Public Disclosure Copy The World Bank Implementation Status & Results Report LS-PFM Reform Support Project (P143197) LS-PFM Reform Support Project (P143197) AFRICA | Lesotho | Governance Global Practice | IBRD/IDA | Investment Project Financing | FY 2014 | Seq No: 6 | ARCHIVED | ISR30816 | Implementing Agencies: Ministry of Finance, Ministry of Finance Key Dates Key Project Dates Bank Approval Date:06-Feb-2014 Effectiveness Date:25-Jul-2014 Planned Mid Term Review Date:08-Apr-2016 Actual Mid-Term Review Date:24-May-2016 Original Closing Date:03-Jul-2017 Revised Closing Date:03-Jun-2019 Project Development Objectives Project Development Objective (from Project Appraisal Document) The project development objective (PDO) is to improve the quality and timeliness of public financial management information in support of the Government’s PFM Reform Action Plan (PFMRAP) to improve budget execution. Has the Project Development Objective been changed since Board Approval of the Project Objective? No PHRPDODEL Components Name Support for improving the stability and reliability of exisitng IFMIS:(Cost $0.53 M) Support for modernization of IFMIS platform:(Cost $2.94 M) Support for change management, training and project management:(Cost $1.51 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO  Moderately Unsatisfactory  Moderately Unsatisfactory Overall Implementation Progress (IP)  Moderately Unsatisfactory  Moderately Unsatisfactory Overall Risk Rating  Substantial  Substantial Implementation Status and Key Decisions 12/7/2017 Page 1 of 10 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report LS-PFM Reform Support Project (P143197) The project has been successfully restructured and the closing date extended to June 3, 2019. The Government of Lesotho has made progress with some of the key actions agreed during the restructuring process. Among the most significant are the following: 1. The new TSA bank accounts for recurrent and development expenditures in the current version of IFMIS are operational since October 10, 2017, and are being reconciled with the bank statements of the Central Bank of Lesotho (with a 96 percent auto matching of transactions achieved through to end November). The implication of this achievement is that a new starting point for forthwith timely and reliable reconciliation of the main expenditure bank accounts for budget execution has been created, which revives an essential control mechanism over the completeness and accuracy of expenditure data in the current version of the IFMIS. Linked to the issue of improving reliability of the current IFMIS data is progress with the implementation of month-end closing procedures, through a pilot process. 2. Issue resolution through piloting of the new Electronic Funds Transfer system continues, and an additional ten line ministries are in process. Once in full production, it will also enable payment processing by sub-accountancies on behalf of district offices of line ministries (not connected to the IFMIS) against the main Treasury accounts in the Central Bank of Lesotho - this will reduce the current dependency on pre-financed commercial bank accounts, greatly simplify the accounting and reconciliation of such expenditures and simplify the current cumbersome paper driven payment process. 3. The implementation of the central budget preparation and control system CBMS has significantly progressed under the component to modernize the IFMIS. The CBMS system has been configured and is already web accessible to users, and training of about 90 users are near complete. The system will be used to support the preparation of the FY18/19 budget, which will inter alia help to guide and monitor budget data input by line ministries, and eliminate past cumbersome processes to exchange and consolidate budget data using Excel files. In addition to the above, the consultant team to support the modernization component of the IFMIS has been deployed, and changes have been made to improve the functioning of the Improvement and Reform Steering Committee (IRSC) - since the restructuring approved in July 2017, three IRSC meetings have been held, chaired by the new Minister of Finance and attended by the Governor of the Central Bank of Lesotho. Key actions that require further attention include the procurement of new hardware for the upgrade of the IFMIS, as well as the associated business process review, system configuration requirements, change management and training. It is also critically important for Government to complete the processes to fill key vacancies in the Office of the Accountant-general. 12/7/2017 Page 2 of 10 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report LS-PFM Reform Support Project (P143197) 12/7/2017 Page 3 of 10 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report LS-PFM Reform Support Project (P143197) Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance  --  Substantial  Substantial Macroeconomic  --  Substantial  Substantial Sector Strategies and Policies  --  Moderate  Moderate Technical Design of Project or Program  --  Moderate  Moderate Institutional Capacity for Implementation and Sustainability  --  Substantial  Substantial Fiduciary  --  Moderate  Moderate Environment and Social  --  Low  Low Stakeholders  --  Moderate  Moderate Other  --  --  -- Overall  --  Substantial  Substantial Results 12/7/2017 Page 4 of 10 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report LS-PFM Reform Support Project (P143197) Project Development Objective Indicators PHINDPDOTBL  1. Improved reliablity of in-year budget execution reports from IFMIS (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Steps have been taken In-year budget by Government to execution improve the reliability of reports from the data in the IFMIS, There are significant upgraded including In-year budget execution concerns regarding IFMIS have no operationalization of reports from IFMIS are data reliability of IFMIS material new TSA expenditure generally considered not to in-year budget concerns bank accounts and their be reliable, due to lack of execution reports as regarding data Value reconciliation with the bank accounts bank reconciliations reliability, since CBL, and piloting of reconciliations and no are not done monthly month-end month-end closing month-end closing of the and there is still no closures are procedures for the IFMIS. month-end closing of operational and IFMIS. In-year budget the IFMIS. TSA bank execution reports have reconciliations been developed, but are are done not yet published on the monthly. web. Date 30-Nov-2012 12-Jun-2017 04-Dec-2017 03-Jun-2019 PHINDPDOTBL  2. Improved timeliness and completeness of annual financial statements (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The FY2018/19 Government eradicated Government eradicated annual financial the 3-year backlog of the 3-year backlog of statements for annual financial annual financial budgetary statements, and the statements, and the central Three-year backlog in the consolidated annual consolidated annual government preparation of annual financial statements for financial statements for continue to be financial statements - 2015/2016 were 2016/2017 were submitted to 2008/09, 2009/10, and submitted within the submitted within the the Office of the 2010/11. IFMIS data to legal timeframe by 31 legal timeframe to the Auditor-general support annual financial August 2016 to the Value Office of the Auditor- within the legal statements for budgetary Office of the Auditor- general. IFMIS timeframe by central government lacks general. IFMIS continues to lack 31 August balances for financial continues to lack complete balances for 2019, and assets and financial complete balances for financial assets and contain data liabilities. financial assets and financial liabilities to from the financial liabilities to support annual financial upgraded support annual statements for IFMIS on all financial statements for budgetary central financial assets budgetary central government. and financial government. liabilities. Date 30-Nov-2012 12-Jun-2017 04-Dec-2017 02-Sep-2019 12/7/2017 Page 5 of 10 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report LS-PFM Reform Support Project (P143197) PHINDPDOTBL  3. Stock of expenditure arrears available in IFMIS (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Stock of expenditure There is no IFMIS data on There is no IFMIS data There is no IFMIS data arrears is Value the stock of expenditure on the stock of on the stock of available online arrears. expenditure arrears. expenditure arrears. in the upgraded IFMIS. Date 30-Nov-2012 12-Jun-2017 04-Dec-2017 03-Jun-2019 PHINDPDOTBL  4. New Treasury Single Account (TSA) bank balances in the IFMIS (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target New TSA recurrent and New TSA bank development accounts are New TSA bank expenditure bank operational and No new TSA balances are accounts opened and Value accounts are in carried forward available in the IFMIS. created in the IFMIS, operation since October into the but not yet in operation. 10, 2017, and is being upgraded reconciled with the CBL. IFMIS. Date 30-Nov-2012 12-Jun-2017 04-Dec-2017 03-Jun-2019 Overall Comments Intermediate Results Indicators PHINDIRITBL  1. Improved wide-area network uptime (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 71.42 97.14 97.14 98.50 Date 30-Nov-2012 12-Jun-2017 12-Jun-2017 03-Jun-2019 12/7/2017 Page 6 of 10 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report LS-PFM Reform Support Project (P143197) PHINDIRITBL  2. Improved IFMIS server uptime (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 92.86 97.17 97.17 98.50 Date 30-Nov-2012 12-Jun-2017 12-Jun-2017 03-Jun-2019 PHINDIRITBL  3. IFMIS users trained (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 40.00 60.00 60.00 80.00 Date 30-Nov-2012 14-Jun-2017 12-Jun-2017 03-Jun-2019 PHINDIRITBL  4. Line ministry revenue transactions not captured in the IFMIS (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Actual non-tax Non-tax Non-tax revenues revenue, according to revenue Bank reconciliation of collected by line ministries the 2015/2016 transactions revenue transactions are not routinely captured unaudited consolidated are recorded since 2009 for all except Value in the IFMIS, and there is financial statements, reliably in the 7 Ministries have been ineffective monitoring at was M1.3bn, but this IFMIS, completed through to Treasury to ensure that figure is not supported supported by end March 2017. this happens. by timely bank timely bank reconciliations. reconciliations. Date 30-Nov-2012 12-Jun-2017 06-Dec-2017 03-Jun-2019 PHINDIRITBL  5. Business process review completed (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Business Business process Business process review Business process review process review review to support to support configuration of to support configuration to support configuration of the Value the new version of IFMIS of the new version of configuration of new version of IFMIS contracted by not yet IFMIS contracted by not the new version contracted by not yet started yet started of IFMIS started completed Date 23-Jun-2017 23-Jun-2017 06-Dec-2017 31-Oct-2017 12/7/2017 Page 7 of 10 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report LS-PFM Reform Support Project (P143197) PHINDIRITBL  6. IFMIS servers upgraded (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Servers for new Servers for new upgraded Servers for new Servers for new upgraded Value version of IFMIS not yet upgraded version of upgraded version of version of procured IFMIS not yet procured IFMIS not yet procured IFMIS operational Date 23-Jun-2017 23-Jun-2017 06-Dec-2017 28-Feb-2018 PHINDIRITBL  7. End-user equipment upgraded (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target End-user End-user equipment to End-user equipment to End-user equipment to equipment Value operate upgraded IFMIS operate upgraded operate upgraded IFMIS upgraded to not yet procured IFMIS not yet procured not yet procured work on new IFMIS Date 23-Jun-2017 23-Jun-2017 06-Dec-2017 31-May-2018 PHINDIRITBL  8. Change management plan initiated (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Change Change management plan Change management Change management Value management not yet developed plan not yet developed plan not yet developed plan initiated Date 23-Jun-2017 23-Jun-2017 06-Dec-2017 31-Oct-2017 12/7/2017 Page 8 of 10 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report LS-PFM Reform Support Project (P143197) PHINDIRITBL  9. Initial operational acceptance of the upgraded IFMIS (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target IFMIS upgrade Initial IFMIS upgrade contracted and initiated. operational IFMIS upgrade contracted Value contracted but not yet CBMS configured and in acceptance of but not yet started started process of being the upgraded deployed. IFMIS achieved Date 23-Jun-2017 23-Jun-2017 04-Dec-2017 29-Jun-2018 Overall Comments Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P143197 IDA-53550 Effective USD 5.50 5.50 0.00 1.10 3.97 20% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P143197 IDA-53550 Effective 06-Feb-2014 24-Feb-2014 25-Jul-2014 03-Jul-2017 03-Jun-2019 Cumulative Disbursements 12/7/2017 Page 9 of 10 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report LS-PFM Reform Support Project (P143197) Restructuring History Level 2 Approved on 30-Jun-2017 Related Project(s) There are no related projects. 12/7/2017 Page 10 of 10 Public Disclosure Copy