FOR OFFICIAL USE ONLY Report No: RES40354 INTERNATIONAL DEVELOPMENT ASSOCIATION RESTRUCTURING PAPER ON A PROPOSED PROGRAM RESTRUCTURING OF UGANDA INTERGOVERNMENTAL FISCAL TRANSFERS PROGRAM APPROVED ON JUNE 27, 2017 TO THE REPUBLIC OF UGANDA Governance Global Practice Africa Region Regional Vice President: Hafez M. H. Ghanem Country Director: Keith E. Hansen Regional Director: Asad Alam Practice Manager: Nicola J. Smithers Task Team Leader(s): Timothy Stephen Williamson, Tihomir Stucka The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) ABBREVIATIONS AND ACRONYMS CBA Cost Benefit Analysis CGAP Consultative Group to Assist the Poor CPF Country Partnership Framework DDEG Discretionary Development Equalization Grant DFID Department for International Development DHMT District Health Management Team DLI Disbursement Linked Indicator DLR Disbursement Linked Result DRDIP Development Response to Displacement Impacts Project EMIS Education Management Information Systems FY Fiscal Year GBV Gender-Based Violence GDP Gross Domestic Product GoU Government of Uganda HC Health Center HUMC Health Unit Management Committee IAG Internal Auditor General IDA International Development Association IFMIS Integrated Financial Management Information System IFTRP Intergovernmental Fiscal Transfers Reforms Program LG Local Government LGFC Local Government Finance Commission LLG Lower Local Government LGPA Local Government Performance Assessment MDA Ministries, Departments and Agencies MGLSD Ministry of Gender, Labour and Social Development MoES Ministry of Education and Sports MoFPED Ministry of Finance, Planning, and Economic Development MoH Ministry of Health MoLG Ministry of Local Government MoPS Ministry of Public Service MIS Management Information System MTP Medium Term Plan MTEF Medium Term Expenditure Framework MWT Ministry of Works and Transport M&E Monitoring and Evaluation NAPA National Adaptation Programme of Action ND-GAIN Notre Dame Global Adaptation Initiative NEMA National Environment Management Authority NPV Net Present Value NWR Non-Wage Recurrent ODI Overseas Development Institute The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) OPAMS Online Performance Assessment Management System OPM Office of Prime Minister OTIMS Online Transfer Information Management System PDO Project Development Objective PfoR Program for Results PIP Performance Improvement Plan PNFP Private Not-for-Profit POM Program Operational Manual PP Program Paper PPDA Public Procurement and Disposal of Public Assets Authority RA Results Area RBF Results Based Financing REAP Resource Enhancement and Accountability Program RCU Reform Coordination Unit RGC Rural Growth Centre SBD Standard Bidding Document SCD Systematic Country Diagnostic SESIL Strengthening Education Systems for Improved Learning SMC School Management Committee TA Technical Assistance TELA Teacher Effectiveness and Leaner Achievement UgIFT Uganda Intergovernmental Fiscal Transfers UGX Ugandan Shilling UNDP United Nations Development Program UNHCR United Nations High Commissioner for Refugees URMCHIP Uganda Reproductive Maternal and Child Health Services Improvement Project USMID Uganda Support to Municipal Infrastructure Development Program VAC Violence Against Children VfM Value for Money WB World Bank WDR World Development Report The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) DATA SHEET (Uganda Intergovernmental Fiscal Transfers Program - P160250) BASIC DATA Project ID Financing Instrument IPF Component P160250 Program-for-Results Financing No Approval Date Current Closing Date 27-Jun-2017 30-Jun-2024 Organizations Borrower Responsible Agency Republic of Uganda,Ministry of Finance, Planning and Ministry of Finance, Planning and Economic Development Economic Development Program Development Objective(s) To improve the adequacy and equity of fiscal transfers and fiscal management of resources by Local Governments for health and education services. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing (US$, Millions) Net Approval Effectiveness Closing Ln/Cr/TF Signing Date Commitment Disbursed Undisbursed Date Date Date IDA-67730 14-Sep-2020 30-Jun-2024 240.00 0 246.74 IDA-D7150 14-Sep-2020 30-Jun-2024 60.00 0 61.79 IDA-61040 27-Jun-2017 26-Apr-2019 29-May-2019 31-Dec-2023 200.00 106.18 94.40 Policy Waiver(s) Does the Program require any waivers of Bank policies applicable to Program-for-Results operations? No Page 1 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) I. PROGRAM STATUS AND RATIONALE FOR RESTRUCTURING A. Introduction 1. The Uganda Intergovernmental Fiscal Transfer (UgIFT) Program (P160250) was approved by the Board on June 27, 2017 and declared effective on May 29, 2019. The original Program has overall allocation of US$200 million which consists of International Development Association (IDA) credit of SDR145.9 Million. The Program has disbursed USD106 million or 53 percent as of March 15, 2020. Despite late effectiveness, the Government of Uganda (GoU) has been implementing the Program since Board approval, which has enabled disbursement in line with met DLIs soon after the Program became effective. The performance of the original Program was rated Moderately Satisfactory between June 2019 and January 2020, when it was rated as Satisfactory following confirmation of results. The original UgIFT Program is supporting the Government of Uganda (GoU) through Program for Results (PforR) instrument. The PforR is disbursing against the achievement of Disbursement Linked Indicators (DLIs), which are a combination of results and key steps on defined reform paths. Under the original UgIFT Program, the GoU provides US$593 million to support and enable the implementation of the Intergovernmental Fiscal Transfer Reform Program (IFTRP) in the health and education sectors, using government systems. The World Bank resources notionally support increased GoU development grant allocations for service delivery infrastructure, whilst GoU funding notionally support increased operational grants for health and education facilities within a combined expenditure framework. 2. The Program Development Objective (PDO) for the Program is “to improve the adequacy and equity of fiscal transfers and improve management of fiscal resources by Local Governments (LGs) for education and health services.” The Program has focused on addressing three challenges in adequacy, equity, and better financial management, and was expected to achieve the following: (a) To enhance the adequacy, or general level of financing, for education and health services. The latter is achieved by providing additional resources to LG conditional grants over four years between FY2018/19 and FY2021/22 based on an agreed medium-term plan (MTP) for increasing financing for LG service delivery, which includes wage, non-wage recurrent, and development grants. (b) To enhance the equity of distribution of LG transfers across districts. The latter is achieved by targeting the least funded LGs using objective and equitable allocation formulae to distribute funds more fairly and predictably to local governments. This is carried out through applying formulae for recurrent and development grants. Recurrent grant formulae were to be phased in over four years using the increases in overall grant allocations, ensuring that no LG’s allocation is reduced, whilst development grant formulae were to be implemented from the outset. (c) Strengthening management at LG level of education and health services. This is achieved through a systematic approach in four stages: (i) improving guidelines for LGs and service facilities (i.e. schools and health centers); (ii) conducting an annual local government performance assessment from 2017/18 in districts and municipalities, and from 2019/20 at the facility level; (iii) supporting poor performing LGs through the development and implementation of performance improvement plans executed by MoLG; and (iv) providing financial incentives linked to grant allocations, with the size of development grants linked to performance assessments. 3. The original Program has demonstrated satisfactory progress despite the delays in the effectiveness. The implementation of the Program has been advancing broadly on schedule since July 2017 even though the effectiveness was only reached in May 2019. The Project Development Objective (PDO) indicators and intermediate indicators are on track in all but the area of equity. 4. In terms of adequacy of financing, grants have increased sizably in Health and in Education since FY2017/18 in line with the PDO Indicators and broadly in line with the MTP. Wage, non-wage recurrent and development grants The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) have shown a steady increase both in education and health from FY2017/18 to FY2019/20. Specifically, reversing over a decade of decline, operational non-wage recurrent grants for both education and health have increased in the double digits. Non-wage recurrent grants for education have increased by 41 percent in the Approved Budget from FY2018/19 to FY2019/20, and similarly non-wage recurrent grants for health have increased by 42 percent. This has had a direct impact on school and health facility level operational funding. More precisely, budgeted and released operational funding for primary schools increased 50 percent, and for health facilities the increase amounted to 43 percent since FY2017/18. Furthermore, an equivalent of US$200 million was allocated to development grants to upgrade and construct health and education facilities. The GoU has decided that most of these funds be used to upgrade existing Health Center (HC) IIs to HC IIIs1 and build secondary schools in sub-counties where these facilities do not exist in line with policy commitments. 5. The achievements in equity, as measured by the original PDO indicators, have been mixed. The IFTRP involved the introduction of objective formulae to enhance the equity and reduce disparities in the distribution of resources, which is supported by DLIs in health and education under UgIFT. In the health sector, non-wage recurrent grants are now more equitable in per capita terms due to the sizable reduction in their spread across districts (Figure 2). In education, the use of enrollment rather than overall population and per child of school-going age in the allocation of recurrent grants has limited the impact of the funding on the PDO measures of equity. Furthermore, between board approval and effectiveness the focus of development grants was agreed to change. A share of development grants has been focused on meeting the GoU policy objectives of one health-center III and one secondary school per sub-county. Whilst a legitimate objective, this was not part of the original design, and a share of development grant allocations have been based on formulae which include population-based indicators. This has, therefore, limited the improvements in equity of development financing as measured by per capita terms. That said, technically population measures equality, not equity, and the objectivity, targeting and transparency of grant allocations has been considerably improved. 6. Higher scores in the management of resources2 have been recorded on each sector assessed by the new Local Government Performance Assessment (LGPA) introduced under the IFTRP in both health and education. Three annual LGPAs of all Districts and Municipalities have taken place so far and have shown improvements in the management of service delivery. Comparing FY2016/17 and FY2018/19, the overall average score for the LGPA increased in education from 52 percent to 65 percent, health from 53 percent to 70 percent, water & sanitation from 59 percent to 68 percent and cross-cutting areas from 56 percent to 61 percent (Figure 3). Performance Improvement Plans (PIPs) were implemented for poorly performing LGs in FY2017/18, which resulted in significant improvements in their LGPA scores in FY2018/19. Local Government PIPs however were not prepared in 2019 as a result of delays to the formal announcement of results. 7. As part of the GoU’s IFTRP, in FY2019/20 the LGPA results were introduced as a variable in the allocation formulae for sector LG development grants in health, education, water & environment and the discretionary development equalization grant. Although this was one year behind schedule, it represented an important step in establishing incentives. 1 Basic health services are delivered through a network of health facilities, which include Health Centre (HC) Level IVs, which are headed by a doctor and HC Level IIIs, which are headed by a nurse. These provide outpatient and basic inpatient services. HC Level IIs, which are small dispensaries, provide outpatient services. In addition, some Districts run general hospitals. The district/municipal health department oversees this network of health facilities and also carries out public health activities. 2 The following is assessed in each sector: i. human resource, planning and management, ii. monitoring and inspection, iii. governance, accountability and oversight, iv. procurement and contract management, v. financial management and reporting, vi. Social and environmental safeguards. The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) Table 1: Achievement of DLIs DLI Year 1 Year 2 FY2017/18 FY2018/19 By June 2018 By June 2019 Results Area 1. Enhancing Adequacy and Equity of Fiscal Transfers and Fiscal Management of Resources for Education Services DLI 1.1: Annual increase in budget allocation to sector conditional grants (wage, non-wage, recurrent, Achieved Not Achieved and development) to LGs for education services DLI 1.2: Enhanced, equitable formula for operational grants in education phased in as planned Achieved Achieved DLI 1.3: Enhanced, equitable formula for development grants in education implemented as planned Not Achieved Achieved DLI 1.4: The quality of fiscal management of education resources by LGs is maintained Achieved Achieved Results Area 2. Enhancing Adequacy and Equity of Fiscal Transfers and Fiscal Management of Resources for Health Services DLI 2.1: Annual increase in budget allocation to sector conditional grants (wage, non-wage, recurrent, Partially Achieved Not Achieved and development) to LGs for health services DLI 2.2: Enhanced, equitable formula for conditional non-wage recurrent grants in health phased in as Not Achieved Achieved planned DLI 2.3: Enhanced, equitable formula for development grants in health implemented as planned Not Achieved Not Achieved DLI 2.4: The quality of fiscal management of health resources by LGs is maintained Achieved Achieved Results Area 3. Improvement in Fiscal Management of Education and Health Services DLI 3: LG Performance assessments, performance improvement plans, value for money audits, and Partially Achieved Partially Achieved fiscal management improvement planning take place Disbursements Disbursement Plan by WB US$40 million US$40 million Achieved DLIs US$26.05 million US$29.5 million DLIs not achieved US$13.95 million US$10.5 million 8. The Program has disbursed so far US$106.18 million or 53 percent as of August 2020. The Bank disbursed the first advance mid-June 2019 totaling US$50 million, while the second advance and results payment were disbursed mid- February 2020 totalling US$56.18 million (Table 1). 9. The achievement of DLIs has been satisfactory and speaks to the decisive steps taken toward restoring the adequacy and equity of financing LG service delivery and the management of service delivery. Nine DLIs were selected to support results under the Program. The GoU has fully or partially achieved 12 out of 18 Disbursement Linked Results (DLRs) in Year 1 (FY2017/18) and Year 2 (FY2018/19). Some DLRs from Year 2 that have yet to be achieved are still achievable. The achievement of DLRs worth US$27 million in Year 3 are on track according to the second Budget Call Circular for FY 2020/21, which reflects that non-wage recurrent and development transfers are in line with those agreed in the MTP. Early in the program, wage allocations were increased beyond what was envisaged in the MTP which made it more costly to achieve target percent increases in grant allocations in year 2 (DLIs 1.1 and 2.1). Rather than attempt to achieve these from 2019/20 onwards, the commitments relating to wage-recurrent allocations will be reformulated as part of the restructuring, in the context of the revised MTP. 10. Overall, the institutional arrangements for advancing reforms are effective. Institutional coordination and management of reforms has improved at both the political and the technical level with increased ownership of the GoU. The oversight and steering committees are regularly attended by ministers and accounting officers respectively, and engagement of technical staff responsible for implementation have broadened within and across implementing agencies. Furthermore, attention of stakeholders, especially at the top, is moving beyond the initial focus on the construction of new facilities to the operational aspects searching for ways to improve service delivery and value for money at the facility level. 11. Some implementation issues have emerged regarding the coordination and oversight of the program and the effectiveness of national engagement. First, the communication and ownership of the UgIFT program needs to be broadened and strengthened and the dissemination of guidelines improved, so that stakeholders are aware of and implement changes to systems and processes at the local level. Second, the oversight and monitoring of service delivery The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) at national and local government levels need to be strengthened overall and, in particular, for construction. Notably, there is a lack of appreciation for environmental and social requirements for civil works implementation at all levels, which means that little is being enforced on the ground. Finally, the coordination of UgIFT is complex and resource intensive, and adequate resources need to be in place to perform the required tasks at the center. 12. The key challenge ahead in maximizing the impact of increased resources and associated fiscal transfers reforms is to improve the quality of service delivery for the population at the facility and subcounty level. Whilst increasing resources to service delivery and improving the management of fiscal resources by LGs will help remove some of the binding constraints to LG service delivery and enhance incentives, improvements in the actual delivery of services to the population will not happen automatically. This challenge has been placed to the GoU and World Bank by the leadership of MoFPED and Sector Management - to make UgIFT count for service delivery. To provide the enabling framework, the GoU is in the process of revising the IFTRP to address the challenges to service delivery across sectors and is updating the associated MTP for financing local service delivery based on the sector costing exercise planned in the original IFTRP. The updated IFTRP will also include a new area focusing on central government oversight of local service delivery. B. Rationale for restructuring 13. The Government of Uganda made a request to restructure the project on April 14, 2020, to deepen the engagement in health and education and increase the focus on service delivery. The changes requested included (i) reducing the timeframe for DLIs by one year to enable frontloading of disbursements in 2020/21 in support of increased health and education transfers in line with the revised MTP for Financing Local Government Services; (ii) aligning the DLIs to the deepened agenda for health, education and cross-cutting issues and (iii) reprogramming or the $24 million DLIs not achieved in the first two years of the Programme. The Restructuring will support the updated IFTRP with the focus on education and health sectors. 14. By deepening the sectoral engagement, this will ensure that going forward the IFTRP reforms lead to improvements in local service delivery. The restructured UgIFT can do this by both supporting and incentivizing the functional change required to deliver such an improvement, in the following four areas: a. UgIFT has the potential to increasing the impact of resources on service delivery by focusing on performance at the point of delivery, through rolling out performance assessment and improvement frameworks at the facility and subcounty level. b. Staffing is a key constraint to service delivery in many LGs – schools and health facilities do not meet basic staffing requirements and critical staff are in position in higher and lower LGs. In 2019, only 8 percent of LGs had all heads of department substantively in place. Targeted incentives and financing have the potential to address this intransigent issue. c. The impact of the IFRTP has been reduced as a result by weaknesses in the center playing its roles. By placing explicit emphasis on strengthening the routine oversight by central government including dissemination of guidelines and capacity building, performance improvement support and joint monitoring, UgIFT can help the implementation of reforms at the local level. Furthermore, there are weaknesses in the processes and systems at the local levels, which can be addressed by concerted action at the center and the use of digital technologies. d. Finally, by linking the size and distribution of financing for local service delivery to the costs of delivering those services is a priority, the IFRTP can contribute more effectively towards achieving sector objectives. 15. Finally, the rationale for UgIFT is made more compelling in the context of the COVID-19 response and recovery and it is crucial that resources to service delivery are sustained. UgIFT will protect basic services and during the recovery phase it will contribute towards increasing the finance and building more robust and resilient systems for local service delivery over the medium term. In doing so, it will strengthen human resource management and oversight of The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) service delivery. UgIFT is also well positioned to provide support and incentives for rolling out e-solutions that improve management, accountability, and transparency. 16. Alongside the restructuring of the original program proposed in this paper, further Additional Financing (AF) and Restructuring for UgIFT has been prepared and was approved by the World Bank Board on the 14th September 2020 (P172868). The AF extends the scope of sectors beyond health and education to Water and Sanitation and Micro- Irrigation, lengthens the Program timeframe and aligns it to the updated IFRTP and deepening agenda. Whilst the restructured Program set out in this paper is not dependent on the effectiveness and implementation of the AF, the DLIs and Program expenditures in this restructuring of the original program supports are aligned with and represent a complementary set of DLIs to those under the Additional Financing. II. DESCRIPTION OF PROPOSED CHANGES 17. While the Program Development Objective (PDO) remains the same, PDO level and intermediate indicators and DLIs framework will be revised to reflect the deepening agenda. PDO indicators and interim results indicators will measure service delivery performance, and performance in relation to national government oversight of service delivery alongside the management of service delivery by local governments. Equity PDO indicators and associated interim results have been adjusted for recurrent and development spending in education to reflect the evolving policy objectives. Table 2 below sets out the changes to PDO indicators and highlights other changes to the results framework. Table 2: Adjustments to PDO Indicators Results Areas Adjusted PDO Indicators Description of Change to PDO and IRI indicators PDO Indicator 1a: Adequacy and Equity of Staffing - % of  Results Areas 1 and 2 adequacy and equity are Higher LGs with a) staffing of schools and health facilities combined. and b) sector department and lower local government  Adequacy PDO indicators remain the same, with an staff above stated minimum levels adjustment to shorten the timeframe to three year 1. Enhancing moving average. PDO Indicator 1b: Adequacy of Non-Wage and Adequacy and  Equity PDO indicators for wage to focus on uplifting the Development Financing - Nominal allocations in health Equity of least funded LGs. and education. Financing for  Equity indicators for development and recurrent PDO Indicator 1c: Equity of Non-Wage and Development changed to adherence to formula. LG Services Financing - % of non-wage recurrent and development  IRIs reflect a) increases in per capita allocations and b) grant allocations to which equitable formula for uplifting transfers and implementing formulae. conditional non-wage recurrent and development grants in health and education has been applied. 2. Improved  This is a new indicator and results area. Oversight of PDO Indicator 2: Overall performance in the Oversight of  IRIs include central performance in specific areas Service Service Delivery by the ministries responsible for health, relating to oversight of service delivery and Delivery by education and cross-cutting areas as measured in the construction, safeguards and MIS, and actions to Central annual performance assessment. improve strengthen systems, processes and performance, including safeguards. Government 3. PDO Indicator 3a: Improvement in the LG Performance in  This is an existing indicator. Improvement the management of services in health, education and  IRIs include LG performance in specific areas relating to in Crosscutting areas as measured in the annual oversight of service delivery and construction, Management performance assessment. safeguards and performance The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) Results Areas Adjusted PDO Indicators Description of Change to PDO and IRI indicators of Services by PDO Indicator 3b: Improvement in LG performance in the Local management of resources in the 20 worst performing Governments LGs in Health, Education and Crosscutting Areas as measured in the annual performance assessment. PDO Indicator 4: Service delivery performance assessed  This is a new indicator which measure service delivery  Education: Secondary school with basic facilities and performance. minimum staffing levels and the average score in the  IRIs highlight performance in specific areas for each primary school performance assessment improves sector and sectoral indicators relating to safeguards  Health: Functional health center III or Iv and average and service delivery. score in RBF facility assessment improves. Changes to Disbursement Linked Indicators (DLIs) 18. The framework for DLIs will be revised to achieve the results across the four Results Areas (RAs) as follows3: a. The DLIs covering the adequacy and equity of local government financing (RA1) will be consolidated and sharpened. The DLIs for non-wage recurrent will be extended to cover both wage and non-wage recurrent funding in line with the MTP for financing local service delivery. Essential medical supplies, which are procured centrally, will also be included. The combined recurrent and development DLIs, now DLIs 4 and 5 respectively will cover the adequacy and equity of all conditional grants for LG service delivery in education and health. This will enable the discontinuation of the original DLIs (originally labeled as DLI 1.1, 1.2 and 1.3 and DLI 2.1, 2.2 and 2.3) from the FY 2019/20 onwards relating to the overall size of health and education resources, as overall adequacy will be covered by DLIs 4 and 5. b. New DLIs will be added to measure central government oversight overall (new RA2) and service delivery performance (RA3). DLI 6 relates to the implementation of key actions to strengthen service delivery process, systems and their implementation by central government. Sector and crosscutting key actions will be set out in a service delivery improvement matrix which will form part of the Restructuring and AF Program Paper and updated in the Program Operations Manual (POM). A value of $1m will be assigned to each action. The original DLI 3 will be discontinued, and replaced by DLI 7, which is broadened to relate to central government performance in oversight, technical support, and capacity building functions overall and incorporates undertaking the LG performance assessment. The original DLIs 1.4 and 2.4 will be replaced from 2019/20 onwards by a single DLI, DLI 8 which measures performance in local government management of service delivery in health, education and crosscutting. Finally, under the new DLI 9, service delivery performance will be systematically assessed and encouraged through the PforR. 19. The framework of DLIs will be applied to all sectors and for crosscutting interventions. Table 3 sets out the revised structure for DLIs. Each sector has annually specified Disbursement Linked Results (DLRs) for each DLI. Similarly, DLRs are specified against DLIs for crosscutting interventions. This differs from the original UgIFT where sectors had their own DLIs and on DLI covered crosscutting areas. 20. Another change is that DLIs will be scalable based on the components of the DLI that have been achieved. During implementation thus far it has become apparent that having ‘all or nothing’ meant that in some cases the DLIs 3 The following DLRs have been discontinued, which either a) were not achieved up to 2018/19 or are being replaced by DLIs 4 to 9 from 2019/20 onwards: DLR#1.1.2 to .5; DLR#1.2.3 to .5; DLR#1.3.1, DLR#1.3.3 to .5; DLR#1.4.3. to .5; DLR#2.1.2 to .5; DLR#2.2.1, DLR#2.2.3 to .5; DLR#2.3.1 to .5; DLR#2.4.3 to .5; DLR#3.3 to .5 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) did not reward genuine progress made. Therefore, in the disbursement DLIs have been disaggregated and made scaleable, with amounts linked to the elements achieved, where appropriate. Table 3: Revised Structure of DLIs DLIs Values Revised Scope of DLIs Results Areas 1: Improving the adequacy and equity of financing of LG services DLI 4 - Adequacy and DLR4.1. Wage Allocations, Recruitment and Releases Equity of Recurrent By June By June Approved budget and MTEF wage recurrent allocations are DLI 4 Recurrent Total Financing of Local 2020 2021 consistent with plans in the MTP in specified sectors for: Service Delivery 4.1 Wage 8.00 20.00 28.00 (a) staffing critical positions to in higher LG departments and in Improves in line with Education 6.00 14.00 20.00 lower LGs, the Medium-Term Plan Health 2.00 6.00 8.00 (b) staffing of newly constructed/upgraded facilities to agreed for Financing Local 4.2 NWR 22.00 25.00 47.00 minimum levels; and Government Service Education 14.00 12.00 26.00 (c) at least an agreed percentage of planned recruitment has Delivery – Wage (DLI Health 8.00 13.00 21.00 been completed, with new staff on the payroll. DLI 4 30.00 45.00 75.00 1.1) and Non-Wage (DLI 1.2) DLR4.2. Non-Wage-Recurrent Allocations and Releases Approved budget and MTEF allocations are for non-wage recurrent financing of service delivery in specified sectors: (a) are consistent with the MTP for financing local services; (b) are based on an agreed formula whose underlying data is publicly available; and (c) at least 97% of the previous FY’s budgeted transfers are released to all LGs and releases publicly available online. NB: This represents an expanded and combined version of former DLI 1.2 and 2.2, including wage together with non-wage recurrent allocations for health and education. This means that the original DLI 1.1 and 2.1 will be discontinued from 2019/20 onwards. DLI 5 -Adequacy and DLI 5 By June By June Approved budget and MTEF allocations for development grants Total Targeting of Development 2020 2021 for service delivery in specified sectors: Development Financing Education 6.00 6.00 12.00 (a) are consistent allocations to grant components within the for Service Delivery Health 8.00 4.00 12.00 MTP; Infrastructure and DLI 5 14.00 10.00 24.00 (b) at least one component is based on an agreed formula; Equipment improves (c) the formula based component is linked to performance as and is linked to specified in the POM; and Performance (d) at least 97% of the previous FY’s budgeted transfers are released to all LGs, with releases publicly available online NB: This is a revised and combined former DLI 1.3 and 2.3 and extends to cover DDEG. Results Area 2: Improving performance in the oversight, management and delivery of LG services DLI 6 (New) Number of DLI 6 Systems & By June By June 18 key actions from Service Delivery Improvement Matrix that Total key actions from the Processes 2020 2021 have been completed where for each action completed the Service Delivery DLI 6 18.00 - 18.00 following is true: (a) the action completed is represented by a Improvement Matrix distinct row in the Service Delivery Improvement Matrix; (b) a that have been definition of completion and evidence required for verification completed by central of completed has been specified in the POM for that action; and government to improve (c) The action has been completed in a way that is consistent with systems, processes and the definition in the POM and the responsible MDA has reported capacity for improved on that completion of that activity to OPM and provided service delivery supporting evidence in line with the requirements of the POM. The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) DLIs Values Revised Scope of DLIs DLI 7 (New) Central DLI 7 Routine By June By June Central MDAs carry out their core functions in the oversight Total Government core Oversight 2020 2021 delivery in specified sectors/areas, including functions in oversight, Crosscutting 2.0 4.0 6.0 (a) essential guidance, guidance, performance Education 1.0 4.0 5.0 (b) performance assessment and improvement support, and assessment and Health 1.0 4.0 5.0 (c) routine review of workplans, budgets and reports, DLI 7 4.00 12.00 16.00 improvement, monitoring of service delivery and construction and monitoring and safeguarding requirements technical support to LG service delivery take place Results Area 3: Improving LG Management of Service Delivery DLI 8 DLI 8 LG By June By June In the performance assessment of the LG management of Total Management of Service Management 2020 2021 services and delivery of infrastructure in the specified Delivery is strengthened Education 2.0 2.0 4.0 sectors/areas: in LGs overall and for Health 2.0 2.0 4.0 (a) for the 18/19 assessment the average LG score has the weakest performing DLI 8 4.00 4.00 8.00 improved and for subsequent assessments the number of LGs LGs meeting minimum conditions is at least an agreed specified level and does not decline; and (b) average ranking of a specified number of the weakest performing LGs, on average improves, in comparison to the previous assessment. NB: This combines and revises the former DLIs 1.4, 2.4 and 3 DLI 9 Service delivery DLI 9 Service By June By June Service delivery performance in facilities School/health facility Total performance is Delivery 2020 2021 and lower local governments has been assessed strengthened overall Education 2.0 2.0 and for the weakest Health 3.4 3.4 performing facilities and Total - 5.37 5.37 sub-counties Table 4: Verification Arrangements DLIs 6 & 7 DL 9 DLIs 4 & 5 Service Delivery DLI 8 Service Delivery DLI Area Equity and Adequacy Improvement and Central LG Performance Assessment Performance Assessment of Financing Oversight OPM, from Sector Sector Ministry, from OPM, from contracted firms, Compilation MoFPED Ministries, with review by assessing entities, with with review by LGPA-TF of Results July 15th FY0 LGPA-TF review by LGPA-TF 15th Dec FY0 July 15th FY0 15th Dec FY0 OPM, supported by OPM, supported by an OPM, supported by Verification of LGFC Independent Independent QA & Independent Results July 31 FY0 st Verification Firm Verification Firm Verification Firm July 31st FY0 Dec 31st FY0 Dec 31st FY04 Endorsement IFT TC IFT TC IGFT TC by GoU and July 31st FY0 Jan 15th FY0 July 31st FY0 forwarding to on advice of the LGPA-TF on advice by the LGPA-TF WB by IFT SC IFT SC MoFPED August 15th FY0 31st Jan FY0 Confirmation Sept 15th FY0 28th February FY0 by WB 4 Audit results ready by end of December will be incorporated in first week of January. The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) 21. LGFC will be responsible for verifying DLIs 4 and 5 relating to the adequacy and equity of financing and OPM will be responsible for verification of DLIs 6, 7, 8 and 9 relating to Central Government Oversight, Local Government Management and Service Delivery performance. This is in line with their institutional mandates. An independent firm or firms will support the OPM in verifying results for DLIs 6, 7, 8 and 9. For those actions under DLIs 3 and 4 which are the responsibility of OPM, LGFC will conduct an independent check. The PS/ST of MoFPED, as chair of the IFT Steering Committee, will continue to report to the World Bank on achievement of DLIs. The IFT Technical Committee, chaired by MoFPED will be responsible for overseeing the reporting on DLIs and endorsement of the verification of the associated results by the LGFC. 22. The IDA will observe the process of results achievement and continue to retain the right to make the final decision on whether a DLR has been achieved or not when confirming results. This will include observing all stages of the annual performance assessment processes and associated meetings of the LGPA task force. The basis of this confirmation will be the verification protocols and reporting requirements set out in the POM. 23. Reallocation of funds between DLIs will streamline project activities to align with government priorities and better contribute to the achievement of the PDO. The amount allocated for the payment to each DLI and DLR has been adjusted (Table 4). The time horizon to achieve DLIs will be reduced from 1 year from end-June 2022 to end-June 2021, enabling allocation resources to new results. The difference in the value of the Original DLIs not yet achieved and Restructured DLIs is due to changes in the SDR US$ exchange rate. Table 5: Proposed reallocation of funds between DLIs DLI Original Program Original DLI values not achieved 1. Enhancing Adequacy and Equity of Fiscal Transfers and Fiscal Management of Resources for $88m ($78m Y3-5, $10m Y1-2) Education Services 2. Enhancing Adequacy and Equity of Fiscal Transfers and Fiscal Management of Resources for Health $45.2m ($33m Y3-5, $12.2m Y1-2) Services 3. Improvement in Fiscal Management of Education and Health Services $11.25m ($9m Y3-5, $2.25m Y1-2) $144.45m Restructured Program Value assigned to restructured DLIs 4. Adequacy and Equity of Wage and Non-Wage Recurrent Financing of Local Service Delivery $75m Improves in line with the Medium-Term Plan for Financing Local Government Service Delivery 5. The Adequacy and Targeting of Development Financing for Service Delivery Infrastructure and $24m Equipment improves and is linked to Performance 6. Systems, processes and capacity for improved service delivery within and across sectors are $18m strengthened 7. Central Government core functions in oversight, guidance, performance assessment and $16m improvement, monitoring and technical support to LG service delivery take place 8. Local Government Management of Service Delivery and Provision of Infrastructure is strengthened $8m in LGs overall and in the weakest performers 9 Service Delivery performance improves overall, and in the weakest performing facilities and sub- $5.37m counties Total $146.37 o/w health $53.37m o/w education $69m o/w cross-sectoral $24m The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) Changes to Medium-Term Plan and Expenditure Framework Table 6: Summary Medium Term Plan for Financing Local Services Actual Budget Allocations MTP Projections 2017/18 2018/19 2019/20 2020/21 2021/22 Total Indicative LG Allocations (USH Billions) Original UgIFT Timeframe LG Unconditional Wage Grant Increment - Additional School Inspectors 1.4 4.3 Total Education 259.2 383.8 450.1 534.9 642.8 Recurrent - Education Sector Wage Grant Increment (Cumulative) 17.2 73.7 o/w Primary Education Wage Increment (Cumulative) 0.0 27.5 o/w Secondary Education Wage Increment (Cumulative) 17.2 46.2 Recurrent - Education Sector Non-Wage Grant 226.7 255.3 298.1 335.3 384.7 o/w Primary Education - Non Wage Recurrent 67.8 85.1 131.8 160.4 196.2 o/w Secondary Education - Non Wage Recurrent 127.1 137.4 130.7 139.4 145.7 o/w Skills Development - Non Wage Recurrent 31.8 32.7 35.0 35.0 42.0 o/w SNE Education - Non Wage Recurrent 0.6 0.6 0.8 Development - Education Sector Development Grant 32.5 128.6 152.0 182.4 184.4 o/w Seed Secondary Schools 79.5 106.4 130.4 117.4 o/w Formula and Performance-Based 45.6 52.0 67.0 Total Health 39.9 109.3 106.2 249.0 426.6 Total Health - LGs 39.9 109.3 106.2 167.6 307.8 Recurrent - Health Wage Grant Increment (Cumulative) 3.5 43.3 Recurrent - Health Non-Wage Grant 39.9 39.9 56.2 85.9 131.4 Development - Health Sector Development Grant 0.0 69.4 50.0 78.2 133.1 o/w Facilty Upgrades 39.7 55.1 88.6 o/w Formula and Performance-Based 10.3 23.1 44.5 Total Health - Central Government (from FY 20/21) 75.3 81.4 118.8 Recurrent - Essential Medical Supplies NMS & JMS - PNFP (from FY 20/21) 75.3 81.4 118.8 Total Grant Allocations 299.1 493.1 556.3 785.3 1,073.7 Indicative Central Level Allocations (USH Billions) Routine Coordination, Oversight and Performance Improvement 0.0 11.2 12.1 14.7 19.9 Strengthening Processes, Systems and Capacity for Service Delivery 0.0 0.0 4.9 2.0 34.1 Total Central Routine Oversight, Systems Strengtening and Capacity Development 0.0 11.2 16.9 16.7 54.1 GRAND TOTAL (Total LG Financing + Central Allocations) 299.1 504.3 573.2 802.0 1,127.8 Of which IDA 183.8 205.8 257.3 88.2 % IDA 36% 36% 32% 8% Annual Allocation Changes (20/21 reflects changes vs 19/20 allocations including new sectors) 205.2 68.9 153.6 325.7 Increase as a % of IDA 112% 33% 60% 369% 24. The Medium-Term Plan for Financing Service Delivery is a key pillar of the IFTRP and is being revised based on sector costing. Table 6 sets out a summary of the revised medium-term plan based on the sectors which have been costed. The Medium-Term Plan involves two main elements: a. First, the allocation to fiscal transfers for local service delivery over time. Within health, the allocations to essential medical supplies have been included in the MTP, which are key service delivery inputs for local service delivery. The MTP covers the period from 2017/18 to 2023/24. Although program expenditures will end in 2022/23 the last year of DLIs will impact on 2023/24 grant allocations. b. Second, central government Oversight and Systems Strengthening, which is given great emphasis in the revised IFTRP. Allocations will be increased significantly to enable its implementation, with costs divided into two components: 1) routine oversight, technical support and performance improvement costs; and 2) the new The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) component, allocation to policies and systems strengthening, which will support the delivery of actions to strengthen service delivery. Central allocations will further be broken down by national government institutions based on their roles in oversight, technical support and policies and systems development requirements in line which agreed principles which take into account the nature of a) routine oversight, technical support and capacity building functions and b) the key actions that need to be implemented in a given year to strengthen processes and systems. 25. The Program expenditure framework represents a subset of the MTP and will continue to be limited to the non- wage recurrent and development transfers to LGs and national government costs. Table 6 shows the Expenditure Framework in US$. The total expenditure framework is US$868 million over the Program period. Of this the World Bank will have contributed US$200 million and GoU US$668 million. The World Bank contribution is approximately equivalent to 75% of the value of development allocations and the GoU covers the value of recurrent allocations and a quarter 25% of development allocations. Table7: Program Expenditure Framework Actual Budget Allocations MTP Projections PEF 2017/18 2018/19 2019/20 2020/21 2021/22 GRAND Total Indicative LG Allocations UgIFT Timeframe Total Total Education 70.5 104.4 122.5 140.9 154.8 593.2 Recurrent - Education Sector Non-Wage Grant 61.7 69.5 81.1 91.2 104.7 408.2 Development - Education Sector Development Grant 8.8 35.0 41.4 49.6 50.2 185.0 Total Health 10.9 29.7 28.9 66.8 104.3 240.6 Recurrent - Health Non-Wage Grant 10.9 10.9 15.3 45.5 68.1 150.6 Development - Health Sector Development Grant 0.0 18.9 13.6 21.3 36.2 90.0 Total Rural Water 0.0 0.0 0.0 Water & Env Non-Wage Recurrent Grant 0.0 0.0 0.0 District Water Development Grant 0.0 0.0 0.0 Total Smallscale Irrigation 0.0 0.0 0.0 Development - Smallscale Irrigation 0.0 0.0 0.0 Total Grant Allocations 81.4 134.2 151.4 207.7 259.1 833.8 Of which Recurrent - Non-Wage 72.5 80.3 96.4 136.8 172.8 558.8 Of which Development 8.8 53.9 55.0 70.9 86.4 275.0 Indicative Central Level Allocations 2017/18 2018/19 2019/20 2020/21 2021/22 Total Routine Coordination, Oversight and Performance Improvement (DLI 4) 0.0 3.0 3.3 4.0 5.4 15.8 Strengthening Processes, Systems and Capacity for Service Delivery 0.0 0.0 1.3 0.5 9.3 11.2 Total Central Routine Oversight, Systems Strengtening and Capacity Development 0.0 0.0 14.7 4.5 14.7 34.0 GRAND TOTAL (Total Grant Allocations + Coordination Oversight, Assessment & Support) 81.4 134.2 166.1 212.2 273.9 867.7 Of which GoU 81.4 84.2 110.1 142.2 249.9 667.7 Of which IDA 50.0 56.0 70.0 24.0 200.0 26. Long term sustainability of the IFTRP beyond UgIFT and the associated gains is expected to be secure for four reasons. Firstly, the GoU is committed to sustaining the improvements to equity and adequacy of transfers to sectors, as these increases and improved targeting is of resources underpinned by sectoral policy commitments and MoFPED leadership and support, the resource allocation process has been hardwired into the system, and the partnership between MoFPED and sector ministries and between central and local governments have further strengthened this commitment. Secondly, the GoU will be able to sustain these changes, as the changes are being made incrementally over time and the share of World Bank resources underpinning those increases will have reduced to less than 30% of the Expenditure Framework by the end of the extended Program. Thirdly performance assessment frameworks in the oversight, management and delivery of services will be difficult to roll back, as they will have been fully institutionalized The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) under the coordination of OPM and MoLG. Finally, the results expected from UgIFT are to improve significantly the service delivery, and this will create expectations in the public as well, which will be politically difficult to roll back. Changes to the Risks 27. The overall risks for the Program continue to be rated as substantial. This is consistent with the overall Program risk at the of approval of the original UgIFT Program as well as the last Implementation Status and Report (ISR) ratings. The risk rating for the operation are presented in Section IV. 28. The COVID-19 pandemic affects risks to the program in several ways, whilst increasing its relevance. If the pandemic accelerates in Uganda, COVID-19 is likely to put strain on local health systems. Schools may also remain closed for a lengthy period, as may travel restrictions and social distancing measures. Health facilities will have to adjust how they deliver services. This makes capacity and systems strengthening simultaneously more important and more challenging. It is important that UgIFT implementation arrangements remain flexible, so they can adapt rather than be derailed by COVID-19 related constraints. This may include innovative and technology-based modalities for remote dissemination, training and monitoring. 29. Political and governance-related risks, together with macroeconomic, environmental and stakeholders’ risks remain moderate. These ratings reflect the implementation progress of the Original UgIFT Program. The Government continues to demonstrate strong ownership and commitment towards the achievement of the PDO. Furthermore, MoFPED provides strong leadership on advancing institutional reforms, and strengthening institutional capacity, and coordinates efforts with line ministries and local governments. Macroeconomic risks remain moderate, despite economic and fiscal shock associated with COVID-19, the low risk of debt distress rating based on the DSF due to the vulnerabilities to weather-related shocks, and the uncertainties regarding the presidential elections that could impact investment activity and therefore growth. From a fiscal sustainability perspective, the increase in allocations for wage, non-wage and development grants to LGs is not expected to result in a deterioration of the risk of debt distress. 30. Substantial risks remain at sector strategies and policies, technical design of the program, institutional capacity, fiduciary, but only change in risk rating is social risks. The main social risks under the project include potential economic and physical displacement for the construction of new school and health facilities. In addition, the expected influx of labor into affected communities to carry out related civil works may pose risks if not mitigated adequately. Under the UgIFT substantial gaps in addressing the issues at both central and local levels have been noted and as such, social risk under this project will be rated at substantial. 31. Risk mitigation measures. The program will put in place mitigating mechanisms to address these risks with a focus on strengthening capacity in MoFPED to perform oversight and coordination functions to the participating ministries and LGs. Additional focus on investing in ministry capacity to oversee local service delivery and accompanying institutional enhancement activities will help mitigate these risks. These measures will address shortcomings which cut across the Program, as well as risks, which are specific to sector strategies and policies, technical and institutional capacity, as well as fiduciary, and environmental and social management. A number of these risks will be addressed at the DLI level and through actions in the Program Action Plan. Measures will be put in place to ensure the quality of systems, process and capacity strengthening activities. Changes to Institutional Arrangements 32. The UgIFT Restructured Program will be more complex to manage given its deepened scope. With appropriate bolstering of the implementation arrangements, this challenge can be met, and the cross sectoral and sectoral benefits will be large. This will involve building on what has worked, including the strong leadership of the MoFPED, and addressing weaknesses that have been identified during implementation. The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) 33. There are two critical dimensions to coordination of the deeper agenda of the Program – cross sectoral and sectoral:  The oversight, steering and technical committees, which are functioning well in providing cross sectoral coordination and oversight, will continue with expanded participation. This will involve participation from MoPS, given the increased focus on crosscutting and sectoral human resources issues. To strengthen oversight of construction of service delivery infrastructure, MoWT and PPDA will be included as will MoGLSD and NEMA. The Inspectorate of Government will also be coopted into the membership alongside PPDA.  At the sectoral dimension, strengthened coordination structures will be established and capacity gap addressed. Coordination structures will depend on the sector, and will involve responsible line departments within sector ministries. In addition, each sector will review its capacity to undertake their functions in supporting service delivery actions will be taken to address capacity gaps. These represent key actions in the service delivery improvement matrix for each sector. 34. The restructured UgIFT provides a greater emphasis on central level oversight and processes and systems strengthening and mechanisms needed to be put to ensure these activities are well coordinated. There are two elements to these activities a) routine oversight, technical support, performance assessment and targeted performance improvement and b) process and systems strengthening. To manage these two dimensions two tools will be introduced:  A calendar of routine oversight, monitoring and technical support activities, which will be developed by each sector and cross sectoral agencies, and help agencies ensure they are on track in the implementation of routine activities  The service delivery improvement matrix, will be a key tool for monitoring action to strengthen processes and systems, and implementing institutions will report quarterly on progress in implementing activities 35. MDAs will report quarterly against both adherence to their calendars to their own coordination mechanisms and the IFTRP technical and steering committees. This will enable stakeholders to review each other progress and help senior managers understand where progress is being made and challenges are emerging. 36. An important implementation lesson is that central activities need to be adequately funded and effective management procedures for those funds need to be put in place. Under the restructured program the following provisions have been made to increase funding and ensure those funds are well managed:  The MTP involves significant increases to ensure these funds are managed effectively. Allocations to routine oversight and process and systems strengthening will increase from $4.6m in 2019/20 to $6.4m in 2020/21 increasing to $13m by 2021/22 – enabling systems and process strengthening to take place alongside routine oversight.  The Reform Coordination Unit (RCU) in MoFPED, which has an established dedicated team to support work- planning, financial management, procurement and reporting, will support the management of central government funding. The majority of resources earmarked for (i) routine oversight, technical support, performance assessment and targeted performance improvement and (ii) process and systems strengthening will be budgeted for under the Resource Enhancement and Accountability Program (REAP), which is managed by the RCU in the Ministry of Finance, Planning and Economic Development. The UGIFT Component of REAP will be led by the Budget Directorate, MoFPED, and each of the implementing institutions will identity a lead senior officer as the focal point to drive implementation at MDA level. The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250)  As part of the arrangements for both windows of funding a) a quarterly system of work-planning and quarterly reporting will be put in place linked to the events calendar and service delivery matrix and b) critical policy and systems strengthening activities will be identified in the POM, and TORs will be required to be cleared by the Technical Committee and the World Bank. Funding for routine activities will be transferred from the RCU directly to MDAs on a half yearly basis. Funding for process and systems strengthening will be activity based and managed directly by the RCU. 37. Further Procedures for the management of these funds will be elaborated in the updated Program Operations Manual. III. SUMMARY OF CHANGES Changed Not Changed Change in Program Scope ✔ Change in Results Framework ✔ Reallocation between and/or Change in DLI ✔ Change in Disbursement Estimates ✔ Change in Systematic Operations Risk-Rating Tool ✔ (SORT) Change in Technical Method ✔ Change in Environmental and Social Aspects ✔ Change in Implementation Schedule ✔ Change in Implementing Agency ✔ Change in Program's Development Objectives ✔ Change in Loan Closing Date(s) ✔ Change in Cancellations Proposed ✔ Change in Disbursements Arrangements ✔ Change in Safeguard Policies Triggered ✔ Change in Legal Covenants ✔ Change in Institutional Arrangements ✔ The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) Change in Fiduciary ✔ Other Change(s) ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_COMPONENTS_TABLE OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE DISBURSEMENT ESTIMATES Year Current Proposed 2018 10,272,000.00 0.00 2019 23,314,400.00 50,492,707.00 2020 36,969,600.00 55,688,419.00 2021 46,877,200.00 74,000,000.00 2022 41,494,600.00 19,818,874.00 2023 32,966,400.00 0.00 2024 8,105,800.00 0.00 OPS_DETAILEDCHANGES_SORT_TABLE SYSTEMATIC OPERATIONS RISK-RATING TOOL (SORT) Risk Category Latest ISR Rating Current Rating Political and Governance  Moderate  Moderate Macroeconomic  Moderate  Moderate Sector Strategies and Policies  Substantial  Substantial Technical Design of Project or Program  Substantial  Substantial Institutional Capacity for Implementation and  Substantial  Substantial Sustainability Fiduciary  Substantial  Substantial Environment and Social  Moderate  Substantial Stakeholders  Moderate  Moderate Other  Moderate  Moderate Overall  Substantial  Substantial OPS_DETAILEDCHANGES_EA_TABLE The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) . The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) ANNEX 1: RESULTS FRAMEWORK AND DISBURSEMENT LINKED INDICATORS . . Results framework Program Development Objectives(s) To improve the adequacy and equity of fiscal transfers and fiscal management of resources by Local Governments for health and education services. Program Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline Intermediate Targets End Target 1 1a: Adequacy and equity of Staffing for Service Delivery (Action: This Objective is New) Primary Schools - % of LGs with enough teachers N/A 78% 78% to meet minimum staffing levels. (Text) Action: This indicator is New Secondary Schools - % of LGs with enough N/A 47% 47% teachers to meet minimum staffing levels. (Text) Action: This indicator is New Health Facilities - % of LGs with enough health N/A 37% 37% workers to meet minimum staffing levels. (Text) Action: This indicator is New Critical Sector Departments & LLG staff - % of LGs N/A 10% 35% all critical staff in place. (Text) Action: This indicator is New Page 18 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline Intermediate Targets End Target 1 1b: Adequacy of Non-Wage Recurrent and Development Financing for Service Delivery (Action: This Objective is New) LG Non Wage Recurrent Financing - Nominal Budget Allocations for Health and Education (UGX 223.00 354.00 421.00 billion) (Text) Action: This indicator is New LG Development Financing - Nominal Budget Allocations for Health and Education (UGX billion) 28.00 202.00 261.00 (Text) Action: This indicator is New 1c: Equity of Non Wage Recurrent and Development Financing for Service Delivery (Action: This Objective is New) LG Non Wage Recurrent Financing - % of Grant Allocations for Health and Education based on an 0% 90% 92% Equitable Formula (Text) Action: This indicator is New LG Development Financing - % of Grant Allocations for Health, Education on an Equitable 100% (Education Only) 28% 29% Formula (Text) Action: This indicator is New 2: Core Functions Carried Out in the Oversight of Service Delivery by Central Government (Action: This Objective is New) Number of core central functions carried in support of service delivery (in Education, Health 0 out of 2 1 out of 2 2 out of 4 and Crosscutting Areas) (Text) Action: This indicator is New 3a: Improvement in the LG performance in the management of service delivery and investments (Action: This Objective is New) Page 19 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline Intermediate Targets End Target 1 Improvement in LG Management Performance Overall (in Education, Health and Cross-cutting N/A Yes Yes Areas) (Text) Action: This indicator is New 3b: Improvement in LG performance in the management of resources in the worst performing LGs (Action: This Objective is New) Improvement in LG management performance in the worst performing LGs (in Education, Health N/A Yes Yes and Cross-cutting Areas) (Text) Action: This indicator is New 4. Service Delivery Performance Assessed (Action: This Objective is New) Education: % of LLGs with population >15,000 with a government secondary school with basic N/A 84% 87% facilities and minimum staffing levels (Text) Action: This indicator is New Education: Average score in the primary school performance assessment improves in the sample N/A N/A Yes LGs. (Text) Action: This indicator is New Health: % of sub-counties with population >15,000 N/A 96% 97% with a functional health center III or IV (Text) Action: This indicator is New Health: Average score in the RBF facility N/A N/A Yes assessment improves (Text) Action: This indicator is New Page 20 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline Intermediate Targets End Target 1 Annual percentage increase in sector conditional grants to LGs for edu and health services (4-yr MA) (Action: This Objective has been Marked for Deletion) Education % (Percentage) 0.01 7.50 Action: This indicator has been Marked for Deletion Health % (Percentage) 0.01 13.25 Action: This indicator has been Marked for Deletion Conditional non-wage current grants per beneficiary of 20 least as % of 20 best funded Districts (Action: This Objective has been Marked for Deletion) Education, per child of school going age: % 33.00 46.00 (Percentage) Action: This indicator has been Marked for Deletion Health, per capita: % (Percentage) 22.00 38.00 Action: This indicator has been Marked for Deletion % share of education and health development grants made to the 30 least served Districts (Action: This Objective has been Marked for Deletion) Transfers to 30 districts with lowest enrolment 20.00 21.00 rates (Percentage) Action: This indicator has been Marked for Deletion % transfers to 30 Districts with highest population 39.00 35.00 per health facility (Percentage) Action: This indicator has been Marked for Deletion Page 21 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline Intermediate Targets End Target 1 Fiscal management of education resources by LGs overall doesn't deteriorate (Action: This Objective has been Marked for Deletion) Education (Yes/No) No Yes Action: This indicator has been Marked for Deletion Health (Yes/No) No Yes Action: This indicator has been Marked for Deletion Fiscal management of health resources in 20 worst performing LGs doesn't deteriorate (Action: This Objective has been Marked for Deletion) Education (Yes/No) Yes Yes Action: This indicator has been Marked for Deletion Health (Yes/No) No Yes Action: This indicator has been Marked for Deletion PDO Table SPACE Intermediate Results Indicators by Result Areas RESULT_FRAME_TBL_IO Indicator Name DLI Baseline Intermediate Targets End Target 1 Results Area 1. Enhancing Adequacy and Equity of Financing for LG Services (Action: This Result Area is New) IR Indicator 1.1: Average size conditional non- 6,621, exc. refugees 7,998 9,397 wage recurrent grants for education (primary & Page 22 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline Intermediate Targets End Target 1 secondary only) and health services per capita. (Text) Action: This indicator is New IR Indicator 1.2: Average size of conditional development grants per capita for health and 907, exc. refugees 5,069 6,349 education (Text) Action: This indicator is New IR Indicator 1.3: Average conditional non-wage recurrent grants for health and education per 47%, exc. refugees 47% 53% beneficiary for the 20 least funded LGs as % national per capita value. (Text) Action: This indicator is New IR Indicator 1.4: Average conditional development grants for health and education per beneficiary for 74% exc. refugees 69% 61% the 20 least funded LGs as % national per capita value. (formula-based only) (Text) Action: This indicator is New IR Indicator 1.5 - Average % of budgeted non- wage recurrent transfers (as per allocation 100% 100% 100% formula) in the health and education released to Local Governments. (Text) Action: This indicator is New IR Indicator 1.6 Enhanced, equitable formula for 100% [Education Only] conditional development grants in health and 28% 29% education implemented as per plan. (Text) Page 23 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline Intermediate Targets End Target 1 Action: This indicator is New Results Area: 2. Improved Oversight of Service Delivery by Central Government (Action: This Result Area is New) IR Indicator 2.1: Central Government Essential No No Yes Guidance Issued and Disseminated (Text) Action: This indicator is New IR Indicator 2.2: Central Government Performance Assessments and Performance Improvement No No Yes Support Implemented (Text) Action: This indicator is New IR Indicator 2.3 Routine Coordination, Oversight, Monitoring and Technical Support of service No Yes Yes delivery and safeguards requirements by central government Implemented (Text) Action: This indicator is New IR Indicator 2.4: Cumulative number of actions to improve service delivery implemented from the 0.00 10.00 20.00 service delivery improvement matrix (Number) Action: This indicator is New IR Indicator 2.5: Cumulative % of agreed actions to strengthen social and environmental management 0% 25% 50% implemented (Text) Action: This indicator is New Results Area 3: Improvement in Management of Services by Local Governments (Action: This Result Area is New) Page 24 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline Intermediate Targets End Target 1 IR Indicator 3.1: Improvement in LG performance in the management of human resources as N/A Yes Yes measured in the annual performance assessment (Text) Action: This indicator is New IR Indicator 3.2: Improvement in LG performance in the inspection, monitoring and assessment of N/A Yes Yes service delivery as measured in the annual performance assessment (Text) Action: This indicator is New IR Indicator 3.3: Improvement in LG performance in the oversight of construction and the N/A Yes Yes implementation of environmental and social requirements (Text) Action: This indicator is New IR Indicator 3.4: Increase in the average number of N/A Yes Yes minimum conditions met by LGs. (Text) Action: This indicator is New Results Area 4: Improvement in Delivery of Services and infrastructure by Local Governments (Action: This Result Area is New) IR Indicator 4.1 – Education: Number of new secondary schools constructed, equipped and 0.00 115.00 117.00 staffed to minimum levels (Number) Action: This indicator is New Page 25 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline Intermediate Targets End Target 1 IR Indicator 4.2 – Education: Number of primary schools upgraded to meet basic infrastructure 0.00 0.00 200.00 standards (cumulative) (Number) Action: This indicator is New IR Indicator 4.3 – Education: Number of LGs where the school performance assessment and 0.00 0.00 50.00 improvement framework has been implemented (Number) Action: This indicator is New IR Indicator 4.5 – Health: Number of HCIIs upgraded to HCIII which are completed, equipped 0.00 157.00 291.00 and staffed up to at least minimum staffing levels. (Number) Action: This indicator is New IR Indicator 4.6 - Health: Number of existing HCIIIs or HCIVs rehabilitated, expanded and/or equipped N/A 0.00 0.00 to meet basic standards. (Text) Action: This indicator is New Enhancing adequacy of fiscal transfers for education and health services (Action: This Result Area has been Marked for Deletion) Average conditional non-wage recurrent grants 6,815.00 11,430.00 for education services per beneficiary (Number) Action: This indicator has been Marked for Deletion Average conditional non-wage recurrent grants 1,295.00 3,198.00 for health services per beneficiary (Number) Page 26 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline Intermediate Targets End Target 1 Action: This indicator has been Marked for Deletion Average conditional development grants for 2,260.00 6,432.00 education per child of school going age (Number) Action: This indicator has been Marked for Deletion Average conditional development grants for 321.00 1,804.00 health services per capita (Number) Action: This indicator has been Marked for Deletion Number of service delivery structures constructed 2,909.00 5,275.00 or rehabilitated in education (Number) Action: This indicator has been Marked for Deletion Number of service delivery structures constructed 780.00 4,365.00 or rehabilitated in health (Number) Action: This indicator has been Marked for Deletion Enhancing equity of fiscal transfers for education and health services (Action: This Result Area has been Marked for Deletion) Average conditional non-wage recurrent grants for education services per beneficiary for the 20 8,303.00 17,349.00 least funded Districts per child of school going age (Number) Action: This indicator has been Marked for Deletion Page 27 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline Intermediate Targets End Target 1 Average conditional non-wage recurrent grants for health services per beneficiary for the 20 least 692.00 2,120.00 funded Districts per capita (Number) Action: This indicator has been Marked for Deletion Enhanced, equitable formula for conditional non- wage recurrent grants in education phased in as No Yes per plan (Yes/No) Action: This indicator has been Marked for Deletion Enhanced, equitable formula for conditional non- wage recurrent grants in health phased in as per No Yes plan (Yes/No) Action: This indicator has been Marked for Deletion Number of services delivery structures constructed or rehabilitated in the 30 least served 574.00 1,110.00 districts in education: no of structures in the districts with lowest enrollment (Number) Action: This indicator has been Marked for Deletion Number of services delivery structures constructed or rehabilitated in the 30 least served districts in health: no of health facilities in the 159.00 786.00 districts with highest population per health facility (Number) Page 28 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline Intermediate Targets End Target 1 Action: This indicator has been Marked for Deletion Enhanced, equitable formula for conditional development grants in education implemented as No Yes planned (Yes/No) Action: This indicator has been Marked for Deletion Enhanced, equitable formula for conditional development grants in health implemented as No Yes planned (Yes/No) Action: This indicator has been Marked for Deletion Improvement in fiscal management of education and health services (Action: This Result Area has been Marked for Deletion) Annual performance assessments of LGs 0.00 100.00 completed (Percentage) Action: This indicator has been Marked for Deletion Number of performance improvement plans 0.00 20.00 prepared for LGs (Number) Action: This indicator has been Marked for Deletion Value for Money audit completed (Yes/No) No Yes Action: This indicator has been Marked for Deletion Page 29 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) IO Table SPACE Disbursement Linked Indicators Matrix DLI IN00814749 ACTION DLI 4.1 Adequacy and equity of wage and non-wage recurrent financing of local service delivery improves in line with the DLI 1 medium term plan for financing Local Government service delivery - Wage Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Outcome Yes Text 28,000,000.00 0.00 Period Value Allocated Amount (USD) Formula Limited increases in wage recurrent allocations and a lack of objective allocation principles and formulae Baseline for conditional grants, with allocations not linked to costs of service delivery. by end June 2018 0.00 by end June 2019 0.00 DLR#4.1.20: 2020/21 Approved Budget and MTEF wage recurrent allocations are consistent with plans in the MTP for (a) staffing critical positions to in higher LG departments and in lower LGs (b) staffing by end September 2020 8,000,000.00 $6m Education; $2m Health of any newly constructed/upgraded facilities to agreed minimum levels, and (c) releases are publicly available online for the following areas: education; health. DLR # 4.1.21: 2021/22 Approved Budget and MTEF wage recurrent allocations are consistent with plans by end June 2021 20,000,000.00 $14m Education; $6m Health in the MTP for (a) increasing staff by specified numbers in the least staffed LGs and staffing critical Page 30 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) positions in higher LG departments and in lower LGs (b) staffing of any newly constructed/upgraded facilities to agreed minimum levels and (c) at least an agreed percentage of planned recruitment for 2020/21 has been completed, with new staff on the payroll, for the following areas: education; health. by end June 2022 0.00 Action: This DLI is New DLI IN00822864 ACTION DLI 4.2 Adequacy and equity recurrent financing of local service delivery improves in line with the medium term plan for DLI 1.1 financing Local Government service delivery - Non-Wage Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Outcome Yes Text 47,000,000.00 0.00 Period Value Allocated Amount (USD) Formula Limited increases in non-wage recurrent allocations and a lack of objective allocation principles and Baseline formulae for conditional grants, with allocations not linked to costs of service delivery. by end June 2018 0.00 by end June 2019 0.00 DLR#4.2.20: 2020/21 Approved Budget and MTEF allocations are for non-wage recurrent financing of service delivery a) are consistent with the MTP, b) by end September 2020 22,000,000.00 $14m Education; $8m Health are based on an agreed formula whose underlying data is publicly available, and c) at least 97% of 2019/20 budgeted transfers are released to all LGs Page 31 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) and releases publicly available online, for the following areas: Education; Health DLR #4.2.21: 2021/22 Approved Budget and MTEF allocations for non-wage recurrent financing of service delivery a) are consistent with the MTP, b) are based on an agreed formula whose underlying by end June 2021 data is publicly available, and c) at least 97% of 25,000,000.00 $12m Education; $13m Health 2020/21 budgeted transfers are released to all LGs and releases publicly available online, for the following areas: Education; Health, including central allocations to essential medical supplies. by end June 2022 0.00 Action: This DLI is New DLI IN00814859 ACTION DLI 5. Adequacy and targeting of development financing for service delivery infrastructure and equipment improves and is DLI 2 linked to performance in the Education and Health, sectors, as applicable Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Outcome Yes Text 24,000,000.00 0.00 Period Value Allocated Amount (USD) Formula 2017/18 budget allocations for conditional health sector development grants and transitional Baseline development grants were ad hoc and not linked to performance. Values of grants had stagnated. by end June 2018 0.00 by end June 2019 0.00 Page 32 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) DLR # 5.20: 2020/21 Approved Budget and MTEF allocations for development grants for service delivery a) are consistent allocations to grant components within the MTP, b) at least one component is based on an agreed formula, c) the by end September 2020 14,000,000.00 $6m Education; $8m Health formula based component is linked to performance as specified in the POM, and d) at least 97% of 2019/20 budgeted transfers are released to all LGs, with releases publicly available online for the following areas: Education; Health DLR # 5.21: 2021/22 Approved Budget and MTEF allocations for development grants for service delivery a) are consistent allocations to grant components within the MTP, b) at least one component is based on agreed formula, c) the by end June 2021 10,000,000.00 $6m Education; $4m Health formula based component is linked to performance as specified in the POM, and d) at least 97% of 2020/21 budgeted transfers are released to all LGs, with releases publicly available online, for the following areas: Education; Health by end June 2022 0.00 Action: This DLI is New DLI IN00814830 ACTION DLI 6. Number of Key actions from the Local Service Delivery Improvement Matrix that take place which are intended to DLI 3 improve systems, processes and capacity for improved service delivery Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output Yes Text 18,000,000.00 0.00 Period Value Allocated Amount (USD) Formula Page 33 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) Baseline 0.00 by end June 2018 0.00 by end June 2019 0.00 by end September 2020 0.00 DLR #6. 18 key actions from Service Delivery Improvement Matrix that have been completed where for each action completed the following is true: (a) the action completed is represented by a distinct row in the Service Delivery Improvement Matrix; (b) a definition of completion and evidence by end June 2021 required for verification of completed has been 18,000,000.00 $1 million per action specified in the POM for that action; and (c) The action has been completed in a way that is consistent with the definition in the POM and the responsible MDA has reported on that completion of that activity to OPM and provided supporting evidence in line with the requirements of the POM. by end June 2022 0.00 Action: This DLI is New Page 34 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) DLI IN00814861 ACTION DLI 7. Central Government core functions in oversight, guidance, performance assessment and improvement, monitoring DLI 4 and technical support to LG service delivery take place Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output Yes Text 16,000,000.00 0.00 Period Value Allocated Amount (USD) Formula No assessment of the performance by central government coordination, oversight, performance Baseline assessment and support. Central government did not have a system of assessing LG performance and improvement planning. by end June 2018 0.00 by end June 2019 0.00 DLR#7.20 Central MDAS carry out their core functions in the oversight of service delivery including a) essential guidance, b) performance assessment and improvement support, and c) $2m Crosscutting; $1m Education; $1m by end September 2020 4,000,000.00 routine review of workplans, budgets and reports, Health monitoring of service delivery and construction and safeguarding requirements, in the following areas: crosscutting; education (a) only; health (a) only. DLR#7.21 Central MDAS carry out their core functions in the oversight of service delivery in 2020/21 to agreed levels including a) essential $4m Crosscutting; $4m Education; $4m by end June 2021 guidance, b) performance assessment and 12,000,000.00 Health improvement support, and c) routine review of workplans, budgets and reports, monitoring of service delivery and construction and safeguarding Page 35 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) requirements, in the in the following areas: crosscutting; education; health. by end June 2022 0.00 Action: This DLI is New DLI IN00814866 ACTION DLI 8. LG management of service delivery is strengthened overall and for the weakest performing Local Governments in DLI 5 education and health as applicable. Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output Yes Text 8,000,000.00 0.00 Period Value Allocated Amount (USD) Formula Baseline No LG performance assessment in place. by end June 2018 0.00 by end June 2019 0.00 DLR#8.20 In the 2019/20 performance assessment of the LG management of services and delivery of infrastructure a) average scores improve overall and by end September 2020 b) the average ranking for a specified number of the 4,000,000.00 $2m Education; $2m Health weakest performing LGs improves in comparison to the previous assessment in each of the following areas ; health – 5 LGs; education – 5LGs. DLR #8.21 In the 2020/21 performance assessment of the LG management of services and delivery of by end June 2021 infrastructure a) the number of LGs that have met 4,000,000.00 $2m Education; $2m Health the minimum conditions has reached the level specified in the POM; and b) the average ranking for Page 36 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) a specified number of the weakest performing LGs improves in comparison to the previous assessment in each of the following areas: health – 5 LGs; education – 5 LGs. by end June 2022 0.00 Action: This DLI is New DLI IN00814860 ACTION DLI 6 DLI 9. Service delivery performance is strengthened overall and for the weakest performing facilities and sub-counties Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Intermediate Outcome Yes Text 5,370,000.00 0.00 Period Value Allocated Amount (USD) Formula Baseline No Service Delivery Assessments in Place. by end June 2018 0.00 by end June 2019 0.00 by end September 2020 N/A 0.00 DLR#9.21 Service delivery performance is assessed by end June 2021 in 2020/21 for: all health center IIIs and IVs; and a 5,370,000.00 $2m Edu; $3.37m Health; sample of primary schools. by end June 2022 0.00 Action: This DLI is New Page 37 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) DLI IN00796423 ACTION DLI 1.1: Annual increase in budget allocation to sector conditional grants (wage, non-wage recurrent, and development to DLI 7 LGs for education services. Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Process No Text 20,000,000.00 0.00 Period Value Allocated Amount (USD) Formula Allocations to conditional grants for the education Baseline sector is planned at 1,419 UGX billion for 2017/18 DLR # 1.1.1: Medium-term plan (MTP) for increasing budget allocations to the transfers reflected in the by end June 2018 MTEF and the approved budget with allocations to 4,000,000.00 education sector conditional grants for 2018/19 at least 6 percent higher than in 2017/18 DLR # 1.1.2: MTP for increasing budget allocations to the transfers reflected in the MTEF and the by end June 2019 approved budget with allocations to education 4,000,000.00 sector conditional grants for 2019/20 at least 10 percent higher than in 2018/19 DLR # 1.1.3: MTP for increasing budget allocations to the transfers reflected in the MTEF and the by end September 2020 approved budget with allocations to education 4,000,000.00 sector conditional grants for 2020/21 at least 7 percent higher than in 2019/20 DLR # 1.1.4: MTP for increasing budget allocations to the transfers reflected in the MTEF and the by end June 2021 approved budget with allocations to education 4,000,000.00 sector conditional grants for 2021/22 at least 7 percent higher than in 2020/21 Page 38 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) DLR # 1.1.5: MTP for increasing budget allocations to the transfers reflected in the MTEF and the by end June 2022 approved budget with allocations education sector 4,000,000.00 conditional grants for 2022/23 not lower than in 2021/22 Action: This DLI has been Revised. See below. DLI IN00825281 ACTION DLI 1.1: Annual increase in budget allocation to sector conditional grants (wage, non-wage recurrent, and development) to DLI 7 LGs for education services. Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Process No Text 4,000,000.00 100.00 Period Value Allocated Amount (USD) Formula Allocations to conditional grants for the education Baseline sector is planned at 1,419 UGX billion for 2017/18 DLR # 1.1.1: Medium-term plan for increasing budget allocations to the transfers reflected in the by end June 2018 Approved Budget and MTEF with 2018/19 4,000,000.00 allocations at least 6 percent higher than in 2017/18. by end June 2019 0.00 by end September 2020 0.00 by end June 2021 0.00 by end June 2022 0.00 Page 39 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) DLI IN00796424 ACTION DLI 8 DLI 1.2: Enhanced, equitable formula for operational grants in education phased in as planned Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Intermediate Outcome No Text 70,000,000.00 0.00 Period Value Allocated Amount (USD) Formula Baseline Enhanced formula drafted but not implemented. DLR # 1.2.1: Enhanced formula and phase in plan adopted and the 2018/19 budget allocations by end June 2018 consistent with formula phase in plan and publicly 14,000,000.00 available online. 2017/18 releases publicly available online. DLR # 1.2.2: 2019/20 budget allocations consistent with formula phase in plan, and publicly available by end June 2019 online. At least 97% of 2018/19 budgeted transfers 14,000,000.00 are released to all LGs. Releases publicly available online. DLR # 1.2.3: 2020/21 budget allocations are consistent with formula phase in plan, and publicly available online; performance incentives are in by end September 2020 14,000,000.00 place. At least 97% of 2019/20 budgeted transfers are released to all LGs. Releases publicly available online. DLR # 1.2.4: 2021/22 budget allocations are consistent with formula phase in plan, and publicly available online; performance incentives are in by end June 2021 14,000,000.00 place. At least 97% of 2020/21 budgeted transfers are released to all LGs. Releases publicly available online. Page 40 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) DLR # 1.2.5: 2022/23 budget allocations are consistent with formula phase in plan, and publicly available online; performance incentives are in by end June 2022 14,000,000.00 place. At least 97% of 2021/22 budgeted transfers are released to all LGs. Releases publicly available online. Action: This DLI has been Revised. See below. DLI IN00825282 ACTION DLI 8 DLI 1.2: Enhanced, equitable formula for operational grants in education phased in as planned Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Intermediate Outcome No Text 28,000,000.00 100.00 Period Value Allocated Amount (USD) Formula Baseline Enhanced formula drafted but not implemented. DLR # 1.2.1: Enhanced formula and phase in plan adopted by MoFPED and the 2018/19 budget by end June 2018 allocations consistent with formula phase in plan 14,000,000.00 and publicly available online. 2017/18 releases publicly available online. DLR # 1.2.2: 2019/20 budget allocations consistent with formula phase in plan, and publicly available by end June 2019 online. At least 97% of 2018/19 budgeted transfers 14,000,000.00 are released to all LGs. Releases publicly available online. by end September 2020 0.00 by end June 2021 0.00 Page 41 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) by end June 2022 0.00 DLI IN00796425 ACTION DLI 9 DLI 1.3: Enhanced, equitable formula for development grants in education implemented as planned Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Intermediate Outcome No Text 30,000,000.00 0.00 Period Value Allocated Amount (USD) Formula 2017/18 budget allocations in line with formula without performance element and publicly available Baseline online. 2016/17 budget disbursements are available online (in document form) are available online. DLR # 1.3.1: 2018/19 budget allocations are in line with enhanced formula and phase in plan, linked to by end June 2018 performance assessment results and publicly 6,000,000.00 available online. The 2017/18 transfers are available online. DLR # 1.3.2: 2019/20 budget allocations are in line with enhanced formula and phase in plan, linked to performance assessment results and publicly by end June 2019 available online. At least 97% of 2018/19 budgeted 6,000,000.00 transfers are released to all LGs which meet accountability requirements. Releases are publicly available online. DLR # 1.3.3: 2020/21 budget allocations are in line with enhanced formula and phase in plan, linked to performance assessment results and publicly by end September 2020 available online. At least 97% of 2019/20 budgeted 6,000,000.00 transfers are released to all LGs which meet accountability requirements. Releases are publicly available online. Page 42 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) DLR # 1.3.4: 2021/22 budget allocations are in line with enhanced formula and phase in plan, linked to performance assessment results and publicly by end June 2021 available online. At least 97% of 2020/21 budgeted 6,000,000.00 transfers are released to all LGs which meet accountability requirements. Releases are publicly available online. DLR # 1.3.5: 2022/23 budget allocations are in line with enhanced formula and phase in plan, linked to performance assessment results and publicly by end June 2022 6,000,000.00 available online. 97% of 2021/22 budgeted transfers are released to all LGs which meet accountability requirements. Releases are publicly available online Action: This DLI has been Revised. See below. DLI IN00825283 ACTION DLI 9 DLI 1.3: Enhanced, equitable formula for development grants in education implemented as planned Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Intermediate Outcome No Text 6,000,000.00 100.00 Period Value Allocated Amount (USD) Formula 2017/18 budget allocations in line with formula without performance element and publicly available Baseline online. 2016/17 budget disbursements are available online (in document form) are available online. by end June 2018 0.00 DLR # 1.3.2: 2019/20 budget allocations are in line with enhanced formula and phase in plan, linked to by end June 2019 6,000,000.00 performance assessment results and publicly available online. At least 97% of 2018/19 budgeted Page 43 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) transfers are released to all LGs which meet accountability requirements. Releases are publicly available online. by end September 2020 0.00 by end June 2021 0.00 by end June 2022 0.00 DLI IN00796426 ACTION DLI 10 DLI 1.4: The quality of fiscal management of education resources by LGs is maintained Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Intermediate Outcome No Text 10,000,000.00 0.00 Period Value Allocated Amount (USD) Formula No performance assessment. Grant guidelines do Baseline not address all fiduciary, environmental and social risks. DLR # 1.4.1: Guidelines at the LG and school level by end June 2018 updated, addressing fiduciary, environmental and 2,000,000.00 social risks and grievance redress. DLR # 1.4.2: The average score on the education by end June 2019 resources management in the annual performance 2,000,000.00 assessment is not lower than in 2017/18 DLR # 1.4.3: The average score on the education resources management in the annual performance by end September 2020 2,000,000.00 assessment and the average score of the 20 worst LGs are both not lower than in 2018/19. DLR # 1.4.4: The average score on the education by end June 2021 2,000,000.00 resources management in the annual performance Page 44 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) assessment and the average score of the 20 worst LGs are both not lower than in 2019/20. DLR # 1.4.5: The average score on the education resources management in the annual performance by end June 2022 2,000,000.00 assessment and the average score of the 20 worst LGs are both not lower than in 2020/21 Action: This DLI has been Revised. See below. DLI IN00825284 ACTION DLI 10 DLI 1.4: The quality of fiscal management of education resources by LGs is maintained Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Intermediate Outcome No Text 4,000,000.00 100.00 Period Value Allocated Amount (USD) Formula No performance assessment. Grant guidelines do Baseline not address all fiduciary, environmental and social risks. DLR # 1.4.1: Guidelines at the LG and school level by end June 2018 updated, addressing fiduciary, environmental and 2,000,000.00 social risks and grievance redress. DLR # 1.4.2: The average score on the education by end June 2019 resources management in the annual performance 2,000,000.00 assessment is not lower than in 2017/18 by end September 2020 0.00 by end June 2021 0.00 by end June 2022 0.00 Page 45 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) DLI IN00796427 ACTION DLI 2.1: Annual increase in budget allocation to sector conditional grants (wage, non-wage recurrent, and development) to DLI 11 LGs for health services. Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Intermediate Outcome No Text 10,000,000.00 0.00 Period Value Allocated Amount (USD) Formula Allocations to sector conditional grants for the Baseline Health sector is planned at 336 UGX billion for 2017/18 DLR # 2.1.1: MTP for increasing budget allocations to the transfers reflected in the approved budget by end June 2018 and MTEF with allocations to health sector 2,000,000.00 conditional grants for 2018/19 at least 21 percent higher than in 2017/18 DLR # 2.1.2: MTP for increasing budget allocations to the transfers reflected in the approved budget by end June 2019 and MTEF with allocations to health sector 2,000,000.00 conditional grants for 2019/20 at least 11 percent higher than in 2018/19 DLR # 2.1.3: MTP for increasing budget allocations to the transfers reflected in the approved budget by end September 2020 and MTEF with allocations to health sector 2,000,000.00 conditional grants for 2020/21 at least 10 percent higher than in 2019/20 DLR # 2.1.4: MTP for increasing budget allocations to the transfers reflected in the approved budget by end June 2021 and MTEF with allocations to health sector 2,000,000.00 conditional grants for 2021/22 at least 9 percent higher than in 2020/21 Page 46 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) DLR # 2.1.5: MTP for increasing budget allocations to the transfers reflected in the approved budget by end June 2022 2,000,000.00 and MTEF with allocations health sector conditional grants for 2022/23 not lower than in 2021/22 Action: This DLI has been Revised. See below. DLI IN00825285 ACTION DLI 2.1: Annual increase in budget allocation to sector conditional grants (wage, non-wage recurrent, and development) to DLI 11 LGs for health services. Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Intermediate Outcome No Text 1,800,000.00 100.00 Period Value Allocated Amount (USD) Formula Allocations to sector conditional grants for the Baseline Health sector is planned at 336 UGX billion for 2017/18 DLR # 2.1.1: Medium-term plan for increasing budget allocations to the transfers reflected in the by end June 2018 1,800,000.00 Approved Budget and MTEF with 2018/19 allocations at least 21% higher than in 2017/18. by end June 2019 0.00 by end September 2020 0.00 by end June 2021 0.00 by end June 2022 0.00 Page 47 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) DLI IN00796428 ACTION DLI 12 DLI 2.2: Enhanced, equitable formula for operational grants in health phased in as planned. Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Intermediate Outcome No Text 20,000,000.00 0.00 Period Value Allocated Amount (USD) Formula 2016/17 budget releases are available online in Baseline document form only. DLR # 2.2.1: Enhanced formula and phase in plan adopted and the 2018/19 budget allocations by end June 2018 consistent with formula phase in plan and publicly 4,000,000.00 available online. 2017/18 releases publicly available online. DLR # 2.2.2: 2019/20 budget allocations consistent with formula phase in plan, and publicly available by end June 2019 online. At least 97% of 2018/19 budgeted transfers 4,000,000.00 are released to all LGs. Releases publicly available online. DLR # 2.2.3: 2020/21 budget allocations are consistent with formula phase in plan, and publicly available online; performance incentives are in by end September 2020 4,000,000.00 place. At least 97% of 2019/20 budgeted transfers are released to all LGs. Releases publicly available online. DLR # 2.2.4: 2021/22 budget allocations are consistent with formula phase in plan and publicly available online; performance incentives are in by end June 2021 4,000,000.00 place. At least 97% of 2020/21 budgeted transfers are released to all LGs. Releases publicly available online. Page 48 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) DLR # 2.2.5: 2022/23 budget allocations are consistent with formula phase in plan, and publicly available online; performance incentives are in by end June 2022 4,000,000.00 place. At least 97% of 2021/22 budgeted transfers are released to all LGs. Releases publicly available online. Action: This DLI has been Revised. See below. DLI IN00825286 ACTION DLI 12 DLI 2.2: Enhanced, equitable formula for operational grants in health phased in as planned. Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Intermediate Outcome No Text 4,000,000.00 100.00 Period Value Allocated Amount (USD) Formula 2016/17 budget releases are available online in Baseline document form only. by end June 2018 0.00 DLR # 2.2.2: 2019/20 budget allocations consistent with formula phase in plan and publicly available by end June 2019 online. At least 97% of 2018/19 budgeted transfers 4,000,000.00 are released to all LGs. Releases publicly available online. by end September 2020 0.00 by end June 2021 0.00 by end June 2022 0.00 Page 49 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) DLI IN00796429 ACTION DLI 13 DLI 2.3: Enhanced, equitable formula for development grants in health implemented as planned. Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Intermediate Outcome No Text 15,000,000.00 0.00 Period Value Allocated Amount (USD) Formula 2017/18 no budget allocations for conditional health sector development grants and transitional Baseline development grants were ad hoc. 2016/17 budget disbursements are available online (in document form) are available online. DLR # 2.3.1: 2018/19 budget allocations are in line with enhanced formula and phase in plan, linked to by end June 2018 performance assessment results and publicly 3,000,000.00 available online. The 2017/18 transfers are available online. DLR # 2.3.2: 2019/20 budget allocations are in line with enhanced formula and phase in plan, linked to performance assessment results and publicly by end June 2019 available online. At least 97% of 2018/19 budgeted 3,000,000.00 transfers are released to all LGs which meet accountability requirements. Releases and are publicly available online. DLR # 2.3.3: 20120/21 budget allocations are in line with enhanced formula and phase in plan, linked to performance assessment results and publicly by end September 2020 available online. At least 97% of 2019/20 budgeted 3,000,000.00 transfers are released to all LGs which meet accountability requirements. Releases are publicly available online. Page 50 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) DLR # 2.3.4: 2021/22 budget allocations are in line with enhanced formula and phase in plan, linked to performance assessment results and publicly by end June 2021 available online. At least 97% of 2020/21 budgeted 3,000,000.00 transfers are released to all LGs which meet accountability requirements. Releases are publicly available online. DLR # 2.3.5: 2022/23 budget allocations are in line with enhanced formula and phase in plan, linked to performance assessment results and publicly by end June 2022 3,000,000.00 available online. 97% of 2021/22 budgeted transfers are released to all LGs which meet accountability requirements. Releases are publicly available online. Action: This DLI has been Marked for Deletion DLI IN00796430 ACTION DLI 14 DLI2.4: The quality of fiscal management of health resources by LGs is maintained. Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Intermediate Outcome No Text 10,000,000.00 0.00 Period Value Allocated Amount (USD) Formula No performance assessment Grant guidelines do Baseline not address all fiduciary, environmental and social risks. DLR # 2.4.1: Grant guidelines at the LG and facility by end June 2018 level updated, addressing fiduciary, environmental 2,000,000.00 and social risks and grievance redress. DLR # 2.4.2: The average score on the health by end June 2019 resources management in the annual performance 2,000,000.00 assessment is not lower than in 2017/18 Page 51 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) DLR # 2.4.3: The average score on the health resources management in the annual performance by end September 2020 2,000,000.00 assessment and the average score of the 20 worst LGs are both not lower than in 2018/19. DLR # 2.4.4: The average score on the health resources management in the annual performance by end June 2021 2,000,000.00 assessment and the average score of the 20 worst LGs are both not lower than in 2019/20. DLR # 2.4.5: The average score on the health resources management in the annual performance by end June 2022 2,000,000.00 assessment and the average score of the 20 worst LGs are both not lower than in 2020/21 Action: This DLI has been Revised. See below. DLI IN00825288 ACTION DLI 14 DLI2.4: The quality of fiscal management of health resources by LGs is maintained. Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Intermediate Outcome No Text 4,000,000.00 100.00 Period Value Allocated Amount (USD) Formula No performance assessment Grant guidelines do not Baseline address all fiduciary, environmental and social risks. DLR # 2.4.1: Grant guidelines at the LG and facility by end June 2018 level updated, addressing fiduciary, environmental 2,000,000.00 and social risks and grievance redress DLR # 2.4.2: The average score on the health by end June 2019 resources management in the annual performance 2,000,000.00 assessment is not lower than in 2017/18 by end September 2020 0.00 Page 52 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) by end June 2021 0.00 by end June 2022 0.00 DLI IN00796431 ACTION DLI 15 DLI 3: Assessment and Targeted Performance Improvement of the Fiscal Management by LGs. Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Intermediate Outcome No Text 15,000,000.00 0.00 Period Value Allocated Amount (USD) Formula a) Performance Assessment Pilot performance assessment conducted. Initial assessment manual Baseline prepared and approved b) Performance Improvement No Performance Improvement Plans. c) VfM Audit No VfM Audit DLR # 3.1: Annual performance assessment of 2016/17 is conducted, validated and publically disseminated. Performance Improvement Plans by end June 2018 3,000,000.00 prepared for and agreed with at least 5 local governments and in 1 thematic areas of underperformance. DLR # 3.2: Annual performance assessment of 2017/18 is conducted, validated and publically disseminated. Assessment manual for assessment of FY 2018/19 onwards updated and disseminated to take into account updated procedures in grant by end June 2019 3,000,000.00 manuals and agreed additional performance parameters. Performance Improvement Plans prepared for and agreed with at least 20 local governments and in 2 thematic areas of underperformance. A VfM audit of 2017/18 is Page 53 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) conducted in a sample of local governments’ expenditures in health and education. DLR # 3.3: Annual performance assessment of 2018/19 using updated manual is conducted, validated and publically disseminated. Performance by end September 2020 3,000,000.00 Improvement Plans prepared for and agreed with at least 20 local governments and in 2 thematic areas of underperformance. DLR # 3.4: Annual performance assessment of 2019/20 using updated manual is conducted, validated and publically disseminated. Performance by end June 2021 3,000,000.00 Improvement Plans prepared for and agreed with at least 20 local governments and in 2 thematic areas of underperformance. DLR # 3.5: Annual performance assessment of 2020/21 using updated manual is collected, validated and publically disseminated. Performance by end June 2022 3,000,000.00 Improvement Plans prepared for and agreed with at least 20 local governments and in 2 thematic areas of underperformance. Action: This DLI has been Revised. See below. DLI IN00825289 ACTION DLI 15 DLI 3: Assessment and Targeted Performance Improvement of the Fiscal Management by LGs. Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Intermediate Outcome No Text 3,750,000.00 100,000.00 Period Value Allocated Amount (USD) Formula a) Performance Assessment Pilot performance Baseline assessment conducted. Initial assessment manual prepared and approved b) Performance Page 54 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) Improvement No Performance Improvement Plans. c) VfM Audit No VfM Audit DLR # 3.1: Annual performance assessment of 2016/17 is conducted, validated and publicly by end June 2018 disseminated. Performance improvement plans 2,250,000.00 75% of originally allocated amount prepared for and agreed with at least 5 LGs and in 1 thematic areas of underperformance. DLR # 3.2: Annual performance assessment of 2017/18 is conducted, validated and publicly disseminated. Assessment manual for assessment of 2018/19 onwards updated and disseminated to take by end June 2019 into account updated procedures in grant manuals 1,500,000.00 50% of originally allocated amount and agreed additional performance parameters. Performance improvement plans prepared for and agreed with at least 20 LGs and in 2 thematic areas of underperformance. by end September 2020 0.00 by end June 2021 0.00 by end June 2022 0.00 Page 55 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) ANNEX 2: PROGRAM ACTION PLAN . . PAP_CHANGE_TBL Action Completion Description Source DLI# Responsibility Timing Measurement Action The Annual Technical MoFPED Recurrent Yearly The Annual No Change Budget Budget and MTEF allocations and allocations are MTEF are consistent with consistent with the MTP. the agreed Medium Term Plan for increasing budget allocations to the transfers which is set out in the POM. Reconsideration Technical MoFPED Recurrent Yearly MTEF allocations No Change of Medium Term changed Plan for following increasing budget agreement of allocations to the revisions transfers in the between WB and POM and MTEF GoU. allocations to the transfers, if specified macroeconomic variables deteriorate. Adherence to the Technical MoFPED Recurrent Yearly Formula phase in No Change revised formulae plan and phase in plan implemented as in the budget measured by DLIs allocations and 1 and 2. releases. Implementation Technical MoLG, MoES, Recurrent Yearly Formulae No Change of a process MoH variables and cost ensuring center lists signed consistency of the off by the data used for responsible implementation parties using of the redesigned process set out in grants. POM. Renegotiation of Technical MoFPED Recurrent Yearly Agreed targets Revised targets if the following combination of renegotiation. formulae, equity targets and Page 56 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) medium term plan to uplift transfers become misaligned, which significantly increases the cost of achieving equity targets. Proposed Renegotiation of Technical MoFPED Recurren Yearly Agreed targets targets if the t following combination of renegotiation. PDO adequacy, equity, service delivery targets, and medium term plan to uplift transfers become misaligned in a way which significantly increases the cost of achieving targets. Implementation Technical MoFPED Recurrent Yearly Institutional No Change of the strengthening institutional measures as strengthening specified in the measures in POM Central implemented Government to manage transfers system, make transfers on time, and to communicate effectively with LGs. Guidance for Environmental and Social MoLG Due Date 31-Aug-2020 Guidance for New unified system of Systems establishment ad grievance redress functioning of and community grievance redress engagement in in LGs including: Local grievance governments handling system; issued. consultative committees to handle grievances and disputes at each LG and MDA; crosscutting and Page 57 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) sectoral community engagement structures. Annual Technical Office of Prime Recurrent Yearly Annual Revised performance Minister assessment takes assessment takes place (DLI 3) and place according validated in line to agreed rules with process in and covers the POM. technical, fiduciary, environmental and social risks. Proposed Annual Technical Office of Prime Recurren Yearly Annual performance Minister t assessment takes assessment takes place (DLIs 7, 8 place according and 9) and to agreed rules validated in line and covers with process in technical, the POM. fiduciary, environmental and social risks. Strengthen tools Environmental and Social MWE, NEMA, Due Date 31-Aug-2020 Tools in place: New for enhancing Systems PPDA, MoGLSD sectoral screening integration of checklists; ESMP Environmental templates; ESHS and Social issues provisions in into LG planning, bidding docs, budgeting, evaluation project screening, criteria, approval procurement, of certificates; contract monitoring, management and reporting and monitoring. E&S mainstreaming checklists. Updating and Technical MoFPED Recurrent Yearly Specified manuals Revised dissemination of and guidelines manuals and adjusted taken procedures into account relating to issues specified in transfers, the POM. procurement, financial management, and LG staffing to cater to technical, fiduciary, Page 58 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) environmental and social risks. Proposed Updating and Technical MoFPED Recurren Yearly Specified manuals dissemination of t and guidelines manuals and adjusted taken procedures into account relating to issues specified in transfers, the POM. Central procurement, MDAs conduct financial dissemination management, and training and LG staffing to exercises annually cater to technical, directly to local fiduciary, government staff, environmental teachers and in and social risks. charges of health facilities. Implementation Technical MoLG, MoES, Recurrent Yearly Local No Change of a process for MoH Government and targeted Thematic performance Performance improvement. Improvement Plans implemented as measured in DLI3 Two thematic Technical MoLG, MoH, Recurrent Yearly Thematic Revised areas for targeted MoES Performance performance Improvement improvement in areas are chosen 2018/19 address accordingly fiduciary and social and environmental risks identified during the first round of LG performance assessments and help to strengthen capacity of LGs to implement the guidelines Proposed Two thematic Technical MoLG, MoH, Due Date 30-Apr-2020 Thematic areas for targeted MoES Performance performance Improvement improvement in areas are chosen 2018/19 address Page 59 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) fiduciary and accordingly social and environmental risks identified during the first round of LG performance assessments and help to strengthen capacity of LGs to implement the guidelines Joint monitoring Fiduciary Systems MWT Sector Recurrent Quarterly Quarterly New visits to all local MDAs MGLSD Monitoring and government for NEMA IG MoLG Follow up construction led PPDA Reports. by MoWT, covering procurement, contract management, safeguards requirements. Minimum Technical OPM Due Date 30-Jun-2020 Updated New condition in the Performance performance Assessment assessment put in Manual place a) to ensure critical staffing in LG sector and fiduciary, environmental and social safeguarding departmental roles and LLGs, and b) to ensure E&S project screening takes place. . Page 60 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) ANNEX 3: PERFORMANCE ASSESSMENT FRAMEWORK 1. The Annual Performance Assessment Framework is at the heart of the design of UgIFT, and sector and crosscutting assessments will be carried out of central oversight, local government management and service delivery performance. Table 8 below sets out the major tentative groupings of performance measures that will be further elaborated in the Performance Assessment Manual. The performance measures identified will be limited within and across sectors to those which are crucial enablers for service delivery or measure service delivery performance directly. Table 8: Summary of the three Levels of Annual Performance Assessment Level 1a: Facility Level 2: Local Government Service Delivery Level 3: Central Government Oversight & Primary Schools and Health Centers III and IV Management and Results Systems Strengthening Primary School Education, Health and Crosscutting Education, Health, Crosscutting  Basic Standards for Staffing, Local Government Service Delivery Results a) Essential sector guidance prepared and Infrastructure and Facilities  Achievement of Basic Standards disseminated (DLI4)  Learner, Teacher  Service Delivery Performance  Essential Sector Guidance for Service  School Management  Investment Performance and execution Delivery Updated and Issued  Community management Service Delivery Performance Reporting and  Grant and Budgeting Guidelines Health Centre III and IV Performance Improvement Updated and Issued on time  Basic Standards for Staffing,  Facility/LLG Compliance and Reporting  LGs and Service Delivery Staff directly Infrastructure, Equipment, and RBF  Performance Improvement trained on all new and updated sector Qualification  Accuracy of Reported Information guidance  Curative Health Services Human Resources Management and b) Performance assessment and  Health promotion and prevention Development improvement support (DLI4)  Budgeting for and Actual Recruitment  Annual Performance Assessment Takes activities and Deployment of staff Place in Line with Assessment Manual  Continuous quality improvement  Attendance and Performance  Performance Improvement Planning  Health Facility Leadership and Management and Support Management Management, Monitoring and Supervision of  Value for Money and Technical Audits  Human Resources for Health Services (crosscutting only)  Essential Medicines and Supplies  Planning, Budgeting and Transfer of c) Routine Coordination, Oversight, Management Funds for service delivery Monitoring and Technical Support  Equipment and Infrastructure  Routine Oversight and Monitoring (DLI4) Level 1b: Lower Local Governments (LLGs)  Communication and Mobilization of  Central government review of LG Education, Health, Crosscutting Beneficiaries budgets, work plans and reports Education Investment Management  Budgeting, Financial Management and  Appraisal of Head Teachers  Planning and budgeting for Investments Procurement  Termly school visits  Procurement, Contract  Monitoring, Oversight and Technical  LLG education investment prioritization management/execution Support to service delivery and follow and selection Environmental and Social Requirements up Health  Safeguards for Service Delivery  Oversight and support to LG  Health awareness, prevention and reporting  Safeguards in the Delivery of Investments investment management, including  LLG health investment prioritization  Transparency Joint Monitoring of Construction and and selection  Grievance Redress follow up Crosscutting Financial Management (crosscutting only)  Coordination and Institutional  Bank Reconciliations Arrangements  Basic Standards for Staffing and Equipment  Internal audit and follow-up on audit  Environmental and Social Safeguards  Planning and budgeting  Audit opinion and Follow up d) Strengthening Local Government  Procurement Locally Raised Revenues (crosscutting only) Processes and Systems (DLI3)  Revenue mobilization  Predictability  Actions to Strengthening Local  Reporting  Revenue mobilization performance Government Processes and Systems in  Execution, gender and environment  Revenue sharing line with the Service Delivery  Sector Indicators Improvement Matrix Page 61 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) 2. Level 1 – Facility and Lower Local Government Service Delivery. This level of performance assessment is focused on the institutions directly providing services. Health Centre IIIs and IVs performance will be assessed as part of the mainstreaming of Results Based Financing in the LG grant system from 2021/22. Primary School performance will be assessed using a new performance assessment framework that will be rolled out in a phased manner over the course of UgIFT. A lower local government assessment will also be phased in over the program period. This will assess performance of lower local governments roles in education health and crosscutting areas. 3. Level 2 – LG Management of Service Delivery. The local government assessment will be sharpened in three respects. Firstly, sectoral assessments will assess service delivery results overall in the district/municipalities, aggregating performance information from facilities and lower local governments and alongside this assess the degree of compliance with performance reporting and performance improvement support. This will provide a focus on and incentives for local governments to focus on performance at the point of delivery. Secondly, minimum conditions for the performance component of development grants will be identified, to focus on key bottlenecks for delivery and safeguards management. Proposed minimum conditions are set out in Table 8 below, which will apply to 50% of the performance allocations for 2021/22 and 100% thereafter. This will sharpen incentives for LGs to address these key issues, which have proved challenging in early UgIFT implementation. 4. Level 3 – Central Assessment. Central ministries will report on progress in performance of core functions in line with their calendar and provide supporting evidence in line with the performance assessment manual. The performance assessment will assess the degree to which each of the four key oversight functions have been carried out. Table 7: LG Minimum Conditions for Accessing the Performance Component of Development Grants Sector Development Grants  HLG has assessed sector facility and LLG basic service delivery standards, service delivery performance and investment performance in line with the LGPA manual and phase in plan.  LG has substantively recruited or requested for secondment of all critical professional staff as per staff structure, where there is a wage bill provision.  Environmental, Social and Climate Change screening has been carried out and ESIAs and costed ESMPs developed (including child protection plans), where required, prior to commencement to project activities. Crosscutting  The HLG has assessed crosscutting LLG performance in line with the LGPA manual.  The LG has ensured critical staff are substantively appointed in HLG departments or has requested for secondment from central government where there is a wage bill provision as below: a) All HoDs b)A Senior Procurement Officer and Procurement Officer (if Municipal: Procurement Officer and Assistant Procurement Officer) c) A Senior Environment Officer and Senior Land Management Officer. d)A Senior Community Development officer e) A Senior Accountant f) At least one Senior Internal Auditor  The LG has ensured critical minimum staff are substantively appointed every LLG as below: g) Senior Assistant Secretary or an Assistant Secretary; h)Community Development Officer or Assistant Community Development Officer; and i) Senior Accounts Assistant or an Accounts Assistant.  Environmental, Social and Climate Change screening has been carried out and ESIAs and costed ESMPs developed (including child protection plans), where required, prior to commencement to project activities.  LG has allocated at least 5% of the total budget allocations to capital development in a LG to oversight and management of construction under the LG administration department, and the planned activities and targets in the workplan include a) procurement and b) contract management and c) environmental and social safeguards as specified in guideliens for investment servicing costs.  The Local government does not have an adverse or disclaimed audit opinion.  The LG has provided information to the PS/ST on the status of implementation of Internal Auditor General and Auditor General findings for the previous financial year by end of February Page 62 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) Sector Development Grants  HLG has assessed sector facility and LLG basic service delivery standards, service delivery performance and investment performance in line with the LGPA manual and phase in plan.  LG has substantively recruited or requested for secondment of all critical professional staff as per staff structure, where there is a wage bill provision.  Environmental, Social and Climate Change screening has been carried out and ESIAs and costed ESMPs developed (including child protection plans), where required, prior to commencement to project activities. Crosscutting  The HLG has assessed crosscutting LLG performance in line with the LGPA manual.  The LG has ensured critical staff are substantively appointed in HLG departments or has requested for secondment from central government where there is a wage bill provision as below: j) All HoDs k) A Senior Procurement Officer and Procurement Officer (if Municipal: Procurement Officer and Assistant Procurement Officer) l) A Senior Environment Officer and Senior Land Management Officer. m) A Senior Community Development officer n)A Senior Accountant o)At least one Senior Internal Auditor  The LG has ensured critical minimum staff are substantively appointed every LLG as below: p)Senior Assistant Secretary or an Assistant Secretary; q)Community Development Officer or Assistant Community Development Officer; and r) Senior Accounts Assistant or an Accounts Assistant.  Environmental, Social and Climate Change screening has been carried out and ESIAs and costed ESMPs developed (including child protection plans), where required, prior to commencement to project activities.  LG has allocated at least 5% of the total budget allocations to capital development in a LG to oversight and management of construction under the LG administration department, and the planned activities and targets in the workplan include a) procurement and b) contract management and c) environmental and social safeguards as specified in guideliens for investment servicing costs.  The Local government does not have an adverse or disclaimed audit opinion.  The LG has provided information to the PS/ST on the status of implementation of Internal Auditor General and Auditor General findings for the previous financial year by end of February 5. The overall assessment process will be coordinated by OPM and the Local Government Performance Assessment Task Force. The strengthened focus on service delivery, especially at levels 1 and 2, will require and rely on strengthened sector management information systems, reporting and validation processes. Actions to develop these systems and strengthen the performance assessment are set out in the Service Delivery Improvement Matrix. Page 63 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) ANNEX 4: SERVICE DELIVERY IMPROVEMENT MATRIX 6. This Annex sets out the Service Delivery Improvement Matrix. The matrix sets out sectoral and cross sectoral actions to strengthen LG service delivery processes, systems and capacity, and forms the basis of DLI 6.  Each row in the matrix represents an action.  Progress on implementation of the actions will be reported on and monitored on a quarterly basis by the IFT TC and follow up activities agreed to complete the actions.  Based on implementation progress, the actions in the matrix may be adjusted, subject to agreement of the World Bank. 7. Completed of actions will be verified as follows:  A definition of completion and evidence required for verification of completion will be specified in the POM for each action. This definition of compliance should be prepared and incorporated in the POM at least six months prior to completion of the action.  Each MDA will provide the supporting evidence to OPM on completion of an action in line with the verification requirements specified in the POM.  The verification of completion of actions will be conducted by an independent firm contracted by OPM, which will report to the LGPA task force.  Where actions are the responsibility of OPM, then the LGFC will review the evidence compiled and advise the LGPA task force. 8. Under DLI 6 a value of $1m is assigned to the completion of each action and the total allocated to the DLI is $50m. The number of actions in the matrix is greater than 50. The completion of 50 actions would be seen as satisfactory progress over the duration of the UgIFT AF Program. Given the nature of the actions in the matrix, it is likely that some will be delayed and others will not be achieved due to unforeseen reasons. In the context of DLI 3, an action will be considered complete, even if it is delayed, unless otherwise stated in the verification procedures for that action in the POM. Page 64 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) Table 8: Service Delivery Improvement Matrix Timing Key Actions – EDUCATION 1: Strengthening school performance, teacher adequacy and time at task supported by a revitalised school inspection function [Contributes to RA4/DLI 6 – Service Delivery Performance] By Sept Basic minimum school standards for service delivery established and approved for both primary and secondary. This includes 2020 specification of a) bare minimum staffing levels, b) infrastructure and equipment requirements c) basic processes for school management. Principles, approach and phase-in plan developed for equitable distribution of primary and secondary teachers across LGs and to schools within LGs focusing on a) uplifting staff numbers in the lowest staffed LGs agreed and integrated into MTP for LG Financing, and b) including staffing for phase 1 and phase 2 secondary schools. By Dec Harmonized inspection tool, staffing structure and model for the Inspection of Primary and Secondary Schools, consistent with integration 2020 of TELA, e-inspection and other instruments developed and disseminated. Staffing structure for the inspection function in Local Governments for primary schools agreed with Ministry of Public Service and funded in the 2021/22 budget. School performance assessment (SPA) tool/manual based on harmonized inspection tool and agreed minimum school standards, tested and finalized along with a combined roll out plan for the School performance assessment and Teacher Effectiveness and Leaner Achievement (TELA) developed and an impact evaluation. 2: Strengthening the capacity, processes and tools for the District/Municipal Education Office to manage human resources, infrastructure and service delivery [Contributes towards RA 3/DLI 5, LG Management of Service Delivery and Investments] By Sept Sector LG budget structure for program outputs, performance indicators, schools, staffing, infrastructure and equipment local government 2020 workplan updated for inclusion in the PBS. By June National stock-take of school infrastructure and equipment undertaken and School Atlas in place. Geotagged asset registers populated by 2021 at least 75 percent of local governments. School Atlas in place, using information from stock-take and piloting of dashboards and tools underway in at least 10 district local governments, with report on implementation including how information is used in decision making and accountability. 3: Strengthening central government oversight and support to improving education service delivery [Contributes towards RA 2/DLI 3, Central Government Routine Oversight Service Delivery] By Sept Framework developed for national government coordination oversight and regional technical support to local service delivery which 2020 includes a) functional roles and responsibilities of MoES and other departments b) required institutional structures c) coordination arrangements c) a calendar of oversight activities and d) performance measures. By June Structures approved and central government positions (incl. the inspection function in DES) agreed with MoPS and filled to perform core 2021 functions in coordination, oversight and management of and technical support to service delivery. 4: Integrated Digitization of Education Service Delivery and its Management [Contributes to all RAs] By June A time bound costed strategy developed for the integrated digitization of education service delivery and its management, based on an 2021 assessment of education information and management tools and systems, incorporating TELA, e-inspection, EMIS and other tools. The strategy aims to enhance the inter-operability of tools, rationalizing overlapping tools and filling in gaps in a way which addresses the challenges to service delivery and improving transparency. Automated system for capturing and quality assuring results school performance assessment results developed and linked to or integrated with OPAMS and OTIMS Page 65 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) Timing Key Actions – HEALTH 1. National Roll out and Mainstreaming Facility Result Based Financing, Quality Improvement and efficiency in the distribution of Health Workers and Medical Supplies [Contributes to RA4/DLI 6 – Service Delivery Performance] By Sept Basic minimum health facility standards for service delivery established and approved and integrated strategy for mainstreaming RBF in 2020 2021/22 and Quality Improvement finalized and approved by the IFTRP Steering Committee. This includes specification of a) bare minimum staffing levels, b) infrastructure and equipment requirements and c) costing and principles for the RBF roll out. Principles, approach and phase-in plan developed for equitable distribution of wage and health workers across LGs and to Facilities within LGs focusing on a) uplifting staff numbers in the lowest staffed LGs to agreed minimum health facility and DHT staffing levels, b) staffing the upgraded HCIIIs and c) follow up with local governments on use of funds allocated for wages this and follow-on FYs. Agreed approach to strengthening supply of essential medical supplies which involves a) increasing allocations to an agreed target level for a defined priority package of commodities, b) objective allocation to districts and facilities linked to workload/need, c) availing information on the allocations and distribution of commodities to LGs and facilities to the public and d) enhance tracking of redistributed health commodities. By Dec Updated implementation manual for RBF mainstreaming and harmonized district/municipal level quality enhancement and performance 2020 assessment tools. This will include the updated package of the core health results to be financed through RBF and priority quality improvement interventions approved including (a) assessment and incentive payments which promote balanced preventive and curative service delivery for mainstreaming for 2021/22 (b) harmonized approach to facility quality improvement based on the HPQAP and the adapted RBF approaches (c) Strengthened framework and tools for monitoring performance of all health facilities by functional DHMTs and HUMCS/Hospital Boards having strong community involvement. 2: Strengthening processes and tools for the District/Municipal Health Team to manage staff, infrastructure and service delivery [Contributes towards RA 3/DLI 5, LG Management of Service Delivery] By Sept Sector LG budget structure for program outputs, performance indicators, health facilities, staffing, infrastructure and equipment local 2020 government workplan updated for inclusion in the PBS. By June National stock-take of health facility infrastructure and equipment takes place, and GIS assisted Health Facility Atlas developed with, 2021 with geotagged asset registers populated for all health facilities in at least 75 percent of local governments. 3: Strengthening central government oversight and support to improving health service delivery [Contributes towards RA 2/DLI 3, Central Government Routine Oversight Service Delivery] By Sept Framework developed for national government coordination oversight and regional technical support (identify all key functions requiring 2020 special oversight e.g. RBF, technical supervision by RRHs, equipment maintenance workshops, refugee health etc.) to local service delivery which includes a) functional roles and responsibilities of MoH and other relevant agencies b) required institutional structures c) coordination arrangements d) a calendar of oversight activities and e) performance measures for inclusion in the performance assessment framework. This framework will accommodate oversight and support required to address the peculiar needs of refugee hosting LGs as well. By June Regional supervisory structures established and central government positions (incl. RBF, technical supervision and mentorship by RRHs, 2021 ensure functionality of regional equipment maintenance workshops) filled to perform core functions in coordination, oversight and technical support to service delivery. 4. Integrated digitalization of health service delivery and its management [Contributes to all RAs] By June A costed strategy developed for the integrated digitization of health service delivery and its management, based on an assessment of 2021 health information and management tools and systems. . The strategy is time bound and aims to enhance the inter-operability of tools, rationalizing overlapping tools and filling in gaps in a way which addresses the challenges to service delivery and improves transparency. Automated system for RBF invoicing, verifying results and administering results payments anchored to DHIS 2 and linked to OTIMS and OPAMS developed, tested and ready for implementation and made available online for FY2021/22 Information on district and facility allocations of medical supplies and facility performance (outputs, quality score etc) made publicly available and linked to the budget website or equivalent. Electronic Medical Records System implemented in all 13 Regional Referral Hospitals Page 66 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) Timing Key Actions - CROSSCUTTING Human Resource Management By Dec Establishment structures for sectoral departments, LLGs and service facilities and aligned to accommodate agreed minimum levels for 2020 critical district and municipal staff, health-workers and teachers (MoPS) and unconditional grant wage allocations adjusted , with complementary circular from MoPS to LGs to provide clear and staged approach to ensuring posts are filled and deployment of staff over the medium term, and central secondment of critical staff. Cross sectoral strategy for addressing absenteeism including a) recruiting, deploying and retaining staff in challenging (hard to reach hard to stay) areas (MoH, MoES, MAAIF and MWE) (b) strengthening time at task (MoPS, OPM, MoFPED and MoLG). June Establishment of consultative committees to handle grievances and disputes at each LG and MDA, in line with Public Service Negotiating, 2021 Consultative, and Dispute Settlement Machinery and this should be captured in the assessment framework.(MoPS) LG Budgeting, Public Investment Management and Reporting and for Service Delivery By Dec LG Public Investment Management Procedures in place which 2020 - Involve LG asset registers for service delivery infrastructure and equipment as the basis of decision making for investing in existing and new infrastructure. - Set out a process for the DTPC processing of projects eligible for budgeting: a) sector certifies in line with sector prioritization guidelines; b) local council structures and community have been consulted c) project environmental and social screening has been carried out and endorsed by the Community Development and Environment Officers and d) land is available and owned by the LG. - Contract supervision including: contract supervision including roles clerks of works, safeguards assurance, supervision, roles of District Engineer, Environment and Community Dev Officers in larger and smaller investments direct supervision by districts. - Interim payment certificates shall be approved by the Engineer only where a) the clerk of works has cleared and b) a site meeting has taken place at which the clerk of works gave his/her recommendation and representatives of the Environment and Community Development Offers were present and b) the Environment and Community Development Officer has approved. - Include relevant forms for project proposals, screening, reporting and checklists. This includes a safeguards mainstreaming checklist to guide LGs during planning, design, budgeting, bidding, contracting and implementation By June Strengthened budgeting and reporting system functionality for 2021/22 including PBS functionality for a) combined allocation of staff and 2021 operational funding to sub-counties and facilities b) improved budget formats with lists facility and project allocations in PBS, c) updated standard output structure and performance indicators for core services, d) linked to LG PIM system e) online review in PBS of sector budget compliance by sector ministries and MoFPED, f) consolidating LG information on sector performance and g) tracking and reporting on environmental ( including Climate Change) and Social performance Social and Environmental Requirements By Sept PPDA standard bidding documents for works incorporating environmental and social risk requirements adopted by all LGs under UgIFT AF. 2020 MWE and NEMA strengthen tools for environmental and social screening and monitoring of implementation of requirements and grievance redress, in consultation with MoWT, MGLSD, MoLG, PPDA and other oversight bodies will revise and update a) the ESHS screening form and checklist, integrating climate change and disaster risks; develop ESMPS templates, and b) develop integrated reporting forms/checklists for joint monitoring at the local governments and central government levels, and c) Guidance for establishment and functioning of grievance redress in LGs including a grievance handling system and consultative committees to handle grievances and disputes at each LG and MDA, in line with Public Service Negotiating, Consultative, and Dispute Settlement Machinery. Crosscutting and sectoral community engagement structures By Dec Undertake a functional review and social skill needs assessment and agree proposals related to strengthening social risk management at 2020 the LG level including, GBV and VAC (in coordination with the review of environment functions). This includes i) development strengthened joint E&S guidelines including monitoring tools for non- E&S Officers, both at the Central and Local Governments ii) agreed staffing structures; iii) prepare a training program for the social team at the Ministries and DLG. iv) Include the application of non-compliance penalties in the LG Assessment Tool; and (v) update budgeting guidelines to require minimum allocations to E&S requirements Eligible investments in environment, climate change mitigation and adaptation and social risk management identified (MoFPED, MWE and NEMA) for including in DDEG and sector guidelines. Environment and Social Safeguards requirements identifiable in revised LG budget structure and reporting formats for Social Development and Natural Resources departments via outputs and performance indicators for inclusion in the PBS aligned with results from the functional review. By June All Local Governments Trained on Strengthened Systems and Guidance for Environmental and Social Risk Management, including key 2021 specialist and non-specialist staff. Coordination and Communication of IFT Reforms By Sept UgIFT Communications Strategy has been developed and initial communication activities have taken place relating to LGPA and minimum 2020 conditions Page 67 of 68 The World Bank Uganda Intergovernmental Fiscal Transfers Program (P160250) Page 68 of 68