89889 Community Action for Nutrition Project (Sunaula Hazar Din) (IDA Credit No. 5137-NP and IDA Grant No. H786-NP) Implementation Review and Support Mission June 2-13, 2014 Aide-Memoire A. Introduction 1. A World Bank team1 led by Manav Bhattarai (Task Team Leader) carried out an implementation review of the Sunaula Hazar Din - Community Action for Nutrition Project from June 2-13, 2014. The objectives of the consultation were to assess the overall implementation progress and identify key steps in order to move forward to ensure accelerated implementation of the project activities. 2. The team would like to express its sincere thanks to the officials of the Ministry of Federal Affairs and Local Development (MOFALD) which include Mr. Reshmi Raj Pandey (Joint Secretary, Project Director), Mr. Tekraj Niraula (Under Secretary, Project Coordinator), Mr. Baburam Shrestha (Chief Controller), Mr. Tula Raj Sunuwar (M & E Officer), Mr. Mahesh Pokharel (Procurement Consultant) and Mr. Indra Bhujel (Social Mobilization Consultant), Mr. Dhananjaya Poudyal (Nutrition Specialist) and Mr. Bishnu Bahadur Rayamajhi (Accounts officer) for organizing the consultations and for the courtesies and cooperation extended to the World Bank team. The team had the opportunity to visit Sunsari and Saptari districts to see communities implementing Rapid Results Initiatives. The list of people met is included in Annex 1. 3. This Aide Memoire (AM) summarizes the discussions and agreements reached during the consultations. The team’s findings, summarized in this AM, were discussed at a wrap-up meeting, chaired by Mr. Shanta Bahadur Shrestha, Secretary, (MOFALD) on June 13, 2014. As agreed at the wrap up meeting, this AM will be classified as a public document under the World Bank’s Access to Information Policy. B. Key Project Data Project Data Project Performance Ratings Board Approval: June 26, 2012 Summary Ratings: Last Now Effectiveness Date: August 24, 2012 Achievement of PDO MU MU Original Closing Date: June 30, 2017 Implementation Progress MU MS MTR Date: (Planned) January 2015 Project Management MU MS Procurement MU MS Original Cr. Amount: USD40 million Financial Management U MS Amount Disbursed: 2.04 million (5.1%) Safeguards MS MS (As of June 30, 2014) M&E MS MS Counterpart Funding S S HS=Highly Satisfactory; S=Satisfactory; U=Unsatisfactory; HU=Highly Unsatisfactory; NA=Not Applicable; NR=Not Rated 1 The team consisted of : Manav Bhattarai, Health Specialist and Task Team Leader) Albertus Voetberg, Lead Health Specialist; Preeti Kudesia, Senior Health Specialist; Tekabe Belay, Senior Health Economist; Phoebe Folger, Operations Officer; Silvia Kaufmann, Senior Nutrition Specialist; Daniel Stein, DIME; Gogi Grewal. DIME, Timila Shrestha, Financial Management Specialist; Annu Rajbhandari, Environmental Specialist; Ramesh Raj Bista, Procurement Specialist and Jasmine Rajbhandary, Social Protection Specialist. 1 C. Achievement of Development Objectives Status 4. The Project Development Objective (PDO) is to improve attitudes and practices known to improve nutritional outcomes of women of reproductive age and children under the age of 2. The project will achieve this development objective by creating demand for nutrition related services and products. There has been an accelerated implementation of rapid results for nutrition initiatives in the last few months in 94 VDCs of 10 districts as was agreed during the last implementation support visit. Out of 831 such initiatives more than 90% have already received budget and have started working. Although progress has been noted in the last four months, the project team still needs to focus on implementation in order to make up for the implementation delays suffered earlier to ensure the likelihood of achieving the PDO. The PDO, therefore, has been retained as “Moderately Unsatisfactory”. Detailed status of the PDO and its indicators are included in Annex 2. D. Current Implementation Status 5. The team reviewed with the government the progress made till date including the progress on the actions agreed during the implementation review and support mission in February, 2014. Since the team observed sufficient progress in most of the pending activities of individual project components, project management, financial management and procurement including compliance to legal covenants like finalization of the Operations Manual and Sub-grant guidelines, the implementation progress has been upgraded to “Moderately Satisfactory”. The progress needs to further accelerate to create adequate basis to increase the likelihood of achieving the PDO. The attached table shows the status of actions agreed during the last mission: Actions Date Agreed Status First round of sub-projects will be completed in 50% 1. July 15, 2014 Ongoing. Of agreed 243 of the wards of 94 VDCs initiatives, 831 were initiated and 770 have received money to conduct activities and are expected to finish on time. BER for Laptop computers to be submitted to the 2. February 15, 2014 Completed, and goods World Bank procured Coaches for 90 VDCs to be hired 3. March 7, 2014 Completed Firm for training/orientation of FSNSC to be hired 4. May 15, 2014 Delayed, Contract evaluation phase 5. Procurement process for consulting and non- May 30, 2014 IEC materials printed consulting services related to additional activities in IEC to be completed 6. February 28, 2014 Completed Project Operations Manual will be finalized and submitted to the Bank Capacity assessments of project DDCs from a 7. June 30, 2014 Delayed financial management perspective to be completed A dedicated and full time accounts officer as 8. February 28, 2014 Completed member of core PMT team to be assigned 2 E. Project Components 6. Component 1 (estimated US$34.86 million) Rapid Results for Nutrition Initiatives (RRNI) at the ward level. The team congratulates the government for progress made under this component. Of the 423 initiatives agreed to be complete by July 15, 2014, 831 RRNI have been grounded. Of these, more than 90% of the communities have received the funds and have started working. The team observed during field visits the excitement and enthusiasm in those communities to successfully complete the first cycle of initiatives on time. 7. The team expressed concern regarding the slow pace of fund flow to communities and encouraged the government to expedite the fund flow to those remaining communities which have not yet received the funds. In order to make up for implementation delays of one year, we are pleased to note that the government is considering allowing multiple initiatives in the communities beginning with the next cycle. This would not only accelerate disbursement but also help to more rapidly produce a developmental impact on nutrition behaviors. In the communities visited, the team observed a great deal of community interest to implement multiple initiatives and their confidence that they could do so. However, the team agreed to allow multiple initiatives only in those communities which were successful in their first cycle. It is expected that successful communities achieve 80% of the targets set in their proposals. 8. National Service Providers (NSPs) contracted by the Ministry recruited coaches who facilitate the communities to choose goals and prepare proposals for sub-projects and help them to implement activities in 94 VDCs. During the field visits, it was observed that the coaches will need constant supervision and mentoring in order for them to help the communities to implement the sub-projects. The government agreed that such provisions will be made to mentor the coaches. 9. The team also pointed out that the work to be done by coaches is comparable to the work done by existing social mobilizers of Local Governance and Community Development Program (LGCDP), and given that the government has decided to increase the salaries of social mobilizers from NRs. 7,000.00 to NRs. 10,000.00 per month, the project should also explore the possibility of raising the salaries of the coaches to the same amount. Agreed Actions: • During the second round of sub-projects, only communities which have achieved 80% of their targets will be allowed to undertake multiple initiatives. • The remaining communities which have not received funds for the first cycle will receive the funds by June 30, 2014. • Every three months, the coaches will receive mentoring and supervision support. 10. Component 2 (estimated US$5.14 million) Project Management, Capacity Building, Monitoring and Evaluation (M&E). This component relates to procurement and financial management activities which include procurement of goods and consultation services for capacity enhancement and district financial capacity assessment, finalization of operations manual and establishment of Management Information System (MIS). Based on the good progress observed in this component as detailed below, the rating for project management has been upgraded to “Moderately Satisfactory”. 3 F. Procurement, Financial Management (FM) and Disbursement Procurement 11. The team reviewed the implementation of the procurement plan and noted that most of the procurement activities planned for the year have been completed. Some procurement activities in consulting services and goods categories have been delayed and are now planned for the next fiscal year. The team suggested preparing an updated procurement plan for the next fiscal year while preparing the proposed annual work program and budget and submitting it to the World Bank for its review by July 31, 2014. Selection of Service Providers for clusters 1 and 3 are in place and reselection process for Cluster 2 has been initiated and the technical evaluation has been submitted to the World Bank for review. This is a critical activity for meeting the project objectives. Procurement of laptops and computers and services for printing materials has been completed. The contract for vehicles has been signed. Based on the significant progress made on procurement activities and its positive impact in project implementation, procurement performance rating has been upgraded to “Moderately Satisfactory”. Agreed Actions: • An updated Procurement Plan for FY 2014/15 to be submitted to the World Bank by July 31, 2014. • Hiring of National Service provider for cluster 2 to be completed by August 15, 2014. • Hiring of a firm to train/orient district and VDC level stakeholders by July 15, 2014. Financial Management and Disbursement 12. The review noted good progress in financial management with most agreed actions being completed, and setting a good ground for continuing good financial information system. The mission is pleased to note that an Accounts Officer as well as an Accounts Assistant has been assigned for the project. The mission is also pleased to see that the Project Operations Manual has been approved and disseminated to the concerned offices. The required books of accounts have also been maintained except for ledgers as per the approved programs/activities which the project has been advised to maintain. The mission appreciated the project’s efforts in submitting the financial reports on time. There were no major issues raised in the external audit report of FY2012/13. The mission, however, reminded one pending action which was agreed during appraisal which relates to carrying out the capacity assessments of project District Development Committees (DDCs) from a financial management perspective. The mission noted that the Request for Proposal (RFP) has been issued and the contract is expected to be awarded by July 2014 and capacity assessment completed by October 2014. Some internal control deficiencies identified during the mission were recommended for rectification. 13. Out of the approved budget of NPR 590.6 million for FY 2013/14, only 1.98% expenditure has been incurred up to May 14, 2014. The mission noted that the budget was approved with the expectation that the communities will be able to undertake at least two cycles of sub-projects in 15 districts but due to delay in establishing institutional arrangement for rolling out the sub-projects, expenditures could not be incurred as expected. As of the review date, only one cycle of sub-projects had been initiated in 10 out of 15 districts. The sub-projects will be implemented as per the recently adopted Project Operations Manual. The corresponding expenditures for those sub-projects will be reflected in the last trimester. The implementation of the project is therefore expected to improve, especially in the Sub-Grants category which is the main component of the project. 14. Disbursement is running very slow. As of June 30, 2014, the disbursements comprise of initial advance to the Designated Account of USD 2 million and a replenishment of USD 40,795.67, which 4 is only about 11.3% of the allocated funds under IDA Grant. There has been no disbursement against IDA Credit. With the improvement in implementation, the disbursement is expected to pick up in FY2014/15. 15. Based on the completion of most of the agreed actions and the progress observed, the financial management of the projects is upgraded to “Moderately Satisfactory” Agreed Actions: • Complete the capacity assessment of project DDCs from a financial management perspective by October 30, 2014. • Submit third trimester Implementation Progress Report of FY2013/14 by August 31, 2014. • Submit unaudited accounts of FY2013/14 by October 15, 2014. G. Safeguards 16. As agreed in the last mission, Operation Manual of the project includes provision made in the Environment and Safeguard Management Framework (ESMF) including environmental screening for safeguard compliance. During the field visits in Sunsari and Saptari districts, the team observed initiatives like Sanitation and Hygiene in a school, creating open defecation free communities, encouraging exclusive breastfeeding and encouraging increased consumption of animal sourced protein among pregnant women and children. The visit to the few wards revealed that toilets have been constructed in schools considering the safeguard aspects for improving the hygiene and sanitation in the school premises. Similarly, at the household level toilets have been constructed considering proximity from the water sources, appropriate location for soak pit and septic tank and water availability. The coaches are using the developed manuals which also include the safeguard concerns (which was shared to the WB safeguard specialists) are being used for monitoring purposes. The Bank team recommended the project to adhere to ESMF while selecting the site for poultry farming (for providing animal protein to pregnant women and children) so that the environmental issues are considered well in advance. Rating for the safeguard has been retained as “Moderately Satisfactory”. H. Results Framework and Monitoring & Evaluation 17. Although preliminary baseline data were received four months ago, the final baseline data turned out slightly different and thus have been updated in the Operations Portal. However, the targets to be achieved will remain the same. Since some progress on the sub-projects being conducted in the field have been reported, the intermediate results indicators have now also been updated. The government is doing its regular monitoring of the performance of the National Service Providers and the coaches and their work with the communities. The third party monitoring has begun in the field as well and their independent review will provide the assurance whether the funds are being used for their intended purpose. 18. The team reviewed the progress on the impact evaluation. The project runs in two phases and the VDCs are randomized for impact evaluation into two groups. The first group is called an “early starter” and the VDCs in this group already have ongoing sub-projects. The second group is called a “late starter” and will have sub-projects beginning FY16. The implementation of sub-projects is happening as per the randomization with implementation beginning in most of the early starter VDCs in clusters 1 and 3 districts. The treatment in which VDCs are required to have female leaders of the RRNI group also seems to have good compliance, as the data shows that 80% of wards in this category have female leaders as compared to 40% in wards without this requirement. However, the strategy for promoting specific focus areas appears to have been less successful. In the field visits, some coaches were aware of focus area promotion and communicated it to their groups, but others were not at all aware of the policy. The team recommends that all coaches receive refresher training 5 before the next cycle in which the idea and methods of suggested focus areas is reinforced. Finally, there was a worrisome error rate between data given provided by the National Service Provider (NSP) (on focus areas chosen and gender of RRNI group leaders) compared to what was observed in the field. The team recommends that the NSP develops a more rigorous and traceable system for collecting this data, and re-confirms all data from the first cycle. 19. The team expressed concerns that the a digital Management Information System (MIS) should have been in place for proper records but the hiring of a firm to establish this has been delayed due to administrative reasons. A proper MIS in place will reduce errors of reporting. 20. Based on the above progress, the rating for Monitoring and Evaluation has been retained as “Moderately Satisfactory” Agreed Action: • Award of contract for MIS to be completed by July 31, 2014. 21. Access to Information 22. The Government agreed that the Aide Memoire can be disclosed as a public document under the World Bank’s Access to Information Policy. Proposed Next Consultation Visit 23. The timing for the next implementation support visit is planned around November/ December, 2014, with a focus on reviewing the implementation progress creating adequate ground to increase the likelihood of achieving the PDO within the project period. The mission will also discuss about the timing for mid-term review planned for the beginning of 2015. Summary of Agreed Actions Actions Date Responsible 1. During the second round of sub-projects, only Next cycle onwards MOFALD successful communities will be allowed to undertake multiple initiatives. 2. The remaining communities which have not June 30, 2014. MOFALD received funds for the first cycle will receive the funds 3. Every three months, the coaches will receive On-going MOFALD/World mentoring and supervision support. Bank 4. An updated Procurement Plan for FY 2014/15 July 31, 2014 MOFALD to be submitted to the World Bank 5. Hiring of National Service provider for cluster 2 August 15, 2014 MOFALD to be completed 6. Hiring of a firm to train/orient district and VDC July 15, 2014 MOFALD 6 level stakeholders 7. Complete the capacity assessment of project October 30, 2014 MOFALD DDCs from a financial management perspective 8. Submit third trimester Implementation Progress August 31, 2014 MOFALD Report of FY2013/14 9. Submit unaudited accounts of FY2013/14 October 15, 2014 MOFALD 10. Award of contract for MIS to be completed July 31, 2014 MOFALD 7 Annex 1: LIST OF PEOPLE MET Ministry of Federal Affairs and Local Development 1. Mr. Shanta Bahadur Shrestha, Secretary 2. Mr. Reshmi Raj Pandey, Joint Secretary and Project Director 3. Mr. Tekraj Niraula, Under Secretary and Project Coordinator 4. Mr. Baburam Shrestha, Finance Officer 5. Mr. Tula Raj Sunuwar, Monitoring and Evaluation Officer 6. Mr. Mahesh Pokharel, Procurement Expert 7. Mr. Indra Bhujel, Social Mobilization Expert 8. Mr. Dhananjaya Poudyal, Nutrition Specialist, MOFALD 9. Mr. Bishnu Bahadur Rayamajhi, Accounts Officer Ministry of Finance 1. Mr. Lal Bahadur Khatri, Under Secretary, IECCD 8 Annex 2: Results Framework and Monitoring . Country: Nepal Project Name: Community Action for Nutrition Project (Sunaula Hazar Din) (P125359) . Results Framework . Project Development Objectives . PDO Statement The Development Objective for the Project is to improve attitudes and practices known to improve nutritional outcomes of women of reproductive age and children under the age of 2. Changes in attitudes and practices would address the key risk factors for child malnutrition and create demand for nutrition related services and products. The supply of these services and products will be provided through existing public sector and donor-funded programs, the private sector and, to a limited extent, financed through the Project. . Project Development Objective Indicators Cumulative Target Values Data Source/ Responsibility for Indicator Name Core Unit of Measure Baseline YR1 YR2 YR3 YR4 End Target Frequency Methodology Data Collection Percentage of unmet 31.5 (final Baseline, Mid- family planning needs Percentage 25 term and end-of- Surveys Consulting firms among women 15-25 data) Project years of age Percentage of pregnant 20.5 (final Baseline, Mid- women taking iron and Percentage 30 term and end-of- Surveys Consulting firms folic acid (IFA) data) Project supplements for 180 days Percentage of children 0- 69.0 (final Baseline, Mid- 6 months age who are Percentage 80 term and end-of- Surveys Consulting firms exclusively breastfed data) Project Percentage of children 6- 9.3 (final Baseline, Mid- 24 months age who Percentage 25 term and end-of- Surveys Consulting firms consume a minimum data) Project acceptable diet 9 Attitude of community members towards the 36.6 Baseline, Mid- importance of keeping Percentage favorable 50 term and end-of Surveys Consulting firms girls in school until at Project least 20 years of age % score Attitude of community 32.1 Baseline, Mid- members towards the importance of reducing Percentage favorable 50 term and end-of- Surveys Consulting firms Project indoor air pollution % score Attitude of pregnant women towards the importance of eating 75 Baseline, Mid- three time a day Percentage favorable 92 term and end-of- Surveys Consulting firms including at least one Project animal-sourced food per % score day . Intermediate Results Indicators Cumulative Target Values Data Source/ Responsibility for Indicator Name Core Unit of Measure Baseline YR1 YR2 YR3 YR4 End Target Frequency Methodology Data Collection Number of wards Trimesterly, Routine carrying out RRNIs Number 0.00 831 2000.00 Annually monitoring MOFALD Percentage of wards Trimesterly, Routine carrying out RRNIs per Percentage 0.00 98.2 80.00 Annually monitoring MOFALD selected VDC Number of RRNIs per Trimesterly, Routine ward per year Number 0.00 1 2.00 Annually monitoring MOFAFALD Characteristics of RRNI Trimesterly, Routine teams: % females Percentage 60.1 40.00 Annually monitoring MOFALD participating in all RRNIs Characteristics of RRI teams: % minority Trimesterly, Routine participation (e.g. dalits, Percentage 51 40.00 Annually monitoring MOFALD janajatis, sunuwar) in all RRIs Will be Percentage of successful Percentage available 80.00 Trimesterly, Routine MOFALD RRIs / VDC after July Annually monitoring 15, 2014 10 Average time between Trimesterly, Routine RRI proposal submission Days 35.5 21.00 Annually monitoring MOFALD and approval/rejection Percentage of RRIs that Will be could not take off due to Percentage available 20.00 Trimesterly, Routine MOFALD, VDC, DDC public sector supply side after July Annually monitoring delays 15, 2014 Semi-annual meetings of Text No Conducte Twice a year Bi-annually Routine MOFALD coaches conducted d monitoring RRNI Process evaluation conducted Text No Planned Yes Once, at Mid-term Mid-term review MOFALD . 11 Annex 3: Financial Management Budget and Expenditures for FY 2013/14: As of May 14, 2014, the following expenditures were incurred in FY 2013/14: NPR in Million Budget Expenditure % of Budge GON IDA Total GON IDA Total t F/Y 2012/13 Recurrent - 560.00 560.00 - 10.85 10.85 1.93% Capital - 30.60 30.60 - 0.85 0.85 2.76% TOTAL - 590.60 590.60 - 11.70 11.70 1.98% Out of the approved budget of NPR 590.6 million for FY 2013/14, only 1.98% expenditure has been incurred up to May 14, 2014. The mission noted that the above budget was approved with the expectation that the communities will be able to undertake at least two cycles of sub-projects in 15 districts but due to delay in establishing institutional arrangement for rolling out the sub- projects, the expenditures could not be incurred as expected. As of the review date, only one cycle of sub-projects had been initiated in 10 out of 15 districts. The sub-projects will be implemented as per the recently adopted Project Operations Manual. The corresponding expenditures for those sub-projects will be reflected in the last trimester. The implementation of the project is therefore expected to improve, especially in the Sub-Grants category which is the main component of the project. Disbursements: As of June 30, 2014, disbursements comprise of initial advance to the Designated Account of USD2 million and a replenishment of USD40,795.67, which is only about 11.3% of the allocated funds under IDA Grant. There has been no disbursement against IDA Credit. With the recent adoption of the Project Operations Manual, implementation is expected to improve, especially in the Sub-Grants category which is the main component of the project. Financial Management: The review noted good progress in financial management with most agreed actions being completed, and setting a good ground for continuing good information system. The mission is pleased to note that an Accounts Officer as well as an Accounts Assistant has been assigned for the project. The mission is also pleased to see that the Project Operations Manual has been approved and disseminated to the concerned offices. The required books of accounts have also been maintained except for ledgers as per the approved programs/activities which the project has been advised to maintain. The mission, however, reminded one pending action agreed during 12 appraisal which relates to carrying out the capacity assessments of project District Development Committees (DDCs) from a financial management perspective. The mission noted that the Request for Proposal (RFP) has been issued and the contract is expected to be awarded by July 2014 and capacity assessment completed by October 2014. Following are some other observations of the review team: Direct Payment from Designated Account: The mission noted that the expenditures included in the financial reports submitted to the Bank for direct payments from the Designated Account have not been included in the project’s accounting system, as the project’s FMIS is only configured to record payment through FCGO. The mission advised the project to modify the FMIS as necessary to include direct payments in the project’s accounting system. Ledgers: The mission also noted that the required books of accounts have been maintained except for ledgers as per the approved programs /activities. The mission advised the project to maintain the required program ledgers. Internal Control: The mission recommended measures to address internal control deficiencies that were identified. The mission guided the project on coding the project’s assets and properly updating the Stock Book. The mission also advised the project to maintain subsidiary ledger to keep track of each asset. Implementation Progress Reports: The mission appreciated the project’s efforts on submitting the first and second trimester financial reports for FY 2013/14 on time. There are no outstanding financial reports. The team reminded that the third trimester progress report is due on August 31, 2014. Audit Reports: The mission noted that there was no major issue raised in the external audit report of FY 2012/13. The auditors had raised concern on slow implementation and the delay in preparing the Sub-grants guidelines and Operations Manual. With the recent adoption of the Project Operations Manual, implementation is expected to improve. The team reminded that the unaudited account for FY2013/14 is due on October 15, 2014 and the audited accounts on January 15, 2015. Agreed Actions: The following actions agreed at the project appraisal were found yet to be completed: S. No. Agreed Actions Previous Agreed Date Revised Agreed Date Carry out capacity June 30, 2014 October 30, 2014 assessments of project 1 DDCs from a financial management perspective 13