Document of The World Bank Report No: 40163-IQ IMPLEMENTATION COMPLETION AND RESULTS REPORT ON A TRUST FUND GRANT IN THE AMOUNT OF US$ 40.00 MILLION TO THE MINISTRY OF EDUCATION OF THE IRAQI GOVERNING COUNCIL FOR AN EMERGENCY TEXTBOOK PROVISION PROJECT June 28, 2007 Human Development Sector Middle East and North Africa Region CURRENCY EQUIVALENTS Exchange Rate Effective March 22, 2004 Currency Unit = Iraqi Dinar US$1.00 = Iraqi Dinar 1,400 FISCAL YEAR January 1 ­ December 31 ABBREVIATIONS AND ACRONYMS DARM Diwan Al Rikaba El Malia (Iraqi Supreme Audit Institute) EERP Emergency Education Rehabilitation Project ESRP Emergency School Rehabilitation Project ESCRP Emergency School Construction and Rehabilitation Project EMCS Etiman Management Consulting Services FMA Fiduciary Monitoring Agent FMR Financial Monitoring Report GDP Gross Domestic Product ICB International Competitive Bidding ICR Implementation Completion Report ITF Iraq Trust Fund (World Bank) KRG Kurdish Governorates MIM Master Implementation Manual MOE Ministry of Education MOF Ministry of Finance MOPDC Ministry of Planning and Development Cooperation NCB National Competitive Bidding PAC Project Advisory Committee PMT Project Management Team QAE Quality at Entry SBD Standard Bidding Document TA Technical Annex TVET Technical and Vocational Education and Training UNDG United Nations Development Group UNICEF United Nations Children's Fund USAID United States Agency for International Development WB World Bank Vice President: Daniela Gressani Country Director: Joseph P. Saba Sector Director: Michal J. Rutkowski Sector Manager: Mourad Ezzine Project Team Leader: F. Peter Buckland ICR Team Leader: Christina W. Djemmal IRAQ Emergency Textbook Provision Project CONTENTS Data Sheet Page No. A. Basic Information i B. Key Dates i C. Ratings Summary i D. Sector and Theme Codes ii E. Bank Staff ii F. Results Framework Analysis iii G. Ratings of Project Performance in ISRs v H. Restructuring v I. Disbursement Graph v 1. Project Context, Development Objectives and Design 1 2. Key Factors Affecting Implementation and Outcomes 3 3. Assessment of Outcomes 9 4. Assessment of Risk to Development Outcome 11 5. Assessment of Bank and Recipient Performance 11 6. Lessons Learned 15 7. Comments on Issues Raised by Recipient/Implementing Agencies/Partners 16 Annex 1. Project Costs and Financing 17 Annex 2. Outputs by Component 18 Annex 3. Economic and Financial Analysis 19 Annex 4. Bank Lending and Implementation Support/Supervision Processes 20 Annex 5. Beneficiary Survey Result 22 Annex 6. Stakeholder Workshop Report and Results 23 Annex 7. Summary of Recipient's ICR and/or Comments on Draft ICR 24 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders 25 Annex 9. List of Supporting Documents 26 Annex 10: Risks and Mitigation Measures Identified in the Project's Technical Annex 27 Annex 11: Details on Financial Management and Procurement 29 Map No. 33422 A. Basic Information (some fields are entered by the system) Country: Iraq Project name: Emergency Textbook Provision Project Project ID: P088945 L/C/TF Number(s): TF051095 ICR Date: May 7, 2007 ICR Type:1 Core Lending Instrument: Trust Fund Recipient: Ministry of Education of the Iraqi Governing Council Original total commitment: US$40,000,000 Disbursed amount: US$38,806,777 Environmental category: C Implementing Agencies: Ministry of Education Cofinanciers and Other External Partners: B. Key Dates (all fields are entered by the system) Process Date Process Original Date Revised/Actual Date(s) Concept review: 02/12/2004 Effectiveness: 05/15/2004 Appraisal: 04/23/2004 Restructuring(s): N/A [Multiple dates if needed] Approval: 05/14/2004 Mid-term Review: N/A Closing: 12/31/2005 12/31/2006 C. Ratings Summary2 C.1 Performance Rating by ICR Outcome: Satisfactory Risk to Development Outcome: Significant Bank Performance: Satisfactory Recipient Performance: Satisfactory C. 2 Detailed Ratings of Bank and Recipient Performance Bank Ratings Recipient Ratings Quality at Entry: Satisfactory Government/Implementation Satisfactory Agency/Agencies: Quality of Supervision: Satisfactory Overall Bank Performance: Satisfactory Overall Recipient Performance: Satisfactory 1 Core or Intensive Learning (ILI) ICR. 2 All ratings given by the ICR should use a six-point rating scale (Highly Satisfactory, Satisfactory, Moderately Satisfactory, Moderately Unsatisfactory, Unsatisfactory, or Highly Unsatisfactory), except for the rating of Risk to Development Outcome (or Global Environment Outcome) that use a four-point scale (Negligible to Low, Moderate, Significant, High). i C.3 Quality at Entry and Implementation Performance Indicators (all fields are entered by the system) Implementation Performance Indicators QAG Assessments (if any) Rating Potential Prob. Project at any time(Yes/No): Yes Quality at Entry (QEA): S Problem Project at any time(Yes/No): Yes Quality of Supervision (QSA): N/A DO rating before Closing/Inactive status: S D. Sector and Theme Codes3 Original Actual Sector Code (as % of total Bank financing) 1. Primary Education 50% 70% 2. Secondary Education 50% 30% 3. Original Priority Actual Priority Theme Code (Primary/Secondary) 1. Education for All Primary Primary 2. E. Bank Staff (some fields are entered by the system) Positions At ICR At Approval Vice President: Daniela Gressani Christiaan Poortman Country Director: Joseph P. Saba Joseph P. Saba Sector Manager: Mourad Ezzine Regina Bendokat Project Team Leader: Peter Buckland Peter Buckland ICR Team Leader/Author: Christina W. Djemmal 3There can be a maximum of five Sector Codes (that has more than zero percent) and five Theme Codes (of which at least one must be "Primary"). ii F. Results Framework Analysis Project Development Objective [or Global Environmental Objective] (from Project Appraisal Document): (the system displays entries in Section 6) The objective of the Project is to improve conditions of learning in primary and secondary schools through the urgent provision of primary and secondary school textbooks. Revised Project Development Objective [or Global Environmental Objective] (as approved by original approving authority): (the system displays entries in Section 6) N/A. (a) PDO Indicator(s) from Project Appraisal Document (Indicators entered from the ISR) Baseline Values from Project Outcome Indicators/Date of Value (from approval documents) Baseline Value Original Target Formally Revised Actual Values Values Target Values Achieved (from approval at Completion or documents) Target Years PDO [GEO] Percentage of textbooks delivered to schools Indicator 1: Value 0% 100% n/a 118% (quantitative or Qualitative) Date achieved 04/01/2004 02/28/2005 Comments 69 million textbooks was the original target for project. 80.25 million textbooks were printed and (incl. % distributed. achievement) iii (b) Intermediate Outcome Indicator(s) - from Project Appraisal Document Baseline Values from Project Outcome Indicators/Date of Value (from approval documents) Baseline Value Original Target Formally Revised Actual Values Values Target Values Achieved (from approval at Completion or documents) Target Years IO Indicator 1: Percentage of textbooks delivered to schools for school year 2004/05 Value 0% 100% n/a 72% (quantitative or Qualitative) Date achieved 04/01/2004 11/16/2005 Comments 69 million textbooks was the original target for the 2004/05 school year; 50 million textbooks (incl. % (72%) were delivered. However, by the end of the project, 80.25 million textbooks were printed achievement) and distributed, resulting in an overall percentage of achievement of 118%. IO Indicator 2: Percentage of books delivered to schools for school year 2005/06 Value 0% 100% n/a 101% (quantitative or Qualitative) Date achieved 04/01/2004 11/16/2005 Comments A target of 30 million textbooks was set when the project was extended. At appraisal, it was (incl. % estimated that 69 million books would be printed and distributed for $39 million. By the end of achievement) the project, 80.25 million textbooks were printed and distributed for $37 million. iv G. Ratings of Project Performance in ISRs (all fields are entered by the system) No. Date ISR Archived DO IP Actual Disbursements (US$mil.) 1 09/14/2004 Satisfactory Unsatisfactory 0.00 2 01/07/2005 Satisfactory Satisfactory 6.43 3 04/28/2005 Satisfactory Moderately 16.66 Satisfactory 4 12/15/2005 Satisfactory Satisfactory 31.30 5 12/18/2006 Satisfactory Moderately 38.56 Satisfactory H. Restructuring (if any) Restructuring Board ISR Ratings at Amount Reason for Restructuring & Date(s) Approved PDO Restructuring Disbursed at Key Changes Made [or GEO] Restructuring Change DO IP in US$m [check box] [GEO] N/A If PDO[GEO] and/or Key Outcome Targets were formally revised (approved by the original approving body) enter ratings below: N/A Outcome Ratings Against Original PDO[GEO]/Targets Against Formally Revised PDO[GEO]/Targets Overall (weighted) rating [the same rating as Section 8] I. Disbursement Profile (system generated graph) v vi 1. Project Context, Development Objectives [or Global Environment Objectives] and Design (this section is descriptive, taken from other documents, e.g., PAD/ISR, not evaluative): 1.1 Context at Appraisal (brief summary of country and sector background, rationale for Bank assistance): Iraq has been largely isolated from the rest of the world and has had no contact with the World Bank for 30 years. Although Iraq was a stable, resource rich middle-income country in the 1970s and 1980s, it has seen low growth and development since the early 1990s with the imposition of international trade sanctions were imposed and as a result of the unstable and deteriorating security situation since 2003. Iraq now faces major political, economic and social challenges, with the lowest human development indicators in the region and an income per capita drop from US$3,600 in the early 1980s to less than US$1,000 in 2004.4 Until the 1980s, the education system in Iraq was considered among the best in the Middle East, with near universal primary enrollment. Since the 1990s, the system has deteriorated as Iraq engaged in three major conflicts and experienced over a decade of international sanctions. The deterioration was evidenced by: (i) a decrease in enrollment and attendance at all levels; (ii) an increase in inequities in gender and in urban/rural distribution; and (iii) a decline in enrollment in the technical/ vocational education track. Quality also decreased at all levels, reflected in deteriorating learning outcomes, outdated curriculum content and a standstill in policy and system development. In addition, public investment in education collapsed and households became increasingly responsible for direct and indirect costs of education. Textbooks became limited during the 1990s and a rationing system to recycle textbooks for two or more years was implemented. In addition, textbook content came to be seen as a reflection of the previous regime, with outdated and, in places, distorted content. The number of textbooks was further limited in April and May 2003 as Ministry of Education (MOE) stores and offices were looted and burned and warehouses and printing presses were destroyed. Emergency efforts were undertaken by various donors (UNICEF, UNESCO, USAID), drawing on US donations and an allocation from unspent Oil-for-Food funds, and enough textbooks were revised, printed and distributed to meet 40% of the demand for the 2003-2004 school year. The procurement of these textbooks was handled by the United Nations (UN) without direct involvement of the MOE, and a large proportion of the contracts were allocated to international firms. In August 2003 a Needs Assessment covering fourteen sectors was prepared jointly by the World Bank (lead agency education sector), the United Nations Development Group (UNDG) and the International Monetary Fund. Subsequently, an International Donors' Conference for Iraq was held in Madrid in 2003, at which donors expressed support for the Needs Assessment and pledged about US$32 billion for a four-year period. The World Bank and UNDG set up an International Reconstruction Fund Facility for Iraq to ensure flexible and coordinated donor financing for priority investments consistent with the Needs Assessment. The Facility consists of two trust funds--a World Bank Iraq Trust Fund (ITF) and a UNDG Trust Fund-- each with its own internal governance procedures and management and a coordination mechanism to ensure close coordination. 4Technical Annex (Report #T7624), p. 1. 1 From late 2003, further donor consultations were held between the MOE, World Bank, UNICEF, UNESCO, USAID and the Coalition Provisional Authority and agreement was reached on priorities for the sector: (i) capacity building for the development of a strategic framework; (ii) emergency rehabilitation and supplies (including textbooks); (iii) initiating curriculum reform; (iv) teacher training; and (v) policy dialogue on technical and vocational education and training (TVET). The MOE's strategy for education in Iraq recognized the persistent problems of access and quality (see section 3.1 on relevance), and for the school year 2004-2005, the MOE requested that the ITF contribute to keeping schools open and to improving teaching and learning conditions by financing the reprinting and distribution of textbooks for primary and secondary schools. The World Bank's first Interim Strategy Note for Iraq was approved by the Board on January 14, 2004. It identified three key priorities for the interim work program: (a) build Iraqi institutional capacity; (b) prepare and start emergency operations to address urgent needs; and (c) lay the groundwork for Iraq's medium term reconstruction and development. The proposed operations in the strategy note included an allocation of US$100 million for an emergency education project. This provided the strategic context for the ETPP which was approved in April 2004. The project was approved by the Iraq Strategic Review Board in February 2004. As the first project for Iraq in several decades, the project was a pioneer effort and became more than just a model for implementation arrangements for subsequent projects. This project was the entry point for establishing the Bank's credibility in Iraq, and for setting the stage for the Bank's work in the education sector ­ now the largest sector of the Bank's portfolio in Iraq. 1.2 Original Project Development Objectives (PDO) [or Global Environmental Objectives (GEO)] and Key Indicators [as approved]: The original development objective of the Project was to improve the conditions of learning in primary and secondary schools through the urgent provision of primary and secondary school textbooks. 1.3 Revised PDO [GEO] (as approved by original approving authority) and Key Indicators, and reasons/justification: N/A 1.4 Main Beneficiaries (original and revised; briefly describe the "the primary target group" identified in the PAD and as captured in the PDO[GEO], as well as any other individuals and organizations expected to benefit from the project): The primary target group for the project was Iraqi students at the primary and secondary levels. Other beneficiaries included teachers who were provided with the materials to conduct class, as well as MOE officials who benefited from various capacity building efforts in project and financial management and textbook procurement. 2 1.5 Original Components (as approved): Component 1: Provision of Textbooks (US$39.5 million). The grant would finance the printing and distribution of about 69 million textbooks for 6 million students in all governorates for the school year 2004-2005. This quantity would cover over 600 titles for all 12 grades of the primary and secondary system. The selection of textbooks to be financed by the grant was to give the highest priority to primary and secondary textbooks, with special attention to the final grades of each phase. Component 2: Project Management and Capacity Building (US$0.5 million). The grant would finance the basic costs of the Project Management Team (PMT) to manage the project, including technical assistance and capacity necessary to ensure effective project management and transfer of skills to the MOE staff. The MOE would cover the costs of the staff of the PMT, with the exception of up to five consultants employed from Grant funds to fill key capacity gaps. The grant would finance office equipment, furniture and operating costs necessary to manage the project. 1.6 Revised Components: N/A. 1.7 Other significant changes (in design, scope and scale, implementation arrangements and schedule, and funding allocations): There were no significant changes to the project. Determination of procurement methods between International Competitive Bidding (ICB) and National Competitive Bidding (NCB) was initially based on an assessment of the capacity of the local printing industry to deliver the quantities required within a very short time-frame. However, reliable data on the capacity of the local printing industry was not readily available. During pre-appraisal, stocks of paper procured by the previous government under the Oil-for-Food program (which were previously thought to have been destroyed) were discovered, so a decision was made to use this paper for local printers who would not have been able to order and receive paper deliveries in time to meet printing and distribution deadlines for the 2004-2005 academic year. Printing contracts were therefore divided between those that involved printing and distribution only (paper supplied by MOE), and contracts that required the procurement of paper. The printing only contracts were procured using National Competitive Bidding (NCB), and the other contracts were procured using International Competitive Bidding (ICB). The number of lots for printing only (NCB) contracts was determined by the amount of paper available in Baghdad, and adjusted at appraisal when evidence of more paper came to light. No international companies competed for NCB contracts, because of the costs of delivery of paper outside of Iraq. Only one Iraqi firm was successful in competing for the first round of ICB contracts, and the unit costs of textbooks reprinted through the NCB contracts were higher than the unit costs obtained through ICB. As a result the MOE expressed a preference for ICB for the second round of printing. Many Iraqi companies won contracts for the second round of ICB contracts, as their prices were more in line with international bidders. Savings of around US$9 million during the printing and distribution of the textbooks for the 2004-2005 school year through competitive bidding were subsequently used to print additional textbooks for the 2005-2006 school year. There was no need for a reallocation of funds since the original project design 3 provided for the printing of "second priority" textbooks in the event that actual prices would be below original estimates. The project was extended by one year to provide more time for the final delivery, inspection and payment of the additional textbooks, and to allow for a textbook capacity development activity to be completed. The textbook capacity development activity was subsequently cancelled due to problems in obtaining travel visas for the Iraqis to attend planned training in textbook production and development in Sweden and Finland. 2. Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design, and Quality at Entry (including whether lessons of earlier operations were taken into account, risks and their mitigation identified, and adequacy of participatory processes, as applicable): The project was prepared in accordance with Emergency Recovery Assistance procedures (Operational Policy 8.50). Project design was simplified in response to the emergency situation in the country. With donor funding available through the ITF, the preparation of an Iraq Emergency Education Rehabilitation Project began in early 2004. It became clear during preparation that there would likely be delays in the readiness to negotiate the school rehabilitation component of this project. A decision was then made to place the textbook activities into a separate project, resulting in the project under review - the ETPP. This creation of a separate operation permitted time to be saved for reprinting and distributing the new textbooks to schools in time for the 2004-2005 school year. The Bank was able to build on relationships established during the Needs Assessment with the UN agencies (UNICEF and UNESCO) to benefit from their experience and data when they procured textbooks for 2003/4. The Bank team met regularly with UNICEF and UNESCO and shared lessons learned from their ongoing experience with the 2003/4 textbook provision. They provided information and statistics to the team preparing the project, and made available to the MOE CD-ROMs with a large number of textbooks layout, and film for about 40% of the textbooks printed in the project. An assessment of MOE's capacity to implement project procurement was undertaken by the Bank during the project pre-appraisal and appraisal phases; this was particularly beneficial given the importance of timely procurement to the attainment of the project's development objectives. Procurement training was provided by the Bank to MOE procurement staff during appraisal and a Project Workshop (June 2004). Several risks to procurement were identified and measures were taken to mitigate these risks, such as the hiring of additional experienced staff specifically for procurement and the establishment of necessary legislation through ministerial decrees to improve national procurement practices. As a result of the focus on procurement capacity, the MOE produced a procurement plan which provided the basis for the final procurement arrangements for the project. A Quality at Entry Assessment (QAE7) was undertaken in June 2005 by the Bank's Quality Assurance Group. The project was rated fully satisfactory overall, highly satisfactory for strategic relevance and approach, and satisfactory in all other areas. The QAE found the following aspects of the project to be particularly strong: (i) simplicity of design; (ii) flexibility and innovation in procurement; (iii) integration of project management into the MOE; (iv) institutional/capacity building focus; and (v) inter- 4 sectoral management (use of various technical and operational advisors). No areas of major weakness were identified, but the task team was encouraged to: (i) begin developing the MOE's capacity in monitoring and evaluation; and (ii) collaborate with the IMF and the Bank's country economist to arrive at reliable estimates of public expenditures for education, including a rough analysis of the fiscal implications of alternative textbook policies. Three different ministers of education were in office during the two-year(+) implementation period of the project. The first Minister of Education, H.E. Dr. Ala' Alwan, served from October 2003 to June 2004, when he transferred to the position of Minister of Health in the Iraq Interim Government. He was succeeded in July 2004 by H.E. Dr. Sami Mudhaffar, who served as Minister of Education until the Interim Government was dissolved in May 2005. The Iraq Transitional Government, with H.E. Dr. Abdul al-Falah al-Sudani as Minister of Education, governed Iraq for seven months until it was dissolved for the elections in December 2005. Dr al-Sudani served in a caretaker capacity until the new Minister, Dr Khudayyir al-Khuza'I was appointed in May 2006. The changes in government presented some challenges to the project where urgent decisions needed to be made, but this was counterbalanced for most of the project's life by a fairly stable PMT. 2.2 Implementation (including any project changes/restructuring, mid-term review, Project at Risk status, and actions taken, as applicable): This was the first project in Iraq funded by the World Bank (since the 1970s) and a model for subsequent Bank-funded projects in terms of implementation arrangements. The Iraqi counterparts had no prior experience in implementing Bank-funded projects and had to learn under difficult and volatile country conditions. The project was never restructured and was considered "at risk" briefly in FY05 for unsatisfactory financial, procurement and monitoring and evaluation performance. One notable risk to implementation was the coordination/ communication problem between the MOE in Baghdad and the Kurdish governorates. The Kurdish governorates had requested changes to technical specifications of the bidding documents for over three million books after the bidding documents had been issued. This was considered a fairly serious issue given that good coordination between the MOE and the Kurdish governorates would be critical for the smooth implementation of this and future education projects. The first two Ministers of Education made trips to the Kurdish governorates, which did facilitate communication, and during most of the project, Kurdish officials were invited to project workshops in Amman, and communication with the authorities in Erbil and Sulaymaniyah improved towards the end of 2005. Bank Emergency Recovery Assistance Guidelines (OP8.50) do not require a mid-term review, but the project was regularly and intensively supervised by the Bank team in Amman, Jordan, with Iraqi counterparts traveling to Amman for quarterly supervision missions, supported by an Iraqi education projects coordination officer and a procurement specialist in Baghdad. In addition, two firms on the ground in Iraq were hired by the Bank to conduct in-country supervision. The Imam and Partners Architectural Consultation Group (IPCG) was hired by the World Bank in 2004 to conduct a comprehensive in-country textbook inspection, which included undertaking visits to the MOE, printers and approximately 200 schools in every governorate to verify that books were delivered to schools as reported. The results of the inspection were favorable and books were found, with very few exceptions, 5 to have been received in schools as reported by the MOE. In 2005, the Etiman Management Consulting Services (EMCS) firm was contracted by the Bank to be the Fiduciary Monitoring Agent (FMA) for the ITF-funded program in Iraq. The firm produced monthly reports on financial management and procurement and quarterly implementation progress reports for the project. They also reviewed and commented on the FMRs prepared by the PMT for the main purpose of verifying the accuracy of the information provided by the PMT, and undertook ex-post reviews of procurement documentation. 2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization: Since only the reprinting and distribution of textbooks to schools would be monitored, basic procurement and FM monitoring tools were designed by the World Bank and MOE; these were ready by the start of project implementation. The monitoring and reporting functions of the PMT were noted to be weak at the beginning of project implementation and M&E was rated as unsatisfactory during the first 18 months of implementation, after which the appointment of a project team member to focus on M&E was made. Once a member of the PMT took on the specific responsibility for monitoring, the quality of the progress reports improved. 2.4 Safeguard and Fiduciary Compliance (focusing on issues and their resolution, as applicable): No safeguard policies were triggered under this project. The main findings on financial management and procurement are bulleted below; full details and lessons learned are provided in Annex 11. Financial Management · Financial Management (FM) staffing was adequate. · There were no major changes to FM during project implementation. · Audit reports for the project were initially delayed, but were received with "unqualified" opinions. · FM capacity is seen as sustainable, as long as no major exodus of FM staff occurs. · The PMT did a relatively good job overall and improved its performance during project implementation. · Bank FM support was proactive and thorough. · The FM risk mitigation measures described in the project's Technical Annex (para. 50) were put into place. · Good FM contributed directly to the achievement of project outcomes and to realizing budgetary savings. Procurement · Procurement staffing was initially limited, but became adequate over time. · MOE procurement capacity was initially found to be weak, however, through intensive training, procurement capacity was built. · Overall procurement performance was satisfactory during implementation and has improved when compared to the way in which procurement was handled prior to this project. · Procurement faced obstacles in several areas, including staffing, delivery delays, contracting delays, curriculum changes and security issues. 6 · A challenging procurement issue was to determine whether to use ICB or NCB to procure the reprinting of textbooks. · The World Bank team was diligent and proactive in supporting project procurement, which was particularly important as this was the first Bank-financed project in Iraq. · The MOE benefited from this project in several procurement dimensions, including procurement capacity, procurement practices and in using information technology. 2.5 Post-completion Operation/Next Phase (including transition arrangement to post-completion operation of investments financed by present operation, Operation & Maintenance arrangements, sustaining reforms and institutional capacity, and next phase/follow-up operation, if applicable): The project under review laid the groundwork for future reforms in MOE's management of textbook printing and distribution. The MOE reported that its capacity in managing the implementation of textbook provision has increased and that it now has a core staff trained in textbook provision. The MOE also reported that this project has contributed to the strengthening of the capacity of local private printers. Subsequent education projects, being prepared and implemented by the PMT of this project, benefit from capacity built in this first project. They include the Emergency School Construction and Rehabilitation Project (currently being implemented) and the Third Emergency Education Project (approved, but not yet under implementation). 3. Assessment of Outcomes 3.1 Relevance of Objectives, Design and Implementation (to current country and global priorities, and Bank assistance strategy): The objective of the project was highly relevant to the unstable situation in the country; it was critical that schools remain open and functioning to mitigate the adverse effects of the on-going instability on the poor and vulnerable populations, especially children. The project objective was also relevant to the second Millennium Development Goal ­ "Achieve universal primary education," as the project contributed directly to keeping children in schools. From 2006, the MOE assumed full responsibility for financing textbook provision. The Bank's Interim Strategy Note still applies. UN agencies continue to support education projects although USAID has withdrawn from education projects and focuses exclusively on capacity-building. The Islamic Development Bank is supporting school construction and capacity-building. The focus of donor support has shifted from immediate requirements (textbooks, schools supplies) which are now provided for in the MOE budget, to reconstruction and capacity-building. The design of the project was relevant because it was simple and focused on meeting the immediate needs of the education system. The MOE's strategy for education in Iraq (revised in July 2005) recognizes the persistent problems of access and quality resulting from: (i) continued deterioration of teaching and learning conditions; (ii) erosion of the quality of the teaching force; (iii) distorted and outdated curricula; and (iv) a standstill in policy and system development. The World Bank's assistance in education in Iraq continues to grow and currently includes the three other education activities: the Third Emergency Education Project (IDA), additional financing for the Construction of Schools in the 7 Marshlands of Southern Iraq (as part of the Emergency School Construction and Rehabilitation Project) and proposed Vocational Education and Training Technical Assistance. These activities all build on the lessons in ETPP, and benefit from the procurement and FM capacity built in ETPP, as well as the practice of using Bank appointed consultants for internal supervision. The use of a PMT and increased integration of the PMT's capacity within the MOE remains relevant. 3.2 Achievement of Project Development Objectives [or Global Environmental Objectives] (including brief discussion of causal linkages between outputs and outcomes, with details on outputs in Annex 4): The project achieved its objective "to improve the conditions of learning in primary and secondary school through the urgent provision of primary and secondary school textbooks." The original number of books the project expected to print and distribute was 69 million for the school year 2004-2005. The project exceeded this number by printing and distributing over 80.25 million textbooks. The local supervision firm inspected 20 schools in each of the 18 governorates to confirm that the textbooks had actually been delivered. In some schools, they witnessed (and took photos of) students using the textbooks in their classrooms (photos are available in the project files). The project had a secondary objective (for Component 2 - project management and building capacity in textbook provision), though a significant training activity of this component was cancelled due to travel-related difficulties, resulting in only a partial achievement of this objective. Overall, the project accomplishments are commendable, given the unstable and volatile environment under which this first project in Iraq was being implemented. Both the MOE and World Bank teams were extremely dedicated to the project and as a result the project not only met its immediate objective of textbook provision, but the MOE began to use the competitive bidding procedures and the bidding documents from the Project in their own textbook procurement. Beginning with the 2006/7 school year, textbook provision has been incorporated into the MOE's annual recurrent budget. 3.3 Efficiency (Net Present Value/Economic Rate of Return, cost effectiveness, e.g., unit rate norms, least cost, and comparisons; and Financial Rate of Return): Initial estimates predicted that 69 million textbooks could be printed and distributed at a total cost of US$39 million; the actual cost was US$30 million. The US$9 million savings were used to print additional textbooks. The total number of textbooks printed was 80.25 million. Additional cost savings of approximately US$2 million were achieved through the close supervision of printing by the MOE, the amendment of some printing contracts, and quality control penalties that were applied by the MOE to printers when quality, quantity, or delivery time did not match the technical specifications. 3.4 Justification of Overall Outcome Rating (combining relevance, achievement of PDOs, and efficiency): Rating: Satisfactory 8 Given that the project reached its main objective (printing and distributing textbooks to schools) and made some progress toward its secondary objective (building capacity in the MOE to manage textbook production more efficiently), the overall project outcome is considered satisfactory. 3.5 Overarching Themes, Other Outcomes and Impacts (if any, where not previously covered or to amplify discussion above): (a) Poverty Impacts, Gender Aspects, and Social Development Poverty and gender issues were not a major focus of this project. The main social development impact of the project was that textbooks were provided to all children in the country and that schools remained open and operating, thereby contributing to social stability. (b) Institutional Change/Strengthening (particularly with reference to impacts on longer-term capacity and institutional development): There is evidence that institutional strengthening did occur during the project, mainly in the capacity of the MOE to manage and implement projects. Early project Implementation Status Reports (ISRs), World Bank supervision documents, pointed to delays in implementation due not only to the difficult local environment, but to weaknesses in procurement and financial management. Procurement and financial management capacity were noted to have improved in early 2005 (ISR#2); the quality of withdrawal applications was rated "very satisfactory." Later ISRs mentioned that the MOE demonstrated "impressive performance" and was successful in solving problems with monitoring and reporting, including audit reports (ISR#4). Carry over of some capacity from ETPP was seen by the task team as helping to lay a basis for the MOE-PMT capacity in subsequent education projects. In 2005-2006, the MOE used the Bank NCB bidding documents for its own procurement of textbooks (only $9 million were financed by the Bank in 2005-2006). However, it should be noted that due to some top level changes in the MOE, this procedure was not followed in 2006-2007 and that textbooks were procured from Iran by the MOE. (c) Other Unintended Outcomes and Impacts (positive and negative): Donor coordination at the technical level was seen by the task team as good during this project, with an adequate sharing of information between UNESCO, UNICEF, USAID and the Bank regarding textbooks and curriculum, with the support of the PMT. At the policy level, coordination has been more sporadic, and gains could not be attributed to this project. This having been the first project in Iraq since the 1970s, both the Bank and the Iraqi government team were frequently called on to share their experience in project preparation and implementation with other Ministries in Iraq. 3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops (optional for Core ICR, required for ILI, details in annexes): N/A. 9 4. Assessment of Risk to Development Outcome Rating: Significant Instability in the country remains a serious challenge and the education sector remains fragile. The achievements and accomplishments realized under this project, as well as future endeavors, can only be maintained if the minimum conditions for learning are upheld for subsequent school years as part of a more comprehensive effort of capacity building for wider system reform and improvement. Textbook provision accounts for a (relatively) small portion of the total annual costs of education in Iraq, and this cost has now been incorporated into the MOE's annual recurrent budget. There is evidence (namely, MOE reports and press releases) that conditions of learning have deteriorated in many urban areas as a result of security conditions, and some of the gains from this project may be lost at the school and classroom level. However, the capacity built in the MOE and in the private sector remains an asset that is more likely to survive the present difficult circumstances. 5. Assessment of Bank and Recipient Performance (relating to design, implementation and outcome issues) 5.1 Bank (a) Bank Performance in Ensuring Quality at Entry (i.e., performance through lending phase): Rating: Satisfactory The Bank team was diligent and thorough in ensuring quality in preparing this project. Namely, they sought frequent advice from and involved high level Bank management on critical design and preparation issues; they worked hand-in-hand with the MOE in designing a simple project and in preparing procurement and implementation documents prior to project approval; they identified numerous risks and risk mitigation measures; they revised the design when risks to implementation became apparent; they assessed the MOE's readiness for implementation and provided capacity building to the MOE in a variety of project management and fiduciary areas; they acted upon many of the recommendations of the QAE; and they drew on project design lessons from the experiences of other conflict and post-conflict countries. The Bank set up an Ad Hoc Advisory Committee to deal with many management-level decisions that would need to be made during the design of the project. This committee included World Bank country and sector managers, staff from the Bank's Operations Policy and Country Services (OPCS) unit, the MENA region quality advisor, a procurement advisor and an FM manager. The Committee was seen by the Bank's Quality Advisory Group to be "an effective means of solving first-time problems". This was particularly valuable since the standard Bank operating procedures would not always be appropriate for this emergency operation. The Bank team was candid about the high risk environment under which the project would be implemented; they identified twenty-six risks to the project during its preparation (see Annex 10.) Some of the risks were beyond the control of the MOE or the WB, but many of the risks were mitigated prior to project approval (e.g., broadening the involvement of actors outside the MOE in the design of the 10 project; and assessing the quality and quantity of paper in the MOE stocks prior to issuing bidding documents). The Bank team responded to the main suggestions of the internal QEA (section E of the QEA Panel's Report) which were to: (i) consider developing the MOE's M&E concepts and capacities; and (ii) work with the IMF and the Bank's country economist to arrive at the most reliable, available estimates of public expenditures for education, and a rough analysis of the fiscal implications of alternative textbook policies. In response to these recommendations, the Bank supported the appointment of a Monitoring Officer in the PMT and provided training. Bank support was supplemented by the assistance provided by the Fiduciary Monitoring Agent, which reviewed the PMT's quarterly progress reports. The Bank worked with the PMT to develop simple tools and formats for reporting progress, and provided training in the use of these tools. With regard to public expenditure, the Bank team held three Budget and Expenditure Analysis workshops working with a team of 15 senior MOE officials and with the participation of MOPDC and MOF. The Bank team recognized that the original implementation schedule for the project was ambitious. However, after careful consideration, and advice received from the Ad Hoc Committee, a decision was made that it would be better to "aim high" and assume that momentum would help carry implementation rather than to proceed with a more realistic implementation plan that would have almost ensured that books would be delivered later in the school year. In fact, the majority of books were actually delivered within three months of the start of the school year, an extraordinary achievement given the country conditions, though two months behind the project schedule. An assessment of Iraq's Public Procurement System was completed by a consulting firm in November 2003. Given the nature of this project and recognizing the importance of the MOE's procurement capacity (known not to meet international standards) to the project's success, the World Bank team in May 2004 further assessed the MOE's capacity to implement procurement. The MOE, with its own procurement organization, function, resources, procedures and practices, was found to have some basic knowledge of public procurement, and staff with enough procurement experience to be trained to carry out procurement according to Bank guidelines. Several recommendations were made to address the lack of adequate procurement capacity, namely: (i) the Project Implementation Manual (PIM) should include a variety of implementation tools, such as standard procurement documents, evaluation reports, progress reports and filing requirements; (ii) a ministerial decree should be issued to address shortcomings in current procurement practices; (iii) thresholds for Bank prior review should be low; (iv) recourse to force account could be considered during implementation; (v) the capacity of the banking system should be monitored during implementation; (vi) a project launch workshop should be held for all MOE staff and directorates to receive the project implementation plan and training; and (vii) a reform/modernization of public procurement laws and regulations should be considered. In response to these recommendations, the PIM did provide implementation and procurement tracking tools, a decree was issued by the MOE specifying the standards necessary to meet WB requirements, and thresholds were set low. There was no need to resort to the use of a force account, although the capacity of the banking system was very slow to develop. A project launch workshop was held in Amman, Jordan, in June 2004, in addition to several other training workshops, including during every supervision mission, in Amman, Jordan (mainly in 2004-2005) for the PMT staff in project management, procurement and financial management. 11 (b) Quality of Supervision (including of fiduciary and safeguards policies): Rating: Satisfactory The quality of supervision by the World Bank team was fully satisfactory. It was impossible for the Bank international staff to travel to Iraq to supervise the project in-country, and the Bank took the following measures to ensure the quality of its supervision: (i) projects were supervised quarterly with a full mission in Amman; (ii) the Bank appointed an Iraqi procurement consultant and an Iraqi education project coordinator who lived and worked in Baghdad and worked closely with the PMT; and (iii) because of delays in the appointment of the Fiduciary Monitoring Agent provided for in the Trust Fund Agreement, the Bank employed a Baghdad-based consulting firm as its supervision agent to conduct a comprehensive review of implementation of the 2004-2005 textbook procurement, including review of data, site visits to printers, warehouses, governorate MOE offices and over 200 schools. Subsequently, the Bank hired an independent monitoring agent (Etiman Management Consulting Services, EMCS) to provide fiduciary oversight to the ITF-funded projects in Iraq, including the Textbooks Project (see section 2.4 for fiduciary details) and to support the MOE with site inspections to verify that textbooks were distributed in all governorates as reported by the distributors. The Bank team traveled to Amman, Jordan about every three months to meet with MOE officials and the PMT to discuss and resolve project implementation issues. The quality and frequency of the World Bank prepared ISRs were adequate and mission aide memoires contained sufficient detail in describing issues of implementation and recording agreements to solving problems where applicable. The Bank team made concerted efforts to adapt standard procedures of supervision to ensure the needs of this emergency project were met. For example, the Bank team assisted the MOE PMT to revise their lengthy review process of payment to contractors from the delivery date of the textbooks which resulted in slow disbursements at the early stage of implementation. After discussions with the Bank, the MOE established three regional quality review teams to expedite quality checks in the governorates. While further improvements in MOE payment processes could have been made, new procedures are now being followed and enhanced. (c) Justification of Rating for Overall Bank Performance: Rating: Satisfactory Bank performance in ensuring quality at entry is satisfactory and quality of supervision is satisfactory, resulting in overall rating of satisfactory for Bank performance. The Recipient also rated Bank performance as satisfactory. 5.2 Recipient Performance Justification of Rating for Overall Recipient Performance: Rating: Satisfactory Recipient commitment was strong. The MOE PMT was frequently referred to as "committed" and "dedicated" in mission aide memoires and ISRs, and they consistently performed their work in a 12 difficult and often dangerous environment. Because of the scarcity of qualified people willing to work for the MOE on Bank-financed projects, the PMT was not adequately staffed during the early phase of project implementation, despite the provision in the Grant Agreement for the hiring of up to five consultants (only 2 had been hired by February 2005). Disbursements lagged considerably early on (US$9.6 million vs. a planned US$39 million) due to the difficulties the recipient had in monitoring contracts and authorizing payments - which could not take place until after quality reviews by MOE textbook review committees verified the quality and content of the newly printed textbooks. PMT efforts to "lighten" their textbook review procedures were effective and fewer delays in authorizing payments were experienced. Overall project guidance was to be provided by a high level Project Advisory Committee, with membership from MOE (chair), MOPDC and MOF. This committee was to be responsible for guiding and monitoring the project, facilitating coordination with key ministries and donors and ensuring adequate operational and maintenance funding. The committee did not meet because of the extreme difficulties of convening inter-ministerial meetings in a context of serious security challenges and frequent changes in government. As a result of this experience, the decision was made not to include such committees in future projects. The MOE took steps to minimize the occurrence of procedures that were found to delay the process of printing and distributing books. During early implementation, the MOE Curriculum Department made frequent last minute changes to books that were already submitted for printing. Because this caused approved proofs to have to be resubmitted, unnecessary delays and added costs were incurred for the textbook printers. The MOE issued instructions to the curriculum department to avoid future changes in textbooks once contracts were signed. While this improved performance somewhat in the second round of printing (2005-2006), it did not completely eliminate the problem as a subsequent minister insisted on some changes, and the communication problems with the KRG ministries meant that some changes were made subsequent to contract signing by the KRG officials. 6. Lessons Learned (both project-specific and of wide general application) Assessing and aligning the capacity of the implementing institutions with the implementation requirements of the project early on is critical, particularly when government systems and structures are being used for the first time - this also requires keeping project objectives and design simple. This is particularly important in unstable environments where new modes of doing business need to be regularly rethought and tested. Project development objectives should be revisited frequently to reconfirm their continued relevance and level of complexity given the fluctuating local capacity situation. Maintaining a focus on the longer term goal of building capacity, while simultaneously aiming to achieve quick and visible results is essential. The project design drew on a recent Bank review of experience in education and postconflict reconstruction in 52 conflict-affected countries, including recent experience in Kosovo, East Timor, Afghanistan and Sierra Leone. The studies emphasized the importance of quickly responding to the most immediate needs of the sector, such as keeping schools operational, supporting teachers and providing students with the necessary educational materials. While these actions are important to keeping the education system functional, they should be coupled with focused capacity building efforts for those in charge of running the system so that the groundwork for 13 improving the system is laid simultaneously. Improved education management capacity will contribute to education strategies that not only respond to immediate and emergency needs, but strategies that will also shape the future of education in a politically changing environment. Capacity-building provides the link between emergency assistance and reconstruction of the system. Building the institutional base for capacity to be sustained, as opposed to focusing on a small group of people, is difficult initially, but fruitful in the long run. A good institutional base will minimize the disruptions that often come with changes in key personnel in a rapidly changing political environment and will support the achievement of the even farther reaching goals of follow-on actions. A good institutional base includes several staff and/or units that can handle all aspects of the management of information to form policy, including budget planning and expenditure tracking, technical inputs and processes and evaluation functions. This is, of course, often difficult to do during a two-year project, particularly in an environment of instability and constant change, but this is all the more reason to build a stronger institutional base. Emergency projects which are simple in design call for a greater emphasis on supervision funding as the speed involved in preparation requires close support and supervision during early implementation. The rapid adaptation of the procurement methods (e.g. ICB and NCB), and the intensive training and support required to build procurement, FM and project management skills in this project required frequent, intensive and sometimes extended supervision missions. Securing in-country supervision when it is not possible to supervise on the ground directly is important to ensure fiduciary responsibility. In addition to local staff, the Bank hired a local university-based consulting firm to verify whether textbooks, in fact, did reach schools as planned. The firm carried out site inspections at schools in every governorate and provided the Bank with large amounts of very detailed, comprehensive documentation of their findings which included: (i) verification of the delivery of textbooks ­ by subject - at over 200 schools; (ii) opinions of teachers on the quality of the books; (iii) a description of problems encountered in the delivery process from the individual school's point of view; (iv) governorate level education data (# of schools, students, etc); and (v) photographs of schools, books and in some cases, students using the new books. This method of supervision, using local consultants, may well strengthen the quality of Bank supervision of projects in other, non-emergency contexts, and could prove very cost-effective. A Quality at Entry Assessment (QEA) contributes significantly to applying lessons learned in the assessment to the project. Some of those lessons can even be acted on during implementation. QEA lessons learned from this project included: (i) project simplicity, flexibility and innovation are appropriate ­ as for most (post-) conflict situations; and (ii) the use of an ad hoc advisory committee is worth considering under volatile conditions where standard Bank operating procedures will not work. 7. Comments on Issues Raised by Recipient/Implementing Agencies/Partners (a) Recipient/implementing agencies: No issues were raised in the Recipient's ICR. (b) Cofinanciers: 14 N/A (c) Other partners and stakeholders (e.g. NGOs/private sector/civil society): N/A 15 ANNEXES Annex 1. Project Costs and Financing (a) Project Cost by Component (in US$ million equivalent) Components Appraisal Estimate Actual /Latest Estimate Percentage of Appraisal (US$ million) (US$ million) 1.Provision of Textbooks 39,505,000 38,512,321 97.5 2.Project Management and 56 Capacity Building 495,000 294,456 3. 4. Total Baseline Cost 40,000,000 38,806,777 97 Physical Contingencies 0 Price Contingencies 0 Total Project Costs 40,000,000 38,806,777 97 Project Preparation Facility (PPF) 0 Front-end fee (IBRD only) 0 Total Financing Required 40,000,000 38,806,777 97 (b) Financing Appraisal Actual/Latest Source of Funds Type of Financing Estimate Estimate Percentage of (US$ million) (US$ million) Appraisal [Government] 15,000,000 0 0 [IBRD/IDA or GEF] Special Financing 40,000,000 38,806,777 97 [Donor A] [WB-administerd TF] [Donor B] [Parallel financing] 16 Annex 2. Outputs by Component Component 1: Provision of Textbooks (US$39.5 million) Schools were kept open and operating, and primary and secondary students received the necessary education materials they needed. This was particularly important, and very difficult given the ever changing and unstable environment in which the project was implemented. Offensive material was removed from textbooks. Existing textbooks were reviewed by panels of teachers and education specialists in Iraq, and the limited "offensive" material found was removed prior to the reprinting of the textbooks (ref. QEA7). Offensive material was defined as material that was insensitive to the social divisions in Iraqi society. Ninety-five percent of "first priority" textbooks were printed and delivered to schools by the February 2005 supervision mission. First priority textbooks were defined as primary and secondary textbooks, with special attention to the final grades of each phase. Component 2: Project Management and Capacity Building (US$0.5 million) MOE capacity was built in several areas: (i) managing the implementation of a donor-financed project; (ii) procuring textbooks using procurement methods that meet international standards, using World Bank procedures; (iii) accurately monitoring and reporting financial activities of projects; and (iv) coordinating donors as they learned to manage the demands and priorities of several different donors that supported textbook production between 2003 and 2006. 17 Annex 3. Economic and Financial Analysis (including assumptions in the analysis) The project was prepared as part of the Interim Strategy of the Bank to address the emergency reconstruction and recovery needs of Iraq. A rapid cost-benefit analysis was carried out during preparation in early 2004 (ref. QAE 7) ­ at which time there was no government in Iraq, and therefore, no official budget, or official data on available teachers. Eventually, the MOE was able (ref. aide memoire June 2005) to provide up-to-date information on teacher numbers, salary and budget provision, and to clarify the number of teachers to be re-hired for the 2005-2006 school year. The Bank agreed to assist in analyzing the financing situation of the sector and share with MOE for review and inclusion in an economic analysis. No quantitative analysis could be carried out at the ICR stage due to the lack of reliable statistics and limited economic information available. The Ministry is currently participating in a series of Budget and Expenditure Analysis workshops and has produced (in 2007 with the support of the Bank team) an analysis of the education budget and expenditure patterns over the past four years. The data, especially relating to budget and expenditure for the period 2003 - 2005, remain somewhat limited because of the large amount of off-budget financing that was channeled to education during this period. However, beginning with the 2006-2007 school year, the MOE assumed full responsibility for financing textbook production from their annual recurrent budget. 18 Annex 4. Bank Lending and Implementation Support/Supervision Processes (a) Task Team members Names Title Unit Responsibility/ Specialty Lending (The system pulls from Task Team in PAD Data Sheet, if any.) Peter Buckland Sr. Education Specialist MNSHD TTL Mohammed Allak Sr. Education Economist SASHD Economic Analysis Céline Gavache Operations Analyst MNSHD Implementation Vasilios Demetriou Sr. Implementation Specialist MNSHD Implementation Majed El-Bayya Sr. Procurement Specialist MNAPR Procurement David Webber Lead FM Specialist LOAG1 Financial Management Hadi Abushakra Lead Counsel LEGMS Legal Robert Bou Jaoude Sr. FM Specialist MNAFM Financial Management Stefanie Brackman Environmental Specialist AFTS4 Safeguards Concepcion Esperanza del Sr. Social Scientist MNSRE Safeguards Castilllo Emma Etori Program Assistant MNSHD Administrative Support Nancy-Jean Seigel Team Assistant MNSHD Administrative Support Supervision (The system pulls from Task Team Members in all archived ISRs.) Peter Buckland Sr. Education Specialist MNSHD TTL Céline Gavache Operations Analyst MNSHD Implementation Emma Etori Program Assistant MNSHD Implementation & Admin. Support Vasilios Demetriou Implementation Specialist MNSHD Implementation Majed El-Bayya Sr. Procurement Specialist MNAPR Procurement Robert Bou Jaoude Sr. FM Specialist MNAFM Financial Management Mohammed Allak Sr. Education Economist SASHD Economic Analysis Nazaneen Ismail Ali Procurement Specialist MNAPR Procurement Layla AbdulWahid Al-Kaissy Consultant (ETC) MNSHD Implementation Mitsue Uemura Consultant MNSHD Education Specialist Mona El-Chami FM Specialist MNAFM Financial Management (b) Staff Time and Cost (from SAP) (The system pulls data available for all fields) 19 Staff Time and Cost (Bank Budget Only) Stage of Project Cycle No. of Staff Weeks US$ Thousands (including travel and consultant costs) Lending FY05 8 US$77,000 TOTAL: Supervision/ICR FY06-07 81 US$383,000 TOTAL 20 Annex 5. Beneficiary Survey Results (if any) N/A. 21 Annex 6. Stakeholder Workshop Report and Results (if any) N/A. 22 Annex 7. Summary of Recipient's ICR and/or Comments on Draft ICR The MOE shared a draft ICR with the World Bank team on April 3, 2007. The ICR focused on (i) the structural aspects of the project design and its management structure, namely how the PMT functioned in the MOE; (ii) project outputs and costs; (iii) Bank and Recipient performance (both satisfactory); and (iv) conclusions and lessons. The MOE considers this project a success overall, with several small contributing achievements. One of the successes they cited is that this project built capacity in the local private printing sector. The MOE expects that it will draw upon the valuable experience of implementing this project to make changes in some of the procedures and regulations regarding textbooks provision, mainly in regard to their review, inspection and payment processes. The MOE noted that the project built much needed capacity in the MOE which now has a core of trained staff with experience in managing the implementation of a major textbook provision project and who have been trained in World Bank procedures. 23 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders N/A. 24 Annex 9. List of Supporting Documents - Project Information Document5, Emergency Education Rehabilitation Project, January 20, 2004 - Project Information Document, May 19, 2004 - Project Technical Annex (PAD equivalent), May 19, 2004 - World Bank Iraq Trust Fund Grant Agreement - Second Interim Strategy Note for Iraq for FY06-07, August 23, 2005 - International Reconstruction Fund Facility for Iraq, World Bank Iraq Trust Fund Report to Donors, December 31, 2005 - Minutes of Negotiations, May 4, 2004 - Iraq Procurement Capacity Assessment, March 2004 - Quality at Entry (QAE7) report by QAG, June 2005 - Iraq Education Annual Meetings Brief, July 2006 - Mission Aide-Memoires (preparation through final supervision) - Implementation Status Reports - Financial Management Reports - Audit Reports - IRISed correspondence with government officials 5PCN Equivalent. No separate PCN was prepared for TEPP since it was originally part of the Iraq Emergency Education Rehabilitation Project. 25 Annex 10. Risks and Mitigation Measures Identified in the Project's Technical Annex Because the task team recognized the uncertain and highly risky environment under which the project would be implemented, they summarized the key risks and indicated measures that would be taken to mitigate these risks. No safeguard risks were identified. Overall, the risks to the project were rated High, particularly in procurement. The project was prepared during the period when legal authority was in the hands of the Coalition Provisional Authority, and the process of transferring authority to Iraqis had not been clarified. The security situation remained a major risk to the project, as did the political uncertainty and the limited institutional capacity of the Ministry of Education. Limited knowledge of the capacity of the private sector also posed a significant risk. The efforts made during preparation to identify risks and propose mitigation measures had a significant impact on the project design, and on its implementation. Risk Rating Mitigation Measures From Outputs to Objectives Transition from CPA to a new Iraqi Keeping project simple. Working closely with administration ­ unknown outcomes that could H Ministry officials to ensure ownership. Working affect project implementation closely with CPA. Administration changes in MOE ­ jeopardizing Building relationships at the technical level with current commitment to project design and H current officials to ensure continuity in event of inputs changes. Sectoral priorities--difficult to establish in the Ongoing communication with Bank counterparts current political setting--possible disagreements working with MOF, MOP. Involving all concerned between MOE and other controlling Agencies S agencies in the design of the project and through (MOF, MOPDC) the PAC. From Components to Outputs Providing an adequate number of textbooks that Textbooks could be diverted to black market M are free of charge to students; direct delivery by printers to directorates; local publicity about textbook availability. MOE has developed an action plan to identify Problems with the availability of textbook titles that do not have film and urgently arranged printing film for some titles could impede H for its production. CDs of available titles from timely availability of textbooks in schools UNICEF and UNESCO will be forwarded to MOE by these agencies. Paper for NCB textbooks could be inadequate, MOE has assessed quality and quantity of paper in of poor quality or lost in transfer to printers M stock. Printers will be responsible for collection of paper from MOE for printing. This is a risk beyond the control of MOE or WB. Delivery of textbooks and conducting supervision Security conditions deteriorate making by private contractors rather than MOE may help distribution of textbooks difficult S reduce visibility. Distribution to Governorates is responsibility of printers, who are required to insure the textbooks. MOE reports that warehouse capacity is adequate Storage of textbooks may present problems M at all but three governorates. MOE will make alternative arrangements for storage in school buildings (not classrooms). 26 Risk Rating Mitigation Measures MOE has responsibility for distribution from Distribution from governorates to schools may governorate storage to schools. MOE will use long encounter difficulties M standing practice of paying for schools to collect books. This is not funded from the Project. Capacity-building will focus on local staff. Where possible, support from international TA will be provided through virtual meetings, and meetings in Difficulty in hiring expatriate TA consultants Amman. In the event that local capacity is initially wherever local expertise is lacking. S not adequate for rapid implementation, the MOE has agreed to the use of agents for relevant aspects of implementation and monitoring in the early stages. Consultants will be contracted to assist in The Bank's inability to carry out in-country supervision. In addition, special monitoring supervision S instruments will be designed for ITF-financed projects and used of MOE implementation staff, supervision consultants and Monitoring Agent. Procurement Risks The lack of good laws and regulations, of A decree was issued by the Minister of Education modern standard documentation, and the habits (April 2004) rectifying shortcomings in the current acquired by procurement staff in the previous H procurement practice at the MOE. Continuous era, which will take time to change training to be provided by an international procurement consultant.. The international procurement consultant will Weakness of procurement staff in use of Bank provide assistance to the PMT in procurement on procurement guidelines and international sound H World Bank procurement guidelines, bidding procurement practices document preparation, bids evaluation and also will provide training in procurement. Close supervision by Bank staff. Inability of Bank procurement staff to supervise Recruitment of local consultants to conduct spot project in the field H physical inspection and assist the PMT in reporting. Delays in implementing the procurement plan The international procurement management due to lack of experience in procurement consultant will provide assistance to the PMT in planning and the volatile security conditions in H procurement related issues and also will provide Iraq training in procurement. Overall Procurement Risk H Financial Management Risks Inherent Risk The Bank engaged a consulting firm to assess the Undetermined financial management capacity current Iraq institutional structure and propose in the MOE. H mitigating measures (ongoing). Meanwhile, knowledge was built through interviews with the MOE, MOF and Ministry of Planning. Limited capacity to manage financial A PMT staffed with a qualified Financial Officer requirements of the Project. S will follow on the project accounts and generate the project reports. The Iraqi contribution to the project will be in kind Counterpart Funds L i.e. the provision of paper for textbooks, and the costs of staff assigned to the PMT. Inventories have been taken of the available stocks of paper. Overall Inherent Risk S 27 Risk Rating Mitigation Measures Control Risk Lack of familiarity with Bank guidelines and Training will be provided to MOE and PMT staff regulations in MOE. H on Bank guidelines and regulations. Flow of funds: difficulties in making payments to suppliers inside and outside Iraq; possible H All major payments will be made through direct risks associated with Iraq banking sector. payment. Staffing: Lack of financial management skills An experienced FO in PMT will be responsible for in PMT. H the project accounting. Financial Operations chapter of the Project Accounting policies and procedures: may not Implementation Manual, will define financial meet Bank management and reporting M policies and procedures. The control policies requirements. applicable to the MOE will be used to follow on the project accounts. The Minister will assign one internal auditor Internal audit: Existing arrangements for (champion) to focus on the project transactions. internal audit may not be adequate or may not M This auditor will be introduced to the project and be familiar with project requirements. trained on Bank guidelines in the Launch Workshop. External audit will be carried out by an independent auditor acceptable to the Bank with External audit: Unknown capacity of auditing international experience. There was no capacity firms in Iraq. H assessment for the audit profession in Iraq to determine capability to perform audits as per ISA. TORs require international experience in auditing. Reporting and Monitoring: Current MOE A "ring-fenced" project accounting system will systems do not generate required reports. H generate the data for the FMRs. Information systems: Not functioning reliably Simple spreadsheet-based reporting format will be in MOE H put in place at Launch Workshop (June 2004) Overall Control Risk H 28 Annex 11. Details on Financial Management and Procurement Financial Management Financial Management staffing was adequate. The MOE PMT included a Financial Officer, who was identified during the design phase and hired later as a consultant, an internal auditor and two accountants (MOE staff) who worked full time on the two Bank-financed projects (textbooks and school construction and rehabilitation). Audit reports for the project were initially delayed, but were received with "unqualified" opinions. The auditor selection process was long due to the inexperience of the PMT with Bank procurement guidelines (this was expected) and to the limited number of qualified auditors willing to work in Baghdad on a Bank-financed project. The first audit report (from project inception to December 31, 2004) was received eight months late, but received an "unqualified" opinion with no major accountabilities identified. A management letter was also submitted and the few observations it made were successfully handled by the PMT. The audit report for the fiscal year ending December 31, 2005 was submitted seven months late, and also received an "unqualified" opinion. The Fiduciary Monitoring Agent, Etiman Management Consulting Services (EMCS), that was hired for FM purposes, was viewed as generally effective. Initially, the FMA's reports were below the expected level of quality, but over time their reports became more useful. EMCS consultants visited the MOE PMT two to three times per month on average to: (i) review the PMT's FMRs and reconcile the PMT records to the Bank records; (ii) monitor unclaimed expenditures; (iii) verify disbursement plan updates; and (iv) provide on-the-job training in FM matters. EMCS included the PMT-prepared FMRs in their quarterly reports, as well as their own adjusted FMRs (with their review comments and recommendations for the PMT FMRs). FMRs were usually submitted in a timely manner. EMCS also conducted statement of expenses reviews covering payments made by the MOE and later reimbursed by the Bank. FM capacity is seen as sustainable, as long as no major exodus of FM staff occurs. The same PMT Financial Officer for this project continues to work on the other ITF-funded project being implemented by MOE. The MOE accountants have left but the impact of their departure is seen as minimal by Bank FM staff. Future projects would benefit from improved English language and word-processing training for the PMT FM team. The PMT did a relatively good job overall and improved its performance during project implementation, and the MOE Finance Department also was involved to a certain extent, joining missions when possible. The project's internal auditor has become quite knowledgeable of World Bank FM requirements. The accountants, internal auditor and other PMT staff could potentially function as Financial Officers in the future if given additional targeted training. There were no major changes to FM during project implementation. Bank FM support was proactive and thorough. The Bank provided adequate FM training at various stages of project preparation and implementation. The main FM issue during the project was the long time it took the MOE to authorize and approve payments to textbook printers and distributors. The 29 process was studied, bottlenecks identified and changes introduced which led to a reduction of steps in the payment approval process, namely, having the payments review and authorization documents go directly from the PMT Director to the DG for Accounting instead of routing them through the Minister. After review, the DG for Accounting sent them to the Minister. The FM risk mitigation measures described in the project's Technical Annex (para. 50) were put into place, except for the one stipulating that withdrawal applications should be reviewed by the Monitoring Agent before being sent to the Bank. This measure was not implemented because the FMA was only appointed in 2005. Once appointed, the FMA performed statement of expenses reviews which were generally satisfactory, although they identified some ineligible payments that MOE has to repay to the Trust Fund. Good FM contributed directly to the achievement of project outcomes and to realizing budgetary savings which, in turn, allowed for the printing of additional books beyond the original target. The project FM staff applied penalties when print shops did not deliver on time. The FM team kept accurate and up-to-date records, provided timely reports for decision-making purposes, participated in bid evaluations and provided FM advice on government textbook regulations. Several FM related lessons can be learned from this project, including: (i) having disbursements made directly in US$ was successful; (ii) taking care to accurately estimate the capacity of those who will be responsible for FM and to hire external consultants to perform the FM function if capacity is determined to be weak; (iii) carefully analyzing internal processes that may affect disbursements in order to identify potential bottlenecks and encourage the recipient to deal with them prior to project implementation or to deal with them as soon as they are identified, involving decision-makers at both the Recipient and Bank levels. Procurement Procurement staffing was initially limited, but became adequate over time. The PMT and the procurement officer were trained during project preparation and implementation. The Ministry considered procurement to be an area of serious interest, and H.E. the former Minister of Education sought to understand the challenging issues related to procurement. MOE procurement capacity was initially found to be weak; however, through intensive training, procurement capacity was built. The MOE procurement capacity was assessed as part of an overall Bank procurement assessment for Iraq. During project preparation, the Bank and the MOE met with Iraqi printers (in Amman) to better understand their concerns, capacities and financial situations, and to discuss ideas about how to move quickly in this project. The Bank team discussed its findings and the shortcomings of the procurement system with the Minister of Education. The MOE took the Bank's advice seriously and issued a decree to address these shortcomings for all MOE procurement activities, including those financed through the government budget. An initial procurement plan was prepared by the MOE during the preparation of the project. Extensive training was conducted during the project launch workshop. Overall procurement performance was satisfactory during implementation and has improved when compared to the way in which procurement was handled prior to this project. During 30 implementation, the MOE improved the quality of their reporting. The procurement capacity built in the MOE is seen as generally sustainable since the MOE textbook officer and the PMT procurement officer are MOE staff, and an international procurement consulting firm is providing the PMT with additional training and continuous procurement support. Procurement faced several obstacles: (i) changes in procurement staff due to personal security threats; (ii) delays in the delivery of some textbooks; (iii) multiple addendums to some contracts because certain specifications in the bidding documents did not reflect recent requests from other concerned MOE departments; (iv) delays in completing contracts due to or bad quality films for printing some textbooks; (v) curriculum changes were introduced during contract implementation for some of the textbooks; (vi) inspection committees took a long time to inspect the printed textbooks; and (vii) security issues (namely, fear of kidnappings and personal threats) caused some printers to leave the country. A challenging procurement issue was to determine whether to use ICB or NCB to procure the reprinting of textbooks. ICB was planned for the majority of textbook printing. The MOE came under pressure from local printers to have the project employ NCB procurement method. An agreement was reached to allow the contracts for which MOE had available paper stocks to be procured using NCB. The contracts that would include the supply of all materials, including paper, would be procured using ICB. It became clear after the first NCB contract packages were completed that using ICB would result in lower prices than using NCB. The MOE, therefore, decided that ICB would be used for all remaining contracts, thereby resulting in the saving of approximately US$9 million by using ICB. In turn, local printers reduced their prices in order to compete with international printers through ICB. The MOE used the cost savings to reprint additional textbooks. The World Bank team was diligent and proactive in supporting project procurement, which was particularly important as this was the first Bank-financed project in Iraq. The Bank encouraged the MOE PMT to seek procurement assistance from external procurement professionals. The Bank provided intensive training and capacity building for the MOE (beyond the PMT) through the project launch, other workshops and on the job training during regular missions to Amman and Baghdad. The Bank prepared a Master Implementation Manual for all Iraq projects. The Bank team sought advice and drew upon the experience from other countries on the reprinting of textbooks specifications. As mentioned in a previous section, the Bank in 2004 hired a qualified local firm to ensure fiduciary responsibility and to conduct physical inspections of textbooks delivery. The firm did a very thorough job and produced ample evidence (through written documents, CD-ROM and photographs) that most textbooks were received as planned. The decision to hire this firm proved to be an important one, and the Bank's efforts in communicating with and guiding them with clarity of expectations are an example of best practice. The MOE benefited from this project in several procurement dimensions: (i) they learned to procure the reprinting of textbooks in accordance with international standards; (ii) they began to reform unsound procurement practices in the ministry; and (iii) they improved their IT experience through the use of modern computer software, such as MS Excel and Word, and the effective use of email for communication purposes. Several procurement lessons can be drawn from this project, including: (i) have the first year's bidding documents ready by project effectiveness; (ii) build procurement capacity during project preparation and make sure that there is a procurement officer who is empowered to make decisions; (iii) 31 ensure that external procurement support is available early on if the Recipient's procurement capacity is weak and/or the procurement risk is high; (iv) ensure that the specifications and information provided by the Recipient are recent and accurate; (v) consider the use of ICB for the reprinting of textbooks as it may be more efficient and more economical than NCB; and (vi) include a member on the Bank team who speaks the Recipient's language. 32 IBRD 33422 IRAQ SELECTED CITIES AND TOWNS MAIN ROADS GOVERNORATE CAPITALS RAILROADS NATIONAL CAPITAL GOVERNORATE BOUNDARIES RIVERS INTERNATIONAL BOUNDARIES 40°E 42°E 44°E 46°E 48°E TURKEY To Urmia Zakhu - - To Urmia - 0 50 100 150 Kilometers To DAHUK Al Qamishli - Tigris Dahuk 'Aqrah - R. 0 50 100 Miles Haji Ibrahim Rayat - - (3,600 m) ARBIL - Sinjar - Mosul 36°N Arbil- EuphratesR. To Dayr az Zawr N I-N A W Á 36°N As Sulaymaniyah - - ISLAMIC Al Hadr - - REPUBLIC Kirkuk- AS SULAYMANIYAH SYRIAN OF IRAN To Dayr TA'MIM AT - ARAB az Zawr Bayji- J a REP. b a l - Tikrit - H a 'Anah - SALAH AD m - - r Al Qa'im DIN Samarra' - - i n To Kermanshah - - 34°N Al Hadithah - 34°N - - Tharthar To Hims Lake 'Akashat - - Ba'qubah - DIYALÁ DIYALÁ - Ar Ramadi- - Al Fallujah - BAGHDAD Habbaniyah - - - Lake BAGHDAD A L A N B A R WASIT- Trebil Razzaza To S y r i a n Lake Karbala- BABIL - Al Kut - Amman Al Hillah KARBALA' - Tigris R. To Dezful - JORDAN D e s e r t 32°N Ad Diwaniyah - - - Al Hayy 32°N Nukhayb An Najaf - AL QADISIYAH - - Al 'Amarah - Euphrates MAYSAN R. As Samawah - Ash Shatrah To Ahvaz - S DHI- QAR - Al 'Uzayr a AN NAJAF h r An Nasiriyah - - a' a l H Al Basrah ij a As Salman- r AL Az Zubayr a h Umm 30°N AL MUTHANNÁ MUTHANNÁ BASRAH Qasr 30°N To Ad IRAQ Damman SAUDI ARABIA KUWAIT This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, or any 28°N endorsement or acceptance of such boundaries. 40°E 42°E 44°E 46°E 48°E FEBRUARY 2005