Document of The World Bank FOR OFFICIAL USE ONLY Report No: 83965-SN INTERNATIONAL DEVELOPMENT ASSOCIATION PROJECT APPRAISAL DOCUMENT ON A PROPOSED CREDIT IN THE AMOUNT OF SDR 26.20 MILLION (US$40.50 MILLION EQUIVALENT) TO THE REPUBLIC OF SENEGAL FOR A SOCIAL SAFETY NET PROJECT April 3, 2014 Human Development Country Department Africa Region This document is being made publicly available prior to Board consideration. This does not imply a presumed outcome. This document may be updated following Board consideration and the updated document will be made publicly available in accordance with the Bank's policy on Access to Information. CURRENCY EQUIVALENTS (Exchange Rate Effective February 28, 2014) Currency Unit = Franc CFA (FCFA) FCFA 485 = US$1 US$1 = SDR 0.6462 FISCAL YEAR January 1 - December 31 ABBREVIATIONS AND ACRONYMS ADIE Agency for the State's Information Technology (Agence de l'Informatique de l'Etat) ANSD National Agency for Statistics and Demography (Agence Nationale de la Statistique et de la Dimographie) APDC Local development community volunteers (Acteurs Porteurs de Dynamiques Communautaires) CACMU Unit for Universal Health Coverage (Cellule d'Appui 6 la Couverture Maladie Universelle) of the Ministry of Health and Social Action CCT Conditional Cash Transfer CDSVC Departmental Validation and Control Committee (Comit D partemental de Validation et de Contr6le) CIP/SNPS Social Protection Inter-ministerial Committee (Comit Interministiriel de Pilotage de la Stratigie Nationale de Protection Sociale) CLCS Local Targeting and Monitoring Committees (Comit Local de Ciblage et de Suivi) CLM Malnutrition Eradication Unit (Cellule de Lutte contre la Malnutrition) CPFS Social Safety Net Steering Committee (Comit de Pilotage des Filets Sociaux) CPS Country Partnership Strategy CRPSV Regional Steering, Supervising and Validating Committees (Comiti Rdgional de Pilotage, de Supervision et de Validation) CSO/PLCP Unit for the Monitoring of Poverty Reduction Programs (Cellule de Suivi Opirationnel des Programmes de Lutte contre la Pauvretd) of the Ministry of Women, Family and Youth CVCS Local Targeting and Monitoring Committee at the level of Villages/Neighborhoods (Comit Villageois de Ciblage et de Suivi) DCEF Directorate for Economic and Financial Cooperation (Direction de la Coopbration Economique et Financiere) of the Ministry of Finance DGAS Social Action Directorate (Direction Gndrale de I'Action sociale) of the Ministry of Health and Social Action DGCPT National Direction for Public Accounting and Treasury (Direction Gndrale de la Comptabilit Publique et du Trdsor) DGPSN Social Protection Delegation (D ligation Gndrale 6 la Protection Sociale et 6 la Solidarit Nationale) DI Investment Directorate (Direction de l'Investissement) of the Ministry of Finance DPS Social Protection Directorate of the Ministry of Civil Service, Labor, Social Dialogue, and Professional Organizations (Direction de la Protection Sociale) FCFA African Financial Community Franc (Franc de la Communautd Financidre Africaine) GDP Gross Domestic Product GoS Government of Senegal IEC Information And Education Campaigns IFR Interim Financial Report MFAAP Manual of Financial, Administrative and Accounting Procedures (Manuel de Procidures Administratives, Financidres et Comptables) MIS Management Information System MDG Millennium Development Goal M&E Monitoring and Evaluation NETS Child nutrition and social tranfer program (Projet Nutrition ciblMe sur l'Enfant et Transferts Sociaux) NGO Non-Governmental Organization ORAF Operational Risk Assessment Framework PAD Project Appraisal Document PDO Project Development Objectives PIM Project Implementation Manual PNBSF National Cash Transfer Program (Programme National de Bourses de Sicuriti Familiale). SNDES National Strategy for Economic and Social Development (Stratigie Nationale de Diveloppement Economique et Social) SSNS Social Safety Net System (Systime de Filets Sociaux, SFS) SYSCOA West African Accounting System (Systime Comptable Ouest Africain) UNDP United Nations Development Programme UNICEF United Nations Children's Fund USD American Dollars WFP World Food Program Regional Vice President: Makhtar Diop Country Director: Vera Songwe Sector Director: Tawhid Nawaz Sector Manager: Stefano Patemostro Task Team Leaders: Aline Coudouel and Philippe George Pereira Guimaraes Leite  SENEGAL Social Safety Net Project TABLE OF CONTENTS Page I. Strategic context ............................................................................................................... 1 A. Country Context ......................1.......................... B. Sectoral and Institutional Context......................................... 2 C. Relationship to Country Partnership Strategy................5........5 II. Project Development Objectives .................................................................................. 6 A. Proposed Development Objectives (PDO) ................................. 6 B. Key Results Indicators .....................6...... ................6 III. Project D escription ........................................................................................................ 6 A. Project Components ..................................... ........ 6 B. Project Financing ......................................... ..... 12 C. Lessons Learned and Reflected in the Project Design..................... 12 IV . Im plem entation ................................................................................................................15 A. Institutional and Implementation Arrangements ................ ......... 15 B. Results Monitoring and Evaluation .................................... 16 C. Sustainability................... ............................. 16 V. Key Risks and M itigation M easures ...........................................................................17 A. Risk Ratings Summary Table ...................................... 17 B. Overall Risk Rating Explanation .............................. ...... 17 VI. Appraisal Sum m ary .................................................................................................... 18 A. Economic Analysis ............................................. 18 B. Technical .................................................... 19 C. Financial Management...................... ................ 19 D. Procurement ......................................... ......... 20 E. Social (including Safeguards) ...................................... 21 F. Environment (including Safeguards) ................................. 22 Annex 1: Results Framework and Monitoring .................................................................... 23 Annex 2: Detailed Project Description .................................................................................. 27 Annex 3: Implementation Arrangements ............................................................................. 42 Annex 4: Operational Risk Assessment Framework (ORAF).............................................60 Annex 5: Implementation Support Plan ................................................................................ 65 Annex 6: Economic and Financial Analysis ......................................................................... 67 Annex 7: Additional Monitoring Indicators ......................................................................... 74 PAD DATA SHEET Senegal Safety Net operation (P133597) PROJECT APPRAISAL DOCUMENT AFRICA AFTSW Basic Information Project ID EA Category Team Leader P133597 C - Not Required Aline Coudouel Lending Instrument Fragile and/or Capacity Constraints [ ] Investment Project Financing Financial Intermediaries [ ] Series of Projects [ ] Project Implementation Start Date Project Implementation End Date April 29, 2014 30-Jun-2019 Expected Effectiveness Date Expected Closing Date 01-July-2014 30-Jun-2019 Joint IFC No Regional Vice Sector Manager Sector Director Country Director Resint President Stefano Paternostro Tawhid Nawaz Vera Songwe Makhtar Diop Borrower: Government of Senegal Responsible Agency: D616gation G6n&rale d la Protection Sociale et la Solidarit6 Nationale Contact: Atoumane Faye Title: Project Coordinator Telephone No.: 221 775788971 Email: urbasta2005@yahoo.fr Project Financing Data(in USD Million) [ ] Loan [ ] Grant [ ] Guarantee [X] Credit [ ] IDA Grant [ ] Other Total Project Cost: 40.50 Total Bank Financing: 40.50 Financing Gap: 0.00 Financing Source Amount BORROWER/RECIPIENT 0.00 International Development Association 37.40 (IDA) IDA recommitted as a credit 3.10 Total 140.501 Expected Disbursements (in USD Million) Fiscal Year 2014 2015 2016 2017 2018 2019 Annual 2.50 8.00 10.00 10.00 6.00 4.00 Cumulative 2.50 10.50 20.50 30.50 36.50 40.50 Proposed Development Objective(s) The development objectives of the proposed Project are to support the establishment of building blocks for the social safety net system and to provide targeted cash transfers to poor and vulnerable households. Components Component Name Cost (USD Millions) Support to the Development of the Social Safety Net 7.0 System Support to the National Targeted Cash Transfers Program 33.5 for Poor and Vulnerable Households Institutional Data Sector Board Social Protection Sectors / Climate Change Sector (Maximum 5 and total % must equal 100) Major Sector Sector % Adaptation Mitigation Co-benefits Co-benefits Health and other social services Other social services 100 Total 100 11 1I certify that there is no Adaptation and Mitigation Climate Change Co-benefits information applicable to this project. Themes Theme (Maximum 5 and total % must equal 100) Major theme Theme % Social protection and risk management Social safety nets 80 Human development Nutrition and food security 20 Total 100 Compliance Policy Does the project depart from the CAS in content or in other significant Yes [ ] No [X] respects? Does the project require any waivers of Bank policies? Yes [ ] No [X] Have these been approved by Bank management? Yes [ ] No [ ] Is approval for any policy waiver sought from the Board? Yes [ ] No [X] Does the project meet the Regional criteria for readiness for Yes [X] No [ ] implementation? Safeguard Policies Triggered by the Project Yes No Environmental Assessment OP/BP 4.01 X Natural Habitats OP/BP 4.04 X Forests OP/BP 4.36 X Pest Management OP 4.09 X Physical Cultural Resources OP/BP 4.11 X Indigenous Peoples OP/BP 4.10 X Involuntary Resettlement OP/BP 4.12 X Safety of Dams OP/BP 4.37 X Projects on International Waterways OP/BP 7.50 X Projects in Disputed Areas OP/BP 7.60 X 111 Legal Covenants Name Recurrent Due Date Frequency Hiring National Cash Transfer Program 01-Sep-2014 Once (Programme National de Bourses de Scuriti Familiale) staff Description of Covenant The Recipient shall, not later than two (2) months after the Effective Date, employ and thereafter maintain, at all times during Project implementation or as otherwise agreed with the Association, a Project coordinator, a procurement specialist, a monitoring and evaluation specialist, and an accountant each of whose qualifications, experience, and terms of reference shall be acceptable to the Association. Name Recurrent Due Date Frequency Social Safety Net Steering Committee 01-Sep-2014 Once Description of Covenant The Recipient shall, not later than two (2) months after the Effective Date, establish, and thereafter maintain, throughout the Project implementation period, with composition, mandate and resources satisfactory to the Association, a steering committee, to be chaired by the executive officer (D ligud Gndral) of the DGPSN and comprised of representatives of the ministries involved in social safety net and key stakeholders, to be responsible for providing technical supervision of the Project, including, inter alia, endorsing the proposed Annual Work Plan and budget for the Project (the "SSN Steering Committee"). Name Recurrent Due Date Frequency Hiring External Auditor 01-Nov-2014 once Description of Covenant The Recipient shall recruit, not later than four (4) months after the Effective Date, in accordance with Section III of Schedule 2 of the Financing Agreement and pursuant to terms of reference satisfactory to the Association, the external auditor referred to in Section 4.09 (b) of the General C, whose qualifications and experience and terms of reference shall be acceptable to the Association. Name Recurrent Due Date Frequency Hiring Internal Auditor 01-Nov-2014 Once Description of Covenant The Recipient shall recruit, not later than four (4) months after the Effective Date, in accordance with Section III of Schedule 2 of the Financing Agreement and pursuant to terms of reference satisfactory to the Association, an internal auditor, whose qualifications and experience and terms of reference shall be acceptable to the Association. Name Recurrent Due Date Frequency Accounting software 01-Sep-2014 Once Description of Covenant The Recipient shall, not later than two (2) months after the Effective Date, acquire, install and iv thereafter maintain an accounting software acceptable to the Association, for the Project. Name Recurrent Due Date Frequency Other Undertakings 01-Nov-2014 Once The Recipient shall ensure that: (a) a comprehensive record keeping system for the DGPSN has been established in a manner satisfactory to the Association, by not later than four (4) months after the Effective Date. Conditions Name Type Program Implementation Manual Effectiveness Description of Condition The Project Implementation Manual has been adopted in accordance with Section I.B of the Schedule 2 to the Financing Agreement. Name Type Disbursement Condition condition Description of Condition No withdrawal shall be made under Category (2), until and unless the Project Implementation Manual has been updated in form and substance satisfactory to the Association to reflect eligibility criteria and conditionality for the provision of such CT Grants. Team Composition Bank Staff Name Title Specialization Unit Aline Coudouel Lead Social Protection Team Leader AFTSW Specialist Phillippe George Pereira Senior Social co-Team Leader AFTSW Guimaraes Leite Protection Economist Wolfgang M. T. Chadab Senior Finance Senior Finance CTRLA Officer Officer Fatou Fall Samba Financial Financial AFTMW Management Analyst Management Analyst Cheick Traore Senior Procurement Senior Procurement AFTPW Specialist Specialist Maya Abi Karam Senior Counsel Senior Counsel LEGAM Paivi Koskinen-Lewis Social Development Social Development AFTCS Specialist Specialist Mamadou Mansour Consultant Procurement AFCF1 Mbaye Consultant v Djibril Ndoye Economist, Poverty Economist, Poverty AFTP4 Lydie Anne Billey Program Assistant Program Assistant AFTSW Aminata Ndiaye Bob Team Assistant Team Assistant AFCF1 Lydie Anne Billey Team Assistant Team Assistant AFTSW Ruslan G. Yemtsov Lead Economist Peer Reviewer HDNSP Theresa Jones Lead Operations Peer Reviewer LCSHS Officer Christophe Lemiere Senior Health Peer Reviewer AFTHW Specialist Thomas Dickinson Consultant Consultant AFTSW Solene Marie Paule Consultant Consultant AFTSW Rougeaux Non Bank Staff Name Title Office Phone City Locations Country First Location Planned Actual Comments Administrative Division Senegal vi I. STRATEGIC CONTEXT A. Country Context 1. Despite clear progress over the past decade, most Millennium Development Goals (MDG) will be difficult to achieve. Achievement of the first MDG on halving poverty is unlikely, and significant challenges remain in terms of poverty, malnutrition, health and education. The latest poverty estimate gives the incidence of poverty at 46.7 percent of the population in 2011. From 1994 to 2005, Gross Domestic Product (GDP) growth was around 4.6 percent per year, and poverty rates fell significantly, from 68 percent in 1994/95 to 48.5 percent in 2005. However, since 2005-06, repeated shocks have contributed to reducing per capita income growth to little more than the rate of population growth. Poverty only slightly decreased over the next 5 years, and reached 46.7 percent in 2011. Poverty remains concentrated in rural areas with a rate of 57 percent in 2011, more than twice the rate of 26 percent experienced in the urban part of the Dakar region. Poverty is associated with low education and large families. In 2011, 83 percent of the poor live in households with a non-educated head. Moreover, while 18 percent of households with less than 5 members are poor, this number is 60.8 percent for households with 20 members or more. Inequality remains moderate and has not worsened recently, but geographical disparities are pronounced and remain broadly unchanged. 2. Successive shocks have undermined growth, and many households remain highly vulnerable to idiosyncratic and exogenous (economic) shocks. Idiosyncratic shocks such as illness or death of the breadwinner affect up to one-third of households every year. And over half of households do not have specific coping mechanisms in place to mitigate the impact of such shocks. As a result, almost a quarter of households report tapping into savings in response to a shock, specifically in cases of health shocks (illness or death) and business failure. Households also frequently respond by selling assets, which can lock them into long-term poverty. Support from family members, both within and outside the country, provides a response to only a quarter of the experienced shocks. Exogenous economic shocks, such as rising prices or the global economic recession, have affected Senegal significantly, in part due to its small, open economy. Indeed, Senegal imports all its oil (which powers most of its electricity), 80 percent of its rice, and almost all its wheat. As an example, in 2007-2008, the price of rice in local markets tripled, and the price of other staples rose by an average of 30 percent. 3. There have been improvements in terms of nutrition, with stunting down to 16 percent and acute malnutrition at 9 percent among children in 2012.1 Recent estimates suggest high prevalence of children with low birth weights (The United Nations Children's Fund (UNICEF) data suggest that 18 percent of infants are born with low birth weight). Anemia is also observed in 76 percent of children under the age of five, 58.6 percent of non-pregnant and non-lactating women, and 61 percent of pregnant women, while 25 percent of children under five are vitamin A deficient. Despite good coverage of primary schools around the country, around 1.6 million children are estimated to be currently out of school. Regional disparities in access and overall low quality of basic social services also remain a serious concern. In education, the primary gross enrollment rate in 2013 is around 93 percent, but the rate falls to 46.1 percent in the SMART survey (2012) 1 2 Kaffrine region compared to 106 percent in Dakar . It will be difficult to reach the MDG on primary school completion, given the high level of repetition and dropout. In the health sector, little progress has been made on improving maternal mortality, which remains at 392 for 100,000 births. The rate of births assisted by trained personnel has increased from 52 percent in 2005 to 65 percent in 2010, but remains low by international standards, in particular for the poorest (only 30 percent). Immunization rates have not increased substantially, and neonatal mortality is still high around 36 per thousand live births in 2010. While Senegal is likely to achieve the under- five-year child mortality MDG, it will certainly miss the maternal mortality MDG. B. Sectoral and Institutional Context 4. The Government has had to respond to multiple covariate shocks over the last decade, including, of note, the drought in 2002-2003 and the economic crisis of 2008-2009. In terms of natural disaster, the Government of Senegal has historically responded directly to drought with financial support to farmers as well as general assistance to the rural population. Interest rate subsidies and debt forgiveness as a response to weather-related shocks suffer from several drawbacks: they are often poorly targeted, benefit larger rural producer and those able to participate in the formal credit system. The Government responded to the fuel and food price hikes with a series of fiscal measures, including subsidies on basic foodstuffs (rice, wheat, and milk), butane/natural gas and electricity. This quick response proved very expensive, absorbing 2.4 percent of GDP, or one-tenth of all spending in 2008. Also, the bulk of benefits went to the non-poor, with, for example, only one-third of beneficiaries of water or electricity subsidies being poor and only 7 or 8 percent in the poorest quintile. The strong majority of beneficiaries of both subsidies were urban dwellers. 5. As of 2011, a dozen social safety net programs were in place in Senegal, ranging from school lunches, food assistance, and targeted support to the elderly and disabled, to two pilot conditional cash transfer programs (see Table 1). While social protection programs have been growing in Senegal, progress has been insufficient to effectively protect the poor or respond to shocks. The main challenges to overcome in terms of social safety nets in Senegal are: (a) The limited coverage of existing programs: the 12 core programs amount to a total of about 0.3 percent of GDP. About 4 million people are estimated to receive some type of assistance each year, but food distribution and school lunches account for about 97 percent of these beneficiaries, and neither screen beneficiaries based on need. (b) The multiplicity of targeting criteria: programs use a variety of targeting mechanisms, with a predominance of categorical targeting. Categorical is often reinforced by prioritization of certain geographical areas and confirmed through community-based mechanisms. The performance of these targeting systems is mixed. (c) The absence of coordination mechanism and the institutional dispersion of programs: Overall, safety net programs tended to be highly fragmented, lack coordination, and were not adapted to respond rapidly to shocks. There has been a history of institutional instability, with frequent reconfigurations of ministries and shifting of departments or programs between ministries, which has hampered developing coherent programming. 2 Rapport National sur la Situation de l'Education (2013) 2 Table 1: Social safety net programs in place in 2011 The Social Safety Net Review undertaken by the Government (CSO/CLCP) and the World Bank in Senegal focused on the main 12 programs present in 2011. These are : (1) Food Security Commissariat (Commissariat t la Securitd Alimentaire - CSA) provides food aid assistance to vulnerable populations either in response to catastrophes or through rice distribution at public rallies and religious festivals; (2) National Solidarity Fund (Fonds de Solidaritd Nationale - FSN) is responsible for providing immediate responses to crisis and emergency situations, including financial, medical and material support; (3) Community-Based Re-adaptation Program (Programme de rdadaptation t base communautaire - PRBC) provides social, economic and cultural integration for disabled persons via material support and funding of income generation activities; (4) Old Age Support Program (Projet d'Appui t la Promotion des Ainds -PAPA) aims to address the vulnerable elderly (over 60 years) via capacity strengthening, grants and subsidized loans for income generating activities to groups of elderly; (5) National School Lunch Program (Programme d'Alimentation Scolaire -DCaS) provides school lunches funded through the national budget; (6) World Food Program (WFP) School Lunch Program (PAM Cantines Scolaires) supports the national school lunch program by providing primary school lunches in vulnerable rural areas; (7) Educational Support for Vulnerable Children (Bourses d'Etude pour les Orphelins et autres Enfants Vulndrables - OEV) a program through the National HIV-AIDS Council to provide for schooling or professional training to children orphaned or affected by HIV-AIDS and other vulnerable children; (8) Sesame Plan (Plan Sisame) covers health service fees for all persons over 60 years; (9) Poverty Reduction Program (Programme d'Appui t la Mise en Oeuvre de la Stratigie de Rdduction de la Pauvretd - PRP) supports grants for income generating activities for vulnerable groups, primarily women, the disabled and HIV-AIDS affected populations; (10) a pilot Cash Transfers for Child Nutrition Program (Nutrition cibhle sur l'Enfant et Transferts Sociaux-NETS) entailing cash grants to mothers of vulnerable children under 5 years old to mitigate the negative impacts of food price increases; (11) WFP Vouchers for Food Pilot Program (Bons d'Achat - PAM CV) to address food insecurity among vulnerable households due to rising food prices. (12) The Social Protection Initiative for Vulnerable Children (Initiative de Protection Sociale des Enfants Vulndrables - IPSEV) Cash grants to households to help them maintain vulnerable children and ensure access to health and education services. Source : World Bank (2013) << Senegal: Social Safety Net Assessment>> Washington D.C. 6. The lack of an overall social safety net system, which would provide tools and instruments for targeting and coordinating, and the limited scope of most programs, result in the inability of the Government to effectively address the needs of the vulnerable and its inability to scale up interventions. Overall, these limitations place Senegal's system relatively low compared to some neighboring countries. Nevertheless, Senegal has significant potential, because of its existing administrative and implementation capacity at all levels of Government, the political will of its leaders, and the motivation of the sector's actors and partners to build a coordinated system. 7. At the heart of its development strategy, the Government has decided to develop a system of social safety net programs that address chronic poverty and supports those households vulnerable to shocks. This is at the heart of the Plan Snigal Emergent and the National Strategy for Economic and Social Development (Stratigie Nationale de Diveloppement Economique et Social, SNDES) for the period 2013-2017, which is articulated around three pillars: (i) growth, productivity, and wealth creation; (ii) human capital, social protection and sustainable development and; (iii) governance, institutions, peace, and security. In her October 2013 Dclaration de Politique Gndrale, the Prime Minister opened her presentation of the 3 Government's policy orientations with social policies and the fight against vulnerability, with a particular focus on improvements in access to (and quality of) basic social services, the expansion of the national cash transfer program, universal health insurance coverage, support to the vulnerable, and programs to promote employment and job creation. 8. In this context, the Government has put in place a Social Protection Delegation (Dildgation Gndrale 6 la Protection Sociale et 6 la Solidarit Nationale, DGPSN), attached to the Presidency, to ensure the leadership for the formulation of social protection public policies, the establishment of interventions, and the coordination of social protection policies. The DGPSN is working in close collaboration with all key actors, assembled under the Steering Committee for the implementation of the recently adopted National Social Protection Strategy. These include the Ministries of Finance; Education; Health; Women, Family, Food Security, Female Entrepreneurship, Micro-Finance and Early Childhood; and the Unit in charge of the Eradication of Malnutrition. The Government has also launched a national Cash Transfer program (Programme National de Bourses de Securit Familiale, PNBSF). This program is also providing the basis for the definition of tools and instruments (for targeting, registry, payment and monitoring and evaluation) that can be used by other social safety nets in the country. 9. The technical and financial development partners have played an important role in supporting the Government in the definition of its social protection strategy, and in the design and implementation of its core programs. Among multilateral partners, UNICEF, United Nations Development Program (UNDP), and the World Food Program (WFP) were particularly important in accompanying the Government in its efforts; some bilateral partners were also instrumental in the process. Development partners have endorsed the national strategy and committed to aligning their support under the leadership of the government. A thematic group provides the space for coordination. 10. The proposed Project aims to support the significant effort that the Government of Senegal is deploying to effectively set up the Social Safety Net System (SSNS) and the implementation of the PNBSF. The agenda is ambitious - creating the tools for a coherent system that can integrate interventions - but it has the potential to significantly transform the sector and its impact on the vulnerable. The effort will be a long-term endeavor, and this Project would support the first phase of a longer term plan to improve coordination, integration, and effectiveness of social safety nets in the country. As the first phase of multiple operations, the Project would concentrate on key pillars, namely the establishment of basic building blocks of the overall system (unique registry and management information system), the establishment of a clear and transparent targeting process, and the implementation of a targeted cash transfers program to promote the investment in the human capital of children and the elderly. The longer term vision is presented in Box 1 below. 4 Box 1: Institutional arrangements for Social Protection in Senegal, 2005-2014 In the mid-2000s, Senegal adopted the Second Poverty Reduction Strategy Paper 2006-2010 and the first National Social Protection Strategy. To address the high poverty level (47 percent in 2011), both made a strong case for strengthening the national social protection system. The goal is to promote access to basic social services to the poor and vulnerable, improve their lives through targeted interventions, and ensure they benefit from economic growth. Results were however limited, partly because of weak institutional arrangements and coordination mechanisms. The Government recently made a renewed effort and prepared the Plan S nigal Emergent, which further highlights the importance of social protection, both to address poverty and to promote inclusive growth and increased productivity. The Government set up an Inter-ministerial Steering Committee on Social Protection, which includes both civil society and development partners. In November 2012, the President created the Dligation Gindrale d la Protection Sociale et d la Solidariti Nationale (DGPSN) to help define social protection policy, implement social protection programs, coordinate the National Social Protection Strategy, and participate in monitoring its implementation. To address overlapping mandates and clarify the roles of the different actors, the Government revised the sector's institutional arrangements, asking the Inter-Ministerial Committee and the DIOgation Gindrale to play central roles in coordinating the implementation of the strategy (the Minister of Finance and the DIOgue Gindral were asked to co-chair the Inter-Ministerial Committee). The Government also launched the national cash transfer program supported by this Project, the Programme National de Bourses de S&uriti Familiale. To further strengthen the sector, the government is working on the setup of an Autonomous Social Protection Fund (Caisse Autonome de Protection Sociale Universelle, CAPSU), which would be responsible for organizing the financing of social protection activities (initially including the financing for the universal health coverage, the national cash transfer program, and pensions for the elderly). The CAPSU's task would be to mobilize resources from a variety of sources - including individual premiums or contributions, government general resources, private sector resources, special taxes, and contributions from development partners; while policy design and the implementation of programs would be the responsibility of the relevant technical institutions. The CAPSU is still in its conceptual phase, and reforms to the sector's institutional setup will likely be necessary once it is defined. In the current context, the DGPSN is responsible for the both the overall leadership and coordination for the sector and for the implementation of the cash transfer program. Experience from other countries around the world suggest that, as systems and programs mature, it is often critical to separate functions of overall leadership and coordination from functions of implementation of specific programs. In the future, the DOlgation G ndrale could focus its efforts on the overall leadership of the sector, the implementation of the National Social Protection Strategy and the definition of policies. The Dligation G ndrale could thus, as part of its coordinating responsibilities, oversee the management of central tools for the sector, and the monitoring of implementation and results. The implementation of programs would remain the responsibility of sectoral institutions. C. Relationship to Country Partnership Strategy 11. The proposed Project is fully aligned with Senegal Country Partnership Strategy (CPS) and with the Government Plan Senegal Emergent and the National Strategy for Social Development (Strategie Nationale de Developpement Social, SNDS). It has been developed as a result of a long-term partnership between the Government and the World Bank. The proposed Project would support the CPS Foundation of "Strengthening the governance framework and building resilience" and both Pillar 1 on "Accelerating inclusive growth and creating employment" and Pillar 2 on "Improving service delivery." Indeed, the Project focuses on strengthening the national systems used to identify, select and enroll beneficiaries for social assistance programs, and putting in place monitoring and evaluation mechanisms that foster accountability. Also, the Project will improve the efficiency of public spending in social assistance, improving the targeting of programs, removing duplications, rationalizing programs, and exploiting synergies. Finally, the program supported by the Project will promote investments in the human capital of the poor and vulnerable households, and promote their productivity and 5 employability. The proposed Project will also build on important synergies with support in the nutrition, health and education sectors. II. PROJECT DEVELOPMENT OBJECTIVES A. Proposed Development Objectives (PDO) 12. The development objectives of the proposed Project are to support the establishment of building blocks for the social safety net system and to provide targeted cash transfers to poor and vulnerable households. 13. Key building blocks include a unique registry of vulnerable households, a targeting mechanism and modules for the sector's management information systems. B. Key Results Indicators 13. The main indicators that will be used to monitor progress in reaching the development objectives are the following (details and intermediate indicators are presented in Annex 1): * Number of households enrolled in the unique registry * Percentage of PNBSF beneficiary households who live below the poverty line * Percentage female members among PNBSF beneficiary households III. PROJECT DESCRIPTION A. Project Components 14. To meet the development objectives, the proposed Project has two components: (1) Support to the development of the social safety net system and (2) Support to the national targeted cash transfer program for poor and vulnerable households. Component 1: Support to the development of the Social Safety Net System [US$7.Omillion] 15. The objective of this component is to support the Government in the development of the social safety net system, as part of a national social protection framework. This component will support (i) the development of core instruments and procedures that will form the backbone of a social safety net system, and (ii) the strengthening of the institutional capacity of the DGPSN and sectoral actors of the social safety net system. Sub-component 1.1: Tools for the Social Safety Net System [US$3.6million] 16. This sub-component will support the design of core instruments and procedures that form the backbone of an efficient social safety net system. Such tools would be used by multiple programs (in particular during targeting, identification and payment of beneficiary households) and provide the basis for greater coordination and reduced overlap or duplication. In particular, the component will finance: 6 (a) Unique Registry of Vulnerable Households. The component will finance the development and implementation of a unique registry of vulnerable households. The registry builds on processes and tools put in place in 2013 for the selection of beneficiaries of the PNBSF. The registry is expected to progressively include the poorest households in Senegal (beyond the initial effort to identify beneficiaries for the PNBSF) and be used by the programs of the SSNS (including programs that focus on the disabled, the elderly poor, or vulnerable children, and programs that provide free pregnancy-related health care, subsidies for health insurance, food vouchers, school fees etc.). The methodology combines geographic targeting, community targeting, and the verification of households' vulnerability with a proxy-means test. This Project will finance the definition and operationalization of the instruments required for the implementation of the unique registry (questionnaires, computer platform, control mechanisms, routines for the automatic calculation of the proxy-means test, etc.). The questionnaire used to collect information on households has been elaborated with all sectoral users, to ensure its relevance for the targeting of their programs. Furthermore, this sub-component will finance the expansion of the unique registry. (b) Management Information System. The component will finance the development of the Management Information System (MIS) for the social safety net system. The objective is not to build a unique central MIS that would cover all the programs; rather, the purpose is to develop a series of modules that all social safety net programs can adapt and use autonomously. This will result in significant savings for the programs. More importantly, the inter-operability of the different programs' modules will foster greater coordination of activities, improved program planning, and better use of synergies between interventions. The modules will include, among others: module for the Unique Registry, template modules for program registration, payment, monitoring of compliance with conditionalities, grievances, and the preparation of monitoring reports. The DGPSN will be responsible for the elaboration of the central MIS modules (registry, system-wide reporting, grievance, etc.) as well as the development of generic modules for each program to adjust to their specific needs (program registry, payment, reporting, etc.). (c) Grievance System. The component will finance the development and management of a grievance system to respond to complaints and ensure a high level of social accountability. As grievances can include a broad range of items, different mechanisms will be put in place for individuals to file their grievances (forms to complain at local level, email address, national hotline for telephone or text messages, postal address), and protocols will be put in place to address them. (d) Monitoring and Evaluation instruments and procedures. The component will finance the development of procedures that social safety net programs can use for regular monitoring and evaluation. As a result, the programs would benefit from an established generic methodology, which they could adapt for regular monitoring of their activities. Adopting standard procedures will also allow the DGPSN and Steering Committee to monitor and evaluate the overall system and its programs, by using reporting tools, indicators, frequency and formats that are consistent and comparable. 7 (e) Information and education methodology and instruments. The component will finance the development of a model of intervention for broad IEC around social safety net programs. This model would provide a common platform for interaction with communities and households at the local level, which would promote greater synergies between different programs, limit duplication at the local level, lighten the load of local staff responsible for such information campaigns and avoid the creation of parallel structures at the local level. (f) Manuals and guidelines. The component will finance the elaboration of users' manuals for the different tools of the Social Safety Net System, to ensure the institutionalization of capacity, the sustainability of procedures, operational transparency, and continuous learning. Sub-component 1.2: Institutional capacity building for Social Safety Net System's actors [US$3.4million] 17. This component will focus on the institutional strengthening of the DGPSN. The goal is to ensure the DGPSN can play its role in defining strategy, planning interventions, coordinating activities, and ensuring results are monitored and lessons learnt. It also focuses on building the capacity of the various institutions from the different sectors that contribute to the objectives of the social safety net system. Finally, it will also support Project management. More specifically, the Project will focus on: (a) Strengthening the capacity of the DGPSN. The DGPSN will be responsible for the strategy, planning, and coordination of interventions under the social safety net system. This sub-component will fund, among others, experts to strengthen the DGPSN's capacity in areas such as monitoring and evaluation, information systems, targeting, program design, or family accompaniment. The profiles of the experts will be defined on the basis of the institutional evaluation that will be implemented in the first semester of 2014. The sub-component will also finance regional coordinators responsible for social protection interventions at the local level. The sub-component will also support capacity building of DGPSN staff via training, technical assistance, and study tours. The sub-component will finance experts on a decreasing basis, in order to ensure that experts put in place systems and procedures, train DGPSN staff in the use of these, and leave for the DGPSN staff to implement the activities on a sustainable basis. (b) Strengthening the capacity of the Social Safety Net System's sectoral actors, so they can fulfill their role in the implementation of the system. These activities will be organized under the leadership of the Social Safety Net Steering Committee (Comite de Pilotage des Filets Sociaux, CPFS), in coordination with the capacity building plans of each sectoral actor, in order to take advantage of potential synergies and ensure greater efficiency. In particular, activities will include training activities for the different sectoral actors (health, education, nutrition, civil registration, employment, agriculture, justice, environment, etc.), civil society, and local communities. Training 8 will inform stakeholders on the issue of Social Protection, on the tools of the SSNS and on the implementation of programs. The sub-component will also support analysis to support sectoral actors in the design, implementation and monitoring of their interventions. (c) Supporting a series of analytical activities led by the DGPSN to analyze existing programs, monitor ongoing interventions, evaluate targeting mechanisms, assess alternative payment systems, design new interventions, etc. This component could also support assessments of institutions' capacity and programs involved in the social safety net strategy, and design of specific recommendations for improvement. (d) Strengthening the DGPSN capacity to implement the Project. The DGPSN is responsible for Project implementation, which includes activities implemented by both the DGPSN itself and sectoral and local actors. This sub-component will finance the experts required to strengthen the DGPSN's capacity to implement the Project, with a view to fill existing gaps. Experts could include, among others, a Project coordinator and his/her technical team, as well as a team in charge of procurement, financial management and administration. As was the case for the strengthening of the DGPSN's capacity to play its role of coordination of the Social Safety Net System, experts will be financed on a decreasing basis, to promote sustainability. Component 2: Support to the national targeted cash transfer program for poor and vulnerable households. [US$33.5million] 18. The second component will support the expansion and strengthening of the PNBSF, the national cash transfer program officially launched in October 2013 targeting the most vulnerable households. The PNBSF's objectives are to reduce poverty and to promote the growth of the human capital of poor and vulnerable households. The PNBSF provides regular cash transfers to stimulate investments in the human capital of poor and vulnerable households as relevant (education, health and nutrition) and provides accompanying measures to these families to promote behavioral changes. The program is national, and aims at reaching the poorest households, irrespective of their place of residence, on the basis of the unique registry. Component 2 will finance monetary transfers to PNBSF beneficiary households; accompanying measures put in place by the DGPSN, sectoral actors and local institutions; and selected program management and evaluation costs. Sub-Component 2.1: Monetary transfers to beneficiary households [US$25.7million] 19. This sub-component will support the expansion of the PNBSF in terms of the number of beneficiaries and of its objectives. In 2013, the program has paid transfers to about 50,000 beneficiary households that were selected according to the national targeting methodology. An additional 50,000 households will be added every year, to reach a total of 250,000 beneficiary households by 2017 (this corresponds to the bottom half of the estimated 534,000 poor households in Senegal, including the 162,000 households estimated to live in extreme poverty in 2011). The program was launched in all regions of Senegal simultaneously, and roll-out will progressively include households in every locality of the country, beginning with the poorest 9 households (as identified by communities). The sub-component will finance transfers to a sub-set of beneficiary households, starting in 2014. The Project will finance an estimated 15 percent of the total PNBSF program beneficiary households on the basis of a quarterly transfer of about US$50 (approximately 15,000 households in 2014, 22,500 in 2015, 30,000 in 2016 and 37,500 in 2017). This number could be revised once the amounts for all types of transfers and the rules for their combination have been established. PNBSF beneficiaries are poor and vulnerable households identified by the national targeting process. 20. In terms of objectives, the PNBSF focused in 2013 on poor and vulnerable households with children aged 6-12, paying an education transfer, conditional upon children's inscription and attendance in primary school. This sub-component will support the broadening of the PNBSF by financing three types of transfers: a. Direct cash transfer to poor households with children aged 0-5 years. The transfers would aim at promoting the welfare of poor households and their investments in the health of their children through the use of preventive health services (immunization, growth monitoring, nutrition, etc.). The conditionality will reflect these preventive services, and will be defined in 2014, together with the mechanisms that will be put in place by sectoral institutions to verify compliance. b. Direct cash transfer to poor households with children aged 6-12 years. These transfers will aim at promoting the welfare of poor households and their investments in the human capital of their school-age children. In this program, transfers are conditional on regular primary school attendance (this includes both formal schools as well as informal schools - Daaras Modernes - that have been certified by the Ministry of Education), with a view to promote primary school completion. Initially, this transfer will use the parameters of the PNBSF as it was implemented in 2013. However, the age group might be revised to include children aged 7 to 16, as Senegal recently defined elementary education (cycle fundamental) to include both primary and lower secondary education over a period of 10 years. c. Cash transfer to poor households with elderly members. This category would include elderly over the age of 60 or 65 (exact age to be defined by the PNBSF in 2014). These transfers would aim at promoting the welfare of poor households, in order to support their elderly members, without conditionality. 21. The most recent household survey suggests that many households among the poorest and most vulnerable in Senegal have a combination of children under the age of 5, children aged 6 to 12 or elderly over the age of 60 (43 percent of households have members in two categories, 42 percent in all three categories). Therefore, the implementation of the three types of transfers would result in overlap. In 2013, the education transfer amounted to FCFA 25,000 each quarter (about US$50). In the third trimester of 2014, the PNBSF will define the value of each type of transfer, establishing both a minimum and a maximum ceiling to avoid negative incentives, and defining the rules for combining different transfers. These will be included in the PNBSF manual (which is part of the Project Implementation Manual). This will influence the total number of households whose transfers will be financed by this Project. Overall, depending on the formula 10 retained, the PNBSF is estimated to cost between 0.4 and 0.8 percent of GDP once it is paying transfers to its full target of 250,000 households. 22. Once registered in the PNBSF, beneficiary households will be initially eligible to receive transfers for a period of five years. After this, eligibility will be reassessed using the targeting mechanisms of the unique registry, as further detailed in the Project Implementation Manual. 23. In 2013, the Post office was selected to put in place the payment of the transfers for the first year of implementation of the PNBSF. During the implementation of the Project, other options will be reviewed (through analysis financed under sub-component 1.2.) with a view to identify the mechanisms that are most effective and least costly. Under this sub-component, the Project will finance the transaction fees associated with the transfers it finances, within the context of a contract that satisfies the procurement norms of the World Bank. Various control mechanisms are in place, as described further in Annexes 2 and 3. Sub-component 2.2: Accompanying measures implemented by the DGPSN, sectoral actors, and local institutions [US$4.9million] 24. International experience suggests that family accompaniment is a key element to promote household behavioral changes, the key objective of the PNBSF. Therefore, in addition to general information campaigns organized by the DGPSN, the relevant sectoral actors will be responsible for the implementation of counseling and additional support measures to help households meet program conditionalities and invest in their human capital by promoting behavioral changes. Building on the information gathered on all households in the registry, covering issues of human development, access to (or use of) services, or community assets. The unique registry can also provide sectoral institutions with a diagnostic of supply constraints, and help them better design their investment plans; and the PNBSF can provide them with an entry point to reach a population that is often hard to reach. 25. The sub-component will finance IEC campaigns, and additional measures to promote the use of preventive health care, good practice in terms of hygiene and nutrition, investments in early childhood and education, registration in the civil registry, and participation in subsidized health insurance mechanisms, among others. Furthermore, this sub-component will finance activities to strengthen the capacity of sectoral institutions to use their management information systems to verify compliance with the PNBSF conditionalities. These activities will be closely coordinated with the ongoing investments of the World Bank in the sectors of education (Senegal Health & Social Financing) and education (Senegal Quality and Equity of Basic Education). Sub-component 2.3: Cash transfer program management [US$2. 0million] 26. This sub-component will provide support to the DGPSN for the PNBSF implementation. In particular, this will finance: (i) management costs at local and central levels; (ii) equipment and expenditures directly linked to the daily management of the PNBSF (office supplies, material, communications, transportation, maintenance and insurance costs, refurbishing and maintenance costs for equipment, supervision costs, etc. at central and local levels); (iii) the training of local committees and communities on PNBSF activities and objectives. 11 Sub-component 2.4: Cash transfer program evaluation agenda [US$0.9million] 27. This sub-component will support the systematic monitoring and evaluation of the PNBSF. Monitoring and evaluation are critical to the success of the program, as they allow learning from experience and continuously improving program design and implementation. The monitoring and evaluation activities financed by this sub-component will be closely coordinated with the broader monitoring and evaluation activities led by the Social Safety Net System Coordination Unit as part of its role of coordinator of the social safety net system. 28. Among essential monitoring and evaluation activities, this sub-component will finance: the implementation of the PNBSF Management Information System, the regular monitoring of its indicators, a process evaluation in (a first process evaluation is planned for the first semester of 2014), spot checks (beneficiary surveys and qualitative evaluations), and an evaluation of the impacts of the PNBSF on households and local economies. B. Project Financing Table 2: project financing per components Project Components Projects Cost IDA Financing % IDA Financing (US$) (US$) Component 1 Component 1.1 3.6 3.6 100 Component 1.2 3.4 3.4 100 Component 2 Component 2.1 25.7 25.7 100 Component 2.2 4.9 4.9 100 Component 2.3 2.0 2.0 100 Component 2.4 0.9 0.9 100 Total Cost 40.5 40.5 100 Front end fees 0 0 Total Financing required 40.5 40.5 100 29. The closing date for the Project is June 30, 2019. C. Lessons Learned and Reflected in the Project Design 29. The Project design built on lessons learned from the implementation of programs by Government agencies and development partners in Senegal, and in other countries around the world. It also builds on a series of analytical works, which have contributed to the identification of the elements that will be required to encourage coordination among institutions through the use of common tools and policy frameworks, and to the design of the cash transfer program supported by this Project. 30. First, the Project was designed taking into account the lessons learned in the context of the recent Social Safety Net Assessment, which reviewed the main social safety net programs 12 implemented in Senegal and identified their strengths and weaknesses.3 The assessment recommended improvements in the targeting of interventions across the board, and suggested the establishment of a national targeting mechanism and associated registry, as supported by this Project's first component. It also highlighted the need for a national program, with a scale that is sufficiently large to limit operating costs. The analysis highlighted the need for strong coordination between demand-side interventions (such as the cash transfer program supported by this Project) and supply-side interventions, which resulted in the inclusion of a strong focus on strengthening the capacity on the supply-side and on coordinating interventions on the ground. 31. In addition, the DGPSN's recent experience with the implementation of the PNBSF identified a number of lessons relevant to the design of the proposed Project. Throughout 2013, the Bank has provided intense technical assistance to the team for the design and operationalization of the PNBSF, and has undertaken a series of evaluations with the authorities to adjust or modify procedures and seek greater efficiency in the implementation of the program. Some of the key lessons that were later translated in the design of the program relate to the organization of the program at the local level (role played by administrative actors, elected officials, and local communities) which resulted in the revision of processes and their inclusion in the PNBSF users' manual, and the creation of a strong MIS to support the processes of targeting and transfers. In particular, the importance of improved communication between the program officials and local authorities, and the need to provide local committees with clear guidance and information were highlighted. The forthcoming process evaluation to be implemented in the first semester of 2014 will shed additional light on early lessons. 32. The Project also benefits from lessons learned from the experience of the Malnutrition Eradication Unit (Cellule de Lutte contre la Malnutrition) with the implementation of the Nutrition Cash Transfer Program (Projet Nutrition ciblee sur 'Enfant et Transferts Sociaux, NETS) and of the Unit for the Monitoring of Poverty Reduction Programs (Cellule de Suivi Operationnel des Programmes de Lutte contre la Pauvrete, CSO/PLCP). In particular, these interventions have fostered the capacity of local agents to play a critical role in community-based targeting, and in the implementation of large-scale health and nutrition information campaigns. The Project also builds on the NETS experience in terms of institutional arrangements, monitoring and evaluation, and management of Bank operations. 33. Lessons learned from other countries also informed Project design. International evidence shows that social safety net programs play an important role in speeding up the momentum of poverty reduction, improving the uneven distribution of the benefits of growth across the population, and improving social indicators. Studies have shown that social safety nets increase the quantity and improve the quality of household consumption, improve children's nutritional intake, improve children's education and health status, and increase expenditures on the productive activities and assets needed to build the resilience of the most vulnerable population.4 Through their participation in the regional Community of Practice on Cash Transfer Programs, the authorities will also continue to incorporate lessons from their West African neighbors. World Bank (2013) Senegal: Social Safety Net Assessment. Washington, DC. 4 Independent Evaluation Group (2011). Evidence and Lessons Learned from Impact Evaluations on Social Safety Nets. Washington, DC: World Bank. 13 34. The most important recommendations incorporated in the Project design include: (a) Improve the institutional framework for social protection policy. The development of an effective social safety net system must begin with the definition of a long-term vision and a coherent policy. A strategic and institutional framework has to be carefully established and defined. This should consist of: (i) an inter-ministerial committee to provide direction and make policy decisions; (ii) an inter-sectoral steering committee to guide Project design and oversee Project implementation, and (iii) a technical unit in charge of the day- to-day management and implementation of social safety net programs. (b) Move from an individual program approach to a national safety net system. Development of such a national SSN system requires developing a medium-term expenditure framework for the sector that prioritizes expenditures and builds a sustainable funding basis for social safety nets. A systems approach reduces fragmentation, promotes harmonization and can enhance both the performance of individual programs and the overall protective, preventive, and promotive functions of social safety nets in Senegal. (c) Develop a management information system that informs strategic decision-making. An MIS would inform the design and implementation of programs, make it possible to demonstrate their impact to political decision-makers, development partners, and civil society, and enhance global knowledge of the social safety nets. (d) Build the capacity of public administration. The Project supports the strengthening of the government's capacity for planning, implementing, monitoring and evaluating social safety nets for all sectors involved in social protection. (e) Build synergies within the World Bank interventions in the country. During both the design and implementation phases, the proposed Project will develop synergies with the other operations in the country, such as the Projects supporting investments in health, nutrition and education. In particular: the PNBSF will work closely with sectoral institutions to design and implement the verification process; sectoral institutions will be responsible for the implementation of the accompaniment measures for beneficiary households; the PNBSF will provide an entry point for some interventions, such as the nutrition program, to filter and identify households who need additional services; and the Unique Registry will be used by other programs to target their interventions (including, for instance the Health Equity Fund or the "Carte d'Egalite des Chances" for the disabled). 14 IV. IMPLEMENTATION A. Institutional and Implementation Arrangements 35. The Inter-ministerial Committee for piloting the National Social Protection Strategy (Comit Interministiriel de Pilotage de la Stratigie Nationale de Protection Sociale, CIP/SNPS) will oversee the Project's implementation. The committee was established by Decree in 2012, and later amended to name as its co-presidents Minister of Finance and the D ligud Gndral of the DGPSN. The CIP/SNPS is a multi-sectoral committee that includes, among others, representatives of the Ministries in charge of Finance, Education, Health, Women and Family, Employment, Agriculture, and the DGPSN. The CIP/SNPS is a high-level committee, mostly comprising of Ministers, and is responsible for overall decisions on the formulation and implementation of the country's social protection strategy. The CIP/SNPS will review and approve the strategic decisions regarding the Project implementation on an annual basis. 36. The Social Safety Net Steering Committee (Comit de Pilotage des Filets Sociaux, CPFS) will be created by an administrative order (arritd administratif) and will coordinate lead the Government's efforts in terms of social safety nets interventions. The CPFS will be inter- sectoral and multi-stakeholder in nature, and involve technical representatives from all sectors involved in social safety nets. This CPFS will be responsible for the regular technical oversight of the Project. In particular, it will evaluate the Project design and approve Project implementation plans and annual budget, and oversee the Project implementation. 37. The Ddligation Gndrale a la Protection Sociale et la Scurit Nationale (DGPSN) will have the overall responsibility for the Project's implementation. The DGPSN was created in 2012, and has built its experience through the implementation of the first phase of the PNBSF. The institutional and implementation arrangements for the Project will build on this experience, which involved central and local government institutions and established successful partnerships with development partners, such as UNDP, UNICEF and the World Food Program. In the future, if the institutional arrangements for the sector were to evolve, some of the Project activities could be undertaken by other institutions in the sector. In this case, the Government, with the World Bank, would evaluate these institutions' fiduciary and implementation capacity, and the Project would need to be restructured. 38. The DGPSN will be responsible for all disbursements and procurement related to the Project in accordance with the World Bank's procedures. It will manage the operational accounts. The coordinator will supervise all activities related to the Project's implementation, included those implemented by various units in the DGPSN as well as Government structures at the central and decentralized level (regional, departmental, and community levels) from all sectors involved (see Annexes 2 and 3 for more details). 39. A Project Implementation Manual, covering all aspects of Project implementation, including the cash transfer program and all financial, administrative and accounting procedures, will be validated and adopted prior to effectiveness. The Project Implementation Manual will be regularly updated as needed (and will further define the modalities for the transfers to households 15 with young children and elderly members). Any changes that concern activities supported by this Project will be agreed with the Bank prior to disbursement for these activities. B. Results Monitoring and Evaluation 40. Monitoring and evaluation is a key element of the Project, because it provides the regular assessment of the Project's performance to the government, the World Bank and other development partners. In this Project, one of the core focuses of Component 1 is to build the capacity within the DGPSN to monitor and evaluate social safety net programs, and design interventions that respond to the diagnosed issues and needs. In particular, the component supports the development of an MIS with a series of modules that each program and the DGPSN will be able to use to monitor the implementation of programs. It also supports stakeholder capacity for monitoring and evaluation and program implementation. 41. In addition, Component 2 supports a series of monitoring and evaluation activities for the cash transfer program. These include: a process evaluation; regular spot checks and beneficiary surveys and an impact evaluation. The DGPSN will also undertake continuous monitoring of the payment of cash transfers to beneficiary households. Finally, the DGPSN will organize annual financial audits for the Project, annual reviews of progress, and a mid-term evaluation to guide the Project implementation. The mid-term review will involve Project's stakeholders and civil society in the review of performance, intermediary results, and outcomes. C. Sustainability 42. The sustainability of the Project interventions rests on the Government commitment. The government has shown strong commitment in investing in the development of the social safety net system as part of the Plan Senegal Emergent (its national development plan), and efforts to provide support to the most vulnerable and meet the Millennium Development Goals. This commitment is reflected in efforts to build a consensus around the national social protection strategy; develop the necessary institutional infrastructure, tools and instruments; and mobilize about US$10million to implement the PBNSF in 2013 and US$20million in 2014. 43. During the Project implementation period, some of the programs and activities of the Social Safety Net System will also receive funding from the Government's central budget and other development partners, in addition to the resources provided by the Project. In particular, the Government has committed significant resources for 2014 to the unique registry and the PNBSF (about US$20 million in 2014) and expects to allocate US$30 million in 2015, US$40 million in 2016, and US$50 million in 2017. To ensure the social safety net system and its programs have the maximum impacts on the most vulnerable, it will also be critical that other sectoral institutions orient a significant share of their resources towards increasing the quantity and quality of the services provided to the most vulnerable households. 44. In the short and medium run, donor support will also be essential to sustain the Social Safety Net System and its core programs. Most development partners have committed to use the registry and targeting mechanism to channel their interventions and resources. They have also shown interest in ensuring that investments in health, nutrition, education or food are planned in 16 a way that complements the PNBSF, whereby supply-side investments match the increase in demand for services generated by the transfer program. 45. An important element for the sustainability of the Social Safety Net System is the effort to build a multi-sectoral decision-making process to oversee the system and ensure joint ownership. Also, this operation's focus on building the capacity and tools of all core sectoral institutions will be critical. Finally, the inclusion of a continuous Monitoring and Evaluation (M&E) process will help inform the definition of a clear strategy for the further development and sustainability of the programs. V. KEY RISKS AND MITIGATION MEASURES A. Risk Ratings Summary Table Risk Category Rating Stakeholder Risk Moderate Implementing Agency Risk - Capacity Substantial - Governance Substantial Project Risk - Design Substantial - Social and Environmental Low - Program and Donor Low - Delivery Monitoring and Sustainability Substantial Overall Implementation Risk Substantial B. Overall Risk Rating Explanation 46. There were important challenges to the preparation of the proposed Project and the implementation of the activities it would support. The Operational Risk Assessment Framework (ORAF) provides a detailed assessment. Key risks identified include: the fact that many of the interventions supported by the Project require the collaboration of multiple sectors and multiple levels of Government and the fact that the institutional setup, the lead agency for the development and implementation of the Social Safety Net System, and the tools and administrative systems are relatively new. 47. The World Bank and the Government have identified a series of mitigation measures, including (i) extensive technical assistance, especially in the initial design phase, (ii) a progressive expansion of activities, (iii) support to coordination mechanisms to promote collaboration within government, (iv) a series of capacity building and institutional strengthening activities, (v) a series of evaluation mechanisms (including audits, spot-checks and process and impact evaluations), and (vi) the establishment of a transparent and objective system for the selection of beneficiaries. 17 VI. APPRAISAL SUMMARY A. Economic Analysis 48. In Senegal, poverty has remained high and stagnated over the past few years and many households remain vulnerable to shocks. Poor households also suffer from low human capital, limiting their ability to break the inter-generational cycle of poverty. International experience shows that conditional cash transfers can play an important role in reducing poverty and improving social indicators, such as nutrition, education and health outcomes. Evidence is also growing on positive effects on local economies and investments towards productive activities. Simulations suggest that a transfer program targeted to the 250,000 poorest households in Senegal could reduce extreme poverty by over 40 percent within five years (upper bound estimate assuming perfect targeting). While the Project will finance transfers to only about 15 percent of the households who benefit from the PNBSF, the support to efficient and transparent tools and instruments is expected to have impacts through all PNBSF beneficiaries and, more generally, beneficiaries of programs that use the Social Safety Net System central tools. The Project will also contribute to addressing issues of inequality and social cohesion, by supporting the poorest and putting in place grievance mechanisms. 49. The tools of a social safety net system can contribute to efficiency gains. The system's approach can help reduce fragmentation, improve harmonization and enhance the performance of individual programs. In particular, a national mechanism to target the poor and vulnerable can promote better-targeted programs, thereby increasing the impact of a given budget on poverty reduction. And as the registry expands to include an increasing number of households, a broader set of interventions can use it to select beneficiaries. In particular, this could help promote the reduction of universal subsidies often put in place in times of crises, for lack of alternatives. 50. Public sector intervention is justified on two main grounds. First, the poverty and inequality situation remains a concern in Senegal, and justifies public intervention for equity purposes and in order to ensure minimum living conditions for all households. Second, the fragmentation of programs justifies an intervention that will help increase the efficiency of public spending by improving coordination, targeting, and rationalization. 51. The World Bank is uniquely placed to support the development of social safety net systems and conditional cash transfer programs because of its international experience and expertise in these matters. The Bank has supported social safety nets projects all around the world over these past ten years, initially mostly in Latin America and the Caribbean, but more recently in other regions, particularly in Sub-Saharan Africa. Finally, the World Bank's Africa social protection team has set up a Community of Practice, which organizes regular and direct exchanges between national teams that are implementing social safety nets and their systems in Africa. This exchange mechanism with neighboring countries is an important tool for the Government team's learning, and for the sharing of its own experience. 18 B. Technical 52. The Project design is based on international best practices in conditional cash transfers and registries, and on Senegalese experience with transfer programs. Beneficiaries will be selected among the poorest with a targeting mechanism based on geographic targeting, community targeting and verification of vulnerability with a proxy-means test. On the basis of the experience acquired in Senegal (in particular the experience with the PNBSF's first phase), this approach should maximize the accuracy of targeting, and therefore efficiently distribute resources to the poorest households. Furthermore, the setting up of a unique registry for all social safety net programs will result in improved targeting for multiple interventions. 53. The measures put in place to accompany households will be designed and implemented in collaboration with the sectoral actors, with a view to develop interventions that effectively promote behavioral changes in the areas of nutrition, health, and education. This will also ensure consistency with sectoral activities and adaptation to the local context. 54. The implementation of the MIS for the social safety net system, and more generally, the development of standardized instruments for all programs, will help address some of the issues identified in the recent review of social safety nets in Senegal and improve program results (through improved targeting, monitoring and management). During the first year of implementation of the PNBSF, studies will be undertaken to identify the most effective and efficient payment mechanism(s) for the transfers. C. Financial Management 55. A financial management assessment of the DGPSN was conducted. The objective of the assessment was to determine whether the DGPSN has adequate financial management arrangements in place to ensure that funds will be used for the purposes intended in an efficient and economical manner for the implementation of the DGPSN. Such arrangements comprise budgeting, accounting, internal controls, flow of funds, financial reporting, and auditing arrangements which (i) are capable of correctly and completely recording all transactions and balances relating to the Project; (ii) facilitate the preparation of regular, timely, and reliable financial statements; (iii) safeguard the Project's assets; and (iv) are subject to auditing arrangements acceptable to the World Bank. 56. The assessment complied with World Bank's requirements under OP/BP 10.00. The assessment complied also with the Management Manual for World Bank-Financed Investment Operations that became effective on March 1, 2010. 57. The DGPSN will have the overall Financial Management responsibility of the Project implementation. The Financial Management capacity of the DGPSN presents the following weaknesses: (i) lack of sufficient financial management team in place (the financial management staff is composed of an accounting team and an administrative and financial management team, that do not have the human resources to successfully handle Project financial management tasks in addition to the DGPSN financial management daily tasks); (ii) lack of adequate accounting software; (iii) weak internal control function (absence of internal auditor, however the DGPSN 19 has started the recruitment of one); and (iv) the existing manual of financial, administrative and accounting procedures is in draft version and does not take into account Project specificities. 58. As a result of the financial management capacity constraints, the following actions should be taken: (i) Recruit an accountant with skills and experience satisfactory to the World Bank to perform accounting tasks for this Project; this accountant will be under the oversight of DGPSN administrative and financial manager; (ii) Update the accounting software; (iii) Finalize and adopt the existing manual of financial, administrative and accounting procedures to take into account the Project's specificities; (iv) Finalize the recruitment, of the internal auditor with skills and experience satisfactory to the World Bank in order to strengthen the internal control environment. 59. The conclusion of the assessment is that the financial management arrangements have to be set up and will meet the Bank's minimum requirements once the mitigation measures are implemented. The residual risk rating for financial management is Moderate. Details on the Financial Management arrangements for this Project are included under Annex 3. D. Procurement 60. The procurement activities will be managed by the Implementing Agency (DGPSN) named "The Agency". The Agency will have overall responsibility in carrying out the following activities: (i) managing the overall procurement activities, and ensuring compliance with the procurement process described in the relevant manuals; (ii) preparing and updating procurement plans annually; (iii) preparing bidding documents, and draft Request For Proposals (RFPs) evaluation reports and contracts in compliance with WB procedures; and (iv) seeking and obtaining approval of national entities and of the International Development Association (IDA) on procurement documents as required. 61. Procurement of goods and consultants' services will be carried out in accordance with (i) the 'Guidelines On Preventing and Combating Fraud and Corruption in Projects Financed by the International Bank for Reconstruction and Development (IBRD) Loans and IDA Credits and Grants' dated October 15, 2006 and updated January 2011, (ii) the 'Guidelines: Procurement of Goods, Works and Non-consulting Services under IBRD Loans and IDA Credits' published by the Bank in January 2011, (iii) the 'Guidelines: Selection and Employment of Consultants by World Bank Borrowers,' dated January 2011, (iv) the Financing Agreement, and (v) the Procurement Plan approved by the World Bank. 62. Assessment of the Agency's capacity to implement procurement activities was conducted in November 2013. The Agency is an organism with financial autonomy. It is led by an Orientation committee (Conseil d'Orientation) which defines orientations and approves budgets and a General Delegate (Ddligud Gndral) who manages the institution. The General Delegate is supported by a Secretary General, a judge at the Court of Auditors (Magistrat de la Cour des Comptes) who holds a Masters in Procurement. The top management comprises the following 20 groups: i) Finance and Administration, ii) Accounting, iii) Analysis and Planning, iv) Social Protection Strategy, v) Mutual Funds, vi) National Solidarity Fund, vii) Food Security Secretariat, and viii) Communication. 63. The Agency is familiar with national procurement procedures and standard bidding documents, but not with the World Bank procurement and consultant guidelines. The Agency has a manual of financial, administrative and accounting procedures that must be updated to take into account the specificities of the proposed Project. The Agency will be responsible for the technical preparation of procurement tenders related to all Project activities. The World Bank procedures and standard bidding documents will be used. The procurement documents will then be submitted to the national entities and IDA for review, following the guidelines for procurement thresholds. 64. The key risks identified are as follow: i) the staff involved in the Project and responsible for process control and approval are unfamiliar with World Bank procedures. This could cause misunderstanding in the interpretation of Bank procedures, leading to slowness in procurement decisions, ii) the Agency's manual of financial, administrative and accounting procedures doesn't take into account World Bank procedures, iii) The Agency still lacks sufficient physical space for filing procurement documents. The overall procurement risk is substantial. 65. The residual Project risk for procurement will be considered moderate after adoption of the following mitigation measures: (i) recruit a qualified, full-time procurement specialist consultant to ensure compliance with World Bank procurement procedures and coach the Agency's team on World Bank procedures, (ii) update the manual of financial, administrative and accounting procedures to take into account the proposed Project, (iii) find more space and purchase appropriate equipment to organize and secure files to ensure compliance with the Bank's procurement filing manual. A procurement plan is presented in Annex 3. E. Social (including Safeguards) 66. The objective of the activities supported by Project is to reduce poverty and increase investments in human capital among the poorest households. The Project is expected to have a positive impact on all direct and indirect beneficiaries, including Senegal's most vulnerable households. Households who benefit from the PNBSF will have to comply with conditionalities linked to the use of health and education services. In case of non-compliance, the situations of non-complying households will be analyzed in order to seek options to support households in complying, before considering a potential suspension or exclusion from the program. 67. Household targeting for the PNBSF and the unique registry will be implemented using a transparent and objective methodology and efficient instruments. The methodology combines geographic targeting, community targeting, and verification of vulnerability with a proxy-means test, to ensure the poorest households are accurately targeted across the national territory. 68. Finally, a grievance mechanism will be established to respond to specific complaints at the different stage of the implementation of the unique registry, the PNBSF and more generally the social safety net system (identification of households, surveys, registration, application of the 21 proxy-means test, registration in programs, quality of services received, regularity of payments, etc.). This grievance system, together with the regular process evaluation and spot checks, will promote a high degree of accountability, and build on the strong existing capacity of civil society members to support programs and monitor their implementation. F. Environment (including Safeguards) 69. The Project is not expected to have any adverse environmental impacts. It does not require any land acquisition leading to involuntary resettlement and/or restrictions of access to resources and livelihood. The Project does not finance construction or health services that could produce medical waste. For these reasons the Project is classified as Category C. 22 Annex 1: Results Framework and Monitoring Project Development Objectives The development objectives of the proposed Project are to support the establishment of building blocks for the social safety net system and to provide targeted cash transfers to poor and vulnerable households. Cumulative Target Values' Data Responsi Freqency Source/ bility for Indicator Name Core Unit of Baseline YR1 YR2 YR3 YR4 End Frequency Methodolog data Measure Target y collection Project Development Objective Indicators Number of households enrolled F iN th uiuehgistry l Number 60000.00 60000.00 110000.00 160000.00 210000.00 210000.00 Semester MIS DGPSN mn the unique registry Percentage of PNBSF DGPSN/ beneficiary households who live Percentage 70.00 80.00 80.00 Every two years Implacti Evaluation below the poverty line firm Percentage of female among Percentage 50.00 50.00 50.00 50.00 50.00 50.00 Semester MIS DGPSN beneficiaries of the PNBSF Intermediate Results Indicators Number of MOUs signed E] between the DGPSN and setoa ato e sectora aNumber 0.00 2.00 3.00 4.00 4.00 4.00 Yearly MOUs DGPSN sectorial actors to define sectoral involvement in the PNBSF. Share of households in the E] unique registry with complete Percentage 65.00 70.00 75.00 80.00 80.00 80.00 Semester MIS DGPSN information Number of modules of the MIS E] that are operational and used by at e onerora and by Number 0.00 2.00 4.00 6.00 6.00 6.00 Yearly MIS DGPSN at least one program: registry and inscription (2014), payment and 5 Year 1: July 2014-June 2015; Year 2: July 2015-June 2016, Year 3: July 2016-June 2017, Year 4: July 2017-June 2018, End Target: July 2018-June 2019. 23 Cumulative Target Values' Data Responsi Unit of End Frequency Source/ bility for Indicator Name Core Unituof Baseline YR1 YR2 YR3 YR4 e Methodolog data Measure Target y collection verification (2015), report preparation and grievance management (2016). Grievance mechanism E] Protocols Instrument 30% cases 60% cases MIS, implemented, at least for the Text 0 defined s prepared Operationa resolved resolved Yearly Manuals' DGPSN iPle t aand actors I module without without Training trained delay delay Material Number of PNBSF beneficiary F-1 households (who have been Number 48000.00 98000.00 148000.00 198000.00 248000.00 248000.00 Semester MIS DGPSN registered) Percentage of PNBSF beneficiaries who know their . DGPSN/ rights and responsibilities in Percentage 50.00 70.00 80.00 Every two years Beneficiary Evaluation terms of conditionalities, surveys Firm program rules and entitlements Share of beneficiary households E] for which conditionalities are Percentage 0.00 55.00 60.00 65.00 75.00 Payment cycle MIS DGPSN monitored Percentage of PNBSF Payment cycle DGPSN/ beneficiaries receiving payments Text Bae o be Bas Base Bas Base and evaluation MIs Evaluation Percendtage. +1 .p +5p.. 2 ppchecks fr in a timely manner cua cycle firm Number of spots checks DGPSN/ (Quantitative and qualitative Evaluation evaluation assessments of beneficiaries and and report firm project implementation) % beneficiaries of 6-12 years of DGPSN/ age who attend school regularly Percentage 60.00 65.00 70.00 75.00 Yearly MIS Education Ministry % beneficiaries of 0-5 years of E] DGPSN/ age who comply with the Percentage 60.00 65.00 70.00 Yearly MIS Health conditionality Ministry 24 Project Development Objective Indicators Indicator Name Description (indicator definition etc.) Number of households enrolled in the unique registry This indicator relates to the number of households whose registration was done prior to the project (baseline) and those whose registration is financed by the Project, and is therefore a subset of the total number of households in the unique registry. Percentage of PNBSF beneficiary households who live This indicator measures the targeting accuracy of the program. It is calculated as the below the poverty line number of beneficiary households with household consumption below the poverty line, as a percentage of the total number of beneficiary households. Percentage of female among beneficiaries of the PNBSF This indicator provides information about the gender composition of program beneficiaries. It is calculated as the ratio of the number of women and girls in beneficiary households over the total number of persons in beneficiary households. Intermediate Results Indicators Indicator Name Description (indicator definition etc.) Number of MOUs signed between the DGPSN and This indicator measures the involvement of sectoral actors in the PNBSF, by sectorial actors to define sectoral involvement in the measuring the number of formal agreements between these sectoral actors and the PNBSF. DGPSN. Share of households in the unique registry with complete This indicator provides information on the quality of the data collection process. It is information calculated as the number of questionnaires filled up that have complete information (without missing information and validated by supervisors), divided by the total number of questionnaires filled up. Number of modules of the MIS that are operational and This indicator allows to monitor the development and implementation of the used by at least one program: registry and inscription Management Information System. (2014), payment and verification (2015), report preparation and grievance management (2016) Grievance mechanism implemented, at least for the This indicator provides information on the development and implementation of the PNBSF grievance mechanism for the PNBSF. Number of PNBSF beneficiary households (who have This indicator provides information about the number of families who benefit from the been registered) PNBSF (have been registered in the program). Percentage of PNBSF beneficiaries who know their This indicator measures the quality of the information provided by DGPSN to program 25 rights and responsibilities in terms of conditionalities, beneficiaries. It is estimated as the number of beneficiaries who know the various program rules and entitlements parameters and rules of the program, divided by the total number of beneficiaries. Share of beneficiary households for which This indicator measures the monitoring of beneficiary households' compliance with conditionalities are monitored the program's conditionalities, and the integration of this monitoring within the program's MIS. It is estimated as the number of beneficiary households whose conditionalities are verified, divided by the total number of beneficiary households in the program. Percentage of PNBSF beneficiaries receiving payments This indicator measures the quality of the payment mechanism. It is measured as the in a timely manner number of beneficiary households that received payments on time (as specified in the operation manual), divided by the total number of beneficiary households who received payments. Number of spots checks (Quantitative and qualitative This indicator measures how often DGPSN implements process evaluations or assessments of beneficiaries and project implementation) beneficiary surveys to inform program design updates. % beneficiaries of 6-12 years of age who attend school This indicator is measured as the number of children aged 6-12 in beneficiary regularly households who attend school, divided by the total number of children in beneficiary households. This is measured only on the basis of households for which conditionalities are verified. % beneficiaries of 0-5 years of age who comply with the This indicator is measured as the number of children under age of 5 in beneficiary conditionality households that comply with the conditionalities, divided by the total number of children under the age of 5 in beneficiary households. This is measured only on the basis of households for which conditionalities are verified. 26 Annex 2: Detailed Project Description Senegal: Social Safety Net Project Government and Project Development Objectives 1. Creating an effective social safety net system is essential to advance the country's goal of poverty alleviation. The Government's objective is to have sound policies and programs to protect households' consumption and promote their investments in the human capital of their members. To support the Government's strategy, this Project focuses on two complementary sets of activities. First, it supports the establishment of a social safety net system, with tools that will promote greater effectiveness and coordination. Second, the Project supports one of the key programs of the Social Safety Net System, namely the cash transfer program targeting the poorest households (Programme National de Bourses de Securite Familiale, PNBSF). These two components are strongly linked, in particular as the rolling out and expansion of the PNBSF forms the basis for the establishment of some of the core tools of the social safety net system (registry, targeting mechanism, etc.). 2. The development objectives of the proposed Project are to support the establishment of building blocks for the social safety net system and to provide targeted cash transfers to poor and vulnerable households. 3. To meet the development objectives, the proposed Project has two components: (i) Support to the development of the Social Safety Net System and (ii) Support to the national targeted cash transfer program for poor and vulnerable households. Component 1: Support to the development of the Social Safety Net System [US$7.0 million] 4. The objective of this component is to support the Government in the process of establishing the Social Safety Net System, as part of a national social protection framework. This component will support the development of basic operational tools and administrative systems that form the backbone of the social safety net system (sub-component 1.1) and the strengthening of institutional capacity of the DGPSN and sectoral actors of the social safety net system (sub- component 1.2). Sub-component 1.1: Operational Tools for the Social Safety Net System [US$3.6 million] 5. This component will support the design of some of the core tools and administrative systems that form the backbone to an efficient social safety net system. These tools would be used by multiple programs (to target, identify and select households, and pay transfers) and provide the basis for greater coordination and reduced overlap or duplication. For some instruments, the sub-component will finance simply the prototype (manual, procedures, generic modules, campaign models, etc.). For the unique registry, the sub-component will also support the implementation, since both the setting up and the maintenance of the registry are the DGPSN's responsibility. 6. In particular, the component will finance (i) the development and implementation of the unique registry of vulnerable households, (ii) the development of the MIS for the social safety 27 net system, (iii) the development and implementation of a grievance mechanism, (iv) the development of monitoring and evaluation procedures for social safety net programs, (v) the development of a model of intervention for broad information and education campaigns around social safety net programs, and (vi) the formulation of users' manuals for the different instruments. (1) Unique registry of vulnerable households 7. The component will support the development and implementation of a unique registry of vulnerable households, building on the processes and tools put in place in 2013 for the selection of beneficiaries of the PNBSF, which included about 65,000 vulnerable households in the registry and 50,000 households selected as beneficiaries for the PNBSF. 8. The purpose of the unique registry is to help multiple programs better target their beneficiaries. In particular, Government or donor-supported programs that have already indicated their interest in using the registry include programs that focus on the disabled, the elderly poor, or vulnerable children; and programs that provide free pregnancy-related health care, subsidies for health insurance affiliation, food vouchers, or scholarship for vulnerable households. To promote that broad use, the questionnaire used to collect information on potentially eligible households has been elaborated with all potential sectoral users. This will ensure the data collected and uploaded in the registry database is sufficient for these sectoral programs to select their beneficiaries (by combining information on the proxy-means test with categorical filters to reach its target population). Hosting the registry within the DGPSN, in a unit that is separated from any specific programs, will also allow the registry to serve its multiple intended users. 9. The process of selection of households and registration in the unique registry combines geographic targeting, community targeting, and the verification of households' vulnerability with a proxy-means test, to confirm the vulnerability of the households put forward by the communities. The results of the process evaluation planned for the first semester of 2014 will be used to adjust this process if necessary: * Geographic targeting: the number of households to be included in the registry for each region, department and locality is decided on the basis of the estimated number of poor it contains based on the official national measure of poverty. This step will ensure that the registry includes the poorest and most vulnerable households in the country. * Community-based targeting: a list of potentially eligible households is prepared by communities in each locality. The elaboration of this list by the communities themselves results in a minimization of errors and in increased transparency. It also promotes local involvement and local ownership of the registry and the programs that will use it to target their interventions (including the PNBSF). 6 In 2013, the process followed the objective of the PNBSF's, focusing on households with children aged 6 to 12. The unique registry will gradually target the other vulnerable households, and support the expansion of the PNBSF. 28 * Verification of households' vulnerability: the level of poverty of each potentially eligible household is defined on the basis of a survey and the application of a proxy-means test. This test detects households whose living conditions are not consistent with poverty and vulnerability, so as to exclude them from the list of beneficiaries. As a result of the process, the unique registry contains a list of households, their socio-economic characteristics, and a score that indicates their poverty level. Different programs can then use these data to select their beneficiaries. 10. The targeting process adopted to establish the registry implies a series of actors, both at the central and local levels. At the central level, the process involves the following institutions: * The National Agency for Statistics and Demography (Agence Nationale de la Statistique et de la Dimographie, ANSD), responsible for the definition of the quotas for each locality (proportional to its estimated vulnerable population), the supervision and quality control of the data collection carried out to ascertain the vulnerability status of all potentially eligible households, and the design of the proxy-means test and associated cut-off points which will be applied to households to define their eligibility. * The Agency for the State's Information Technology (Agence de l'Informatique de l'Etat, ADIE), in charge of hosting and maintaining the unique registry database. This responsibility might be revised during Project implementation. 11. At the local level, the institutional setup comprises the four following operational levels: Overall, the set up includes four levels: * A Regional Steering, Supervising and Validating Committee (Comiti Rdgional de Pilotage, de Supervision et de Validation, CRPSV), headed by the region's Governors (local authority nominated by the country's President) and comprising of local representatives (elected regional council, Conseil Rfgional), representatives of de- concentrated sectoral ministries, and community organizations. They are in charge of supporting the information, mobilization, and participation of local institutions in the process. They also consolidate information from lower-level committees (beneficiary lists, grievances, verification, etc.) and transmit it to the DGPSN. * A Departmental Validation and Control Committee (Comit D partemental de Validation et de Contr6le, CDSVC), headed by the Prefets (representative at the department level, nominated by the country's President) and comprising local representatives of de-concentrated sectoral ministries, elected mayors (Maires) or rural community presidents (Prisidents des Communauts Rurales), representatives from various population groups, local religious authorities, NGOs, etc. Its function is to support the process of registration, targeting and information of the population. * A Local Targeting and Monitoring Committee (Comit Local de Ciblage et de Suivi, CLCS) in rural areas, headed by Sous-Prefets (representatives at the local level in rural areas, nominated by the country's President) and comprised of representatives from deconcentrated services, local elected officials and local religious and civil leaders. Their 29 role is to facilitate the process, and provide support to the local committees in their activities of targeting of households. They oversee and monitor the implementation of the program at the local level, propose remedial measures, validate beneficiary lists, and transmit various reports to the UCSFS. * A Local Targeting and Monitoring Committee at the level of Villages/Neighborhoods (Comite Villageois de Ciblage et Suivi, CVCS). These committees are organized on the basis of existing structures (the elected village representatives, or the elected neighborhood committees) and local religious and civil representatives. These committees are responsible for the establishment of the list of potentially eligible households (who are then surveyed and whose poverty status is verified centrally). 12. The steps for the elaboration of the Unique Registry include: * Definition of quotas. The ANSD defines the quotas for each locality, in light of the estimated number of vulnerable households in the area. * Committee formation. At the regional, departmental and local levels. * Information campaign. Campaigns organized by the DGPSN, using local infrastructure such as community radios, to inform population about the registry and targeting methodology. * Process of identification of potentially eligible households. Village/neighborhood committees draft list of potentially eligible households, according to quotas provided by ANSD. * Process of collection of data on potentially eligible households. The DGPSN and the ANSD organize the collection of socio-economic data on the potentially eligible households, and upload the data in the database hosted by the ADIE. * Application of the proxy-means test to verify vulnerability. The DGPSN applies the test, to establish the level of poverty and vulnerability of each household (on the basis of the test prepared by the ANSD). * Eligibility determination. Each program selects households from the registry, using the proxy-means test and other filters according to its target population. * Grievance mechanism: a grievance mechanism is in place for households to question inclusion or exclusion from the program, or file in complaints about the processes. 13. This Project will finance the definition and operationalization of various instruments required for the implementation of the unique registry and the targeting methodology (questionnaires, computer platform, control mechanisms, routines for the automatic calculation of the proxy-means test, etc.). Beyond the definition of the instruments themselves, this sub- 30 component will also finance the expansion of the unique registry coverage throughout the country. (2) Management Information System of the social safety net system 14. The Project will support the development of the Management Information System (MIS) of the social safety net system. The objective is not to build a central, unique, MIS that would cover all the programs; rather the purpose is to develop a series of modules that all social safety net programs can adapt to their needs and use autonomously. 15. The use of these generic modules will result in significant savings for the social safety net programs (which will not have to develop their own MIS). Furthermore, and more importantly, using these modules will allow a certain degree of inter-operability between the modules of the different programs - based on the use of a unique identifier across interventions (the identifier in the Unique Registry, which will also include the official ID when available). This inter- operability will foster greater coordination of activities, improved program planning, and better use of synergies between interventions. This will also facilitate the monitoring of the overall social safety net system. 16. The Project will support the elaboration of modules that focus on (i) registration in the registry, (ii) program registration, (iii) payment, (iv) the monitoring of compliance with conditionalities, (v) grievances, and (vi) the preparation of monitoring reports. The DGPSN will be responsible for the elaboration of the central MIS modules (registry, system-wide reporting, grievance, etc.) as well as the development of generic modules for each program to adjust to their specific needs (program registry, payment, reporting, etc.). (3) Grievance mechanism 17. The Project will support the development and management of a grievance system to respond to requests or complaints and ensure a high level of social accountability. This mechanism will be used for the different social safety net programs, and dispatch complaints to the relevant institutions. This will allow individuals - whether they are beneficiaries of a particular program or not - to formulate their complaints in a simple and straightforward fashion, without having to know the details of which institution or person is responsible for the process that the complaint refers to. 18. Complaints can concern a range of items, with individuals requesting an actualization of their personal information in the registry, contesting their exclusion from a list of beneficiaries, denouncing the unfair inclusion of other households, complaining about problems during the implementation of a program, or denouncing cases of fraud or unfair treatment by a program agent, etc. Because of this diversity, different mechanisms will be put in place for individuals to file their grievances (forms to complain at local level, email address, national hotline for telephone or text messages, postal address), and protocols will be put in place to address them. 31 19. In addition to being a mechanism for social accountabitlity and for the protection of beneficiaries' rights, the grievance mechanism will be integrated with the programs' MIS and used to identify recurring issues, make adjustments as necessary, and guide future investments. (4) Procedures for the monitoring and evaluation ofprograms 20. The Project will support the development of procedures that social safety net programs can use to ensure their regular monitoring and evaluation. With these procedures, programs would benefit from an established generic methodology, which they can adapt for the regular monitoring of their monitoring and evaluation activities. Furthermore, adopting standard procedures will allow the DGPSN and Steering Committee to monitor and evaluate the overall system and its programs, by using reporting tools, indicators, frequency and formats that are consistent and comparable. The Project will support the formulation of the monitoring and evaluation guide. In the context of the Sub-component 1.2, activity "Strengthening the capacity of the Social Safety Net System's sectoral actors", the Project can also finance a support to the programs for the design of the tools and their testing. (5) Strategy of intervention for information and education campaigns (IEC) 21. The Project will support the development of a strategy for broad IEC around social safety net programs. This model would provide a common platform for interaction with communities and households at the local level, which would promote greater synergies between different programs, limit duplication at the local level, and avoid the creation of parallel structures at the local level (that is the creation by each program of procedures and mechanisms to undertake information campaigns, with the frequent implication of the same local actors). (6) Formulation of users' manuals for the different instruments 22. The Project will support the elaboration of users' manuals for the different tools of the Social Safety Net System, to ensure the institutionalization of capacity, the sustainability of procedures, operational transparency, and a continuous learning. Among others, this will include the preparation of the users' manual for the unique registry in order for all actors to contribute to this effort using similar methodologies and norms to ensure quality and homogeneity (under the control of the DGPSN); the preparation of the users' manual for the grievance mechanism to ensure homogeneity in the responses and to foster the inter-operability of different institutions' processes; and other manuals as necessary. Sub-component 1.2: Institutional capacity building for Social Safety Net System's actors [US$3.4 million] 23. This component focuses on the institutional strengthening of the Ddligation Gndrale a la Protection Sociale et la Solidarit Nationale, in order to ensure it can play its role in the implementation of the national social protection strategy - defining the strategy, planning interventions, coordinating activities, and ensuring results are monitored and lessons learned on what interventions are most effective. It also focuses on building the capacity of the various 32 sectoral implementing institutions who contribute to the objectives of the social safety net system. Finally, it supports the activities required to ensure Project management. (1) Strengthening the DGPSN technical capacity 24. The DGPSN is the institution responsible for the strategy, planning, and coordination of interventions under the social safety net system. The DGPSN needs to have a certain set of multidisciplinary competencies to play the key functions of leader of this sector. On the basis of a planned institutional evaluation, the experts and additional resources required to reach these objectives will be identified. In particular: * The sub-component will finance the hiring of experts to strengthen the DGPSN in the aspects in which its capacity remains limited. These areas could include, for instance, monitoring and evaluation, management information systems, targeting, program design, or family accompaniment. The objective is to use these external experts to put in place the procedures and tools and to transfer the know-how to the DGPSN staff, with a view to promote sustainable institutional capacity. As such, the Project will only finance consultants recruited on a competitive basis, and not civil servants. * The sub-component will also finance regional coordinators, responsible for the coordination of social protection interventions at the local level. The terms of reference of these coordinators include the implementation of coordination mechanisms between sectoral actors of the Social Safety Net System at the local level, and support to the implementation of programs (including the PNBSF). This role is particularly important in the context of the ongoing decentralization of key functions to the local level (the transfer of important competencies at the local level, in particular at the level of communes, should be further deepened during the implementation of the third act of decentralization, starting in 2014). * The sub-component also supports the capacity of DGPSN staff, in particular through training, the provision of technical assistance, and the participation in study tours. 25. It is important to note that this sub-component will support the financing of experts and the capacity building on a decreasing basis, in order to ensure that experts put in place systems and procedures, test them, train DGPSN staff in the use of these, and leave the DGPSN staff to implement the activities on a regular and sustainable basis. (2) Strengthening the capacity of the Social Safety Net System's sectoral actors 26. Different sectoral actors have to play a critical role in the Social Safety Net System's implementation. Indeed, this system intends to promote the coordination between all interventions that target the poorest and most vulnerable households, to take advantage of potential synergies between the interventions and to avoid duplications or contradictions. In this context, the Project will support a series of activities to help sectoral actors as they enter the Social Safety Net System and start using common tools or coordination mechanisms. These activities will be organized under the leadership of the Inter-ministerial Social Protection 33 Committee (Comite Interministeriel de la Protection Social) and the Social Safety Net Steering Committee (Comit de Pilotage des Filets Sociaux). They will be organized in coordination with the sectoral capacity building plans of each sectoral actor, with a view to take advantage of potential synergies and ensure greater efficiency. Activities will include, among others: * Training activities for the different sectoral actors, to sensitize them to social protection themes, inform them on the instruments of the Social Safety Net System, and clarify the roles of the different actors in the implementation of programs. The institutions targeted include institutions responsible for the services provided in health, education, nutrition, civil registration, employment, agriculture, justice, environment, etc. They also include Non-Governmental Organizations (NGOs) and civil society institutions involved in social safety nets. Finally, they also include local communities who play a role in the identification of beneficiaries and in the implementation of programs. These activities will be organized in coordination with other capacity building activities put in place by the sectors, and will use existing decentralized and deconcentrated structures. * Analysis or evaluations that these sectoral actors would need to better play their role within the Social Safety Net System. For this, the Project will finance diagnostics of household conditions relevant to the sector's interventions, diagnostics of the supply of services, evaluations of programs to help better target and serve the most vulnerable and increase impact, and the development of instruments to monitor regularly the sector's contribution to the Social Safety Net System. These activities will be supported by specialists from the DGPSN, who will bring the Social Safety Net perspective to the sectoral teams, and will foster adjustments to the interventions. (3) Supporting analytical activities to build the Social Safety Net System 27. One of critical role of the DGPSN is to guide policies and programs in the area of social safety nets. To do so, the DGPSN will need to undertake a series of studies and evaluation. These studies will concern, among others: * The analysis of existing programs, the monitoring of ongoing interventions, the evaluation of existing targeting mechanisms, the assessment of alternative payment systems, or the design of new interventions, and * The assessment of conditions and capacities of the institutions and programs involved in the overall social safety net strategy, including specific recommendations for improvement and the design and implementation of institutional strengthening plans. (4) Strengthening the DGPSN capacity to manage the Project. 28. The DGPSN is responsible for Project implementation, which includes both activities implemented by the DGPSN itself and activities implemented by sectoral and local actors of the Social Safety Net System. The Project management requires a series of skills and capacity, in terms of coordination and in terms of financial management, disbursement and procurement. This sub-component will finance the experts required to strengthen the DGPSN's capacity to 34 implement the Project, with a view to fill existing gaps. Experts could include, among others, a Project coordinator and his/her technical team, as well as a team in charge of procurement, financial management and administration. As was the case for the strengthening of the DGPSN's capacity to play its role of coordination of the Social Safety Net System, experts will be financed on a decreasing basis, to ensure the transmission of know-how to the DGPSN's team and the sustainability and institutionalization of capacity. In this context, the sub-component will also finance a regular audit of the Project, regular expenditures associated with the daily management of the Project, and the strengthening of the Direction de l'Investissement in the Ministry of Economy and Finance. Component 2: Support to the national targeted cash transfer program for poor and vulnerable households [US$33.5million] 29. The second component will support the expansion and strengthening of the PNBSF, the cash transfer program launched in October 2013 which targets the poorest and most vulnerable households. The PNBSF's objectives are to reduce poverty and promote the development of the human capital of poor and vulnerable households, by providing them with regular cash transfers, conditional on investments in the human capital of its members as relevant (education, health and nutrition) and by providing measures of accompaniment to these families to promote behavioral changes. Description of the PNBSF 30. The PNBSF is national, and aims at reaching the poorest households nationally, irrespective of their place of residence, on the basis of the unique registry. It is expected to reach 50,000 households selected with the national targeting criteria described above (in 2013) to which another 50,000 households will be added each year until reaching 250,000 households in 2017. This corresponds to the bottom half of the estimated 534,000 poor households in Senegal (about 35 percent of all households), including the 162,000 households estimated to live in extreme poverty in 2011 (about 11 percent of all households). 31. The PNBSF uses a single national norm, in order to ensure that the poorest have effective access to the transfers, whether they live in an area with high poverty incidence or not. The household selection criteria are indeed based on the official national definition of poverty determined by the ANSD. The program has been implemented in all regions of the country right from its inception, and the proposed roll-out of the program would progressively include households in each locality starting from the poorest households (as identified by communities and verified by the proxy-means test). 32. The process of selection of beneficiary households for the PNBSF combines geographic targeting, community targeting, and the verification of households' vulnerability with a proxy- means test, as described in the section on sub-component 1.1. At the end of the targeting process (geographic quotas, selection of potentially eligible households by the communities, application of the proxy-means test, and registration in the unique registry), the poorest households are invited to sign up as beneficiaries for the PNBSF (Other households remain in the unique registry for consideration in subsequent phases of implementation of the program). 35 33. In 2013, the process of identification of vulnerable households for the unique registry followed the objective of the first phase of the PNBSF, which focused on vulnerable households with children aged 6 to 12. For the subsequent phases, the PNBSF will gradually target vulnerable households with young children and elderly members, with a view to progressively target all poor and vulnerable households. 34. In practice, the focus in 2013 on households with children aged 6 to 12 resulted in a coverage of most poor and vulnerable households. Indeed, the most recent household survey suggests that 83 percent of the 250,000 poorest households have children aged 6 to 12. And many households among the poorest have simultaneously children under the age of 5, children aged 6 to 12 or adults over the age of 60 (42 percent have members in the three categories, and another 43 percent have members in two of the three categories). Table 2.1: Demographic composition of vulnerable households (poorest 250,000) Households with at least: - one child aged 0-5 (a+b+c+e) 85.2 213,000 - one child aged 6-12 (a+b+d+f) 82.5 206,250 - one adult over the age of 60 (a+c+d+g) 57.0 142,500 Households with the following compositions: (a) 0-5 years-old, 6-12 years-old and over 60 years-old 42.0 105,000 (b) 0-5 years-old and 6-12 years-old 31.8 79,500 (c) 0-5 years-old and over 60 years-old 6.1 15,250 (d) 6-12 years-old and over 60 years-old 5.4 13,500 (e) 0-5 years-old 5.3 13,250 (f) 6-12 years-old 3.4 8,500 (g) +60 years-old 3.6 9,000 (h) No member under the age of 12 or over the age of 2.5 6,250 60 Total 100.0 250,000 Source: own calculations on basis of recent household survey, using a combination of monetary and asset poverty. 35. In the context of the expansion of the PNBSF, Component 2 will support the payment of cash transfers to beneficiary households (sub-component 2.1), accompaniment measures implemented by the DGPSN, sectoral actors and local institutions (sub-component 2.2), the management of the PNBSF (sub-component 2.3), and selected evaluations (sub-component 2.4). Sub-Component 2.1: Monetary transfers to beneficiary households [US$25.7millionJ 36. This sub-component will support the expansion of the PNBSF in terms of the number of its beneficiaries and in terms of its objectives. In terms of the number of beneficiary households, the program has paid transfers to about 50,000 beneficiary households selected according to the national targeting methodology in 2013. An additional 50,000 households are expected be added every year, to reach a total of 250,000 beneficiary households by 2017. The sub-component proposes to finance transfers to a sub-set of beneficiary households, starting in 2014. The 36 estimated number of households for which the Project would finance the transfer is estimated to represent approximately 15 percent of beneficiary households on the basis of a quarterly transfer of about US$50 (approximately 15,000 households in 2014, 22,500 in 2015, 30,000 in 2016 and 37,500 in 2017. This number could be revised once the amounts for all types of transfers and the rules for their combination have been established). The eligibility criterion for the PNBSF is poverty and vulnerability, and households are to be identified by the targeting process of the unique registry (which combines geographic targeting, community targeting, and the application of a proxy-means test). 37. In terms of objectives, the PNBSF has focused in 2013 on poor and vulnerable households with children aged 6-12, with the payment of an education transfer, conditional upon children's attendance in primary school. This sub-component will support the broadening of the PNBSF, by financing three types of transfers: * Direct cash transfer to poor households with children aged 0-5 years. These transfers would aim at promoting the welfare of vulnerable households with children under the age of five, and promoting their investments in their children's human capital by incentivizing the use of preventive health services (immunization, growth monitoring, nutrition, etc.). The conditionality will reflect these preventive services, and will be defined in 2014, together with the mechanisms that will be put in place by sectoral institutions to verify compliance. * Direct cash transfer to poor households with children aged 6-12 years. These transfers would aim at promoting the welfare of poor households and their investments in the human capital of their school-age children. In this program, transfers are conditional on regular primary school attendance (this includes both formal schools as well as informal schools that have been certified by the Ministry of Education), with a view to promote primary school completion. Initially, this transfer will use the parameters of the PNBSF as it was implemented in 2013. However, the age group considered might be revised during Project implementation to include children aged 6 to 16, as Senegal recently defined elementary education as including both primary and lower secondary education over a period of 10 years. * Cash transfer to poor households with elderly members. This category would include elderly over the age of 60 or 65 (exact age to be defined by the PNBSF in 2014). These transfers would aim at promoting the welfare of vulnerable households, in order to support their elderly members. It would be implemented without conditionality. 38. In light of the composition of poor and vulnerable households (which have often members in more than one of the categories targeted by the PNBSF), the implementation of the three types of transfers would result in overlap in beneficiary households. In 2013, the education transfer amounted to FCFA25,000 each quarter (equivalent to US$50 per quarter). In the fall of 2014, the PNBSF will define the value of each type of transfer, establishing both a minimum and 7 The Bank also expects to support the program's focus on working age adults through a separate trust fund on adaptive safety nets. 37 a maximum ceiling to avoid negative incentives, and the rules for combining different transfers. In 2013, the education transfer amounted to FCFA 25000 each quarter (equivalent to US$50 per quarter). The amount and rules for the combination of multiple transfers will be decided in 2014 and included in the PNBSF manual, which will have an impact on the total number of households whose transfers will be financed by this Project. 39. Once they are registered in the PNBSF, beneficiary households will receive transfers for a period of three years. After this period, their eligibility will be reevaluated using the targeting mechanisms of the unique registry, as further described in the PNBSF manual. Furthermore, the accompaniment measures financed under Sub-Component 2.2 will help ensure that transfers are suspended in case of death of the elderly household member. 40. In 2013, the Post office was selected to put in place the payment of the transfers for the first year of implementation of the PNBSF. During the implementation of the Project, other options will be reviewed (through analysis financed under sub-component 1.2.) with a view to identify the payment mechanism that is most effective and least costly. The Project plans to finance the transaction fees associated with the transfers it would finance, within the context of a contract that satisfies the procurement norms of the World Bank. 41. The payment mechanism was defined on the basis of international best practice. Payments are made by the agency (or agencies) responsible for the payment, on the basis of the information provided by the PNBSF and upon verification of the identity of each beneficiary, to avoid fraud (the PNBSF provides a personal identity card to its beneficiaries, with information both on the person and on her household). The transfers will be implemented following the cycle described below: * Preparation of the list of beneficiaries. The PNBSF prepares the payment list on the basis of its MIS, and sends it to the payment agency, together with information on the household, the amount to be transferred, the designated beneficiary, and its alternate (information campaigns will reinforce the importance of having the children's mother as main beneficiaries, in light of their role in ensuring children health, education and nutrition). o For the first transfer, payment will be made to all beneficiary households without verification of compliance with conditionalities, in order to ensure timely and predictable payment. o For following payments, the list of beneficiaries that are to receive a transfer will be made on the basis of the verification of compliance with the PNBSF relevant conditionality by the relevant sectoral institution. There will be a delay between the period during which the conditionality is verified, and the payment that is based on that verification, as the processing cycle typically requires a few months. The program will define the consequences for non-compliance (warning, suspension, or exclusion, depending on the duration of non-compliance) and specify them in the users' manual. 38 * Transfer offunds to payment agency. Before payments are due, the PNBSF authorizes the transfer of the total amount of the cash payments from the designated account to the bank account of the payment agency. And the payment agency transfers funds to their local agents according to the payment list. * Payment and certification of the payment. After verifying the beneficiary's proof of registration by examining beneficiary card, the payment agency validates the beneficiary name on the list, and transfers the funds, before recording the transaction. * Reconciliation of payment transactions. The payment agency submits information about transactions actually completed. The PNBSF records the information in its management information system, in order to reconcile the payments made to the beneficiaries with the original list of beneficiaries to be paid. * Transmission of the statement of expenditure. At the end of each payment cycle, the PNBSF prepares a payments report, which is then included in the customized statement of expenditures. 42. Various mechanisms are in place to monitor the payment cycles and processes. First, the payment mechanisms will be the object of the annual external audits. Furthermore, the process evaluations will form the basis for recommendations to further improve the process and adjust specific elements to increase efficiency and quality. The regular spot checks, which will randomly select a few communities and evaluate the program in those localities, will also verify the quality of the payment processes. Finally, the internal auditor will monitor the payment processes on a continuous basis and the Bank team will assess the processes on the basis of the statement of expenditures for the payment of transfers, which will follow a format agreed with the Bank's disbursement team. 43. Sub-component 2.1 will finance cash transfers to beneficiary households, as well as the financial fees charged by the financial institution responsible for the payment the cash transfers to the beneficiary households. Sub-component 2.2: Accompanying measures implemented by the DGPSN, sectoral actors, and local institutions [US$4.9million] 44. International experience suggests that family accompaniment is a key element to promote household behavioral changes, the key objective of the PNBSF. In addition to general information campaigns organized by the DGPSN, the relevant sectoral actors will be responsible for the implementation of accompaniment measures - counseling or additional support - related to the different types of transfers. The unique registry can also provide sectoral institutions with a diagnostic of supply constraints, and help them better design their investment plans; and the PNBSF can provide them with an entry point to reach a population that is often hard to reach. 45. The elements of this package of accompaniment will be developed in partnership between the DGPSN and the sectoral actors, to ensure the development of information campaigns and accompaniment measures of quality (based on the expertise and experience of 39 specialized institutions) and to avoid a duplication of efforts when sectoral actors already implement this type of activity. In this context, this Project will be implemented in coordination with parallel Projects in health and nutrition and in education. For instance, the nutrition intervention supported by the health Project would use the activities implemented under the PNBSF to identify households in need of further nutritional services (using the PNBSF to filter potential beneficiaries), and will use the Unique Registry to target insurance subsidies from its Fonds d'Equite. 46. The sub-component will finance IEC campaigns, and additional measures to promote the use of basic services for preventive health care of children, good practice in terms of hygiene and nutrition, investments in early childhood and education, registration in the civil registry, and participation in subsidized health insurance mechanisms, among others. The sectoral institutions will build on their network of decentralized and deconcentrated services to deliver the relevant training and counselling (in the context of the implementation of the recently approved decentralization reforms called "Third Act" ("acte trois"), the role played by local-level sectoral institutions is likely to grow. Furthermore, the activities will likely build on the existing network of local Development Community Volunteers (Acteurs Porteurs de Dynamiques Communautaires, APDC) developed and capacitated by the Ministry of Women, Family and Youth. 47. Furthermore, this sub-component will finance activities to strengthen the capacity of sectoral institutions to use their management information systems to verify compliance with PNBSF conditionalities. In education, the Government is currently defining how to build on existing information systems for primary school reporting (in particular the reporting mechanisms used by the school inspection system at the regional, departmental and district levels) to report the data on attendance already collected at the level of each school. In the health sector, the definition of the conditionality for the transfers to families with children aged 0 to 5 will be made in light of the existing reporting mechanisms. These activities will be closely coordinated with the ongoing investments of the World Bank in the sectors of health and nutrition (Senegal Health & Social Financing) and education (Senegal Quality and Equity of Basic Education). Sub-component 2.3: Cash transfer program management [US$2. Omillion] 48. This sub-component will provide support to the DGPSN for the implementation of the PNBSF. In particular, this sub-component will finance: (i) management costs at local and central levels, (ii) equipment and expenditures directly linked to the daily management of the PNBSF (office supplies, material, communications, transportation, maintenance and insurance costs, refurbishing and maintenance costs for equipment, supervision costs, etc. at central and local levels); and (iii) the training of local committees and communities on the PNBSF and its processes. Sub-component 2.4: Cash transfer program evaluation agenda [US$0.9million] 49. This sub-component will support the systematic monitoring and evaluation of the PNBSF. Monitoring and evaluation are critical to the success of the program, as they allow 40 learning from experience and continuously improving program design and implementation. The monitoring and evaluation activities financed by this sub-component will be closely coordinated with the broader monitoring and evaluation activities led by the DGPSN as part of its role of coordinator of the social safety net system. In addition to the implementation of the Management Information System of the PNBSF, and the regular monitoring of its management indicators, this sub-component will contribute to supporting: * Regular process evaluations to assess the program's operations. The Project will finance a process evaluation in 2016 (a first evaluation is being organized in the first semester of 2014 with trust fund resources to review the initial phase of the education element of the program). The process evaluations will review all the processes and systems of the program, to verify whether the procedures described in the users' manual are properly implemented, identify potential bottlenecks or issues, and propose improvements. * Beneficiary surveys and spot checks. The Project will support beneficiary surveys and spot checks during the implementation period to gather beneficiary perception and assess the quality of implementation. These will be carried out on a randomly selected number of communities. This information will serve to adjust program design, including the communication and accompaniment strategy. Particular attention will be paid to reviewing the payment process in the context of these spot checks. Local NGOs and community groups are expected to play a critical role in monitoring the program, building on their important capacity, including the capacity developed in the context of their contribution and collaboration with past or ongoing Government programs and through the network of local Development Community Volunteers (Acteurs Porteurs de Dynamiques Communautaires, APDC). * Impact evaluation. An impact evaluation will be undertaken to measure the impact of the program on households and local economics. A recognized international firm will be contracted for the design and implementation of the impact evaluation. The timing and specific questions to be addressed by the impact evaluation, as well as the identification methodology remain to be decided. Initial ideas include the comparison of the impact of different packages of interventions (for instance contrasting households who only benefit from the transfers and basic information with households who also benefit from specific accompaniment activities such as tutoring or training or from a more intense intervention). In such cases, the additional measures would be provided on a random sample of households or localities. 41 Annex 3: Implementation Arrangements Senegal: Safety Net Project I. Project Institutional and Implementation Arrangements 1. The Inter-ministerial Committee for piloting the National Social Protection Strategy (Comit Interministiriel de Pilotage de la Stratigie Nationale de Protection Sociale, CIP/SNPS) will oversee the Project's implementation. The committee was established by Decree in 2012, and later amended to name as its co-presidents Minister of Finance and the General Delegate (D ligud Gndral) of the Social Protection Delegation (D ligation Gndrale 6 la Protection Sociale et 6 la Solidarit Nationale, DGPSN) . The CIP/SNPS is a multi-sectoral committee that includes, among others, representatives of the Ministries in charge of Finance, Education, Health, Women and Family, Employment, Agriculture, and the DGPSN. The CIP/SNPS is a high-level committee, mostly comprised of Ministers, and is responsible for overall decisions on the formulation and implementation of the country's social protection strategy. The CIP/SNPS will review and approve the strategic decisions regarding the Project implementation on an annual basis. 2. The Social Safety Net Steering Committee (Comit de Pilotage des Filets Sociaux, CPFS) will be created by an administrative order (arritd administratif) and will lead the Government's efforts in terms of social safety nets interventions. The CPFS will be inter-sectoral and multi-stakeholder in nature, and involve technical representatives from all sectors involved in social safety nets. This CPFS will be responsible for the regular technical oversight of the Project. In particular, it will evaluate the Project design and approve Project implementation plans and annual budget, and oversee the Project implementation. The CPFS will meet at least once a year to review and approve work plans, budgets and reports, and as necessary, hold special meetings at the request of the President. The CPFS will be inter-sectoral in nature, and involve technical representatives from all sectors involved in social safety nets, including the DGPSN, the Directorate for Investment (Direction de l'Investissement, DI) and the Directorate for Economic and Financial Cooperation (Direction de la Coopbration Economique et Financiere, DCEF) from the Ministry of Economy and Finance, and representatives from the Direction Gndrale de l'Action Sociale (DGAS) and the Unit for Universal Health Coverage (Cellule d'Appui 6 la Couverture Maladie Universelle, CACMU) of the Ministry for Health and Social Action; of the Malnutrition Eradication Unit (Cellule de Lutte contre la Malnutrition, CLM) attached to the Office of the Prime Minister; of the Unit for the Monitoring of Poverty Reduction Programs (Cellule de Suivi Opirationnel des Programmes de Lutte contre la Pauvretd, CSO/PLCP) in the Ministry of Women, Family, and Youth; of the Direction de la Planification et de la Riforme de 'Education of the Ministry of National Education and of the Social Protection Directorate (Direction de la Protection Sociale, DPS) in the Ministry of Employment. 3. The DGPSN will have the overall responsibility for the Project's implementation. The DGPSN was created in 2012, and has built its experience through the implementation of the first phase of the PNBSF. The institutional and implementation arrangements for the Project will build on this experience, which involved central and local government institutions and established successful partnerships with development partners, such as UNDP, UNICEF and the 42 World Food Program. In the future, if the institutional arrangements for the sector to evolve, some of the Project activities could be undertaken by other institutions in the sector. In this case, the Government, with the World Bank, would evaluate these institutions' fiduciary and implementation capacity, and the Project would need to be restructured. 4. The DGPSN will be responsible for all disbursements and procurement related to the Project in accordance with the World Bank's procedures. It will manage the operational accounts. The coordinator will supervise all activities related to the Project's implementation, included those implemented by various units in the DGPSN as well as Government structures at the central and decentralized level (regional, departmental, and community levels) from all sectors involved. 5. The main activities of the DGPSN include: (i) development, implementation and monitoring of plans of activities and budget for the Project; (iii) coordination with other development partners and stakeholders in the sector of social protection; (iv) production of interim and annual financial reports; (v) development and maintenance of the tools of the Social Safety Net System; (vi) implementation of the PNBSF; and (vii) implementation of core capacity building activities for the main actors involved in the sector, both centrally and locally. In the future, as the institutional arrangements for the sector evolve (with the establishment of the Autonomous Social Protection Fund (Caisse Autonome de Protection Sociale Universelle, CAPSU), for instance, as described in Box 1, the management of the PNBSF could shift to another institution, to allow the DGPSN to focus on its central policy definition, coordination and monitoring role. 6. Sectoral institutions (health, education, nutrition, employment, agriculture, etc.) play a critical role in the implementation of a series of demand-side activities, in addition to their participation in the various committees mentioned above. These activities - including service delivery, information campaigns and family accompaniment - complement the demand-side intervention that aims at increasing demand for services through the cash transfer program. Sectoral institutions will also monitor households' compliance with the conditionalities of the cash transfer program. 7. At the local level, the Project will be implemented with support from existing decentralized and de-concentrated government structures. These institutions include local administrative actors from De-concentrated Sectoral Ministries (Services Techniques Dconcentris de l'Administration), administrative institutions (Regions, D6partements, Arrondissement), elected local authorities (maires, conseils de quartier, chefs de village), and population representatives (NGOs, religious and civil authorities). 8. Besides the DGPSN and sectoral institutions, the Project also involves selected central institutions in the design and implementation of the various activities. In particular, at the central level, actors include the National Agency for Statistics and Demography (Agence Nationale de la Statistique et de la Dimographie, ANSD), the Agency for the State's Information Technology (Agence de l'Informatique de I'Etat, ADIE), the National Direction for Public Accounting and Treasury (Direction Gndrale de la Comptabilit Publique et du Trdsor, DGCPT), the Direction for Investment and the Direction for Economic and Financial Cooperation of the Ministry of 43 Economy and Finance. Finally, the financial institutions responsible for the payment of cash transfers to beneficiary households will play an important role. The agency is currently the Post Office, but other options may be explored during Project implementation, with a view to identify a more efficient and cheaper payment mechanism. 9. A Project Implementation Manual, covering all aspects of Project implementation, including the cash transfer program and all financial, administrative and accounting procedures, will be validated and adopted prior to effectiveness. The Project Implementation Manual will be regularly updated as needed (and will further define the modalities for the transfers to households with young children and elderly members). Any changes that concern activities supported by this Project will be agreed with the Bank prior to disbursement for these activities. II. Financial Management, Disbursements and Procurement 10. A Project Implementation Manual, covering all aspects of project implementation, including the cash transfer program and all financial, administrative and accounting procedures, will be developed and adopted prior to effectiveness. The Project Implementation Manual will be regularly updated to include additional elements as needed (in particular the definition of the transfer modalities for households with young children and elderly members). Any change that concern activities supported by this Project will be agreed with the Bank prior to disbursement for these activities. A. Financial Management arrangements 11. Budgeting arrangements. The budgeting process and monitoring will be clearly defined in the manual of financial, administrative and accounting procedures. The budget will be adopted by the Program Steering Committee before the beginning of the year. The Steering Committee will also monitor execution. Annual draft budgets will be submitted to the Bank's non-objection before adoption and implementation. 12. Accounting arrangements. The current accounting standards in use in Senegal for ongoing Bank-financed Projects will be applicable. The West African Accounting System (Systeme Comptable Ouest Africain, SYSCOA) is the assigned accounting system in West African Francophone countries. Project accounts will be maintained on an accrual basis, supported with appropriate records and procedures to track commitments and to safeguard assets. Annual financial statements will be prepared by the DGPSN in accordance with the SYSCOA. 13. Financial Reporting Arrangements. The DGPSN will produce unaudited Interim Financial Reports (IFR) that will include sources and uses of funds by Project expenditure type and a comparison of budgeted and actual Project expenditures (committed and disbursed) to date and for the quarter. The IFRs are to be produced quarterly and submitted to the Bank within 45 days after the end of the calendar quarter. DGPSN will produce annual Financial Statements, and these statements will comply with SYSCOA and World Bank requirements. 44 14. Internal control arrangements. The manual of financial, administrative and accounting procedures has been updated and must now be validated and adopted. The purpose of the update is to: * Take into account the Project's specificities and clearly define FM procedures; * Give clear description of cash transfers documentation; * Provide a clear description of the internal control systems that will be used by the Project; * Clarify roles and responsibilities of all stakeholders; * Give clear description of budget monitoring process. 15 In order to strengthen the internal control environmental, the DGPSN has started the recruitment of an internal auditor. This auditor would have skills and experience satisfactory to the World Bank. The cash transfers will be monitored in a continuous manner, on the basis of the reporting made by the payment agency and of regular spot checks. 16 External Auditing arrangements: An external auditor with qualification and experience satisfactory to the World Bank will be recruited to conduct an annual audit of the Project's financial statements. The Auditor will express an opinion on the Annual Financial Statements of the Project and of the DGPSN, and perform his audit in compliance with International Standards on Auditing (ISA). The Auditor will be required to prepare a Management Letter detailing his observations and comments, providing recommendations for improvements in the internal control environment. The audit report on the annual Project financial statements and activities will be submitted to IDA within six months after the end of each Project fiscal year. Table 3.1: External audit arrangements Entity Audit report Due Date DGPSN Annual audited financial statements and End of June Management Letter (including reconciliation of the Designated Accounts with appropriate notes and disclosures). B. Flow of Funds and Disbursement Arrangements 17 Disbursement Methods. Disbursements will be transactions-based. Direct Payment and Statement of Expenditures methods will apply as appropriate. A Designated Account (DA) will be opened in a commercial bank to facilitate payment for eligible expenditures. The Designated Account will be managed according to the disbursement procedures described in the manual of financial, administrative and accounting procedures in compliance with the Disbursement Letter. The DA will be managed by the Directorate of Investment (DI) that is an entity of the Ministry of Economy and Finance in charge of managing the designated accounts in Senegal, in coordination with the DGPSN. The allocation of the Designated Account will approximately cover four months of expenditures. The minimum value of applications for direct payment and special commitment is 20 percent of outstanding advance made to the designated account. 45 18 Flow of Funds Arrangements. Funds flow arrangements for the Project are as follows: Credit Account nFunds) DP 1 (Washington) at the World Bank Government Designated Accounts DGPSN (Commercial Bank) Suppliers / Consultants Managed by DI Beneficiaries .o.Funds =p.Transmission of documents (report invoice, withdrawal application audit report IFR, direct payment), goods, etc 19 Disbursement Categories. The following table specifies the categories of Eligible Expenditures that may be financed out of the proceeds of the Financing ("Category"), the allocations of the amounts of the Financing to each Category, and the percentage of expenditures to be financed for Eligible Expenditures in each Category: Table 3.2: Expenditures per category Category Amount of the Financing Percentage of Expenditures to Allocated (expressed in SDR) be Financed (inclusive of Taxes) (1) Goods, works, non- 16,300,000USD 100% of amounts disbursed consulting services, Training, Operating Costs, audits and consultants' services under Components 1 and 2 of the Project (except Cash Transfers under Sub-Component 2.1 of the Project) (2) Cash Transfers under Sub- 11,200,000USD 100% of amounts disbursed Component 2.1 of the Project under the respective Cash (for the young children and Transfers elderly components) (3) Cash transfers under Sub- 13,000,000USD 100% of amounts disbursed Component 2.1 of the Project under the respective cash (for the education component) transfers TOTAL AMOUNT 40,500,000USD 46 20 Financial Management Action Plan: The following actions need to be taken in order to enhance the financial management arrangements for the Project: Table 3.3: Financial Management Action Plan Action Date due by Responsible 1 * Recruit an accountant with skills and experience Not later than two (2) DGPSN satisfactory to the World Bank months after * Update the existing accounting software effectiveness DGPSN Not later than two (2) months after effectiveness 2 * Validate and adopt the updated manual (PITM) Condition of DGPSN effectiveness * Finalize the recruitment of an internal auditor DGPSN with skills and experience satisfactory to the Not later than four (4) World Bank months after effectiveness 3 * Selection of an external auditor with No later than four (4) DGPSN qualification and experience satisfactory to the months after World Bank. effectiveness C. Procurement arrangements General 21 The procurement activities will be managed by the Implementing Agency (DGPSN) named "The Agency". The Agency will have overall responsibility in carrying out the following activities: (i) managing the overall procurement activities, and ensuring compliance with the procurement process described in the relevant manuals; (ii) preparing and updating procurement plan annually; (iii) preparing bidding documents, and draft Request For Proposals (RFPs) evaluation reports and contracts in compliance with WB procedures; and (iv) seeking and obtaining approval of national entities and of IDA on procurement documents as required. 22 Procurement of goods and consultants' services will be carried out in accordance with (i) the "Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants", dated October 15, 2006, as revised in January 2011; (ii) the "Guidelines: Procurement of Goods, Works and Non-Consulting Services under IBRD Loans and IDA Credits" published by the World Bank in January 2011; (iii) "Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits & Grants by World Bank Borrowers" dated January 2011; (iv) the provisions stipulated in the Financing Agreement; and (v) the Procurement Plan approved by the World Bank. 47 National Procurement System and Procurement Reforms 23 The Government substantially improved the country's public procurement system to comply with the West African Economic and Monetary Union (WAEMU) Procurement Guidelines and international standards including: (i) the setting up of an Independent Regulatory Body (ARMP) and a Procurement Control Department (DCMP); (ii) an electronic system (SIGMAP) for collecting, disseminating, managing procurement information and monitoring procurement statistics and procurement complaints; and (iii) a set of national standard bidding documents prepared on the basis of IDA's standard bidding documents (SBDs). 24 In general, Senegal's procurement laws and regulations do not conflict with IDA's Guidelines on procurement; IDA procedures take precedence over these laws and regulations. 25 National Competitive Bidding (NCB) procedures may be used for work contracts with a cost estimate less than US$15,000,000 and for goods contracts less than US$1,000,000. The procedures may be those described in "Section 2 - Appel doffres ouvert" in Chapter 4 of the Title III of the National Procurement Code. 26 Some provisions of this code are not concordant with the World Bank's Procurement Guidelines: (1) the procurement of fuel for vehicles for the public administration (the provisions 3.4c(i) of the public procurement code) and the procurement of hotels services (the provisions 3.4c(iii) of the code) may not be submitted to the code and may not be done with transparency and equity; (2) domestic preference may not be used in NCB, and bidders from any country may be eligible for domestic preference (provision 50 of the code) instead of national bidders only; (3) possible restrictions excluding foreign bidders' participation in direct contracting for operations financed under the National Budget (provision 52 of the code); (4) the general procurement notice (GPN) is prepared for each fiscal year instead of the duration of the Project; the publication of this GPN and of all International Competitive Bidding (ICB) procurement notices on UNDB portal is not clearly mentioned as mandatory (provision 56 of the Senegal Code of public procurement); (5) the paragraphs 2(b) and 2(c) of the provision 76 related to direct contracting in the context of imperious urgency refers to possible implication of political authorities in the related cases, which leads to political interference in the procurement process; and (6) the provision 108 related to quality control, allowing possible price refection in case the goods, works or service delivered are not fully compliant with the specifications/description/terms of reference inserted in the contract. These provisions have been seen as weaknesses in the procurement regulation. In particular, the provisions related to (i) the procurement of fuel and hotel services, (ii) the possible involvement of political authorities in direct contracting for imperious urgencies and (iii) the quality control and possible price refection, have been raised by the Association and discussed with the authorities for improvement. Special attention should be accorded to these provisions. 27 With regard to the procurement code, in order that the above referred procurement method designated as "Appel d'Offres Ouvert" be acceptable to IDA to be used for NCB, the following special requirements will need to be followed: (i) bids shall be advertised in at least one national newspaper with wide circulation; (ii) bid evaluation, bidder qualification and award criteria shall be specified clearly in the bidding documents; (iii) bidders shall be given an 48 adequate response time (minimum four weeks following the date of the invitation to bid or the date of availability of the bidding documents, whichever is later) to prepare and submit bids; (iv) bids shall be awarded to the lowest evaluated bidder; (v) eligible bidders, including foreign bidders, shall not be precluded from participating; and (vi) no preference margin shall be granted to domestic contractors. 28 In addition, the following other dispositions should be applied for contracts financed under the Project, irrespective of the procurement method: (i) The GPN will cover the whole duration of the Project execution with the possibility to be updated when needed; the GPN as well as all ICB procurement notices, will be advertised in at least one national newspapers with wide circulation; (ii) in addition to not using the preference margin in case of NCB, if a preference margin is used in any ICB contract, it will be applied in accordance with the World Bank Procurement Guidelines; (iii) the following provisions of the national procurement code will not apply: (i) the provisions 3.4c(i) related to the procurement of fuel for vehicles for the public administration, and the provisions 3.4c(iii) referring to the procurement of hotels services: in the need of procuring such goods and services, reference will be made to the relevant methods described in the Procurement Guidelines; (ii) the provision 52 containing the possibility to exclude foreign bidders' participation in direct contracting; (iii) the paragraphs 2(b) and 2(c) of the provision 76, involving political decisions in the use of direct contracting in the context of imperious urgency; and (iv) the provision 108 related to quality control and possible price refection. 29 Furthermore, in accordance with para.1.16 (e) of the Procurement Guidelines, each bidding document and contract financed out of the proceeds of the Financing shall provide that: (i) the bidders, suppliers, contractors and subcontractors shall permit IDA, at its request, to inspect their accounts and records relating to the bid submission and performance of the contract, and to have said accounts and records audited by auditors appointed by the association; and (ii) the deliberate and material violation by the bidder, supplier, contractor or subcontractor of such provision may amount to an obstructive practice as defined in paragraph 1.16(a)(v) of the Procurement Guidelines. Procurement methods Procurement of works, goods and non-consulting services 30 Procurement of works. It is not expected to procure works under this Project; however, if any work is to be procured in the future, ICB will be the procurement method by default. Other methods which may be used when works are to be procured meet requirements spelled out in the corresponding paragraph of the procurement Guidelines for such procedures, i.e: NCB as per paragraphs 3.3 and 3.4; shopping as per paragraph 3.5; and direct contracting as per paragraphs 3.7 and 3.8. 31 Procurement of Goods. Goods to be procured under this Project would include: vehicles and motorcycles, office equipment, printing documents, tools, IT equipment, software, equipment and other furniture needed for the Project implementation. Given the new thresholds that apply for Senegal, it is not expected to procure goods by ICB; however, if any good to be 49 procured in the future, which is above the threshold, ICB will be the procurement method by default. Other methods may be used when the related goods meet requirements spelled out in the corresponding paragraph of the Procurement Guidelines for such procedures. For instance, NCB (for example, for goods available locally) as per paragraphs 3.3 and 3.4; shopping as per paragraph 3.5; and direct contracting as per paragraphs 3.7 and 3.8. 32 Procurement of non-consulting services. Non-consulting services procured under the Project would include general services for the Project implementation, services for training and workshop sessions, insurances, maintenance, etc. These services are not expected to be at high value; therefore, they will be procured using shopping procedures as per paragraph 3.5 of the Procurement Guidelines. 33 Contracts estimated at less than US$15,000,000 for works and contracts for goods available locally, or non-consulting services with a cost estimate at less than US$1,000,000, may be awarded through NCB procedures. Contracts for small works (if any), small goods such as office supplies, minor equipment and furniture available locally, or non-consulting services, with a cost estimate equal or bellow US$100,000, may be procured under the shopping procedure in accordance with the provisions 3.5 of the Procurement Guidelines. 34 Procurement for works (if any), goods and non-consulting services will be carried using the Bank's Standard Bidding Documents (SBD) for all ICB (if any). In the case of NCB, the Borrower has developed National SBD; however, these ones may not be up to date in particular with regard to provisions related to fraud and corruption. As such, it has been agreed that for this Project, the Bank's SBD be adapted (or modified to meet the exceptions authorized under NCB) and used for NCB. In the case of shopping, the procurement will be done in accordance with the Memorandum "Guidance on Shopping" issued by the Bank, date June 9, 2000 (provided this memorandum is not contradictory with the Procurement Guidelines) and the "Guide for the procurement of small contracts" issued on February 1, 2011. Selection of Consultants 35 Consultant services to be procured would include: studies, development of manuals of procedures, technical assistance, financial audit, and training. Consultants will be selected using the Quality and Cost-Based Selection (QCBS) method in most cases. In other cases specified in the Procurement Plan (PP) the following methods will be used: (i) Least Cost Selection (LCS); (ii) Selection Based on the Consultants' Qualifications (CQS); (iii) Single Source Selection (SSS) and (iv) Individual Consultants (IC) Selection (either through competitive selection or single source). 36 For competitive selection methods, the selection will be done necessarily (i) through requests for expressions of interest (REls) except for the Selection Based on the Consultants' Qualifications and the selection of individual consultants for which REls are not mandatory, and (ii) using the Bank's Standard Request for Proposals where required. For simplified selection methods such as the Selection Based on the Consultants' Qualifications and the Selection of Individual Consultants, the "Guide for the procurement of small contracts" issued on February 1, 2011 may be used (in the present case for the use of CQS or Individual Consultants Selection). 50 37 Short lists of consulting services with a cost estimated to less than US$300,000 equivalent per contract may be composed entirely of national consultants, in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines. Operating Costs 38 The Credit would finance the incremental operating costs related to the implementation of the Project. They would be covered whenever possible using shopping procedures or using the Project Operational Manual acceptable to the Bank. Assessment of the agency's capacity to implement procurement 39 An assessment of the Agency's capacity to implement procurement activities was conducted in November 2013. The assessment reviewed the organizational structure for implementing the Project and the interaction between the staff responsible for procurement for the Project and the Agency's relevant central unit for administration and finance. 40 The Agency is an organism with financial autonomy. It is led by an Orientation Committee (Conseil d'Orientation) which defines orientations and approves budgets and a General Delegate (D ligud Gndral) who manages the institution. The General Delegate is supported by a Secretary General, a judge at the Court of Auditors (Magistrat de la Cour des Comptes) who holds a Masters in Procurement. The top management comprises the following groups: i) Finance and Administration, ii) Accounting, iii) Analysis and Planning, iv) Social Protection Strategy, v) Mutual Funds, vi) National Solidarity Fund, vii) Food Security Secretariat, and viii) Communication. 41 The Agency is familiar with national procurement procedures and standard bidding documents, but not with the World Bank procurement and consultant guidelines. The Agency has a manual of financial, administrative and accounting procedures that must be updated to take into account the specificities of the proposed Project. The Agency will be responsible for the technical preparation of procurement tenders related to all Project activities. The World Bank procedures and standard bidding documents will be used. The procurement documents will then be submitted to the national entities and IDA for review, following the guidelines for procurement thresholds. 42 The key risks identified are as follow: i) the staff involved in the Project and responsible for process control and approval are unfamiliar with World Bank procedures. This could cause misunderstanding in the interpretation of Bank procedures, leading to slowness in procurement decisions, ii) the Agency's manual of financial, administrative and accounting procedures doesn't take into account World Bank procedures, iii) The Agency still lacks sufficient physical space for filing procurement documents. The overall procurement risk is substantial. 43 The residual Project risk for procurement will be considered moderate after adoption of the following mitigation measures: (i) recruit a qualified, full-time procurement specialist consultant to ensure compliance with World Bank procurement procedures and coach the 51 Agency's team on World Bank procedures, (ii) update the manual of financial, administrative and accounting procedures to take into account the proposed Project, (iii) find more space and purchase appropriate equipment to organize and secure files to ensure compliance with the Bank's procurement filing manual. A procurement plan is presented in Annex 3. Frequency of Procurement Supervision 44 In addition to the prior review of documents to be carried out from Bank offices, the capacity assessment of the implementing agencies has recommended two supervision missions a year; during one of those missions, a post review of procurement will be carried out. Procurement Plan 45 The Borrower has developed a preliminary Procurement Plan for Project implementation during an initial period of 18 months, which provides the basis for the procurement methods. The procurement plan was approved by the Bank on February 13, 2014. However, it was agreed that this plan will remain dynamic and updated to reflect more details in the implementation of the project when decision will be taken on these details. 52 Goods, Works, and Non Consulting Services Prior review thresholds: Method Levels Comments 1. Goods and non-consultancy services =or>500,000 USD Prior review 3. Works =or>10,000,000 USD Prior review 5. Direct Contracting All contracts Prior review Ref Contract Estimat Procure P-Q Domes Re- Expected Comments (Description) ed ment tic Pre- view Bid-Opening No. Cost Method ference by Date (USD) Bank Sub-component 1.1: Operational Tools for the Social Safety Net System 1 Catering costs and room hire in Dakar for training of 22,038 shopping NA NA Post 1 March 2015 6 training sessions of 3 days surveyors and data entry operators' 2 Catering costs and room hire in Central region for training 18,365 shopping NA NA Post 1 March 2015 5 training sessions of 3 days of surveyors and data entry operators' 3 Catering costs and room hire in Southern region for training 18,365 shopping NA NA Post 1 March 2015 5 training sessions of 3 days of surveyors and data entry operators' 4 Catering costs and room hire in Northern region for training 18,365 shopping NA NA Post 1 March 2015 5 training sessions of 3 days of surveyors and data entry operators' 5 Catering costs and room hire in Eastern region for training 18,365 shopping NA NA Post 1 March 2015 5 training sessions of 3 days of surveyors and data entry operators' 6 Various documents printing for household survey 150,000 NCB NA NA Post 1 March 2015 7 Vehicles hire for the organisation of the households' survey 29,400 shopping NA NA Post 1 March 2015 21 days in 14 regions 8 Purchase of software tools to establish unique registry 25,000 shoppin NA NA Post 1 August g 2014 9 Equipment for the establishment of the unique registry 116,40 NCB NA NA Prior 15 August 4 servers, storage, switch, and data collection 0 2014 56 computers, 2 laptops Sub-component 1.2: Institutional capacity of the Social Safety Net System's actors 10 Catering costs and room hire for all trainings and 65,560 shoppin NA NA Post 1 July 2014 5 1-day-sessions, 1 2-day- workshops taking place in Dakar under this g session, 6 3-day-sessions, component 4 5-day-sessions; 2 6-day- sessions 11 Flight tickets 12,000 shoppin NA NA Post 15 Sept 2014 6 travels in total g 12 Catering costs and room hire for trainings at the 27,152 shoppin NA NA Post 15 July2014 4 5-day- sessions and 4 3- regional and departmental level in the northern region g day-sessions 53 Ref Contract Estimat Procure P-Q Domes Re- Expected Comments (Description) ed ment tic Pre- view Bid-Opening No. Cost Method ference by Date (USD) Bank of Senegal 13 catering costs and room hire for trainings at the 33,,94 shoppin NA NA Post 15 July 2014 5 5-day- sessions and 5 3- regional and departmental level in the southern region 0 g day-sessions of Senegal 14 catering costs and room hire for trainings at the 33,940 shoppin NA NA Post 15 July 2014 5 5-day-sessions and 5 3- regional and departmental level in the Central region g day-sessions of Senegal Sub-Component 2.1: Monetary transfers to beneficiary households 15 Transfer costs for cash transfers to 15 000 vulnerable 150,00 NCB NA NA Post 30 Sept. 2014 Represents around 10% of households 0 total transfer costs. Contract will be for lyear, renewable depending on performance Sub-component 2.2: Accompanying measures implemented by the DGPSN, sectorial actors, and local institutions 16 Equipment and material for the ministry of Family and 120,00 NCB NA NA Post. 1 July 2015 to be defined at a later ministry of Education 0 stage 17 Equipment and material for the ministry of health and 120,00 NCB NA NA Post. 1 Oct.2015 to be defined at a later nutrition cells 0 stage Material for the communication campaign 200,00 NCB NA NA Post. 15 Sept. 2014 to be defined at a later 0 stage Sub-component 2.3: Cash transfer program management 18 catering, accommodation and room hire for training of 10,000 shoppin NA NA Post 1 Aug. 2014 2 five-day-sessions trainers at regional/ departmental level in Dakar g 19 catering, accommodation and room hire for training of 10,000 shoppin NA NA Post 1 Aug2014 2 five-day-sessions trainers at regional/departmental level in Northern g region 20 catering, accommodation and room hire for training of 10,000 shoppin NA NA Post 1 Aug 2 five-day-training trainers at regional/ departmental level in Southern g 2014 region 21 catering, accommodation and room hire for training of 15,000 shoppin NA NA Post 1 Aug 3 five-day-training trainers at regional/ departmental level in Central g 2014 region 54 Ref Contract Estimat Procure P-Q Domes Re- Expected Comments (Description) ed ment tic Pre- view Bid-Opening No. Cost Method ference by Date (USD) Bank 22 accounting software for the DGPSN 16,500 shoppin NA NA Prior 1 June 2014 g 23 Computer and office supplies for the DGPSN and the 57,600 shoppin NA NA Prior 1 June 2014 14 regional offices g 24 Insurance for 3 cars and 14 motorbikes 3,450 shoppin NA NA Post 1 Aug2014 g 25 Maintenance contract for the 3 cars 4,500 shoppin NA NA Post 1 Sept- 2014 g 26 Maintenance contract for IT material in the DGPSN 11,300 shoppin NA NA Post 15 Sept- and in the 14 regional offices g 2014 27 3 cars for the DGPSN and 14 motorbikes for regional 177,00 NCB NA NA Prior 1 July 2014 two 4x4 and one pick-up coordinators 0 differen t lots 28 Various material and equipment for the DGPSN and shoppin NA NA Post 1 July 2014 Projector, refrigerators, regional offices 64,900 g stabilisers, inverters, camera, computers, laptops, printers, software, air conditioners 29 Furniture for the DGSPN offices and the 14 regional 26,150 shoppin NA NA Post 1 July 2014 Chairs, desks, meeting offices g tables, filing cabinets Procurement concerning several sub-components (sub-components 1. 1; 1.2; and 2.3) 30 supplies for trainings and workshops 90,000 shoppin NA NA Post 15 July 2014 26 sessions in component g 1.1; 48 in component 1.2 and 749 in component 2.3 31 Fuel for cars and motorbikes 86,340 shoppin NA NA Post 1 July 2014 For the sub-component 1.1 I_ g _ 1 1_1_11and 2.3 46 ICB contracts estimated to cost above US$500,000 per contract for goods and non-consulting services, US$ 10,000,000 per contracts for works, and the first two contracts irrespective of the cost estimate and all direct contracting will be subject to prior review by the Bank. 55 Consulting Services Prior review thresholds: Selection method Prior review level Comments 1. Selection of firms >or=300,000 USD Prior review 2. Selection of individual consultants >or-100,000 USD Prior review 3. Single source for firms and individual All contracts Prior review consultants 1 2 3 4 5 6 7 Ref Description of Assignment Estimated Selection Review Expected Comments Cost Method by Bank Proposals No. (USD) (Prior / Submission Post) Date Sub-component 1.1: Operational Tools for the Social Safety Net System 1 Selection of consultants for training of surveyors and data 23,400 IC Post 1 Feb. 2015 several trainers will be entry operators for the organisation of households survey selected 2 Consultant to work on the software expansion of the unique 112,000 Firm Priori 15 July 2014 registry QSBC 3 Consultant to draft the Project manual 6,000 IC Post 15 Aug. 2014 4 Consultant pour to draft the manual of financial and 6,000 IC Post 15 Aug. 2014 administrative procedures 5 Consultant to draft the capacity strengthening manual 6,000 IC Post 30 Sept. 2014 6 Consultant to draft the monitoring and evaluation manual 6,000 IC Post 15 Oct. 2014 7 Consultant to draft the communication manual 6,000 IC Post 30 June 2014 8 Consultant to carry out the diagnostic of sectorial actors' 10,000 IC Post 15 July 2014 management information systems me 9 Support (intellectual services) to the sectors to strengthen 10,000 IC Post 15 Jan. 2015 Content to be defined at a their management information system I later stage Sub-component 1.2: Institutional capacity of the Social Safety Net System's actors 10 Project coordinator 126,000 single Prior 15 May 2014 source 11 expert the unique registry 72,000 IC Prior 15 May 2014 12 Expert safety net 72,000 IC Prior 15 May 2014 13 Expert monitoring and evaluation 72,000 IC Prior 15 May 2014 56 1 2 3 4 5 6 7 Ref Description of Assignment Estimated Selection Review Expected Comments Cost Method by Bank Proposals No. (USD) (Prior / Submission Post) Date 14 Expert accompaniment 72,000 IC Prior 15 May 2014 15 IT specialist 72000 IC Prior 15 May 2014 16 Procurement specialist 72,000 IC Prior 15 May 2014 17 Accountant 36,000 IC Prior 15 May 2014 18 Project coordinator assistant 18,000 IC Prior 15 May 2014 19 Assistant to the unique registry coordinator 18,000 IC Prior 15 May 2014 20 Regional coordinators of the DGPSN 378,000 IC Prior 15 May 2014 14 coordinators in total 21 consultant for DGPSN training 5,500 IC Post 30 Sept. 2014 2 five-day-sessions 22 Consultant for the trainings at the regional and 33,040 IC Post 15 July 2014 several trainers will be departmental levels selected. 36 sessions in total; 18 5-day-sessions and 18 3-day-sessions 23 Consultants for the training of the technical committee 7,200 IC Post 30 Nov. 2014 1 five-day-sessions and 1 seven-day-session 24 Comparative studies, research actions and evaluation 80,000 Firm Post Oct. 2014 The exact content of these activities QSBC activities will be defined at a later stage 25 external audit 17,000 Firm Prior 15 Feb.2015 1 audit in 2015 QSBC Sub- component 2.2: Accompanying measures implemented by the DGPSN, sectorial actors, and local institutions 26 Support (intellectual services) for education ministry 240,000 CI Prior 15 June 2015 Exact needs will be 27 Support (intellectual services) for ministry of health 240,000 CI Prior 15 June 2015 defined at a later stage 28 Support (intellectual services) for ministry of family 240,000 CI Prior 1 Aug. 2015 and split into contracts 29 Support (intellectual services) for nutrition cell 240,000 CI Prior 1 Aug. 2015 30 intellectual services for the communication campaign 250,000 Firms Prior 15 Aug. 2014 I QSBC Sub-component 2.3: Cash transfer program management 31 Consultants for the training of trainers at the regional and 10,800 CI Post 15 Aug. 2014 Several trainers will be departmental levels selected. 9 five-day- sessions Sub-component 2.4: Cash transfer program evaluation agenda 57 1 2 3 4 5 6 7 Ref Description of Assignment Estimated Selection Review Expected Comments Cost Method by Bank Proposals No. (USD) (Prior / Submission Post) Date 32 Consultant for spot-check evaluations 50,000 Firms Post 15 Sept. 2014 QCBS 33 Consultant for impact evaluations 200,000 Firms Post 15 Sept. 2014 QCBS 47 Consultancy services estimated to cost above US$300,000 per contract for firms and US$100,000 per contract for individual consultants, the first two contracts irrespective of the cost estimate and every single source selection of consultants (firms) for assignments will be subject to prior review by the Bank. 48 Short lists composed entirely of national consultants: Short lists of consultants for services estimated to cost less than US$300,000 equivalent per contract may be composed entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines. 58 Environmental and Social (including safeguards) 49 The Project is not expected to have any adverse environmental impacts. Indeed, the Project does not require any land acquisition leading to involuntary resettlement and/or restrictions of access to resources and livelihood. The Project does not finance any construction or health services which could result in waste. Hence, the Project is classified as Category C. 50 The objective of the activities supported by the proposed Project is to reduce poverty and increase investments in human capital among the poorest households. The Project is expected to have a positive impact on all direct and indirect beneficiaries, including the most vulnerable households throughout Senegal. Beneficiary households will have to comply with conditionalities linked to the use of health and education services. In case of non-compliance, the situations of non-complying households will be analyzed by the PNBSF in order to understand the reasons for non compliance and to seek options to support households in complying, before considering a potential suspension or exclusion from the program. 51 The targeting of households for the PNBSF and, more generally, the establishment of a unique registry, are implemented using a transparent methodology and efficient instruments. This methodology combines community targeting, verification of the vulnerability of the household with a proxy-means test, and a geographic targeting that ensures the poorest households are reached across the national territory. These mechanisms should result in an efficient and accurate targeting of the most vulnerable population groups. 52 Finally, a grievance mechanism will be established to respond to specific complaints by beneficiaries or other members of society at the different stage of the implementation of the unique registry, the PNBSF and more generally the social safety net system (identification of households, surveys, registration, application of the proxy-means test, registration in programs, quality of services received, regularity of payments, etc.). This grievance system, together with the regular process evaluation and spot checks will promote social accountability. Monitoring & Evaluation 53 Monitoring and evaluation is a key element of the Project, since it lays the foundations for the regular assessment of the Project's performance. In this Project, one of the core focus of Component 1 is to build the capacity within the DGPSN to monitor and evaluate social safety net programs, and to design interventions that respond to the diagnosed issues. In particular, the component supports the development of a Management Information System with a series of modules that each program and the DGPSN will be able to use to monitor effectively the implementation of programs. It also supports the development of procedures to monitor and evaluate all programs, and the building of sectoral agencies' capacity to implement them. 54 Component 2 also supports a series of monitoring and evaluation activities for the cash transfer program, including: (i) process evaluation; (ii) regular spot checks and beneficiary surveys; and (iii) an impact evaluation. Finally, the DGPSN will organize annual financial audits of the Project, annual reviews of progress, and a mid-term evaluation. 59 Annex 4: Operational Risk Assessment Framework (ORAF) Senegal: Senegal Safety Net operation (P133597) Stakeholder Risk Rating Moderate Risk Description: Risk Management: The focus on building a Social Safety Net System (that The activities supported by the Project are fully in line with the country's Social will be used by all institutions to target their Protection Strategy, defined by a thorough consultative process involving all key beneficiaries, limit overlap and exploit synergies) and on stakeholders from the Government, donors, communities, and NGOs. There are no implementing a conditional cash transfer at the scale of conflicts between the Project and the activities of these sectoral actors; rather, the tools the country is relatively recent. These initiatives have supported by the Project (including the unique registry and targeting system) will been fully endorsed by all stakeholders within benefit their own operations. Also, a Steering Committee, comprising all these actors, government and the donor community, but support could will be set up to oversee this Project's activities. weaken over time. Resp: Status: Stage: Recurrent: Due Date: Frequency: Client In Progress Both 30-Jun-2014 Capacity Rating Substantial Risk Description: Risk Management: The main implementing agency is a relatively new The Project has a component focused on assisting the implementing agency in institution, which is still building its capacity. consolidating its structure, building the capacity of its staff, developing the tools and instruments for the implementation and monitoring of its activities, and developing all users' manuals and protocols (including evaluations and audits) to ensure actors can be easily capacitated as the activities are implemented and scaled up. Also, the agency can build on the significant experience of sectoral actors involved in the activities - both at the central and local levels - who have implemented similar activities and Bank operations in the sectors of education, health and nutrition. By June 2015, the Project will recruit and fund highly qualified specialists to put in place the mechanisms and progressively hand over activities to government employees, including financial management and procurement systems. The Project will also benefit from the established capacity at the local level in Senegal, in particular in the context of significant decentralization and deconcentration of functions (which will be further deepened in the context of the implementation of the recently approved third phase of the reforms). Finally, the team will benefit from guidance from regional peers, through 60 its participation in the West Africa Community of Practice and other south-south exchange platforms. Resp: Status: Stage: Recurrent: Due Date: Frequency: Both In Progress Both 30-Jun-2015 Governance Rating Substantial Risk Description: Risk Management: The main implementing agency is a recently created The implementing agency has a very strong commitment to the activities supported by institution, with new financial management systems. the Project and the results expected from their implementation which are at the core of their mandate, as per the national Social Protection Strategy and Development Plan. The management capacity of the institution will benefit from the significant experience in the Government, in particular in the Ministry of Finance. Clear mechanisms are being put in place to ensure accountability, the inter-ministerial steering committee ensures oversight, and close supervision will be implemented by Financial Management specialists. More generally, this Project supports the development of tools and systems, which will be used by the Government to channel its resources to the sector, beyond the funds provided by this Project. The governance systems put in place by this Project will therefore be leveraged beyond the execution of the Project. A financial management specialist, an accountant and auditors will be recruited by September 2014. Resp: Status: Stage: Recurrent: Due Date: Frequency: Both In Progress Both 30-Sep-2014 Risk Management: The Project supports the design and implementation of a series of systems, which are designed to ensure transparency and accountability in the targeting, registration and payment of vulnerable households. Learning from international experience, the process put in place to identify and select households is transparent and objective, involving local communities and population groups, as well as local authorities to ensure a series of checks and balances. Furthermore, the tools and systems supported by this Project will be used to channel significant Government resources (the Project only finances about 10 percent of the beneficiaries of the PNBSF), thereby leveraging the impact on overall governance in the sector. The program will also put in place grievance mechanisms to ensure households and communities can appeal decisions. The targeting system uses an objective proxy-means test that is automatically calculated, and no local 61 agency can input data in the information system or influence the decision-making process. Furthermore, the Project will support a series of control measures to closely monitor the payment process. The program will also implement regular spot checks and audits of the systems. Local NGOs and community groups are expected to play a critical role in monitoring the program, building on their significant capacity, including the capacity developed in the context of their collaboration and contributions to past Govermment programs and through the network of local development community volunteers (Acteurs Porteurs de Dynamiques Communautaires, APDC). These measures will be reflected in the PNBSF operational manual. Resp: Status: Stage: Recurrent: Due Date: Frequency: Client In Progress Both CONTINUOUS Design Rating Substantial Risk Description: Risk Management: The Project supports a conditional cash transfer program Using extensive international experience in designing and implementing cash transfer that is quite complex in nature, as it requires programs, the government and Bank have progressively built the instruments and collaboration from actors in different sectors and all procedures for the program implementation. The program is being rolled out levels of government. progressively, both by enrolling households progressively over the years and by building the accompaniment measures over time. The PNBSF users' manual specifying roles and responsibilities of all parties will be finalized by July 2014. The government has also put in place an evaluation agenda, to learn from the implementation and adjust the design as required. The Project will support a series of activities to strengthen all sectoral agencies involved, which should help strengthen collaboration. Resp: Status: Stage: Recurrent: Due Date: Frequency: Client In Progress Both 31-Jul-2014 Social and Environmental Rating Low Risk Description: Risk Management: There are no expected negative environmental or social n/a impacts. On the contrary, the program will result in Resp: Status: Stage: Recurrent: Due Date: Frequency: significant distributional impacts for the poor and vulnerable households and their communities, and the 7 local communities are involved in the selection of 62 beneficiaries. Program and Donor Rating Low Risk Description: Risk Management: The success of the social safety net system and the CCT The sectoral actors and donors are committed to the activities financed by this Project, program depend on the collaboration of other sectoral as one of the key element of the national Social Protection Strategy. Ministries and institutions and development partners, and the alignment donors have pledged their support to its implementation. The institutional setup for the of some of their programs. activities (including the Steering Committee) has been designed to ensure they can participate in the key decisions, and align their activities as needed. It will be important for donors to ensure their support is provided in a manner that is consistent with the national strategy and collaboration agreements signed between the different actors. Together with the Steering Committee (where donors are represented), the donor Social Protection Thematic Group promotes donor coordination. Resp: Status: Stage: Recurrent: Due Date: Frequency: Both In Progress Both CONTINUOUS Delivery Monitoring and Sustainability Rating Substantial Risk Description: Risk Management: The institution and the team are relatively new. The implementing agency will build on existing implementing and monitoring capacity in the Government, and will hire a series of specialists to develop the systems (especially monitoring and evaluation) and build the capacity of the institutions' staff by June 2015. The Project itself will support the development of the Management Information System and its M&E modules, the implementation of the agenda of evaluations (spot checks, impact evaluation, process evaluation, regular audits), and the strengthening of the institutions' implementation capacity. The support to the development of capacity will be decreasing over the life of the Project, as the capacity improves and systems mature. In terms of sustainability, this Project benefit from a strong commitment from the Government and the donor community. In addition, the activities are expected to result in efficiency gains in the implementation of social safety nets (by targeting the poorest and most vulnerable, the targeting system allows to limit leakages, avoid duplication, and promote synergies) and could form the basis for the rationalization of poorly targeted or universal programs that fail to reach the poorest. Resp: Status: Stage: Recurrent: Due Date: Frequency: Both In Progress Both 30-Jun-2015 63 Overall Implementation Risk: Rating Substantial Risk Description: In light of the risks highlighted earlier, the overall implementation risk is Substantial. The Project will focus particularly on strengthening the institutional capacity for implementation, and the Bank will continue to support the Government with the required technical assistance. 64 Annex 5: Implementation Support Plan Senegal: Safety Net Project Strategy and Approach for Implementation Support 1. The Implementation Support Plan focuses on mitigating the risks identified in the Operational Risk Assessment Framework (ORAF), and aims at making implementation support to the client more flexible and efficient. It also seeks to provide the technical advice necessary to facilitate achievement of the Project Development Objectives (PDO) (linked to results/outcomes identified in the result framework), as well as identify the minimum requirements to meet the Bank's fiduciary obligations. III. Technical. Implementation support will include: (i) progress on objectives (ii) fine tune strategies where required (iii) drawing lessons from the implementation for wider applicability. * Financial management. Implementation support will include: (i) providing additional staff and training; (ii) reviewing submitted reports and providing timely feedback to the implementing agency. * Procurement. Implementation support will include: (i) providing additional staff and training; (ii) reviewing procurement documents and providing timely feedback; (iii) providing detailed guidance on the Bank's Procurement Guidelines; and (iv) monitoring procurement progress against the detailed Procurement Plan. * Other Issues. Sector level risks will be addressed through policy dialogue with the governments' Ministries. Implementation Support Plan 2. Despite the Bank's experience in the country, the wide geographical scope of and innovations in the Project will require fairly intensive supervision, especially during the first two years of implementation. The Bank team members will be based either in Washington DC, or in Country Offices, and will be available to provide timely, efficient and effective implementation support to the clients. Formal supervision and field visits will be carried out at least twice annually. These will be complemented with regular video conferences to discuss Project progress. Detailed inputs from the Bank team are outlined below: * Technical, Policy and legal/Regulatory inputs. Technical, policy and legal/regulatory related inputs will be required to review bid documents to ensure fair competition, sound technical specifications and standards, and confirmation that activities are in line with Government's social protection strategies. * Fiduciary requirements and inputs. Training on financial management and procurement will be provided. The Bank team will also help identify capacity building needs to strengthen financial management capacity and to improve procurement 65 management efficiency. Financial management and the procurement specialists will provide timely support. Field supervision of financial management and procurement will be carried out annually. * Operation. The Task Team will provide day-to-day supervision of all operational aspects, as well as coordination with the clients and among Bank team members. Relevant specialists will be identified as needed. Table 5.1: Imp ementation Support Plan Time Focus Skills Needed Resource Estimate (US $) First twelve Capacity building to develop Management information system $150,000 months management information specialist system Capacity building for Social protection staff and IT monitoring and evaluation specialist activities and various assessments/studies Support to the development Social Protection staff of the Social Safety Net System and to improvements in the cash transfer program Capacity building on financial Financial management, internal management, procurement auditor, and procurement staff and internal audit and consultants Support to design of impact Social protection staff evaluation and spot-checks 12-48 months Implementation support Same as above $100,000 per year Table 5.2: Skills Mix Required Skills Needed Number of Staff Weeks Number of Trips Comments Task team leader 15 SWs annually Fields trips as DC based required. Procurement Specialist 2 SWs annually Fields trips as Country office based required. Financial Management 1.5 SWs annually Fields trips as Country office based Specialist required. Senior Social Protection 10 SWs annually Fields trips as DC based Specialist required. MIS and M&E Specialist 5 SWs annually Fields trips as DC based required Impact Evaluation 4 SWs annually Fields trips as DC based Specialist required. Consultants on Project 20 weeks each Fields trips as Country office and DC management and social required based protection programs 66 Annex 6: Economic and Financial Analysis Senegal: Social Safety Net Project 1. The development objectives of the proposed Project are to support the establishment of building blocks for the social safety net system and to provide targeted cash transfers to poor and vulnerable households. This section presents the case for the cash transfer intervention and Social Safety Net System (SSNS) supported by this Project, using evidence from existing interventions in Senegal, as well as experience from programs internationally. A targeted cash transfer to the poorest households is expected to: (i) increase households' income and expenditures, leading to lower monetary poverty levels; (ii) result in higher food consumption and better nutrition; (iii) have positive effects on health (vaccination) and education (higher enrollment); (iv) promote the adoption of positive practices regarding health and nutrition; and (v) have a multiplier effect on local economic activity. And the tools put in place by social safety net systems can result in efficiency gains, by improving the targeting of programs, improving planning, increasing their efficiency, promoting greater use of synergies, and reducing duplications or gaps. Poverty in Senegal and its drivers 2. In Senegal, poverty has remained high and stagnated over the past few years. Even if the poverty index fell from 55.2 percent to 48.3 percent between 2001 and 2005, it has thereafter only marginally decreased to reach 46.7 percent in 2011. Multiple shocks have affected Senegal between 2006 and 2011, in particular the 2006 and 2007 droughts, the food and fuel crisis in 2008, and floods in 2009. 3. Many households remain highly vulnerable to shocks. The low level of education and size of households have been identified as the main factors most correlated with poverty. Poverty is essentially concentrated in rural areas. Extreme poverty, defined as the inability to meet one's food requirements, went from 17.2 percent to 15.9 percent between 2001 and 2005, before reaching 14.8 percent in 2011. Vulnerable children, individuals with disability, and elderly without family support are particularly at risk. The formal social security system coverage only covers 13 percent of the population, including 6.2 percent of individuals covered by a formal pension system, 3 percent benefitting from social security payments, and 3 percent covered by some form of health insurance. The poor and informal workers suffer particularly from the lack of access to social protection. 4. Poor households tend to be more affected by shocks. According to the last household survey, a third of households report experiencing at least one shock over the previous 12 months, a proportion that increases to 40 percent for households in the poorest two quintiles.8 The poorest households can be affected dramatically by idiosyncratic shocks such as illness or death of the breadwinner, are also more affected by exogenous shocks such as droughts, floods or international food price increases. Without social support and mitigating mechanisms, most households respond by selling assets, which can lock them into long-term poverty. World Bank (2013) Senegal: Social Safety Net Assessment Washington, DC. 67 5. Poor and vulnerable households also suffer from barriers to access to basic services, and weak health, nutrition and education indicators. Poverty in Senegal is strongly linked to health. Prevalence of stunting among children is significantly higher among the poor, with 39 percent prevalence among the poorest quintile, versus 16 percent among the richest quintile. And 40 percent of women in the lowest quintile do not benefit from professional birth attendants, while this is the case only for 5 percent of women in the richest quintile. Vaccination rates are also low among the poor, with just about 56 percent of the children vaccinated in the poorest households (versus 70 percent among the richest). Coverage of health infrastructure and personnel is below international norms, and rural areas are less endowed than urban centers. 6. Poverty is also strongly correlated with education. Poverty rates among households with heads that have secondary or post-secondary education stands at around 25 and 8 percent respectively, while poverty prevalence is over 50 percent when the household head has not completed primary education. And children in the poorest households have lower enrolment rates at all education levels (for example, the gross enrolment rate in primary school is 71 percent among the poorest, versus 97 percent among the richest). Low educational results have been linked to issues in terms of access to education, as well as quality of educational services (including issues of teacher absenteeism, infrastructure, and supplies). It is important to note the persistence of large regional disparities, despite a relatively good supply of primary schools throughout the country. Estimates suggest that about 1.6 million children are out of school. Social Protection Policy 7. The Government has had to respond to multiple shocks over the last decade, including the drought in 2002-2003 and the economic crisis of 2008-2009. In these cases, the Government of Senegal has historically responded directly with financial support to farmers as well as general assistance to the rural population, and by a series of fiscal measures, including subsidies on basic foodstuffs (rice, wheat, and milk), butane/natural gas and electricity. This ensured a quick action by the Government, but proved very expensive and relatively poorly targeted. 8. The recent Social Safety Net review suggests that in 2011, programs had limited coverage and effectiveness. Furthermore, these social safety net programs were spread across a number of ministries and agencies. There had been a history of institutional instability which had hampered developing coherent programming, particularly within the social welfare ministries. For the last 10 years, there had been frequent reconfigurations of the main social welfare ministries and shifting of departments and programs between ministries. This had weakened the ability to effectively design and implement social safety net programs. Various institutional coordination mechanisms were in place, though they were mostly Project-specific. 9. Confronted by the difficulties of addressing the needs of the poor and vulnerable, the Government has revived its National Social Protection Strategy (Strategie Nationale de Protection Sociale, SNPS) 2005-2015 to adopt an integrated and global vision of social protection, that can promote the access of vulnerable groups to adapted risk management mechanisms. It plans the diversification and expansion of the social protection tools, in particular social safety nets to support the most vulnerable groups. 68 10. In the National Strategy for Economic and Social Development (Stratigie Nationale de Diveloppement Economique et Social, SNDES) 2013-2017, the authorities draw from the social protection floor initiative, that aims at guaranteeing better access to basic services and social transfers for the poorest and most vulnerable. As a result, the Senegalese Government has positioned social protection as a key instrument to reduce poverty and promote economic growth and human capital development. 11. Furthermore, in 2012, the President created the Social Protection Delegation (D ligation Gndrale 6 la Protection Sociale et 6 la Solidarit Nationale, DGPSN), attached to its cabinet, to ensure the coordination, management and monitoring of social protection policies. More specifically, the DGPSN is responsible for: supporting the President in the definition of policies in terms of social protection and national solidarity; promoting and implementing public policies of social protection and national solidarity; coordinating the SNPS; and coordinating social protection policies that contribute to poverty and inequality reduction. 12. During the electoral campaign, the current President announced the creation of a social cash transfer program targeting the poor, as the major instrument for the implementation of its economic and social policy. As a result, the National Cash Transfer Program (Programme National de Bourses de Scuriti Familiale, PNBSF) for the poor conditional on investments in children' human capital, was officially launched in October 2013 and is being implemented by the DGPSN. Conditional cash transfers' impact on human development 13. In the last decade, Conditional Cash Transfer (CCT) programs have become one of the most widely used tools of social protection in developing countries to support families living in poverty. CCTs are increasingly being used for income support and human capital promotion among the poor. Programs provide money transfers to poor households conditional on compliance with a number of health, education, and nutrition conditionalities. Latin America is the leading region in the world in the use of CCTs, with currently over 90 million people benefitting from such programs. Countries such as Brazil, Mexico, and Colombia were pioneers in the implementation of programs and in the use of more precise targeting and monitoring systems. Following on this, many African countries today are preparing or implementing programs inspired by the models of Latin America and adapted to local realities. 14. International experience has demonstrated that CCTs can have significant impacts on poverty reduction and human capital development. The CCT programs play an important role in accelerating poverty reduction, improving the distribution of growth outcomes across the population, and improving social indicators. Studies show that social safety nets increase the quantity and quality of households' consumption; improve children's nutritional intake, education and health outcomes; and increase expenditure towards productive activities necessary to strengthen the resilience of the poorest.9 9 See Independent Evaluation Group (2011). It is important to note that in no evaluated country did cash transfers ever lead to increased expenditures on alcohol or tobacco. 69 15. In Senegal, recent experience with cash transfers showed a positive impact on the poverty, health, and education of children targerted by the program. The impact evaluation of the cash transfers provided through the Child Nutrition and Social Tranfer Program (Projet Nutrition ciblee sur 'Enfant et Transferts Sociaux, NETS) found that, at the household level, benefits were predominantly dedicated to food purchases, leading to increases in the number of meals reported and reductions in negative coping strategies. 10 Mothers showed increased awareness of reproductive health care, through trainings provided as part of the program. The intervention led to: (i) more diverse diets for children 0 to 23 months old, (ii) the adoption of better eating habits for children under the age of 5, (iii) the recommended number of meals for children 6 - 23 months old, (iv) a reduction in infant morbidity, particularly diarrheal disease, and (v) improved vaccination coverage. The evaluation of the program of education subsidies for vulnerable HIV/AIDS-affected children shows positive impacts on school enrolment and on civil registration. 16. Such results are confirmed internationally, with the Bolsa Familia in Brazil resulting in reductions in food insecurity and increases in food consumption among participating poor families. Consumption increased as a share of total spending among beneficiary families, especially in expenditure on food, education, and children clothing. For each real received as a transfer, 62 cents were spent on food, as opposed to 24 for non-beneficiaries. For 74 to 85 percent of families, in addition to food consumption, the quality and variety of food consumed, the number of daily meals, and the quantity of children's food increased. The beneficiary families' diets were 5.1 percent more diverse than that of non-beneficiaries. 17. Cash transfers also lead to increased school enrolment and attendance, though impacts tend to vary by program. In Africa, primary and secondary school enrollment increased in Kenya, Zambia, Malawi, Ghana and South Africa, and in some cases led to increases in the highest grade completed (Kenya), reductions in grade repetition (Ghana) and absences (South Africa). In Brazil, evaluations show that Bolsa Familia increased enrollment rates by 5-7 percentage points and had small effects on dropout rates and grade promotion in the short term, and that enrollment rates increased by 13 percent in the long run. 12 The impact on education outcomes has been strongest for the most vulnerable or traditionally neglected children, but impacts on actual learning outcomes have been lower than initially expected. Broader impacts of cash transfers on local economies 18. Evidence is growing about the effects of cash transfers on local economic activity. 13 Cash transfers provide an immediate impact by raising the purchasing power of beneficiary households. As beneficiary households spend cash, impacts immediately spread outside 10 Institut Fondamental d'Afrique Noire (IFAN). "Impact Evaluation of Cash Transfers in the NETS Program of Social Transfers Targeting Children" University of Dakar, Laboratory of Research on Social and Economic Transformations (LARTES), 2012. 1 Ministerio de Saide. 2007. Avaliaqao do componente de saude do Programa Bolsa Familia. Brasilia DF: Serie C. Projetos. Instituto Brasileiro de Analises Sociais e Econ6micas (Ebadi). 2008. Repercuss6es do Programa Bolsa Familia na Seguranqa Alimentar e Nutricional. Rio de Janeiro. 12 Glewwe and Kassouf (2010), Glewwe and Kassouf (2008). 1 From Protection to Production Project (FAO, 2013) and the transfer project (FAO, 2013) 70 beneficiary households to others inside and outside their communities. In Ghana for example beneficiaries of the LEAP program spend about 80 percent of the transfers inside the local economy, which in turn launches a new round of income increases in the community. In turn, periodic markets and purchases outside village will shift income effects to other communities. In the longer run, as programs are scaled up, transfers will have direct and indirect (or general equilibrium) effects throughout the region of implementation. Cash transfers can therefore have large income multiplier effects, provided markets are functioning fluidly. If, on the other hand, production constraints limit supply response, it is conceivable that transfers may lead to higher prices and a lower multiplier effect. 19. Cash transfers can also lead to significant increases in productive investment. Cash transfer programs in Zambia led to increased investments in agricultural inputs, particularly for smaller households, as well as a shift to higher-value agricultural production (from cassava to maize or rice) and more selling at market (from 23 to 35 percent) and ownership of non- agricultural enterprise (from 22 to 39 percent). Cash transfers also led to increased livestock ownership in the Zambia, Kenya and Malawi programs. 20. Cash transfers also promote more productive allocations of labor within households. Cash transfers have been shown to favor reductions in adult agricultural wage labor and increases in time spent on household production, such as family farms (in Zambia, Malawi, Kenya, and Ghana). Evaluations also show an increase in non-agricultural labor market participation (Zambia and South Africa). Cash transfers also allowed elderly and physically disabled to "rest" (Zimbabwe). However, results remain mixed on child labor, with programs leading to reductions of child labor in Kenya and South Africa, reductions in child wage labor but increases in on-farm activity in Malawi, and no impact in Ghana or Zambia. The impact of cash transfers on poverty 21. Cash transfers can also be effective instruments in poverty reduction. In Africa, evaluations show Zambia's CGP program has led to a 5 percent reduction in poverty, 11 percentage point reduction in the poverty gap and 11 percentage point reduction in the severity of the poverty gap (using severe poverty line). Kenya's cash transfer for orphans and vulnerable population led to a 13 percentage point reduction in poverty. South Africa's transfer programs together reduced the poverty gap by 45 percent. 22. Simulations of a cash transfer program perfectly targeted to the 250,000 poorest households in Senegal could reduce extreme poverty by 46 percent within five years, at a cost of 0.4-0.8 percent of Gross Domestic Product (full cost of the program once 250,000 households are receiving transfers). Assuming that the poorest households enter each year, and stay in the program at least until year 5, the program would reduce extreme poverty from 14.8 to 8.0 percent. As the program targets the poorest, the impact on the national poverty rate will be more limited (the program targets the poorest and brings them above the extreme poverty line, but not necessarily above the poverty line). However, the impact on poverty depth and severity is significant, with a reduction by 20 and 35 percent respectively. These are estimates of the maximum impacts of this program, since they assume perfect targeting, and the actual impacts are likely to be somewhat lower. 71 Table 6.1: Number of households in program, and poverty measures Waves of enrolment in the Year of program program Year 1 Year 2 Year 3 Year 4 Year 5 1 50,435 50,435 50,435 50,435 50,435 2 48,823 48,823 48,823 48,823 3 48,645 48,645 48,645 4 49,520 49,520 5 52,705 Cumulative number of households 50,435 99,258 147,903 197,423 250,128 Poverty measures (baseline data) Extreme poverty rate (14.8%) 14.8 14.5 11.5 9.3 8.0 Poverty rate (46.8%) 46.7 46.7 46.7 46.7 46.5 Poverty depth (14.5%) 14.3 13.9 13.3 12.5 11.4 Poverty severity (6.6%) 6.3 5.9 5.3 4.7 4.1 Inequality Gini (37.8) 37.6 37.3 36.8 36.2 35.6 Impacts of the social safety net system on program efficiency and effectiveness 23. The Project will also support the development of a Social Safety Net System that will contribute to the move from a set of fragmented programs, to a more comprehensive system that can help rationalize interventions, articulate programs, and increase overall efficiency. By having programs share central tools and mechanisms, some of the duplication of processes can be avoided. This system's approach can help reduce fragmentation, improve harmonization and enhance the performance of individual programs. 24. One of the key elements supported by this Project is the elaboration of a national mechanism for the targeting of poor and vulnerable households. This can help promote programs that are more effectively targeted than existing ones, thereby increasing the impact of a given budget on poverty reduction. Furthermore, as the registry expands to include an increasing number of households, a broader set of interventions (such as school feeding, subsidized health insurance, or food distribution) can use the unique registry to select beneficiaries. In particular, an important reform that can be promoted by the unique registry and targeting mechanism is the reduction of universal subsidies (often put in place in times of crises, for lack of alternative). Rationale for public sector intervention 25. Public sector intervention in the sector of social safety nets in Senegal is justified on two main grounds. First, the poverty and inequality situation remains a concern in Senegal, and justifies public intervention for equity purposes and in order to ensure a minimum living condition for all households, in line with basic human rights. Indeed, poverty remains high and has stagnated over recent years. Inequality remains moderate and has not recently worsened, but geographic disparities remain elevated and have failed to shrink. Numerous households remain highly vulnerable to exogenous and idiosyncratic shocks. Furthermore, more than half of all households do not have specific coping mechanisms in place to mitigate the impact of such shocks. The poorest households have limited access to basic services, which could help them improve their living conditions and their ability to generate incomes. Informal support and 72 insurance mechanisms are not sufficiently developed to protect the poorest and most vulnerable from the impact of shocks. 26. Second, the current fragmentation of social safety nets interventions justifies an intervention that will help increase the efficiency of public spending by improving coordination of programs, improving their targeting, and rationalizing interventions. In Senegal, programs are spread across a number of ministries and agencies, often lack an effective targeting mechanism, and generally lack good planning and management tools. Activities supported by this Project are critical to effectively reach the vulnerable and improve efficiency and effectiveness. Value added of Bank's support 27. The World Bank is uniquely placed to support the development of social safety net systems and conditional cash transfer programs because of its international experience and expertise in these matters. Indeed, the Project and the country will benefit in technical areas in which the World Bank has a strong comparative advantage, giving the technical expertise accumulated globally. The Bank has supported social safety nets projects all around the world over these past ten years. 14 After having long supported countries in Latin America and the Caribbean, the World Bank has developed over the past years its experience in this area in other regions, particularly in Sub-Saharan Africa. 15 28. As indicated in the project design section, the project will also build on lessons based on Senegal's national experience (in particular in the NETS nutrition project supported by Bank operations) and the in-depth assessment of the sector recently carried out in partnership with the Government of Senegal (Unit for the Monitoring of Poverty Reduction Programs (Cellule de Suivi Operationnel des Programmes de Lutte contre la Pauvrete, CSO/PLCP)).16 29. Finally, the World Bank's Africa social protection team has set up a Community of Practice, which organizes regular and direct exchanges between national teams that are implementing social safety nets and their systems in Africa. This exchange mechanism with neighboring countries is an important tool for the Government team's learning, and for the sharing of its own experience. 14 Over fiscal years 2000-10, the World Bank supported SSNs with $11.5 billion in lending and an active program of analytical and advisory services and knowledge sharing (see IEG (Independent Evaluation Group). 2011. Social Safety Nets: An Evaluation of World Bank Support, 2000-2010. Washington, DC: World Bank.) 15 See World Bank (2012) World Bank's Africa Social Protection Strategy 2012-2022 - Managing Risk, Promoting Growth: Developing Systems for Social Protection in Africa, and World Bank (2011) 2012-2022 - Social Protection and Labor Strategy: Resilience, Equity and Opportunity. 16 World Bank (2013), Senegal: Social Safety Net Assessment. Washington D.C. 73 Annex 7: Additional Monitoring Indicators Senegal: Social Safety Net Project 1. Additional indicators, some of which are beyond the reach of the Project, will be monitored regularly to assess progress on a broader set of results, including: Cumulative Target Values1 Responsi- Indicator Name Core o Baseline Irequency Data source Measure Year I Year 2 Year 3 Year 4 End target data collection Component 1: Support to the development of the Social Safety Net System Number of meetings of the Minutes of Comit Intersectoriel de Pilotage Number 1 2 4 6 8 9 Yearly meetings DGPSN de la SPNS Number of programs which use Nombre 1 2 3 4 4 4 Yearly MIS DGPSN the unique registry Number of programs which use Nombre n/a 1 2 3 4 4 Yearly MIS DGPSN modules of the MIS Number of analytical reports on elements of the Social Safety Net System (on payment mechanisms, Number 0 1 3 5 7 8 Yearly Reports DGPSN targeting, program evaluation, etc.) produced by the DGPSN Regular monitoring reports on the Social Safety Net System and Number 0 1 3 5 7 8 Yearly Reports DGPSN financial audits Component 2: Support to the national targeted cash transfer program for poor and vulnerable households Number of PNBSF beneficiaries Number 14,000 64,000 114,000 164,000 214,000 244,000 Semester MIS DGPSN who have received a transfer 17 Year 1: July 2014-June 2015; Year 2: July 2015-June 2016, Year 3: July 2016-June 2017, Year 4: July 2017-June 2018, End Target: July 2018-June 2019. 74 Cumulative Target Values17 Responsi- Indicator Name Core Unit of Baseline Frequency Data source bility for Measure Year 1 Year 2 Year 3 Year 4 End target data collection Number of PNBSF information, education and communication Number 0 1 3 5 7 8 Yearly ma 'al, DGPSN campaigns Spot checks (qualitative and Evaluation DGPSN, quantitative beneficiary surveys Number n/a n/a 1 2 3 4 evaluation and process evaluation) consultant % of PNBSF beneficiaries who are satisfied with the program DGPSN, (information, processes, % n/a n/a 60 n/a 75 n/a Every 2 evaluation complaints management, years consultant information campaigns, etc.) % of PNBSF beneficiaries PNBSF satisfied with primary education % n/a n/a 50 n/a 65 n/a Beneficiary services surveys % of PNBSF beneficiaries satisfied with health services % of PNBSF beneficiaries satisfied with nutrition services 75 i www 1ww SENEGAL M AURITANIA SOCIAL SAFETY NET PROJECT o CITIES AND TOWNS SENEGAIL& ~Da°9° Ndiayne\ REGION CAPITALS Richard-Toll Haré Lao® NATIONAL CAPITAL La eS AIN T- RIVERS L S -ad Mbout MAIN ROADS 16°N I SaIint-Louis 16°N RAILROADS Thilogne Mpal Lagbar REGION BOUNDARIES - - INTERNATIONAL BOUNDARIES Ndiaye . uga Maam Koki . 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