s): David Tuchschneider John Morton ICR Contributing Author: Nicholas James Callender Page 4 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES A. CONTEXT AT APPRAISAL Context 1. At the time of appraisal, the Dominican Republic was highly centralized, with most public services, investments, and resources managed directly by the National Government with local governments playing a minimal role in service provision. Due to this centralization, local governments served mostly as the distributing agencies for central government transfers and would occasionally step in to provide basic services. This service provision, however, was administered in a fragmented, discretionary, and inefficient manner. 2. Municipalities, especially small ones, did not have a functional organizational structure, lacked effective financial or administrative systems and used limited, if any, technical or economic criteria in the allocation of public resources.1 During project preparation, the service delivery capacity and municipal management capabilities for five municipalities were assessed; these demonstrated a heavy dependence on fiscal transfers; an absence of planning functions and development plans; and a lack of well-organized internal processes, procedures, and accounting systems. 3. Against these challenges, the Government identified good governance, strong public institutions, and decentralization as key areas to address poverty reduction and improve social cohesion. The governance and decentralization agenda resulted in the passage of six public sector administration reform laws.2 These laws provided a new legal framework for local governments and assigned new responsibilities to municipalities to improve access to basic services in rural and peri-urban areas. The laws and their associated regulations directly affected how municipalities carried out their planning functions, provided basic municipal services, and allocated expenditures. A World Bank Learning Grant3 executed during the preparation stages catalyzed the approval of the Municipal Development Law and related participatory planning processes that had been in a draft stage for 10 years. 4. The Municipal Development Project was designed to support the decentralization process mandated in the Municipal Law by strengthening municipal management function and the capacity to provide poor communities with Minimum Municipality Services (These services are defined as the category of services that every municipality must be able to provide).4 1 Project Appraisal Document. Dominican Republic Municipal Development Project, December 16, 2009. 2 The laws are Public Planning and Investment Law, the Procurement Law, the Treasury Law, the Organic Budget for the Public- Sector Law, and the Municipal Law and the laws creating the new Secretariat of Finance and the Secretariat of Economy, Planning, and Development. 3 Policy and Human Resources Development (PHRD) Grant for Preparation of the Regional, Local, and Community Development Project. Grant No.TF056963. 4 Minimum Municipality Services are the category of services that every municipality must be able to provide, as defined by the Municipal Law 176-07 (2007), including cemeteries and funerary services; collection, processing, and disposal of urban and rural solid waste; street cleaning; access to populated areas; repair and maintenance of streets, sidewalks, curbs, and rural paths; squares and public parks; public libraries; sport facilities; slaughterhouses; markets; civil protection; fire prevention and extinction; environmental protection; urban planning; and basic social services. Page 5 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) 5. The rationale for World Bank engagement was clear and aligned with both country objectives and the Country Partnership Strategy (CPS) objectives. The project served as an instrument for the Government to implement the newly enacted legislation on decentralization and local development to improve the quality of local public services. The project dovetailed and expanded efforts by the donor community to assist the Government in strengthening municipal capacity related to organizational structure, human resource (HR), financial, and procurement management to improve the provision of Minimum Municipality Services as mandated in the new legal framework. The engagement was fully consistent with the CPS 2009–2012 (Report #49620-DO), contributing to the strategic objective of enhancing quality of public expenditures and institutional development. Theory of Change (Results Chain) Activities PDO Outcomes Long-Term Outputs Component 1  Improved Outcome Component 1  Development of technical   31 IAPs Increased Institutional capacity to  11 implemented efficiency and Action Plan (IAP) program, finance effectiveness in Municipal  Development of and deliver the management Development Municipal Minimum of public Plans Development Municipality  Standardized resources at the Plans Services local government Procedural  Basic  Improved level Manuals institutional financial capacity   Established a FM Increased access strengthening of to program, to basic system municipal finance, and  Institutional municipality governments deliver Minimum service delivery structure to  Strengthening of Municipality continue the national Services provision of institutional municipal support system strengthening for municipal services planning Component 2 Component 2  Completed  Matching grants municipal works for municipal subprojects  Technical assistance and training in the management of municipal subproject implementation 6. Please see annex 1.B for key outputs by component. Page 6 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) Results Framework by PDO Elements PDO Outcome 1: Improved Technical Capacity to Program, Finance, and Deliver Minimum Municipality Services PDO Indicators5  Direct project beneficiaries/female/indirect beneficiaries (core indicator)  Local government budgets, excluding project resources, respond to the priorities established in Municipal Development Plans  Local governments have adopted and are using transparent, standardized, and efficient FM, Procurement and HR management procedures, as specified in procedures manual, and produce budgets  At least 75 percent of the direct subproject beneficiaries satisfied with the provision of services or the executed infrastructure works  DGODT6 has created a Municipal Management Unit to continue provision of municipal strengthening services PDO Outcome 2: Improved Financial Capacity to Program, Finance, and Deliver Minimum Municipality Services PDO Indicators7  Local Government financial reports are in accordance with acceptable accounting standards  Local governments have adopted and are using transparent, standardized, and efficient FM, Procurement and HR management procedures, as specified in procedures manual, and produce budgets8 Project Development Objectives (PDOs) 7. The Project Development Objective (PDO), as stated in the Loan Agreement, was to improve the technical and financial capacity of the Participating Municipalities to program, finance and deliver Minimum Municipality Services. 8. This would be achieved through the provision of (a) technical assistance in core municipal management functions, such as participatory planning and budgeting, procurement, financial, and HR 5 This refers to the Revised PDO Indicators 6 General Directorate of Territorial Development (DGODT). 7 This refers to the Revised PDO Indicators 8 This is a single compound indicator that addresses both elements of the PDO. Page 7 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) management, and (b) matching grants for investment subprojects identified in the Municipal Development Plan (MDP). Key Expected Outcomes and Outcome Indicators 9. The key expected outcome was to strengthen the technical and financial capacity of local governments to deliver Minimal Municipality Services. 10. The PDO was to be measured by the following outcome indicators:  Direct Project Beneficiaries  Local Government Budgets, excluding project resources, respond to the priorities established in the Municipal Development Plans  At least 75 percent of the direct sub-project beneficiaries satisfied with the provision of services or the executed infrastructure works  DGODT has created a Municipal Management Unit to continue provision of municipal strengthening services  Local Government financial reports are in accordance with acceptable auditing standards  Local Governments have adopted and are using transparent, standardized and efficient budget and FM, Procurement and HR management procedures as specified in FM, Procurement and HR procedures manual and produce budgets Components 11. The project was designed with three components to support the achievement of the PDO. The first two components were directly linked to the PDO and the third component supported project management. Component 1: Institutional Strengthening (Total US$5.45 million) (a) Provision of support for the institutional strengthening of municipal governments, including, among others, (i) The design and implementation of a new municipal organizational structure and establishment of organizational units and planning systems; (ii) The creation and functioning of Municipal Development Councils, including specific actions to enhance the transparency of municipal administrations and the participation of civil society; (iii) The strengthening of the municipal administration, including the budget and financial administration system in each Participating Municipality, improving procurement management policies, and strengthening the HR management function; and Page 8 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) (iv) The strengthening of the capacity for programming, implementing, and managing basic municipal services, including the preparation and implementation of minimum annual maintenance programs. (b) Strengthening the national level institutional support system for municipal governments, including, among others, providing assistance to strengthen the capacity of Sub-secretariat of Planning-General Directorate of Territorial Planning (SSEPLAN-DGODT), General Directorate of Public Investment, and General Directorate of Economic and Social Development to implement the new national, regional, provincial, and municipal planning systems. (c) Provision of support for the formulation of MDPs, including, among others, IAPs and local investment programs, as well as assistance in the preparation of Municipal Subproject Agreements. Component 2: Municipal Investments (Total US$13.50 million) (a) Provision of support for the carrying out of municipal investments required to improve coverage, quality, and management of Minimum Municipality Services and infrastructure, through the provision of matching grants9 to Participating Municipalities for the implementation of municipal subprojects (b) Provision of technical assistance and training to Participating Municipalities to assist in the management of municipal subproject implementation Component 3: Project Administration, Monitoring, and Evaluation (US$1 million) (a) Provision of support for project coordination and strengthening of the DGDOT through the provision of technical assistance (including audits), training, goods and equipment, and incremental operating costs required for project administration and monitoring (b) Carrying out of monitoring and evaluation (M&E) activities that provide inputs to continuously guide project management decisions, including the preparation of a communication strategy to support project implementation, all for ensuring the achievement of project objectives (c) Provision of support for the preparation of studies relevant to project objectives, including social and institutional assessments necessary for the inclusion of new municipalities in the project 12. Selection of Participating Municipalities. The selection of the project municipalities was done based on an analysis of the 154 municipalities during preparation using data from the 2002 census and the 2005 poverty study carried out by the National Planning Office. The municipalities were given a combined ranking equally weighting the following characteristics: percentage poor population, percentage illiterate, percentage rural and population density. For municipalities to participate, they need to be identified on the list of eligible municipalities developed based on the aforementioned criteria. Additionally, they need to show evidence of a minimum municipal organization structure based 9 A financial transfer from the borrower to the Participating Municipality, on a periodic basis, for the payment of goods, works, and services required for the implementation of municipal subprojects. Page 9 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) on the Municipal Law, demonstrate an ongoing formal process for establishing a Municipal Development Council and state a commitment to developing an MDP. B. SIGNIFICANT CHANGES DURING IMPLEMENTATION (IF APPLICABLE) Revised PDOs and Outcome Targets 13. Change to the PDO. The revised PDO reflects the inclusion of municipal districts in the project, with the original designation ‘Participating Municipalities’ replaced with ‘Participating Local Governments’. The revised PDO reads as follows: “Improve the technical and financial capacity of Participating Local Governments to program, finance and deliver Minimum Municipality Services.� 14. Change to the municipality definitions. Before the constitutional change, municipal districts fell under the jurisdiction of municipalities; afterwards, they acquired financial and electoral autonomy, becoming separate jurisdictions with identical functions. The designation ‘local governments’ refers to both municipalities and municipal districts. 15. Change to project scale. The project originally intended to intervene in 15 to 30 municipalities. The project area was reduced to 11 municipalities; however, given the disaggregation of the original municipalities into both municipalities and municipal districts, the number of targeted Participating Local Governments rose to 31 (11 municipalities and 20 now autonomous municipal districts). The end target for project beneficiaries was reduced from 335,952 to 266,396 people, corresponding to the total population of the 31 local governments included in the restructured project. Thus, while the number of beneficiaries were reduced, the number of local governments receiving capacity support for provision of Minimum Municipality Services surpassed the original project goal of interventions in 15 to 30 autonomous jurisdictions. Revised PDO Indicators 16. Change to PDO indicators. The PDO indicators were revised to include municipal districts in the wording and targets. Revised Components 17. Reallocation of funds. Funds were reallocated to increase amounts within Components 1 and 3. A new category, ‘Unallocated’, was created to serve as a contingency. (See Section Aspects of Design and Implementation for more details). 18. Partial loan cancellation (from US$20 million to US$17 million). US$3.0 million was cancelled from the loan, removed from Component 2: Municipal Investments. The reduction in component cost was because of a decrease in the project area and, consequently, in the number of beneficiaries. The costs and reallocations of the revised project are summarized in the following table: Table 1. Revised Summary of Costs Amount of the Loan Allocated (US$) Category Original Revised Page 10 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) Component 1 5,450,000 5,700,000 Component 2 13,500,000 7,300,000 Component 3 1,000,000 3,200,000 Front-end Fee 50,000 50,000 Unallocated — 750,000 Cancelled — 3,000,000 TOTAL AMOUNT 20,000,000 20,000,000 Other Changes 19. Changes to implementation arrangements. The initial design had the project functioning under the DGODT, which would be responsible for coordinating the implementation of activities in line with the national planning policy, through a Steering Committee comprising three ministries—Environment, Economy, and Finance. Due to the absence of interinstitutional coordination, the DGODT had direct technical coordination with stakeholder institutions and local governments to design the MDPs, carry out institutional strengthening activities, and execute the civil works. Through the pilot diagnoses and development of IAPs and MDPs, it was concluded that the local governments would not have the capacity to contract the works in compliance with World Bank guidelines—as such, the execution mechanism was adjusted and the Project Coordination Unit within the DGODT carried out the procurement processes for the small municipal works. 20. Changes to Results Framework. Project outcome and intermediate results indicators were adjusted to (a) replace ‘municipalities’ with ‘local governments’; (b) adjust the PDO indicators and targets; and (c) facilitate the measurement of expected results, incorporating improved institutional development benchmarks. 21. Project extensions. In February 2016, a Level 2 restructuring extended the project by nine months, with a revised closing date of November 15, 2016. In October 2016, a Level 2 restructuring extended the project by an additional seven months until June 15, 2017. The extension was to allow for the completion of municipal investment works in 26 of the 31 municipalities that had met the defined performance targets for institutional strengthening. 22. Change to counterpart financing requirements. The February 2016 restructuring lowered the required national counterpart contribution and increased the disbursement percentage for the corresponding expenditure categories to 100 percent. This allowed for counterpart financing for local governments to remain but provided more flexibility in the timing of payments of counterpart funds to mitigate delays in execution and to remedy weaknesses in audits related to the proper accounting of financing sources. Rationale for Changes and Their Implication on the Original Theory of Change 23. The changes did not affect the expected outputs and outcomes, as outlined in the Theory of Change. The inclusion of municipal districts also does not affect the original analysis and Theory of Change. Because most municipal districts had lower capacities than the municipalities from which they were disaggregated, the need for the design and implementation of a system to improve local government capacity for service delivery and back-office functions was further reinforced. Page 11 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) II. OUTCOME A. RELEVANCE OF PDOs Assessment of Relevance of PDOs and Rating 24. Relevance of objectives is rated as High. The PDO is well aligned with the CPS FY2015–2018 (Report #89551-DO), which is anchored in the Government’s 2013–2016 National Development Strategy (Estrategia Nacional de Desarollo) for the public sector, focusing on institutional development with ambitious medium-term goals in social development. During the Performance and Learning Review, the CPS objectives were refined to include a pillar on “improving service delivery for the poor� with a significant focus on municipal development services. CPS Outcome 8 and Indicator 8.1 focus on basic services in the poorest municipalities of the country and reflect the targets set under the Municipal Development Project. 25. Supporting an efficient, transparent, and result-oriented public administration as outlined in the National Development Strategy is identified in the CPS as strongly aligned with the World Bank Group’s twin goals, has a strong potential impact, is a high CPS priority and has a high World Bank Group comparative advantage in the Dominican Republic. Furthermore, the project is fully in line with the Independent Evaluation Group reviews of projects that closed during the FY2010–2013 CPS period and of the FY2006–2009 CPS Completion Report, which points to the need to strengthen in-country financial and procurement management and ensure organizational and staffing continuity to achieve success. B. ACHIEVEMENT OF PDOs (EFFICACY) Assessment of Achievement of Each Objective/Outcome 26. The PDO of the project is to “Improve the technical and financial capacity of Participating Local Governments to program, finance and deliver Minimum Municipality Services.� Achievement of each of the two elements of the PDO is discussed in the following paragraphs.10 PDO Element 1. Improve the technical capacity of Participating Local Governments to program, finance, and deliver Minimum Municipality Services. This Element is rated as Substantial. 27. Achievement of PDO indicators. As shown in table 2 below, achievement of PDO Indicators #1, #3 and #5 exceeded target values. PDO Indicator #2 fell slightly short of its ambitious target of 70 percent, with an achievement rate of 65 percent. PDO Indicator #4 was not met at project closing, because the ratification of the unit to be established within the DGODT was not yet completed.11 However, intermediate indicator, ‘DGODT has set up a system to monitor local government institutional development’ has been met. Further discussion on the measurement mechanisms for the PDO indicators can be found in annex 9. 10 Two of the PDO indicators are relevant to assessing the achievement of both elements of the PDO and are discussed in further detail in the Theory of Change section. 11 Through the project, the design for a unit within the DGODT was approved by the Ministry of Public Administration with the creation of the unit forthcoming, but not completed at the time of Project closing. Page 12 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) Table 2. PDO Indicators and Targets Achieved PDO Indicators Target Achieved 12 #1 Direct Project Beneficiaries 194,229 202,378  Female 47% 47%  Indirect Beneficiaries 216,581 266,396 Baseline: 0/0/0 #2 Local government budgets, excluding project resources, respond 70% 65% to the priorities established in Municipal Development Plans. Baseline: 0% #3 Local governments have adopted and are using transparent, 25 of 31 28 of 31 standardized, and efficient FM, Procurement and HR management procedures, as specified in procedures manual, and produce budgets. Baseline: 0 #4 At least 75% of the direct sub-project beneficiaries satisfied with 75% 80% the provision of services or the executed infrastructure works. Baseline: 0% #5 DGODT has created a Municipal Management Unit to continue YES NO provision of municipal strengthening services. Baseline: No 28. PDO indicators, as designed, effectively allow for the discussion and measurement around the achievement of targets for this element of the PDO, tracking the quality of municipal management in terms of compliance with regulatory and municipal management frameworks, satisfaction with service delivery and measuring outcomes related to planning, HR management, procurement, and transparency. 29. In addition, a beneficiary satisfaction survey—including a household sample of 1,052 households and focus groups involving 280 people across a sample of 16 local governments—was undertaken, with the results also discussed further below in this section (see annex 7 for detailed information on this process). Design and Delivery of Institutional Strengthening Program (PDO Indicator #3 and #5) 30. The project designed a model for institutional strengthening which was piloted in 5 municipalities and later scaled to another 6 municipalities and 20 municipal districts. The instrument for monitoring compliance with this model can be found in annex 6. The local governments were subject to an institutional diagnostic which resulted in an IAP to determine capacity needs in processes, methodologies, and instruments with a program designed on that basis to facilitate improved municipal management. The 16 indicators (outlined in annex 6, figure 6.2), tracked compliance with administrative rules and procedures, financial processes, adequate and trained personnel requirements, transparency requirements, information flows to governing bodies, and resource allocation. These 16 indicators formed the basis for the measurement and successful achievement of PDO Indicator #3, whereby the target number of 25/31 was surpassed, with an achievement of 28 (a 90 percent result). 12 The definition of project direct beneficiaries is those benefitting from works. The definition of project indirect beneficiaries is those benefitting from improved services through institutional strengthening. Page 13 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) 31. The PDO Indicator #5 in table 2 was included to assure continued services and support to municipalities and municipal districts, following completion of the project. The PDO indicator was not met, as the unit is not yet created, through its structure has been ratified by the Ministry of Public Administration with establishment forthcoming. Due to delays outside the control of the project for the establishment of the Municipal Management Unit, the DGODT has included technical assistance to local governments supported by the project and has included the establishment of a technical support desk and revisions of MDPs in its agenda going forward. Improvements in Municipal Management Planning (PDO Indicator #2) 32. Institutional strengthening activities carried out under Component 1 helped improve local governments’ capacity for planning and delivery of Minimum Municipality Services. As shown in annex 1, A.2, Intermediate Indicators, all 31 local governments have adopted their IAPs as well as their MDPs produced by the Municipal Development Council with participation from civil society organizations. The beneficiary survey (annex 7) demonstrated that in 85 percent of the cases, the beneficiaries indicated that they knew of the minimum services that the local governments must provide to their citizens. In the case of the MDPs, 55 percent of the interviewees mentioned that they knew of their existence and were also familiar with their content. 33. PDO Indicator #2 demonstrates that 65 percent of Participating Local Governments had at least 40 percent of their budgets responsive to what is in the MDP, excluding project resources. The amount, mandated by the Partipatory Planning Law, to be dedicated to capital investments and municipal works and to be allocated to the participatory budget is 40 percent. While the final result demonstrates a 65 percent achievement rate for the indicator as designed, the budgets in all local governments were aligned with the lines of work as outlined in the MDPs; the MDPs were developed first and based on those, the partipatory budgets were defined, ensuring alignment. This was confirmed during the external evaluation. 34. As outputs, the following procedures manuals were developed by the project and accepted as policy: (a) Municipal Management Manual, (b) Manual of Procedures for the Management of Municipal Human Resources, (c) Manual of Procedures for Municipal Planning, (d) Manual of Procedures for Municipal Financial Management, (e) Manual of Procedures for the Management of Municipal Services, (f) Manual of Procedures for the Management of Purchases and Municipal Contracts, and (g) Manual of Procedures for Environmental Management. 35. The adoption and compliance with the administrative procedures and utilization of procedures manuals has been instrumental both for the internal management of the municipalities and for provision of public services. According to focus group discussions, the project properly promoted the creation of municipal development committees, as a crucial instrument for improving participatory planning. Through a better organization of local government functions, the implementation of the participatory budget was significantly improved and the level of citizen participation in the processes of identification and prioritization of needs were increased, as well as in the social oversight during works construction. Satisfaction with Service Delivery and Executed Infrastructure Works (PDO Indicator #4) Page 14 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) 36. A total of 31 municipalities and municipal districts received community prioritized civil works investments following local government compliance with the institutional strengthening requirements. 84 small civil works subprojects were completed (these included 39 sidewalks, 20 parks, 13 sports areas, 6 cemeteries, 3 funeral homes, 3 fire stations, and 1 cultural house). These investments were financed with 10 percent local counterpart funds which increased ownership of the works. 37. Technical trainings were given for management of investments and procedures for management of Minimum Municipality Services were defined in the Procedures Manuals (including maintenance planning, environmental planning and compliance, participatory planning procedures, works design, and supervision). The construction of the municipal works financed by the project, emerging from the processes generated by the MDPs and the participatory planning, served as a practical exercise for municipal officials and social organizations in the municipalities, using the procedures manuals. 38. Based on the final evaluation interviews, the level of satisfaction with the works was high—90 percent reported using the works and 80 percent reported economic improvements as a result of the investments. Additionally, 85 percent of respondents indicated that the work responds to the needs of the community, and indicated that they have been satisfied by the project’s community participation mechanisms. 39. The external evaluation of the project showed a high degree of satisfaction on the part of the beneficiaries regarding the delivery of municipal services in general, through better trained staff and functional systems. Regarding municipal services, 70 percent of the beneficiaries indicated that during the last three years, they have observed improvements in the provision of services. 40. The PDO Indicator #4 target of 75 percent (in table 2) was surpassed, with the achievement of 80 percent (an average of the works satisfaction, investment improvement in quality of life, and measure of improvements in the delivery of services). Comparison of Project Municipalities with National Averages 41. The Dominican Republic has adopted a Municipal Monitoring System for Public Administration (Sistema de Monitoreo de la Administración Pública, SISMAP) to systematically measure the quality of municipal management, through organization and management indicators. Only the municipalities involved in the project (not the municipal districts) were used in this comparative evaluation as the SISMAP tool was developed to measure institutional management of municipalities, with larger capacities. Therefore, for effective comparison with other national municipalities, six Project Municipalities were used. As evidenced in annex 8, the six Project Municipalities surpassed the national averages in HR, municipal development planning, procurement and contract management, access to public information, and participatory budget—all components of this PDO element. PDO Element 2. Improve the financial capacity of Participating Local Governments to program, finance and deliver Minimum Municipality Services. This Element is rated as Substantial. 42. Achievement of PDO indicators. As shown in table 3 below, PDO Indicators #1 and #2 exceeded target values. For PDO Indicator #1, 26 out of 31 municipalities have financial reports disclosed, published, and delivered to the governing body in compliance with acceptable accounting standards. Page 15 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) The target for PDO Indicator #2 was surpassed with 28 local governments meeting at least three of four requirements for fulfillment of the indicator target: (a) submission of budget reports to the General Budget Directorate (Direccion General de Presupuesto, DIGEPRES), General Comptroller and Chamber of Accounts, in proper format; (b) selection and hiring of personnel according to the Human Resources Manual; (c) adoption and use of standardized FM Procedures as specified in the Management Manual with satisfactorily prepared budget reports; (d) adoption and use of standardized procurement procedures with 50 percent of purchases made in accordance with the approved purchasing plan. 43. For comparison, the 2016 Diagnostic Report from the Chamber of Accounts in the Dominican Republic announced that only 35 percent of the country’s municipalities complied with the delivery of this information for the full year; as for the municipal districts, only 11 percent complied. Further discussion on the measurement mechanisms for the PDO indicators can be found in annex 9. Table 3. PDO Indicators and Targets Achieved PDO Indicators Target Achieved #1 Local Government financial reports are in accordance with 25 of 31 26 of 31 acceptable accounting standards. Baseline: 0 #2 Local governments have adopted and are using transparent, 25 of 31 28 of 31 standardized, and efficient FM, procurement, and HR management procedures, as specified in procedures manual, and produce budgets. Baseline: 0 44. PDO indicators, as designed, sufficiently allow for the discussion and measurement around the achievement of targets for this element of the PDO, measuring progress in financial and budgetary transparency and improvements in financial reporting allowing for more effective programming and delivery of municipal services. Improvements in Financial Reporting, Procedures, and Budgetary Transparency (PDO Indicators #1 and #2) 45. The project developed a set of manuals that facilitate compliance with the procedures of the State Financial Administration System. Specifically, the Procedural Manual for Municipal Financial Management developed served as a guide to support transparency of administrative acts through timely information on budget execution, created efficient work practices, accurately determined the documentation and flow for each financial procedure, served as a basis for the internal and external control, and outlined procedures to publish the budget and its execution to ensure access to information. To achieve the goal, the project provided each local government with computer equipment and software. 46. The project successfully supported the mainstreaming of the Ministry of Finance’s Integrated Financial Management System (SIGEM), which was installed in all 31 Participating Local Governments and has been implemented in 26—a rate of 84 percent.13 PDO Indicator #1 reflects that with the support 13 In the following five local governments, the system has only been installed: Mena, Los Frios, Bahoruco, La Cienaga, and Enriquillo. Page 16 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) of the SIGEM, 26 local government financial reports have been published and submitted to regulatory bodies in accordance with acceptable accounting standards. Before the project, SIGEM was limited to central government entities, omitting decentralized institutions and regional levels of government, which created bottlenecks for full budget integration of the public sector in accordance with the National Plan for Public Financial Management. The use of SIGEF supports systematized Municipal Financial Management, making it easier for users to carry out administrative and financial transactions in a transparent, efficient, reliable, and timely manner in compliance with legislated budget and accounting standards. This system allows local governments to formulate and implement annual budgets, record accounting procedures, execute budget transfers, prepare and present financial reports, and implement fiscal and administrative policies at the municipal level in accordance with national law. The implementation and operation of this system allows local governments to optimize the use of human and financial resources, guarantee transparent processes, and efficiently deliver municipal public services. PDO Indicator #2 demonstrates that 28 local governments have adopted and are using transparent and standardized FM procedures, following the Financial Management manual, with budgets published and submitted to regulatory bodies on time. 47. While SIGEM was installed in all local governments and implemented14 in 26 of them, at project closing, the system was being used in only 20 of 31 local governments. In August 2016, presidential and local government elections resulted in a change in authorities in 23 of the 31 local governments, whereby personnel trained in the use of the system were changed and several users unfamiliar with the system were introduced.15 While the elections resulted in key personnel turnover late in the project, local governments using the system have recurrent remote support and ongoing training through an established technical help desk, which contributes to the sustainability of the system. Annex 6, Figure 6.3 has more detailed information on the results from the project’s implementation of SIGEM. 48. The outcomes of these activities resulted in positive change in Municipal Financial Management, increase in the quality of local public investments, and a reduction in discretionary local government spending. The computerization of financial processes generated higher levels of administrative efficiency and ensured that local governments complied with all the procedures and requirements of the state entities regarding transparency in use of public resources. Staff were trained in the recording of income and expense data as well as general accounting practices. Comparison of Project Municipalities with National Averages 49. Through SISMAP, project municipalities were compared against national averages to ascertain levels of financial performance (see Annex 8). The project municipalities’ average for budget and FM was 99.16 percent compared with a national average of 84.48 percent. Project municipalities scored 81.16 percent in quality of expenditure in budgetary execution compared to a national average of 59.65 percent. Access to public information reflects a score of 68.33 percent for project municipalities versus a national average of 45.32 percent. 14 Implemented means that the system was installed with all modules (programming, budgeting, budget execution, procurement, and payment systems) capable of working in an integrated manner. 15 The six local governments where SIGEM was implemented but its use discontinued due to the change of authorities and staff trained in the use of the system are Gonzalo, Carrera de Yegua, La Sembra, Pueblo Viejo, Paraíso, and Los Patos. Page 17 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) Justification of Overall Efficacy Rating 50. Justification of Overall Rating as Substantial. Efficacy is rated Substantial because the operation almost fully achieved its objectives and intended outcomes as demonstrated through focus group interviews, post-completion surveys, review of the project Results Framework and through evidenced compliance with the institutional strengthening indicators (annex 6, figure 6.2). These information sources demonstrate the improvements in programming, financing, and delivering Minimum Municipality Services through the introduction of procedures and systems outlined in Municipal Manuals, improvements in municipal planning integrating the local communities, increased financial transparency, and through more efficient work structures within the local governments themselves. This overall efficacy assessment also considers that this project proved transformative in supporting and offering strong capacity support toward a newly legislated mechanism for municipal governance that breaks with the centralized system of governance that all stakeholders were used to; this required the adoption of a new culture for public management and a new culture of participation for the local communities themselves. The project supported some of the poorest local governments in the country where capacity was weakest and where there was a relative shortage of technical professionals and personnel to receive training and assume new functions. C. EFFICIENCY Assessment of Efficiency and Rating 51. The efficiency is rated as Substantial. In line with the ex-ante methodology outlined in the PAD, an ex-post economic and financial analysis was carried out. As described in the PAD, the financial analysis assesses the capacity of local governments to allocate resources for ensuring the incremental maintenance and operation of project-funded investments. The economic analysis assesses the minimum benefit required from Project-funded investments to cover both the investment and recurrent costs. 52. Economic Analysis. Public infrastructure and services are economically efficient if the benefits to the population at least equal the total incremental costs generated. This minimum benefit is estimated considering subproject investments cost, the economic life of the investment, a discount rate equal to the opportunity cost of capital (assumed to be 12% per annum), and a period of analysis of 10 years. The economic benefits for the inhabitants of the LGs were calculated based on the willingness to pay and the time saved by the housewives, using information of the beneficiary survey and focus groups. The Internal rate of return (IRR) of the public infrastructure and services, which were possible to assess through this analysis, are higher than the discount rate, which was established as 12% in the PAD. The IRR for sidewalks, playgrounds and solid waste management services were 23%, 16% and 43% respectively. 53. Financial Analysis. The analysis assessed the capacity of local governments to allocate incremental resources for maintenance and operations of project-funded investments. Financial capacity for operations and maintenance has been assessed by comparing increases in direct transfers from central government to the municipalities during Project implementation, with annual maintenance costs generated by the infrastructure financed by the Project. In real terms, the direct transfers from central government to the 31 LGs (around 12 million per year) has remained steady with a slight Page 18 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) downward trend from 2014, while annual maintenance costs generated by the infrastructures financed by the Project are estimated at USD 215,000/year. During the early years following the Project maintenance costs are low with the Government not needing to increase its contribution; therefore at this time, it is still too early to assess the medium-term impact for incremental costs needed for maintenance. However, per the external evaluation carried out at the end of the Project, the authorities and citizens have been clearly demonstrated a commitment to managing the parks, the playgrounds and cemeteries properly, and the beneficiary survey shows that 85% of the people feel that these infrastructures fulfill the functions for which they were built, and for 80%, they contribute to improve their living conditions. See Annex 4 for more details on the efficiency analysis. Aspects of Design and Implementation 54. Changes introduced during implementation contributed to a higher degree of efficiency in the use of resources. Following delays in the pilot phases of the project involving five municipalities, the DGODT undertook the selection of the additional municipalities (and their municipal districts) through an open, competitive, and transparent process, fully defining the project area that formed part of the project restructuring. The number of target municipalities was reduced from 15 to 11; however, as the territory of these 11 municipalities included 20 newly autonomous municipal districts, the total number of local governments which the project will benefit will increase to 31. With this change, the total number of project beneficiaries was reduced by a third. 55. As noted in Section I.B, US$3 million in loan funds was cancelled, reducing the allocation for municipal investments under Component 2. At appraisal, the indicative allocation for municipal investments was US$25 per capita, determined by a poverty-based formula. Due to the reduction in beneficiaries due to the smaller project area, the per capita allocation was increased to US$35. This increase was justified in terms of maximizing poverty-reduction impact and compensating for accumulated inflation since project approval. The allocation under Component 3 (Project Administration, Monitoring, and Evaluation) was increased from US$1 million to US$3.2 million during the Level 1 restructuring based on a defined action plan to accelerate implementation due to initial delays. Component fund increase facilitated the scale-up of the institutional strengthening program to the 26 non-pilot local governments through the hiring of consultant firms and nongovernmental organizations (NGOs). 56. The project was extended for 16 months beyond the original closing date, through two Level 2 restructurings. The extension was to allow for the completion of municipal investment works in 26 of the 31 municipalities that had met the defined performance targets for institutional strengthening. The extension allowed for execution of 32 additional municipal works and supported the credibility of the performance-based approach. While the extension was granted to achieve initially expected outcomes, the additional time allowed for continued support to the local governments following the local government election in August 2016 to ensure sustainability of the institutional strengthening program and outcomes achieved under the project (See Section: Risk to Development Outcome). 57. While local Government elections in 2016 resulted in turnover, the Project was able to withstand the negative impact of that transition (See Key Factors during Implementation Section). From the Bank side, TTL turnover was considered fairly reasonable with 4 TTLs involved from Project conceptualization and design through implementation. Page 19 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) D. JUSTIFICATION OF OVERALL OUTCOME RATING 58. The overall outcome rating is Satisfactory based on the combined ratings of relevance of the PDO (High), efficacy (Substantial), and efficiency (Substantial). E. OTHER OUTCOMES AND IMPACTS (IF ANY) Gender 59. The project actively promoted the equitable participation and access of all community members. Direct female participation in the project was 39 percent;16 of the 2,588 people that participated in project activities (training workshops, seminars, and development of Municipal Action Plans) 1,016 were women. Within the 31 local governments, 168 out of the 432 people who were trained were women, equivalent to 38.8 percent. Poverty Reduction and Shared Prosperity 60. While the project had a national scope, it directly benefitted impoverished populations through a defined formula for local government selection. The local governments selected for inclusion in the project had some of the highest levels of poverty and illiteracy in the country. The 31 local governments chosen were made based on the following criteria: (a) poverty rate, (b) illiteracy rate, (c) percentage of rural population, (d) population density, (e) access to transport and connectivity, (f) economic potential, and (g) natural resource management criteria. The project began with five pilot rural municipalities that were selected based on rates of poverty, illiteracy, population density, and percentage of rural population.17 To maximize the impact on poverty reduction, the allocation for investment resources under Component 2 of the project was based on a per capita value of US$35, corresponding to the number of inhabitants below the poverty line per each local government. Other Unintended Outcomes and Impacts 61. The European Union (EU) has been a partner to the Dominican Republic in supporting the public administration reform process. Through the Support Program to Local Authorities and Civil Society ( El Programa de Apoyo a la Sociedad Civil y Autoridades Locales, PASCAL), the EU, with resources from the National Government, extended this reform support to municipal governments through the Ministry of Public Administration (this was parallel financing, of which project activities were supported by the EU but coordinated because of complementarities). SISMAP was designed and implemented with strong support from this project. SISMAP was adopted as policy under Decree 85-15, Article 7 (see annex 8 for more information). 62. This project was designed as a performance-based program in which local governments are provided financing for three sets of works if they meet institutional strengthening targets; civil works under Component 2 investments served as an incentive structure for local government participation and 16 This value is distinct to the direct female beneficiaries (those benefitting from project works and services) as measured by the Results Framework—which was 47 percent. 17 This selection was done based on an analysis of 154 municipalities using data from the 2002 census and a 2005 poverty study completed by the National Planning Office. Page 20 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) to reward achievements in institutional strengthening targets while also building technical capacity for the programming and management of municipal works. Additionally, the EU and PASCAL adopted this incentive-based structure for achievements in institutional strengthening outcomes. III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME A. KEY FACTORS DURING PREPARATION 63. Soundness of background analysis. The project was closely aligned with the country’s development goals and the World Bank strategy at approval. As mentioned in Section I.A, the objectives of the project were well aligned with the World Bank CPS 2009–2012, contributing to the key pillar of enhancing quality of public expenditures and institutional development. The project also supported the broader agenda of improving public investment in the context of subnational and territorial development being advanced by the Secretariat of Economy, Planning and Development and the Sub- secretariat of Planning. 64. The project extracted and applied five lessons from a review of six relevant projects previously undertaken in the Dominican Republic. Additionally, seven lessons learned were applied based on other municipal development projects in Latin America, Asia, and Africa. These lessons informed the design as it pertained to community participation, institutional structure, indicators to measure program impact, capacity building, entry criteria, staffing, financing mechanisms, and assistance to municipalities. 65. During project preparation, a sample of five municipalities were selected to assess their municipal management and service delivery capacity. These municipalities were representative in terms of the range and social and economic characteristics of national provinces. The analysis identified six areas of deficiency in municipal management, which served to further inform project design.18 66. Project design. The design was kept simple, building off lessons learned from other regional municipal development projects with the plan to start in a few pilot municipalities and then scale up the approach. The three project components were directly linked to successful achievement of the PDO. The project design at entry was clear conceptually but how it would be operationalized and implemented was not well defined in the Project Appraisal Document (PAD). The sequence of actions for how the institutional strengthening components of the project would be executed and the definition of links with the incentive system for works under Component 2 was designed and defined during implementation. 67. Adequacy of risk and mitigation measures. The overall risk at appraisal was correctly assessed as Substantial. Two ‘Substantial’ risks were identified at project appraisal (implementation capacity and sustainability, and procurement) with associated mitigation measures included. Low implementation capacity in the DGODT and municipalities was mitigated by hiring of qualified technical staff within the DGODT, formation of technical coordination groups, and an analysis of key personnel carrying out key 18 These five municipalities also served as the five initial pilot municipalities of the proposed project. These areas of weakness identified were (a) heavy dependence on fiscal transfers from the central government and limited income from own fees and taxes; (b) little cost recovery in basic municipal services and maintenance of a large low paid staff; (c) poor addressing of environmental issues; (d) no involvement in urban planning or planning for public infrastructure needs; e) not active in coordination of development projects within the municipality; and (f) lack of transparent or well-organized internal processes and procedures, personnel policies, or automated revenue or accounting systems. Page 21 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) municipal functions in municipalities. To mitigate the sustainability risk, institutional arrangements within the DGODT aimed to provide ongoing technical support for core functions and Minimum Municipality Services. Procurement risk mitigation measures were incorporated into project design. The risks identified as substantial materialized during implementation and the mitigation measures helped minimize impacts on implementation. B. KEY FACTORS DURING IMPLEMENTATION 68. Project implementation overview. Project implementation was initially slow due to delays in project effectiveness. The five initial pilot interventions took longer than expected to develop the tailored institutional strengthening program to be scaled to the other local governments. The midterm review (MTR) resulted in a significant restructuring better aligning the project at design to the new legislative context in the country. The restructuring, lessons learned from the pilots, institutional strengthening program designed for the country context, and the strong World Bank implementation support contributed to speedier implementation that carried through to project closing. Factors Subject to Government and/or Implementing Entities Control 69. Central government delays and challenges. Project effectiveness was declared 11 months after Board approval as congressional approval was required. Following the Level 1 restructuring, it took seven months to obtain the counter signature. Implementation of planned investments was also impeded by a limited spending authority and allocation in the national budget or lack of preauthorization of the contracts in the Treasury. This was due to the growing public debt and the squeeze on the investment budget nationally.19 70. Local government delays. Given the size of some of the local governments, the human resources did not always exist to respond to requirements on time and assume needed responsibilities and functions. In the Participating Local Governments, the working week was 20–30 hours, with that figure being even less in the smaller municipal districts. 71. Time delays in the municipal pilot projects. The institutional strengthening program developed in the five pilot municipalities was delayed, being completed 2.5 years after commencement. This resulted in slow disbursement, project uncertainty, and the inability to scale to other municipalities. However, once this was completed, the resulting system was highly functional and the capacity-building program at scale was very effective. As the pilot work was done internally, there was a deep in-house understanding of the system which proved very beneficial in the scale-up and management of the program across the remaining local governments. Factors Subject to World Bank Control 72. Institutional strengthening indicators were engineered and designed to reflect the capacities of the local governments. Revisions in the institutional strengthening indicators during implementation considered the capacity differences between very small municipal districts and municipalities. This 19 Nonfinancial sector public debt doubled from 18.3 percent of GDP in 2007 to 36.6 percent in the first quarter of 2014 (General Public Credit Directorate of the Dominican Republic and the World Bank). Page 22 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) allowed for a more realistic approach to the capacity-building program and removed bottlenecks from accessing investment funds from Component 2. 73. Size of works affected implementation of Component 2. Because the size and budget of the investment works were very small, higher capacity companies were less incentivized to compete in the bidding processes. Responsive companies were often small and of lower capacity with financial constraints, lack of access to bank guarantees, and constrained resources resulting in several failed procurement processes, time delays, or extended construction times. 74. Capacity building provided to the DGODT streamlined implementation of works. The World Bank team, the Food and Agriculture Organization (FAO), and hired consultants provided intense support to the DGODT to increase internal organization and train staff in the management and supervision of civil works projects and supported the hiring of technical staff and engineers. Technical support and training was provided to the team managing infrastructure, project staff engaging with the communities, and staff responsible for procurement, evaluation, and contract management. The result was good engagement and relationship with communities; strong implementation planning (all projects required a design phase, environmental and social screening/verification, and supervision); and good cost and quality control. A total of 85 works were managed, most of which were executed in less than two years following completion of the institutional strengthening program. Factors Outside of the Control of the Government and/or Implementing Entities 75. Electoral change did not have an adverse negative impact on the implementation of the Project. The Director of the DGODT was in his post over the period of project design through implementation (from 2008 until 2016). The local government authorities being capacitated under the project received six years of support (2010 to 2016), whereby the project worked with one municipal administration in institutional strengthening and design and programming of works. All the institutional strengthening work had been completed and the infrastructure works were largely completed prior to the local government electoral change in 2016. The Risk to Development Outcome section outlines the transition process to the new incoming Governments. IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME A. QUALITY OF MONITORING AND EVALUATION (M&E) M&E Design 76. The Results Framework adequately reflected the initial project design. PDO indicators were outcome focused and directly measured progress toward the objective of achieving improved technical and financial capacity to program, finance, and deliver Minimum Municipality Services. This is outlined in the Theory of Change section as well as annex 1.B. PDO and intermediate output indicators as well as PDO and intermediate targets were adjusted during the 2013 restructuring, following the MTR in April 2014 and further refined during World Bank supervision missions. The baseline and final target values of the indicators were appropriate. The results chain was clear with intermediate outputs feeding into PDO Page 23 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) outcomes. One of the PDO indicators20 had design limitations against its intended purpose, but overall the indicators allowed for sufficient assessment of the achievement of the project objectives. Support through FAO staff aided in the design of the M&E system and the data collection and reporting requirements. M&E Implementation 77. During the first half of the project, M&E implementation faced challenges with late submissions of data provided in nonstandardized formats, which impeded the tracking of progress over time. There was no clear guidance on indicator monitoring, periodicity of data collection, and sources of information, which led to delays and inaccuracies in project reports. During the second half of the project following the MTR, M&E data collection, and analysis became more systematized and methodological, with quarterly and annual reports better tracking PDO and overall project implementation progress. M&E Utilization 78. During the second half of the project, M&E utilization was improved with data collected and revised monthly to track institutional strengthening progress for each local government. This formed the basis for decision making and action planning at an individual government level if progress was falling off track. This was critical for ensuring institutional strengthening compliance (in accordance with annex figure 6.2) and allowing for the subsequent infrastructure investments. Refer to annex 9 for discussion on measurements of key PDO indicators. Justification of Overall Rating of Quality of M&E 79. Overall quality of M&E is rated as Substantial, because the system as designed was generally sufficient to assess the achievement of the objectives and test the links in the result chain, but there were moderate weaknesses in the choices of certain indicators and the periodic updating of the results to allow for decision making during the project implementation period. B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE 80. Overall safeguards compliance. The project was correctly categorized as Category B, because the civil works were neither large nor complex and the environmental and social impacts were site specific and simple to mitigate. 81. Environmental safeguards compliance. Environmental safeguards triggered by the project were (a) Environmental Assessment (OP/BP 4.01); (b) Natural Habitats (OP/BP 4.04); and (c) Physical Cultural Resources (OP/BP 4.11). During preparation, an Environmental Assessment and an Environmental and Social Management Framework (ESMF) were developed, which considered the World Bank requirements for compliance with these three policies. Additionally, five municipal environmental analyses were developed for the pilot municipalities during preparation. Safeguards documents, complying with World Bank requirements, were prepared and disclosed before project appraisal. 20 ‘Local government budgets, excluding project resources, respond to the priorities established in Municipal Development Plans.’ See Efficacy section as well as annex 9. Page 24 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) Detailed screening procedures and environmental management were included in both the ESMF and the Project Operations Manual and include the World Bank’s screening requirements as well as the application of the National Environmental Law in the Dominican Republic. Aside from environmental screening, the project excluded execution of works in protected areas or natural habitats and provided guidance for addressing chance finds with cultural or historical significance. The project unit within the DGODT housed an environmental specialist who oversaw the application of environmental policies and coordinated the oversight with environmental staff at the municipal level. Training and guidance for inspection and reporting of environmental issues were given to project staff during the project period. Safeguards monitoring reports were of good quality and furnished on time. Environmental safeguards were rated Satisfactory throughout project implementation. 82. Social safeguards compliance. During the Level 1 restructuring, the project triggered the World Bank’s Social Safeguards Policy for Involuntary Resettlement (OP/BP 4.12) with a Resettlement Policy Framework (RPF) subsequently prepared and disclosed in-country and on the World Bank’s external website to ensure compliance with the policy. The RPF included the legal and institutional framework for resettlement and land acquisition, rules for voluntary donation of land, measures for provision of compensation, and guidance for preparation of Resettlement Action Plans. A Grievance Redress Mechanism was in place with procedures adequately outlined. During implementation, the Project Coordination Unit social specialist received a two-week training in involuntary resettlement planning provided by the Safeguards Advisory Team. Five sites21 required the development of specific Resettlement Action Plans and, in some cases, small-scale land acquisition to accommodate the following types of works: construction of sidewalks, retrofitting of community centers, recreational parks, local government buildings, and public buildings. All landowners were fairly compensated and project-affected persons were provided with options to mitigate the impact and disruption arising from the works, including temporary relocation of their businesses, or compensation during the period of execution of works. There was no permanent resettlement because of the works and the lands acquired were unoccupied and unused. Compliance with OP 4.12 was assessed as Moderately Satisfactory for a year following project restructuring due to delays in the finalization of the Operations Manual and inability to verify adequate field application. Subsequent Implementation Status and Results Reports (ISRs) from May 2015 to closing reported no pending OP 4.12 issues. Compliance with the World Bank’s social safeguard policies was satisfactory. 83. FM compliance. Aside from the first year of the project, FM was rated as Moderately Satisfactory during implementation. During the first three years of implementation, integrated progress reports with unaudited financial information reports were normally submitted late; this was resolved and was improved during the second half of implementation. External audits were generally submitted on time and were of good quality. Audit observations were addressed by the government and project agencies on time (except for the counterpart contribution issue mentioned below). Internal audit reviews were conducted, though lengthy internal processes sometimes led to disbursement delays. (Please refer to Fiduciary Aspects in Quality of Supervision for more information.) 84. Procurement compliance.22 Procurement actions were performed directly by the Project Coordination Unit of the DGODT where there were weaknesses in procurement capacity as well as 21 The five sites were Mama Tingo, Rio Yaque del Sur, Padre Las Casas, Uvilla, and La Siembra 22 There was only one archived Procurement Performance Rating and Summary from Procurement-Risk Management Page 25 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) contracting processes that led to delays in execution and disbursement of resources. During the MTR, procedural errors and incorrect application of guidelines were found. Procurement post reviews over the course of implementation demonstrated weaknesses in poor quality of documents, incomplete or inaccurate evaluation reports, and weaknesses in contract execution. The World Bank provided strong capacity support for strengthening of the procurement specialist, including direct support from the World Bank’s Procurement Department. The DGODT added trained personnel to support the procurement function of the project, which resulted in an improvement in the quality and timeliness of procurement processes, which was notable at the end of the project. During the last two years of implementation, procurement compliance was upgraded from Moderately Unsatisfactory to Moderately Satisfactory, reflecting the improved capacity and performance on contract execution and adherence with defined action plans. Overall procurement compliance was Moderately Satisfactory. C. BANK PERFORMANCE Quality at Entry 85. Strategic Relevance and approach. The project was initially envisioned as a community-driven development project but was changed during preparation to support the implementation of the newly enacted legislation on decentralization and local development in accordance with government priorities. 86. Technical. Technical assessment was sound, with the expertise of technical service providers in the project area assessed during preparation and verified to be sufficient for technical assistance needs. A sectoral coordination group was also established to afford technical support from central and technical agencies as an input to design quality and implementation of proposed investments. Additionally, technical criteria for investment subprojects was defined during preparation. 87. Policy and institutional aspects. Project design underestimated the impact of the proposed constitutional change, which came into effect in January 2010, but was presented to the National Congress earlier during the period of preparation. The implications of these changes were not fully understood, even on the Government side to address needed changes, until a year into implementation. A project restructuring was necessary to advance implementation. 88. Fiduciary and safeguards. An assessment of the procurement capacity of the implementing agency was carried out during preparation with an action plan identified to mitigate the risk and weaknesses identified. The FM arrangements for implementation met minimum requirements with an action plan defined to mitigate assessed control risks. As outlined in section B, a series of studies and instruments were developed to assure social and environmental sustainability and to comply with national environmental legislation as well as World Bank safeguards policies. 89. Risk assessment. As outlined in section III.A., the risks identified and associated mitigation measures were sound. Assessment System dated November 30, 2011 Page 26 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) 90. Implementation arrangements. With the legislative changes in country, the role of the DGODT was expanded,23 with a unit located within the DGODT to facilitate project coordination. The design overestimated the DGODT’s capacity to carry out overall project coordination and management functions in line with their newly legislated role. During implementation, their structure was reorganized to provide services in line with project objectives. Quality of Supervision 91. Adequacy of supervision inputs and processes. World Bank implementation support was strong throughout the project, with 2–3 supervision missions carried out annually and proactive measures taken to adjust the project design during implementation, provide strong capacity support to the DGODT, adjust implementation arrangements, address fiduciary challenges, extend the closing date to accommodate small works because of meeting institutional strengthening targets24 and adjusting the M&E Framework. Support was also provided through the engagement of the FAO, which provided staff who assisted in the M&E work, developed implementation schedules and supported transparent and realistic programming, and provided ongoing training and capacity-building support to implementing agencies.25 The strong supervision support resulted in a project that largely met its PDO targets at closing, having been in “problem status� between November 2012 and May 2015. 92. Focus on development impact. The outcomes defined in the PAD were ambitious and out of reach for the size of some of the small municipal districts in the Dominican Republic, with no clearly defined process or methodology to follow for achieving those outcomes. After Year 1 of the project when there was more internal clarity on the implications of the constitutional change, the World Bank team defined the process for achieving these indicators, through constructing a sequencing process and methodology (figure 6.3) for achieving the outcomes. This process was defined based on the national legislation and set clear institutional targets linked to the project indicators and outcomes. The definition of the sequencing was also tailored to the local challenges and context in the Dominican Republic26. 93. Candor and quality of performance reporting. ISRs were archived biannually and clearly documented project status, issues, bottlenecks, and action items for resolution in a candid and clear manner. Project and component ratings were modified based on issues raised during supervision missions with ratings modified based on challenges or improvements encountered. 23 Law 496-06, Decree 23 1/07, expands on the DGODT’s functions and elaborates on its general mandate as follows: “to formulate public policies for sustainable territorial development within the National System of Territorial Management [and] to coordinate, across sectors and institutions, the different levels of the public administration and private entities at the local, provincial, regional and sectoral levels, with an influence in the design, formulation, implementation, management and evaluation, of urban and rural management and land classification.� 24 The project closing date was extended twice over the course of implementation to accommodate the completion of works or execution of works that were earned by the local governments for compliance with the institutional strengthening targets; the potential for these extensions were flagged in the ISRs, with the decision to extend made based on compliance with an implementation action plan and achievement of targets. The original end date according to the PAD was October 15, 2015. 25 This support is also referenced in section III.B. 26 For example, the first (of three) institutional targets was limited to the signing of a participation agreement and designation of personnel; the moment this occurred they were eligible for the first tranche of Component 2 financing. This created an environment of trust in the project in an environment of distrust, where management transfers were often very politicized or not complied with and created an environment of goodwill, moving forward, through the other institutional strengthening targets. Page 27 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) 94. Fiduciary aspects. Specific training on procurement and FM was provided on a regular basis to project staff. The World Bank team worked diligently to address procurement and FM issues that impeded the achievement of the development outcomes. Procurement contracts were reviewed by the internal auditors within the Dominican Republic’s Comptroller’s Office, which often took a significant amount of time, delaying disbursements; this was escalated by the World Bank team to the General Comptroller and Director of Territorial Planning where a resolution was found. Over the project life, counterpart contributions for Component 2 and 3 were insufficient27 which caused cash shortages—due to this, financial statements had material issues and there were internal control weaknesses due to the comingling of funds where World Bank resources were used to fund counterpart contribution expenses. Due to the tight fiscal space, this issue was remedied through the counterpart financing amendment within the February 2016 Level 2 restructuring. 95. Safeguards. The World Bank team worked closely with the DGODT to ensure compliance with safeguards requirements as well as the National Environmental Law and provided guidance to ensure impacts on local communities were minimized. 96. MTR and further actions. During the MTR carried out in April 2014, overall implementation and progress toward achievement of PDO were assessed as Moderately Unsatisfactory. At the time of the MTR, the Government had not yet countersigned the project restructuring which occurred in January 2014, and included institutional and implementation changes to improve implementation. The MTR confirmed the relevance of the design and it was decided that a consulting firm would be contracted to scale the pilot interventions based on the in-house program developed and outputs gained from the first five pilot municipalities. Institutional strengthening targets were also adjusted to reflect the reality in the smallest municipal districts. During the MTR, the risks were reviewed (with no new risks emerging) and mitigation measures determined to be appropriate. Justification of Overall Rating of Bank Performance 97. Despite minor shortcomings largely because of political and governance changes, overall World Bank performance is assessed as Satisfactory due to Quality at Entry and the Quality of Supervision afforded by the World Bank team during project implementation. D. RISK TO DEVELOPMENT OUTCOME 98. At project completion, the principal risk to sustaining the development outcomes was the sustainability of technical and institutional capacity support to municipalities and continued financing for municipal programs. There is still uncertainty regarding the sustainability of a national program for municipal management and the provision of continued support to municipalities. The ratification of the unit to be created to provide continued capacity support to municipalities within the DGODT remains pending within the Ministry of Public Administration; this unit is important for continued capacity building. At project closing, there was a proposal for a second phase to the project as a mechanism to finance municipal investments; a consultancy for the design of the second phase is ongoing. There is opportunity and scope for scaling this intervention, provided there is adequate support for the 27 ISR Seq #14 highlights the counterpart funding deficit as a portfolio-wide issue in the Dominican Republic. Page 28 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) municipal agenda in the Dominican Republic, which wavers. The residual risk for continued sustainable support is assessed as Moderate. 99. Turnover risk exists at the local level, which could compromise advancements made in enhancing technical and financial capacity for delivering and managing municipal services as well as the maintenance of project works. During the project, local government elections were held in 2016 which resulted in an authority change within 23 out of 31 Participating Local Governments. The project undertook a short program of recapacitating and familiarizing governments with the procedures and systems as well as maintenance plans. During the final evaluation, 16 focus groups28 were created where local government officials expressed satisfaction for the receipt of institutional strengthening under the project and indicated their commitment to preserving the structures, systems and procedures as well as municipal management improvements advanced through the project. The project was proactive in guaranteeing this sustainability through meetings with local government candidates and new authorities to confirm post-election support, ongoing follow-up as well as capacity support on the various elements of the strengthening program through the use of individual consultants and a program of knowledge exchange and highlighting good practices. The institutional strengthening work undertook a systems approach backed up by law, where the systems implemented and organizational structure changes were done in accordance with the national policies and Municipal Laws. Thus, the residual risk is assessed as Low. V. LESSONS AND RECOMMENDATIONS 100. The project provides six lessons learned/recommendations, both project specific and of wide general application. 101. A community participation approach enhances the accountability in the provision of municipal services and increases ownership of local investments. The preparation of MDPs and prioritization of services and works based on community-expressed needs fostered a high degree of ownership over the investments, supported planning engagements, and ensured higher levels of satisfaction and utility of the investments. The ownership that was fostered through this in the planning and design phases carried on into the supervision phase whereby the local communities were closely engaged in the technical, social, and environmental supervision of ongoing works in their area and would alert the supervising firm regarding any issues or concerns that may have been arising on site or in the community. 102. Establishing a mechanism for financing investments following successful achievement of institutional strengthening targets yields positive results. The conditional linking of predetermined levels of institutional strengthening corresponding with access to investment funding for strengthen municipal services proved to be effective following this project with a proof of concept achieved for scaling nationally. The mechanism for cofinancing of investments can be implemented through the national public investment system to allocate funds to the local governments that comply with predetermined institutional strengthening requirements. 28 See annex 7. Page 29 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) 103. Subsequent municipal development projects should adhere to SISMAP which was adopted as institutional policy. A strong M&E system is essential for tracking local government progress in institutional strengthening, keeps local governments focused on their principal goals and targets, and serves to support greater levels of efficiency and efficacy in services and investments. 104. It is critical to systematize the model and procedures for achieving institutional strengthening targets to be used in future municipal development projects. Under the project, manuals and procedures for providing municipal services and managing municipal services were designed and engineered based on the local context and capacities; a methodology for the documentation of their application as used and applied was not systematized. Moving forward, documenting the methodology used clearly would assist the DGODT and other institutions in the country to employ them when scaling this program nationally or across other regions. 105. Maintaining small project teams and employing third parties for institutional strengthening actions and improvement of municipal management services and infrastructure in Local Governments proved successful. During implementation, the project team was kept small with the hiring of consultants and firms increased the efficiency of implementation because of the number and size of contracts and the effort required for institutional strengthening across 31 local governments. This also served to develop private sector capacity to deliver service to municipalities. 106. Selection mechanisms for local government participation in future municipal development projects should not be determined solely on socioeconomic criteria. Future municipal development interventions in the Dominican Republic should consider the differences in size and capacity of municipal districts and municipalities, even though the legal frameworks do not consider this. Institutional strengthening programs and targets should distinguish between these sizes and capacities and design goals and outcomes accordingly. The role of the mayor within the local governments and the local government authorities proved to be a decisive factor in the realization of institutional reforms, which is a strong indicator for ownership and implementation success. . Page 30 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS A. RESULTS INDICATORS A.1 PDO Indicators Objective/Outcome: Improve the technical capacity of Participating Local Governments to program, finance and deliver Minimum Municipality Services Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Direct project beneficiaries Number 0.00 0.00 194229.00 202738.00 22-Jan-2010 22-Jan-2010 15-Jun-2017 17-Mar-2017 Female beneficiaries Percentage 0.00 0.00 47.00 47.00 22-Jan-2010 22-Jan-2010 15-Jun-2017 17-Mar-2017 Indirect Beneficiaries Number 0.00 0.00 216581.00 266396.00 22-Jan-2010 17-Mar-2017 Comments (achievements against targets): Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Local government budgets, Percentage 0.00 15.00 70.00 65.00 Page 31 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) excluding project resources, 12-Oct-2010 12-Oct-2010 15-Jun-2017 15-Jun-2017 respond to the priorities established in Municipal Development Plans. Comments (achievements against targets): Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Local governments have Percentage 0.00 70.00 25.00 28.00 adopted and are using transparent, standardized, 16-Dec-2009 16-Dec-2009 15-Jun-2017 17-Mar-2017 and efficient FM, Procurement and HR management procedures,as specified in procedures manual, and produce budget. Comments (achievements against targets): Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion At least 75% of the direct Percentage 0.00 75.00 75.00 80.00 sub-project beneficiaries satisfied with the provision of 16-Dec-2009 16-Dec-2009 15-Jun-2017 15-Jun-2017 services or the executed infrastructure works. Page 32 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) Comments (achievements against targets): Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion DGODT has created a Yes/No N Y Y N Municipal Management Unit to continue provision of 17-Apr-2014 17-Apr-2014 15-Jun-2017 02-Jun-2017 municipal strengthening services. Comments (achievements against targets): Objective/Outcome: Improve the financial capacity of Participating Local Governments to program, finance and deliver Minimum Municipality Services Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Local Government financial Percentage 0.00 80.00 25.00 28.00 reports are in accordance with acceptable accounting 15-Oct-2010 15-Oct-2010 15-Jun-2017 15-Jun-2017 standards. Comments (achievements against targets): Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Local governments have Percentage 0.00 70.00 25.00 28.00 Page 33 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) adopted and are using 16-Dec-2009 16-Dec-2009 15-Jun-2017 17-Mar-2017 transparent, standardized, and efficient FM, Procurement and HR management procedures,as specified in procedures manual, and produce budget. Comments (achievements against targets): A.2 Intermediate Results Indicators Component: Component 1: Institutional Strengthening Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion 31 local governments have Number 0.00 15.00 31.00 31.00 adopted their MDP produced by the Municipal 16-Dec-2009 16-Dec-2009 15-Jun-2017 17-Mar-2017 Development Council with participation of civil society organizations Comments (achievements against targets): Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Page 34 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) 31 local governments have Number 0.00 31.00 31.00 31.00 adopted the Institutional Action Plan (IAP) 17-Apr-2014 17-Apr-2014 15-Jun-2017 17-Mar-2017 Comments (achievements against targets): Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Municipal contracts signed Number 0.00 31.00 31.00 31.00 with 31 local governments, based on institutional targets 17-Apr-2014 17-Apr-2014 15-Jun-2017 17-Mar-2017 and priorities established in IAPs and MDPs Comments (achievements against targets): Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion 80% of local governments Percentage 0.00 60.00 80.00 84.00 have implemented the IAP with core elements 16-Dec-2009 16-Dec-2009 15-Jun-2017 17-Mar-2017 Comments (achievements against targets): Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Page 35 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) Number of local 0 25 25 28 governments that have benefitted from works 21-Jan-2010 21-Jan-2010 15-Jun-2017 15-Jun-2017 corresponding to their level of advancement in institutional strengthening. Comments (achievements against targets): Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion DGODT has developed Yes/No N Y Y Y contractual mechanisms for supporting local government 16-Dec-2009 16-Dec-2009 15-Jun-2017 17-Mar-2017 development (municipal contract) Comments (achievements against targets): Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion DGODT has set up a system Yes/No N Y Y Y to monitor local government institutional development 16-Dec-2009 16-Dec-2009 15-Jun-2017 17-Mar-2017 Comments (achievements against targets): Page 36 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion DGODT has developed a Yes/No N Y Y Y strategy for financing municipal investments 16-Dec-2009 16-Dec-2009 15-Nov-2016 05-May-2017 Comments (achievements against targets): Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion A proposal for the creation of Yes/No N Y Y Y a Municipal Development Unit (including budget, 17-Apr-2014 17-Apr-2014 15-Jun-2017 17-Mar-2017 procedures and post structure) has been submitted to the Ministry of Public Administration Comments (achievements against targets): Component: Component 2: Municipal Investments Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion 31 local governments have Number 0.00 15.00 31.00 31.00 adopted their MDP produced by the Municipal 16-Dec-2009 16-Dec-2009 15-Jun-2017 17-Mar-2017 Page 37 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) Development Council with participation of civil society organizations Comments (achievements against targets): Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Number of local government Number 0.00 15.00 16.00 30.00 that have executed at least 80% of resources assigned to 16-Dec-2009 16-Dec-2009 15-Jun-2017 17-Mar-2017 subprojects in a satisfactory manner Comments (achievements against targets): Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Number of local 0 25 25 28 governments that have benefitted from works 21-Jan-2010 21-Jan-2010 15-Jun-2017 15-Jun-2017 corresponding to their level of advancement in institutional strengthening. Comments (achievements against targets): Page 38 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion 75% of facilities built Percentage 0.00 75.00 75.00 98.00 /rehabilitated effectively used 16-Dec-2009 16-Dec-2009 15-Jun-2017 15-Jun-2017 Comments (achievements against targets): Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion DGODT has developed a Yes/No N Y Y Y strategy for financing municipal investments 16-Dec-2009 16-Dec-2009 15-Nov-2016 05-May-2017 Comments (achievements against targets): Page 39 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) KEY OUTPUTS BY COMPONENT Objective/Outcome 1: Improve the technical capacity of Participating Local Governments to program, finance, and deliver Minimum Municipality Services 1. Direct project beneficiaries 2. Local government budgets, excluding project resources, respond to the priorities established in Municipal Development Plans. Outcome Indicators 3. At least 75% of the direct sub-project beneficiaries satisfied with the provision of services or the executed infrastructure works. 4. DGODT has created a Municipal Management Unit to continue provision of municipal strengthening services. 1. 31 local governments have adopted their MDP produced by the Municipal Development Council with participation of civil society organizations 2. 31 local governments have adopted the Institutional Action Plan (IAP) 3. Municipal contracts signed with 31 local governments, based on institutional targets and priorities established in IAPs and MDPs 4. 80% of local governments have implemented the IAP with core elements 5. Number of local governments that have benefitted from works corresponding to their level of advancement in institutional strengthening. 6. DGODT has developed contractual mechanisms for supporting local government development Intermediate Results Indicators (municipal contract) 7. DGODT has set up a system to monitor local government institutional development 8. A proposal for the creation of a Municipal Development Unit (including budget, procedures and post structure) has been submitted to the Ministry of Public Administration 9. Number of local government that have executed at least 80% of resources assigned to subprojects in a satisfactory manner 10. Number of local governments that have benefitted from works corresponding to their level of advancement in institutional strengthening 11. 75% of facilities built /rehabilitated effectively used Page 40 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) 1. 31 Institutional Action Plans 2. 11 Municipal Development Plans 3. 85 community civil works Key Outputs by Component 4. Municipal Management Manual (linked to the achievement of the 5. Human Resource Management Manual Objective/Outcome 1) 6. Procedural Manual for Municipal Planning 7. Procedures for Municipal Management Services 8. Manual of Procedures for Contracts and Purchases 9. Environmental Management Manual Objective/Outcome 2: Improve the financial capacity of Participating Local Governments to program, finance and deliver Minimum Municipality Services 1. Local Government financial reports are in accordance with acceptable accounting standards. 2. Local governments have adopted and are using transparent, standardized, and efficient FM, Outcome Indicators Procurement and HR management procedures,as specified in procedures manual, and produce budget. 1. DGODT has developed a strategy for financing municipal investments 2. A proposal for the creation of a Municipal Development Unit (including budget, procedures and post Intermediate Results Indicators structure) has been submitted to the Ministry of Public Administration 3. Number of local government that have executed at least 80% of resources assigned to subprojects in a satisfactory manner 1. Manual of Procedures for Financial Management Key Outputs by Component 2. Financial and Administrative software installed (linked to the achievement of the 3. FM, budgeting, and accounting training Objective/Outcome 2) Page 41 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION A. TASK TEAM MEMBERS Name Role Preparation Supervision/ICR John Morton Task Team Leader(s) Nicholas James Callender ICR Main Contributor Zoila Catherine Abreu Rojas Procurement Specialist(s) Maritza A. Rodriguez De Pichardo Financial Management Specialist Noreen Beg Social Safeguards Specialist Jorge Ignacio Mesa Regueiro Team Member Martin Henry Lenihan Social Safeguards Specialist Francisco Xavier Geraldes Siragusa Environmental Safeguards Specialist B. STAFF TIME AND COST Staff Time and Cost Stage of Project Cycle No. of staff weeks US$ (including travel and consultant costs) Preparation FY06 11.340 71,507.43 FY07 29.259 142,503.01 FY08 19.992 90,753.39 FY09 18.687 109,459.58 FY10 16.353 105,088.63 Total 95.63 519,312.04 Supervision/ICR FY10 1.340 7,120.10 Page 42 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) FY11 14.544 72,161.25 FY12 15.400 82,609.93 FY13 14.438 115,262.56 FY14 26.113 169,137.22 FY15 10.691 81,654.05 FY16 11.738 81,074.73 FY17 10.294 106,828.94 FY18 7.927 41,890.56 Total 112.49 757,739.34 Page 43 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) ANNEX 3. PROJECT COST BY COMPONENT Actual at Project Percentage of Amount at Approval Components Closing (US$, Approval (US$, (US$, millions) millions) millions) Institutional Strengthening 5.75 5.70 99 Municipal Investments/Subprojects 11.20 7.30 65 Project Administration, Monitoring, 3.05 3.20 105 and Evaluation Total 20.00 16.20 81 Page 44 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) ANNEX 4. EFFICIENCY ANALYSIS The Project aimed to strengthen 31 local governments (LGs) in terms of basic institutional management capacities (planning, finance, procurement and human resource) and the provision of the minimum services stipulated in the Municipal Law. To support these municipality functions, the Project included 3 components: Component 1 (C1): Institutional Strengthening (US$5,865,336); Component 2 (C2): Municipal Investments (US$ 7,235,564) and Component 3 (C3): Project Administration, Monitoring and Evaluation (US$3,421,000). Table 1: Project Costs Component Original Disbursed at June 2017, after restructuring C1 5,540,000 5,865,336 C2 13,500,000 7,375,159 C3 1,000,000 3,421,000 Total 20,040,000 16,661,495 As outlined in the PAD, the financial analysis assesses the capacity of local governments to allocate incremental resources for maintenance and operation of project-funded investments, as well as some quantified benefits of the institutional strengthening program (Component 1). The economic analysis assesses whether benefits generated by the municipal infrastructure investments, are greater than the incurred costs. For the purpose of this analysis, the time saved by household and the willingness to pay for the new services were converted to economic values. However, due to the different nature, scope and scale of the investments in the 31 LGs and the difficulty in quantifying benefits for several of them, an ex-post cost benefit analysis of the Project as a whole was not carried out. In fact many of the most important social benefits of the enhanced municipal services, such as the improvement in public health due to improved cemeteries and solid waste management, the effects on children education due to a better access to ground plays, or the increased value of the properties and private businesses, where the streets and parks were conditioned, were not converted to their economic values. FINANCIAL SUSTAINABILITY Table 2 presents the different infrastructure types and services that have been improved through Project support. Most of them were financed through Component 2. Through the Institutional Strengthening Component (C1), the Project also provided technical and administrative support, enabling LGs to improve the management of the services provided to the citizens, and ensure that a maintenance plan was established for each work. Table 2: Investment and works in service funded by the Project from 2014 to 2017 Page 45 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) Project % Infrastructure Num. Infrast Investment Beneficiaries Households invest USD Sidewalk and 2,449,994 39 35% 45,241 9,048 pavement Cemeteries 6 1,381,438 20% 112,398 3,693 Playgrounds 13 1,279,476 19% 22,189 22,480 Parks 20 1,053,406 14% 18,466 1,491 Mortuary 3 617,753 9% 66,297 2,947 Fire station 3 593,092 2% 8,136 13,259 Solid waste 109,722 215,315 management (1) Total 7,375,159 100 215,315 215,315 (1) Investment related to the improvement in solid waste management were funded by the Local Government budget, with the Project providing technical assistance Table 3 presents the expected increase in the municipalities’ recurrent costs (subproject maintenance and operative costs) due to the investments made through Component 2 (except for Solid Waste Management) and compares them against the direct transfers they receive from the central government and the number of beneficiaries. Table 3: Direct transfers to the LG and incremental cost for operation and maintenance of improved services 2011 2012 2013 2014 2015 2016 2017 Total Project 406,860 1,331,195 1,257,260 2,033,894 4,836,937 5,201,663 1,454,091 investment Maintenance 9,451.99 73,545.50 185,743.14 224,103.21 Costs generated by the project (1) Direct transfers 11,576,888 11,963,470 12,532,841 12,106,046 12,282,839 11,793,306 (2) Real Increase in 3% 5% -3% 1% -4% direct transfer Share of - - - 0% 1% 2% 2% incremental maintenance costs in total direct transfers Beneficiaries 38,786 147,078 215,315 numbers of works/service Page 46 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) Incremental 2.14 0.50 1.04 cost per beneficiary (US$) (1) Maintenance costs were calculated for each kind of work; (2) Converted in US$ using the average annual exchange rate While the incremental costs arising from project interventions is around 2% of the total budget of the LGs, the transfers from the central government, which is their main revenue stream, has remained steady starting from 2012 (with a slight decrease starting from 2014). This fact might negatively affect the capacity of the LGs in covering the incremental maintenance costs needed for the works built with the Project funds. However, at the end of the Project, the new authorities and citizens were clearly committed to managing the parks, the playground or cemeteries properly, and the external evaluation showed that all the works were properly used and operated. Furthermore, as showed in the beneficiary survey, the LGs supported by the Project made substantive efforts to make the services more efficient, as it is the case for the solid waste management or increase their quality, as is the case for the playgrounds, parks, cemeteries or mortuaries. Given the demonstrated improvement in the service provision, in the near future, local authorities of the most populated municipalities propose to recover the costs of providing services through charging citizens a fee. It is still too early to assess the medium-term impact of Project interventions aimed at increasing local government capacities to raise their own revenues, but with a contribution of at least US$ 2.00 per year citizen, the LGs would be able to cover the incremental cost for providing enhanced municipal services. ECONOMIC EFFICIENCY Public infrastructure and services are economically efficient if the benefits to the population at least equal the total incremental costs generated. This minimum benefit is estimated considering subproject investments cost, the economic life of the investment, a discount rate equal to the opportunity cost of capital (assumed to be 12% per annum), and a period of analysis of 10 years29. As mentioned before, it was not possible to convert the benefits arising from improved minimum services into a monetary value. Furthermore, it was not possible to obtain from the beneficiaries survey information on the willingness to pay for some services such as the renewed parks or fire stations. The beneficiary survey showed that the works are responding to the people demand, because 82% of them directly use them, and for 85% they fulfill the functions for which they were built. See Annex 7. Therefore, this analysis focused on the works and services which represented the highest investment rates under Component 2 – Municipal Infrastructure and for which an economic value of the benefits was possible, such as the solid waste management, the building of sidewalk and the improvement of playgrounds. 29 The considered period of analysis is rather short given the uncertainty about the financial capacity of the municipalities of the country to maintain the infrastructure during a long period of time. Page 47 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) Solid Waste Management The Project provided technical support to improve the efficiency of solid waste management to the most populated GLs, but did not invest in any assets. The Project team supported the design of efficient waste collection routes and suggested key investments. In five LGs30, the authorities decided to invest their own budgetary resources in improving the access to dumps and strategically deploying street containers. Usually, the LGs lease most of the necessary trucks to local entrepreneurs in which 3 or 4 municipal employees collect the waste and bring them to the dump. Thanks to the reorganized system these LGs are currently enable to collect 100% more solid waste daily and ensure the collection 3 times a week, instead of one or two. To date, in these municipalities, 50% more citizens receive the service, especially those located in rural areas. The average incremental cost of the improved service of solid waste management is around US$ 0.5 year per citizen. LGs interested in increasing their income and recovering the cost of the services envisage asking their citizens for a contribution of US 2.5/month in urban areas and US 1.25/month in rural areas. In that case, the IRR of this activity will be around 43%. Table 5: Economic efficiency for improved solid waste collection systems in the LGs supported by the Project Number of LGs implementing the 5 improved system Number of beneficiaries 110,000 Incremental investment 350,000 USD Incremental cost by beneficiaries US$ 0.5/year Financial projection 10 years Monthly cost recovered for the service US 1.25-2.0 / by inhabitant IRR 43% Sidewalk and Street improvement (35% of Municipal Investment Component) These works consisted of building sidewalks and investments in street improvement in the LGs. This kind of investment were identified as a priority by 22 LGs, for both the main urban centers as well as in the rural areas. This investment item corresponds to the largest number of works executed (35% of the Component total investment). Different types of economic benefits were identified through the beneficiary survey and the savings in time of housewives in particular was identified as the most relevant. This survey captured information on time saved in terms of house cleaning and laundry. The increase in the commercial value of the houses and businesses located in the improved streets might be significant but was not calculated due to the very incomparability of the areas where these works were built. 30 Bayaguana, Sabana Grande, Padre de Las Casas, Matas de Farfan and Paraiso Page 48 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) A total of 41.89 km of sidewalk/road improvements were undertaken, benefitting 9048 households, for an incremental maintenance cost for street sweeping in the LGs of US $ 61,000 per year, which represents a value of US$1.6/beneficiary/year. Time saved by the households due to a reduction of house cleaning and clothe washing tasks was estimated to be 120 hour/year, equivalent to US $ 96/year per households31. This analysis demonstrated that the time saved by the beneficiaries due to new sidewalks and street improvement has an IRR equivalent to 28%. Table 6: Economic efficiency for improved sidewalk and streets in the LGs supported by the Project Number of LGs with sidewalk and 22 street improved Number of Km built 42 km Number of beneficiaries 45,241 Number of households benefitted (1) 9048 Incremental investment US $2,608,340 Incremental cost by beneficiaries US$ 1.6/year Financial projection 10 years IRR 28% (1) Including a municipal contribution of 10% Playgrounds (19% of Municipal Investment Component) The Project largely invested in the improvement of existing playgrounds, mainly baseball courts but also basketball and other types of sport areas for young people. The total investment in this area represented 19% of the amount disbursed under the Component benefiting 22,189 persons. Thanks to the Project support the playgrounds were leveled, cleaned, enlarge with proper lighting installed. By cleaning and proper lighting in the area, more children use the courts, and they are much safer. An exercise of the economic profitability of the investment in this item was carried out, based on the beneficiary survey results for 9 baseball courts. Prior to the project intervention, on average 1.5 children attended the park per day per beneficiary household, which is around 4,000 users. Investment flows were looked at for 2015 and 2016, with an incremental operating cost of US 2,716 annually per baseball court used as the estimation for the financial analysis. The benefits were estimated based on a willingness to pay estimate of $ 1 / family/ week for the use of the improved playground. This is equivalent to about 1% of the monthly family income. The analysis demonstrated that with a monthly payment of around US $ 4.00/household (only those that use the courts currently), for an average of 1.5 children, the improvement of playgrounds have an IRR around 16%. Table 7: Economic efficiency for improved baseball courts in the LGs supported by the Project 31 The time saved was valued using the official rural minimum wage for a low-skilled worker in Dominican Republic, equivalent to US$ 200/month or US$ 0,8/hour Page 49 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) Number of LGs with baseball 9 playground improved Number of potential beneficiaries 20,000 Number of current users 4,000 Incremental investment (1) 900,141 USD Incremental cost by beneficiaries US$ 50/year Financial projection 10 years IRR 16% (1) Including 10% of the Municipal contribution Page 50 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) ANNEX 5. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS Proyecto de Desarrollo Municipal (PRODEM) Informe Final Resumen Ejecutivo Antecedentes y contexto 1. La República Dominicana presenta una alta concentración en la mayoría de los servicios, inversiones y recursos públicos administrados directamente por el gobierno nacional. Los gobiernos locales, hasta la fecha, han tenido un papel limitado en la provisión de los servicios e inversiones, en el mejor de los casos, han actuado como agencias de distribución de las transferencias recibidas del gobierno central, incluyendo la distribución de los servicios de bienestar social. 2. Los municipios, especialmente los pequeños, carecen de una estructura organizativa. El poder ejecutivo se concentra en unas cuantas manos quienes toman las decisiones de gastos. Los municipios tienen un número excesivo de personal sin responsabilidades funcionales definidas, equipos o espacios apropiados, y carecen de sistemas financieros o administrativos efectivos. Cumplen marginalmente con sus funciones de planificación, y utilizan de manera muy limitada, si acaso, criterios económicos o técnicos en la asignación de recursos públicos en las contadas inversiones que se llevan a cabo. Las mejorías a la infraestructura local se hacen en respuesta a las demandas de comunidades individuales, usualmente de manera aislada fuera de un plan de desarrollo más amplio. Por ejemplo, la construcción de aceras puede ser realizada sin referencia a un plan de ciudad o a un diseño adecuado de sistemas de drenaje. 3. Durante la preparación del Proyecto, se escogieron cinco municipios para evaluar sus administraciones municipales y sus capacidades de provisión de servicio. Estos municipios fueron representativos en términos del rango de características sociales y económicas de las Provincias del Proyecto y proporcionan diversidad en el tamaño que oscila de aproximadamente 10,000 a 50,000 habitantes. Sirvieron también como los cinco municipios piloto iniciales del Proyecto. 4. Los gobiernos locales seleccionados:  Eran muy dependientes de las transferencias fiscales del gobierno central  Usaban dichas transferencias para financiar infraestructuras simples  No eran efectivos en abordar aspectos medioambientales básicos,  No se involucraron en la planificación urbana,  No eran activos en coordinar proyectos de desarrollo  No poseían procesos y procedimientos internos transparentes ni bien organizados, ni políticas de personal, ni sistemas automatizados de ingresos o contabilidad. 5. Para abordar los desafíos mencionados arriba, en el 2005 el Gobierno identificó que la buena Page 51 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) gobernabilidad, en las instituciones públicas fuertes y descentralizadas operaban fortaleciendo las áreas claves de la gestión municipal para reducir la pobreza y mejorar la cohesión social en el país. Su agenda de gobernabilidad y descentralización ha resultado en la aprobación de seis leyes de reforma en la administración del sector público en el periodo de cuatro años de 2005-2008. Las leyes son: Ley de Planificación e Inversión Pública; la Ley de Compras y Contrataciones; la Ley de Tesorería; la Ley de Presupuesto Orgánico para el Sector Público; la Ley Municipal y las leyes que crean la nueva Secretaría de Hacienda y la Secretaría de Economía, Planificación y Desarrollo.32 Estas leyes y sus regulaciones asociadas afectan directamente la forma como los municipios llevan a cabo sus funciones de planificación, proveen servicios municipales básicos y asignan gastos. 6. También, asignan a los municipios, nuevas responsabilidades para mejorar el acceso a los servicios básicos en las áreas rurales y suburbanas. Una de estas leyes, la Ley de Municipios No. 176-07, procura modernizar y fortalecer los gobiernos locales. Define claramente los roles de gestión municipal, diferencia las responsabilidades entre los municipios y las instituciones del gobierno central. Esta ley establece las responsabilidades con respecto a la provisión de servicio y establece los Servicios Municipales Mínimos obligatorios. 7. El marco legal que regula los municipios proporciona la oportunidad de organizar la estructura municipal interna, de fortalecer las capacidades de los municipios en las funciones administrativas centrales, de mejorar la provisión de servicios municipales y de fortalecer las entidades de apoyo municipal para proporcionar de manera más efectiva la asistencia técnica y la supervisión del gasto público local. 8. La justificación para la participación del Banco en el proyecto se basó en los siguientes aspectos:  El Proyecto representaba un instrumento para que el Gobierno de la República Dominicana implementara la legislación sobre descentralización y desarrollo local. El Gobierno está interesado en implementar el marco legal e institucional para la descentralización y el desarrollo local, incluyendo el Sistema Nacional de Planificación e Inversión Pública (SNPIP), y ha expresado un marcado interés en recibir apoyo del Banco en esta área. El Proyecto también fortalecería los recientes esfuerzos del Gobierno para reformar su administración de manera que esté mejor equipada para apoyar la descentralización y el desarrollo local;  El Proyecto encaja y amplía los esfuerzos de la comunidad de donantes para asistir al gobierno en el proceso de descentralización. Las iniciativas apoyadas por otros donantes aportaron lecciones de experiencia y contribuyeron a establecer mejorías en los procesos de gestión municipal en pequeña escala. Se cimentó sobre estas lecciones y procesos, y proporcionó una oportunidad para que el Gobierno ampliara el alcance y acelerara estas iniciativas. Se inició en un momento cuando algunas de dichas iniciativas habían terminado y existe una gran necesidad de brindar apoyo continuo para profundizar y acelerar los esfuerzos de descentralización del país; 32 Actuales Ministerios de Hacienda y Economía, Planificación y Desarrollo, respectivamente. Page 52 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 )  El Proyecto se nutrió del conocimiento y de la experiencia del Banco de las buenas prácticas regionales e internacionales. El Banco ha aplicado al diseño del Proyecto su conocimiento y experiencia sobre descentralización, enfoques espaciales, desarrollo territorial, desarrollo municipal, y planificación participativa de sus trabajos analíticos y proyectos en América Latina (Nicaragua, Méjico, Bolivia, Perú, Brasil, Chile), en Asia (Filipinas) y �frica (Senegal, Ruanda y Guinea). Objetivo de desarrollo y diseño del Proyecto 9. El Proyecto era totalmente consistente con la Alianza Estratégica con el País (AEP) del Grupo del Banco Mundial 2009-2012. El Proyecto contribuiría específicamente con uno de los objetivos estratégicos de la AEP para mejorar la calidad del gasto público y el desarrollo institucional. Apoyó este objetivo al trabajar con los gobiernos locales para incrementar la capacidad gerencial en las funciones administrativas centrales para mejorar la provisión de los Servicios Municipales Mínimos. 10. El Proyecto es parte de una agenda más amplia que consiste en mejorar la inversión pública en el contexto del desarrollo sub-nacional y territorial que el Ministerio de Economía, Planificación y Desarrollo (MePYD) y el Vice Ministerio de Planificación (VPLAN) están llevando a cabo. Adicionalmente, el enfoque y las actividades propuestas en el Proyecto son consistentes con las recomendaciones del Banco Mundial al Gobierno, i.e., dar apoyo a los gobiernos locales para incrementar la transparencia en la toma de decisiones, para garantizar la transparencia en el uso de los recursos públicos y para proporcionar las herramientas para comprometer a la sociedad en la definición de las necesidades locales y la planificación. 11. Fueron asistidos treinta y un (31) gobiernos locales (municipios y distritos municipales rurales) ubicados en cinco (de treinta y dos) provincias, en cinco (de diez) diferentes regiones del país. 12. Los objetivos del Proyecto consistían en mejorar la capacidad técnica y financiera de los municipios participantes para programar, financiar y brindar los Servicios Municipales Mínimos. Esto se lograría mediante la provisión de: (i) asistencia técnica en las funciones centrales de administración municipal, tales como planificación y presupuestos participativos; compras y contrataciones, administración financiera y de recursos humanos; y (ii) donaciones de contrapartida para la inversión en sub-proyectos identificados en el Plan Municipal de Desarrollo. 13. El Proyecto fortaleció la gestión de los gobiernos locales para mejorar su capacidad de proveer Servicios Municipales Mínimos. Dicho fortalecimiento institucional no se dio sólo de manera intangible, sino que estuvo vinculado con la ejecución de inversiones públicas locales apoyadas, contribuyendo a incrementar su calidad, así como de reducir la discrecionalidad mediante la transparencia y la participación de las comunidades. 14. Con base en los dos objetivos del proyecto se establecieron tres componentes estructurales: (a) Fortalecimiento institucional, con la intención de transferir a los GL capacidades para mejorar su gestión y el suministro de servicios mínimos municipales. Se organizó con tres subcomponentes: a) Fortalecimiento institucional, para suministrar asistencia técnica a GL en las áreas de Recursos Humanos; Planificación y presupuestos participativos; Gestión Page 53 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) financiera; Compras y contrataciones; y, mejoramiento en la prestación de servicios mínimos; b) Fortalecimiento del sistema de apoyo institucional a nivel nacional para los gobiernos municipales y, c) Provisión de apoyo para la formulación de los Planes Municipales de Desarrollo. (b) Inversiones municipales, incluido el apoyo financiero a obras priorizadas por las comunidades mediante los Planes Municipales de Desarrollo. (c) Administración, monitoreo y evaluación, que diera apoyo a la DGODT en la ejecución y monitoreo, para orientar de manera continua las decisiones del Proyecto. Relevancia y logro del Objetivo del Desarrollo del Proyecto (ODP) 15. El alcance general del ODP establece dos niveles de fortalecimiento institucional. El primero, que tiene que ver con las áreas de apoyo o centrales de la administración pública en los gobiernos locales y el segundo con la oferta de los servicios municipales y las infraestructuras requeridas para su prestación. Análisis de la vigencia de los Objetivos de Desarrollo del Proyecto (ODP) en función de la Estrategia Nacional de Desarrollo (END). 16. La vigencia de los objetivos del proyecto se evidencia al revisar la correspondencia con la Estrategia Nacional de Desarrollo (2012), a nivel de sus ejes estratégicos y sus respectivos objetivos generales, específicos y líneas de acción. 17. Sobre el Eje Estratégico 1: “Un Estado social y democrático de derecho, con instituciones que actúan con ética, transparencia y eficacia al servicio de una sociedad responsable y participativa, que garantiza la seguridad y promueve la equidad, la gobernabilidad, la convivencia pacífica y el desarrollo nacional y local�. 18. Objetivo General No. 1: Administración pública eficiente, transparente y orientada a resultados. 1.1.1 Estructurar una administración pública eficiente que actúe con honestidad, transparencia y rendición de cuentas y se oriente a la obtención de resultados en beneficio de la sociedad y del desarrollo nacional y local 1.1.2 Impulsar el desarrollo local, provincial y regional, mediante el fortalecimiento de las capacidades de planificación y gestión de los municipios, la participación de los actores sociales y la coordinación con otras instancias del Estado, a fin de potenciar los recursos locales y aprovechar las oportunidades de los mercados globales 1.1.2.1 Fortalecer las capacidades técnicas, gerenciales y de planificación de los gobiernos locales para formular y ejecutar políticas públicas de manera articulada con el Gobierno Central. Page 54 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) 1.1.2.2 Transferir gradualmente a los municipios las competencias, recursos y funciones tributarias para mejorar la oportunidad y calidad de los bienes y servicios públicos prestados a los munícipes, en función de las potencialidades y limitaciones que presenta el territorio municipal, sobre la base de mecanismos y procedimientos legales que respeten los principios de subsidiaridad y transparencia y asegurando que su potestad tributaria no colida con impuestos nacionales. 1.1.2.3 Establecer mecanismos de participación permanente y las vías de comunicación entre las autoridades municipales y los habitantes del municipio para promover la permanente participación social activa y responsable en los espacios de consulta y concertación del gobierno local, mediante el desarrollo de una cultura de derechos y deberes de las y los munícipes y el fortalecimiento de las organizaciones comunitarias y representativas de los distintos sectores que interactúan en el municipio, enfatizando las de niños, niñas, adolescentes, jóvenes y mujeres. 1.1.2.4 Identificar y resolver los conflictos de competencias y atribuciones entre autoridades municipales y centrales, para mejorar la coordinación en la ejecución de las políticas nacionales y locales. 1.1.2.5 Fortalecer los mecanismos internos y externos de fiscalización de la ejecución presupuestaria municipal. 1.1.2.6 Redefinir el rol y función pública del órgano asesor del sistema municipal y establecer e implementar procedimientos y mecanismos estandarizados de gestión municipal que impulsen la eficiencia, equidad y transparencia de la administración local. 1.1.2.7 Fortalecer los espacios de coordinación intermunicipal (mancomunidades y asociaciones), a fin de implementar políticas que trasciendan los límites geográficos de municipios particulares y potenciar y generar sinergias y economías de escala en el uso de los recursos municipales disponibles. 1.1.2.8 Impulsar el desarrollo de polos regionales y otros esquemas de desarrollo local de competitividad fundamentados en la creación de ventajas competitivas y fomento a la innovación, que cuenten con las infraestructuras y servicios de apoyo requeridos y la necesaria coordinación entre empresas y centros académicos. 19. Sobre el Eje Estratégico 2: “Una sociedad con igualdad de derechos y oportunidades, en la que toda la población tiene garantizada educación, salud, vivienda digna y servicios básicos de calidad, y que promueve la reducción progresiva de la pobreza y la desigualdad social y territorial.� 20. Objetivo General No. 4: Cohesión territorial 2.4. Integrar la dimensión de la cohesión territorial en el diseño y la gestión de las políticas públicas. 2.4.1.1 Fortalecer las capacidades de la planificación del ordenamiento territorial en todos los Page 55 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) niveles de la administración pública. 2.4.1.2 Definir para todas las instancias estatales un marco común de Regiones Únicas de Planificación, estratégicas y operativas, sobre la base de las características culturales y socioambientales del territorio, que permita una mejor planificación y gestión de las políticas públicas y una distribución de los recursos públicos que disminuya las disparidades del desarrollo regional. 2.4.1.3 Diseñar e implementar un Plan de Ordenamiento Territorial que facilite la gestión integral de riesgos, regule el uso del suelo e incentive el aprovechamiento sostenible de los recursos naturales, a partir de las potencialidades que presentan las grandes regiones estratégicas de planificación del desarrollo. 2.4.1.4 Definir, al interior de las Regiones Únicas de Planificación, un esquema de división político-administrativa que facilite la provisión de servicios públicos de manera eficiente y en correspondencia con las necesidades de la población 2.4.1.5 Gestionar las políticas públicas en el territorio con base en las Regiones Únicas de Planificación y el Plan Nacional de Ordenamiento Territorial. 2.4.1.6 Establecer un Fondo de Cohesión Territorial para promover el cofinanciamiento entre gobierno central y gobiernos locales de proyectos de inversión pública, con énfasis en los municipios más deprimidos. 2.4.1.7 Promover el desarrollo integral y sostenible de litorales costeros, cuencas hidrográficas, montañas, valles y llanuras, considerando sus potencialidades ambientales y socioeconómicas 21. En conclusión, los Objetivos de Desarrollo del Proyecto armonizan estrechamente con los lineamientos planteados en la Estrategia Nacional de Desarrollo 2010-2030. Aspectos positivos y negativos que incidieron en la implementación del proyecto: i) Principales factores que facilitaron la implementación del proyecto: 22. El Banco Mundial financió mediante una asistencia técnica la preparación del PRODEM, mediante la cual aportó un equipo técnico de formulación y una vez en ejecución, como parte del contrato de préstamo, supervisó la implementación del proyecto con misiones periódicas. La FAO asignó especialistas financiados por el PRODEM y por el Banco, para acompañar su ejecución. 23. La permanencia del equipo directivo de la agencia responsable de la ejecución del proyecto, Ministerio de Economía, Planificación y Desarrollo; Viceministerio de Planificación; Dirección General de Ordenamiento y Desarrollo Territorial, garantizó que se mantuviera la misma orientación. 24. Un período de gestión excepcional de seis años permitió que el fortalecimiento institucional, la programación y contratación de las obras no se vieran interrumpido por un cambio de autoridades. Así como el compromiso e interés demostrado por las autoridades de los gobiernos locales y el Page 56 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) involucramiento de los funcionarios y empleados municipales. 25. El cambio de autoridades (2016) se dio con el fortalecimiento institucional entregado y validado, la mayor cantidad de las obras terminadas y algunas en ejecución y finalización. 26. La ejecución de otros proyectos financiados por préstamos del Banco Mundial sugirió establecer contratos entre el Proyecto y los GL, para el financiamiento de obras de inversión a cambio de progresos en el fortalecimiento de las capacidades técnicas e institucionales en los GL. Este mecanismo fue aplicado por el PRODEM con resultados positivos. 27. EL PRODEM suscribió un acuerdo o Convenio Municipal con cada municipio participante (lo cual ayudó a crear compromisos), donde se establecieron (i) los aspectos técnicos, financieros, administrativos y fiduciarios del Proyecto y la participación municipal en la implementación de las obras, y el uso de los fondos. 28. La tercerización del fortalecimiento institucional realizada para los 26 gobiernos locales beneficiarios, contó con los insumos generados por el equipo del PRODEM para su implementación, reduciéndose los tiempos de fortalecimiento a un año, de los tres años en los gobiernos pilotos. Esto permitió acuerdos internos sobre el enfoque a los municipios (intervención directa Vs tercerización) y la evaluación de la experiencia entre ambos modelos de intervención y sus complementariedades. ii) Principales factores que afectaron la implementación del proyecto. 29. El fortalecimiento institucional en algunos gobiernos locales se vio limitado por la poca disponibilidad de personal técnico local con la experiencia y conocimientos necesarios para el desempeño de sus funciones. 30. La contratación para la ejecución del Componente de inversiones debió efectuarse desde el PRODEM. Como resultado de los diagnósticos y del proceso de fortalecimiento para la implementación de los Planes de Acción Institucional (PAI) y la elaboración de los Planes Municipales de Desarrollo (PMD), se llegó a la conclusión que los GL no estaban en capacidad de implementar sus obras. 31. Los diversos cambios en los procesos que ejecuta la Contraloría General de la República generaron atrasos y demoras en las contrataciones y desembolsos, tanto en procedimientos para consultorías como para obras. 32. Para las primeras inversiones no se encontraba activa la salvaguarda social de reasentamiento, lo cual limitaba la tipología de proyectos a ejecutar. Impactos no previstos 33. Inversiones complementarias en pavimentación vial fueron efectuadas por el Gobierno Nacional en seis GL beneficiarios del PRODEM en los que fueron construidos aceras y contenes. 34. PASCAL fue financiado con recursos del Gobierno Nacional y de la Cooperación Europea, y diseñó el Sistema de Monitoreo de la Administración Pública Municipal (SISMAP Municipal), bajo la rectoría del Ministerio de la Administración Pública, adoptando el Manual de Gestión Municipal Page 57 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) elaborado y desarrollado por el PRODEM, bajo la revisión de los órganos rectores en cada una de las áreas de apoyo asistidas. 35. Por los resultados obtenidos en los gobiernos locales asistidos por el proyecto, se generaron demandas de otros en ser fortalecidos institucionalmente, como son los casos de Pedernales, Pedro Corto, Las Yayas, San Luis, El Llano, Hondo Valle, Comendador, El Cercado, Barahona, Oviedo, Cristóbal, Monte Plata, Peralvillo, Chirino, Guayiga, La Cuava, Guayabal, Neiba, entre otros). Durante el período de ejecución del Proyecto se registraron solicitudes de gobiernos locales para participar en el Proyecto. 36. Las experiencias desarrolladas por el proyecto sirvieron como referencia para la elaboración del Plan Estratégico de Desarrollo de la provincia Pedernales. Sostenibilidad del proyecto 37. Como resultado del PRODEM, el Gobierno Nacional acordó crear la Unidad de Gestión Municipal, a lo interno de la DGODT, para continuar con el proceso de fortalecimiento iniciado por el proyecto. 38. A la fecha, se tiene la propuesta de una segunda fase del PRODEM y se han realizado acciones correspondientes. La Federación Dominicana de Distritos Municipales (FEDODIM) entregó un documento al Presidente de la República solicitándole la segunda fase del proyecto. 39. Los gobiernos locales que, a pesar de cambios de autoridades a partir de los comicios de 2016, mantuvieron el personal técnico que había sido fortalecido, lograron presentar mejores resultados en el cumplimiento de sus indicadores. Lecciones aprendidas 40. La implementación de la Ley Municipal conlleva la necesidad de la suficiencia financiera para el marco de competencias que se asigna a los gobiernos locales, siendo el contexto actual similar al de los antecedentes iniciales del PRODEM. Las transferencias recibidas desde el Gobierno Central se mantienen fijas en el tiempo y progresivamente pierden relevancia en términos reales y en cuanto a la participación en el Presupuesto General de la Nación. Los mecanismos de co-financiación, prevista en la Ley del Sistema de Planificación e Inversión Pública, y que el PRODEM generó una experiencia y modelo, posibilitan la superación de las limitaciones de las transferencias ordinarias, al disponerse de otras transferencias extraordinarias potenciales, en función de alcanzar determinadas metas o indicadores de fortalecimiento institucional y de priorizar iniciativas incluidas dentro de sus planes municipales de desarrollo. 41. Dado que la formulación de los indicadores del Pascal fue tomada a partir de los del marco de resultados del proyecto, se recomienda que sea este el sistema de medición para el monitoreo de cumplimiento de los indicadores de fortalecimiento institucional, lo cual facilitaría tanto el proceso de fortalecimiento como la inversión en obras. El sistema de seguimiento y evaluación es clave para mantener los equipos focalizados en las metas principales. 42. El esquema desarrollado de condicionalidad de determinados niveles de fortalecimiento Page 58 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) institucional para acceder a fondos de inversión para el fortalecimiento de los servicios municipales se mostró efectivo, y tiene todo el potencial para ser replicado a escala nacional. Adicionalmente, ha validado el mecanismo de co-inversión que puede ser implementado a través del Sistema Nacional de Inversión Pública para asignar fondos a aquellos gobiernos locales que cumplan con determinados requerimientos de fortalecimiento institucional. 43. Para mejorar la institucionalidad nacional con miras a sostener los procesos a nivel de los gobiernos locales, se sugiere mejorar la integración de los órganos rectores con las instituciones técnicas. ANEXO Implementación de los componentes 44. El Componente 1 tuvo tres subcomponentes: 1.1 Fortalecimiento de GL; 1.2; Fortalecimiento del sistema de apoyo institucional a nivel nacional para los gobiernos municipales; y, 1.3 elaboración de los Planes Municipales de Desarrollo. El subcomponente 1.1 de fortalecimiento y el subcomponente 1.3 de elaboración de los PMD recibieron mucha atención por parte del PRODEM. Como resultado se confirma que los GL atendidos avanzaron en su desarrollo institucional. Se elaboraron los Planes Municipales de Desarrollo que ordenaron las prioridades de los gobiernos locales. Se diseñaron y establecieron procedimientos. Se elaboraron y se aplican los manuales de funciones. Se reporta información financiera y presupuestal de manera oportuna a los entes de control. Se mejoró la prestación de servicios municipales. Se diseñó una metodología para incorporar la participación de las comunidades, hecho que mejoró la gobernabilidad en los GL. 45. El Componente 1 generó los siguientes productos: (a) Manual de Gestión Municipal. (b) Manual de Procedimientos para la gestión de Recursos Humanos Municipales (c) Manual de Procedimientos para la Planificación Municipal (d) Manual de Procedimientos para la gestión Financiera Municipal (e) Manual de Procedimientos para la gestión de Servicios Municipales (f) Manual de Procedimientos para la gestión de Compras y Contrataciones Municipales 46. Se elaboró, además: (a) Manual de Procedimientos para la gestión Ambiental Municipal Page 59 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) (b) Se elaboraron 31 Planes de Acción Institucional y (c) 11 Planes Municipales de Desarrollo que integraron el territorio del municipio (cabecera, distritos y área rural). Cuadro Error! No text of specified style in document.-1 PRODEM, Comp. II, Cantidad y monto asignado por tipo de obra (Dic 2016) 47. El equipo de asistencia US$ técnica del PRODEM generó de Total 84 6,031,655 manera constante Aceras y Contenes 39 2,371,219 39.3% procedimientos, instrumentos, Parques 20 868,018 14.4% manuales para la gestión de los Areas Deportivas 13 899,677 14.9% servicios municipales mínimos, Cementerios 6 1,053,379 17.5% entre otros: Recolección de Funerarias* 3 561,771 9.3% basura, Alumbrado público, Estación de Bomberos* 3 277,592 4.6% *Obras con s ervi ci os Administración de cementerios y múl ti pl e Administración de parques. Fuente: PRODEM Estas inversiones no incluyen diseños ni supervisión. Se incluyeron en el Componente 1. Page 60 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) ANNEX 6. INSTITUTIONAL STRENGTHENING 1. The objective of the institutional strengthening model developed was to create a customized program specific to the Dominican Republic context, to advance and support the provision of Minimum Municipality Services. The objectives were to support the proper use of available resources, achieve the strategic objectives of the local government and fulfill the institutional mission, support proper planning of programs and resources, improve M&E of projects, improve transparency in municipal management, and support continuous improvement of the services provided to the population. 2. The provision of support for institutional strengthening was defined through an initial diagnostic of the local government and through the development of IAPs. 3. The MDPs included (a) Diagnosis of the Territory, (b) Vision and Strategic Development Lines, (c) Territorial Development Objectives, (d) Local Investment Plan for the City Council, (e) Management Actions in Tandem with Other Entities. 4. The Annual Operating Plans are the guiding instruments for municipal management during a calendar year and the starting point for the preparation of the Municipal Budget. Figure 6.1. Institutional Strengthening Process for Local Governments Page 61 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) Signing of the Participation 1a TIER 1 Agreement Designation of personnel for the key 1b areas of intervention IAP and MDP approved by the 2 Council of Registrars or Relevant Boards Publication and transparency of Publication and transparency of the quarterly 3 9 budget and budget implementation physical - financial budget execution 50% of purchases made in accordance with the 15 Quarterly financial programming approved purchasing plan developed and approved, at The Municipal Office of Planning and 4 minimum for the operational Programming has full-time staff to accompany expenditure of the municipality 12 the preparation, implementation, and follow- up of the participatory budget. TIER 2 TIER 3 Letter of commitment for an Letter of commitment for all prioritized 5 10 approved municipal service municipal services prioritized Adoption of the organizational Organizational structure, Municipal 6 structure from the municipal 13 Management Manual implemented management manual Recruitment and selection of personnel Selection of staff based on job 7 11 according to the Human Resources description Management Manual Send to DIGEPRES, Chamber of Comprehensive financial management system 16 Accounts and General Comptroller implemented 8 quarterly budget reports, according to the established format and in the 14 Prepared and audited financial statements planned time frame Figure 6.2. Instrument for the Validation of Institutional Strengthening Compliance 5. Each local government was assessed for compliance against this rubric. Compliance with each tier, and satisfactory completion of the elements within it, allowed the local government to access corresponding works under Component 2. The first batch required two elements: signing the agreement and having staff for the key functions. The next two batches were connected and interrelated. The requirements to activate the second round of investment, required demonstration of sound progress in institutional strengthening. The third batch elaborated on the strengthening elements: transparency; physical-financial programming with its implementation; letter of commitment to the community for the provision of municipal services, adoption of the organizational structure, and its implementation; selection of staff and recruitment; and FM reports to the governing bodies based on the implementation of an FM system. 6. Out of the 16 indicators, 9 of the 31 local governments (29 percent) complied with 100 percent Page 62 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) of the indicators,33 17 of 31 (54.8 percent) local governments complied with 80–95 percent of the indicators,34 and 4 of 31 (12.9 percent) complied with 70–80 percent.35 Only 1 of the 31 local governments fell below 70 percent, with a compliance percentage of 63 percent.36 33 Local governments with 100 percent compliance: Bayaguana, Sabana Grande de Boya, Los Botados, Padre de Casas, Monte Bonito, Polo, Santana, Monserrat, and Santa Barbara. 34 Local governments with 80–95 percent compliance: Gonzalo, Majagual, Yamasa, Mama Tingo, La Siembra, Las Lagunas, Las Matas de Farfan, Carrera de Yegua, Matayaya, Arroyo Dulce, Enriquillo, Los Patos, Bahoruco, Paraiso, Tamayo, Mena, and Cabeza de Toro. 35 Local governments with 70-80 percent compliance: El Rosario, Los Frios, Pueblo Viejo, and Uvilla. 36 Local government with less than 70 percent compliance: La Cienaga (63 percent). Page 63 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) 7. SIGEM is the system that allows the integrated interaction of modules (subsystems), to carry out operations complying with policy, financial, and reporting requirements legally established by the control entities of the Dominican State in the municipal level. These include systems and subsystems specialist for authorities, budget, purchases, and contracts, accounting, treasury, internal control, reporting, standardization and monitoring, management and statistics, administration, and maintenance. Table 6.1. Implementation of SIGEM SIGEM SIGEM Modules in Use Use of Budget RR-HH Technical Collectio Migrated to Municipio Installed Implement In Support Budget n and Accounting Treasury and Reporting ed use SIGEM Nomina No. /Distrito Desk Cash Municipal s SIGE Othe 2016 2017 SI NO SI NO SI NO SI NO SI NO SI NO M rer Province Monte Plata 1 Yamasa X X X X X X X X X X X X Los 2 X X X X X X X X X X X X Botados Mama 3 X X X X X X X X X X X X Tingó Sabana 4 Grande X X X X X X X X X X X X de Boya 5 Gonzalo X X X X X X X X X 6 Majagual X X X X X X X X X X X X 7 Bayaguan a X X X X X X X X X X X X Province Azua Page 64 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) Padre las 8 X X X X X X X X X X X X Casas La 9 X X X X X X X X X Siembra Las 10 X X X X X X X X X X X Lagunas 11 Los Fríos X X X X X X X X 12 Monte X X X X X X X X X X X X Bonito Pueblo 13 X X X X X X X X X X Viejo 14 El Rosario X X X X X X X X X X X X Province San Juan Las Matas 15 X X X X X X X X X X X X de Farfán Carrera de 16 X X X X X X X X X Yeguas 17 Matayaya X X X X X X X X X X X X Province Barahona 18 Polo X X X X X X X X X X X X 19 Enriquillo X X X X X X X X Arroyo 20 X X X X X X X X X X X Dulce La 21 X X X X X X X X Ciénaga 22 Bahoruco X X X X X X X X 23 Paraíso X X X X X X X X X X Page 65 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) 24 Los Patos X X X X X X X X X X Province Bahoruco 25 Tamayo X X X X X X X X X X X Cabeza de 26 X X X X X X X X X X X X Toro 27 Mena X X X X X X X X 28 Monserrat X X X X X X X X X X X X Santa 29 X X X X X X X X X X X X Bárbara - El 30 Santana X X X X X X X X X X X X 31 Uvilla X X X X X X X X X X X X TOTAL 31 26 20 21 19 21 10 20 11 20 11 20 11 20 11 20 11 12 19 65 68 32 100% 84% 68% 61% 39% 61% % % % Page 66 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) ANNEX 7. PARTICIPATORY EVALUATION ON THE SATISFACTION OF PROJECT BENEFICIARIES Objective of the Evaluation 1. The evaluation sought to know the level of satisfaction of the clients of the municipal services strengthened by PRODEM and of the beneficiaries of the works financed by PRODEM, by conducting a household survey and focus groups. Methodology 2. In April and May 2017, a consulting firm carried out this participative evaluation, as part of the external final evaluation of the Dominican Republic Municipal Development Project, in the municipalities and municipal districts (local governments). 3. According to the terms of reference for this participatory evaluation, the activities were carried out by taking a sample across 16 local governments, including from both the municipalities and municipal districts. The area of territorial influence spanned 43 works developed in the selected 16 LGs, which encompassed 45,241 beneficiaries. The evaluation model also included the organization of focus groups, as a qualitative instrument to understand the perception of key stakeholders involved in the development of the different components of the project across both districts and municipalities. Household Survey 4. The specific objective of the survey was to understand the perception of household members regarding changes in the management of local governments, the level of satisfaction for the delivery of the minimum services, as well as the benefits generated by the works and improvement in the citizen participation. 5. The survey was conducted through a sample of 1,032 households located near the works developed through the project. Before starting the interview, it was verified that the people knew the minimum services that the local governments are expected to provide as well as knowledge of the works that were constructed through the project. Focus Groups 6. The specific objective of the focus groups was to understand stakeholder perception of the changes in the management of the local governments, receive information on the improvement in services delivery, understand the factors that facilitated and limited the achievement of the expected results, and obtain stakeholder recommendations for improvement in the implementation of the program. People involved in the focus groups were members of the local governments, civil society representatives, and people involved in the supervision of works. 7. A total of 280 people (107 women) were interviewed in 16 local governments, including local government employees, members of the Municipal Development Council, neighbors' committees, works oversight committees, NGO representatives, and stakeholders from economic, social, cultural, and environmental sectors who participated in the preparation of the MDPs. Page 67 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) 8. The focus group discussions lasted a maximum of 90 minutes and involved around 25 participants. Outcomes 9. The main results of the beneficiary survey and focus groups are the following: • In 85 percent of the cases, the beneficiaries indicated that they knew which were the works built by the project and the minimum services that the local governments must provide to their citizens. With regard to the MDPs, 55 percent of the interviewees mentioned that they knew of their existence and were familiar with their content. • About 82 percent of the respondents directly use the works built by the project and estimated that more than 90 percent of the community do in general. For 85 percent of them, the works fulfill the functions for which they were built and for 80 percent, the works contribute to improving their living conditions. • For 54 percent of the beneficiaries, the works have represented a time savings, in particular they were benefitted by the works that facilitated house cleaning and the washing of children’s clothes. • In 66 percent of the cases, the members of the households and in particular the children frequented parks and sporting grounds two or three times more than previously. • About 97 percent of the beneficiaries mentioned that they are very satisfied with the extension of the cemeteries and, where applicable, the new funeral services. • Regarding municipal services, 70 percent of the beneficiaries indicated that during the last three years, they have observed improvements in the way in which the local governments are providing them. • Regarding the quality of the solid waste collection service, 60 percent of the interviewees rated the service as excellent and good; 28 percent rated it as regular. • According to the focus group discussions, the project properly promoted the creation of the municipal development committee, as a crucial instrument for improving participatory planning. Through a better organization of local government functions, the implementation of the participatory budget was significantly improved and the level of citizen participation in the processes of identification and prioritization of needs were increased, as well as in the social oversight during the construction of the works. • Focus group participants generally highlighted the change from occupying a passive role in the local government administration, to having an active role, as a consequence of having received training and integration in the planning and programming of investments in the local government. For the representatives and users of the services offered by the LG, the improvement in the processes and the response of the administration to procedures that are carried out in the local government are significant. Page 68 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) ANNEX 8. EVALUATION OF THE COMPLIANCE FOR SELECT PROJECT MUNICIPALITIES VERSUS THE NATIONAL AVERAGE 1. SISMAP aims to systematically measure the quality of municipal management, with regard to efficiency, effectiveness, and quality of compliance with regulatory and procedural municipal management frameworks through a series of basic indicators and subindicators. SISMAP was adopted as national policy by executive power through Decree No. 85-15, which created the Presidential Commission for Municipal Reform. Each group of indicators, called the Basic Indicators of Organization and Management (IBOG) measures progress through scores ranging from 0 to 100 (all the indicators have the same weighting). The main IBOG are related to planning, participatory budgets, HR management, FM, procurement, and transparency, which are very similar to the project indicators (in fact SISMAP used the project experiences in deriving this tool). Through the EU-supported PASCAL, a sample of municipalities (not including districts) were assessed with the tool. The sample comprised the bigger municipalities in each province, which is why these municipalities have a higher budget than the average municipality selected by the project (the poorest). This is also why the results achieved by the project are very relevant. Quality of Submission Procurement Access to Budget Expenditure Participatory of Affidavit Municipality HR MDP and Contract Public Averages and FM in Budgetary Budget According to Management Information Execution Law 311-14 Sabana Grande 91.67 100.00 100.00 90.00 90.00 93.00 83.00 30.00 84.70 de Boyá Bayaguana 68.33 95.00 100.00 63.00 90.00 97.00 87.00 30.00 78.79 Padre las Casas 15.00 95.00 100.00 67.00 30.00 63.00 97.00 100.00 70.87 Polo 50.00 75.00 100.00 20.00 60.00 67.00 70.00 60.00 62.75 Yamasá 31.67 85.00 100.00 0.00 80.00 87.00 97.00 0.00 60.08 Paraíso 31.67 75.00 95.00 20.00 60.00 80.00 50.00 0.00 51.45 IBOG AVERAGE 48.05 87.50 99.16 43.33 68.33 81.16 80.66 36.67 68.05 NATIONAL 46.58 57.76 84.48 26.52 45.32 59.65 55.97 38.89 47.98 AVERAGE Page 69 of 70 The World Bank Dominican Republic Municipal Development Project ( P095863 ) ANNEX 9. DISCUSSION ON MONITORING MECHANISMS FOR KEY PDO INDICATORS 1. Local governments’ budgets, excluding project resources, respond to the priorities established in MDPs. The project’s M&E specialist compared investment projects approved by the local government in 2015 and 2016 (participatory budget as well as the local government’s regular budget, which amounts to 40 percent of the total annual transfer) with the priorities defined in the MDP. Local governments that have invested 40 percent or more of their annual investment budget in works aligned with the MDPs fulfill the criteria. The 2015 evaluation of this indicator was overseen by an external firm (Girsa- Chevez), while the 2016 evaluation was overseen by the FAO. It is important to consider that the participatory budget (40 percent) is not entirely under the control of the local government as some commitments with neighborhoods and communities were made before the MDP endorsement. 2. Local governments’ financial reports are in accordance with acceptable accounting standards. The financial reports are submitted to DIGEPRES, which formally approves the report. 3. Local governments have adopted and are using transparent, standardized, and efficient FM, procurement and HR management procedures, as specified in the procedures manual, and produce budget reports on time. This is part of the institutional subindicators set up by the project to track the progress in the institutional strengthening component (Component 1), as a basis to then approve the subsequent works subprojects (Component 2). They were measured by an independent firm in 2015 and then updated by the M&E team just before the local government elections. There is now a new local government process, but per the final evaluation, the institutional management progress was maintained. 4. At least 75 percent of the direct subproject beneficiaries were satisfied with the provision of prioritized services or the executed infrastructure works. This indicator was only measured at the end of the project. See annex 7 for the results and outcomes measured. 5. The DGODT has created a Municipal Management Unit to continue provision of municipal strengthening services. This would be complied with on receipt of a government resolution approving the structure of the unit, including organizational chart, mission, function, and staffing arrangements. Page 70 of 70