The World Bank Implementation Status & Results Report PK Sindh Public Sector Management Reform Project (P145617) PK Sindh Public Sector Management Reform Project (P145617) SOUTH ASIA | Pakistan | Governance Global Practice | IBRD/IDA | Investment Project Financing | FY 2015 | Seq No: 12 | ARCHIVED on 23-Dec-2020 | ISR44456 | Implementing Agencies: Islamic Republic of Pakistan, Sindh Revenue Board, Economic Reform Unit, Finance Department Key Dates Key Project Dates Bank Approval Date: 28-Jan-2015 Effectiveness Date: 28-Apr-2015 Planned Mid Term Review Date: 13-Nov-2017 Actual Mid-Term Review Date: 13-Nov-2017 Original Closing Date: 31-Aug-2020 Revised Closing Date: 28-Feb-2021 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The development objective of the Project is to strengthen public sector performance in the Province of Sindh through improved revenue generation and expenditure management. Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Component 1: Results-based financing to provide an incentive for achieving eligible PSM reforms.:(Cost $40.00 M) Component 2: Technical Assistance (TA) to support capacity building and institutional strengthening associated with achievement of eligible PSM reforms.:(Cost $10.00 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Moderately Satisfactory Moderately Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Satisfactory Overall Risk Rating Substantial Substantial Implementation Status and Key Decisions The World Bank (WB) task team carried out a virtual implementation support mission for the Sindh Public Sector Management Reform Project (Loan IDA-55840-PK) in the last week of November 2020. The mission evidenced a good progress on project implementation, noting that all disbursement linked indicators (DLIs) and intermediate results indicators (IRIs) have been achieved, and that all legal covenants have been fulfilled and maintained. During the reporting period, the project was able to achieve the remaining IRI on internal audit and assist three departments (Home, Health, and School Education) in establishing Internal Audit function. Also, the project has continued the certification of procurement officials through the Massive Open Online Course (MOOC). As of now, more than 600 Procurement Officials have been certified. The mission recommended to continue focusing on the completion of the remaining procurement activities under the Technical Assistance (TA) component before reaching the project closing date of February 28, 2021. The WB task team also encouraged the Economic Reform Unit (ERU) 12/23/2020 Page 1 of 10 The World Bank Implementation Status & Results Report PK Sindh Public Sector Management Reform Project (P145617) and the Sindh Revenue Board (SRB) to coordinate and communicate with the Bank's procurement and financial management specialists for guidance at any time and to ensure an adequate closing of the project. The WB task team also recommended to the ERU and stakeholders to start the processes of collecting all documentation of the project to ensure a sound closing process, including key actions for the sustainability of the activities achieved during the project implementation. The mission also met with the Economic Affairs Ministry virtually on November 26th, 2020. This meeting allowed the WB task team to debrief authorities on the mission’s findings, in particular, the remaining activities for the implementation of activities with the TA funds and inform them of the tasks to be prepared for the closing of the project. 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 -- Substantial Substantial Sustainability Fiduciary -- Substantial Substantial Environment and Social -- Low Low Stakeholders -- Moderate Moderate Other -- -- Substantial Overall -- Substantial Substantial Results PDO Indicators by Objectives / Outcomes Strengthen public sector performance through improved revenue generation and expenditure management IN00922435 ►Improved collection of Sales Tax on Services (STS) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 3.50 7.00 7.00 3.50 Date 30-Jun-2014 04-Jun-2020 04-Jun-2020 30-Jun-2019 This indicator measures the overall performance of the Sales Tax on Services (STS) collection in real terms, as three and a half percent annual collection growth minus inflation. Comments: FY2014/15: PKR$49.4 billion (25% increase from baseline in nominal terms; 20.8% increase in real terms based on annual inflation of 3.6%). 12/23/2020 Page 2 of 10 The World Bank Implementation Status & Results Report PK Sindh Public Sector Management Reform Project (P145617) FY2015/16: PKR$61 billion (23.3% increase in nominal terms, 21.4% annual increase in real terms based on annual inflation of 2% for FY2015/16). FY2016/17: PKR$76 billion (24.7% annual increase in nominal terms) FY2017/18: PKR$92 billion (21% annual increase in nominal terms) FY2018/19: PKR$93 billion (1.3% annual increase in nominal terms). On this, it is important to note that assuming PKR$10 billion lost for Cellular Mobile Operators (CMO) service collection suspension, the expected revenue STS might be PKR$103 billion (12% annual increase in nominal terms and 7% annual increase in real terms with a 5% annual inflation rate).. This indicator measures the overall performance of the STS Collection. STS must be measured in real terms, as three and a half percent annual collection growth minus inflation. Performance is cumulative, and over or under-performance adjustable vís-a-vís preceding or succeeding years. Based on the cumulative revenue collection, the targets have been achieved and surpassed. This aspect has been confirmed by the draft TVP Report of December 2019 and the TRU Analytical Report. Note. During the December 2019 supervision mission, the task team was informed that SRB corrected the figures for the entire series by only including the STS collection as it is requested by the PDO indicator. The difference for FY16/17 and FY17/18 is explained by the Salaries and Workers Welfare Fund (SWWF) tax which was wrongly included in the revenue collection of the Sales Tax on Services (STS) in the previous report. This correction is also reflected in the TVP report of December 2019. Previous ISR Current ISR Difference FY (A) (B) (B) - (A) FY14/15 49.4 49.4 N/A FY15/16 61.0 61.0 N/A FY16/17 78.6 76.0 -2.6 FY17/18 100.0 92.0 -8.0 FY18/19 110.0* 93.0 N/A */ Forecast in previous ISR. Source: SRB IN00922501 ►Transparency in budget formulation, allocation and execution (DLI) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target All targets have been achieved. FD has: (i) submitted FD has: (i) submitted to the Cabinet the a) Budget Strategy Paper to the Cabinet the Budget Strategy Paper not prepared According to the TPV Budget Strategy Paper for FY2019/20; and (ii) b) One quarterly report report, targets for year 1, for FY2019/20; and (ii) submitted all four (4) Value submitted to the 2, 3, 4 and 5 have been submitted all four (4) budget execution Provincial Assembly achieved. budget execution reports for FY2018/19 reports for FY2018/19 to the Provincial to the Provincial Assembly and Assembly and published them on published them on FD's website. FD's website. Date 30-Jun-2014 04-Jun-2020 04-Jun-2020 30-Jun-2019 All targets for this indicator have been consistently achieved in FY14-15, FY15-16, FY16-17, FY17-18 and Comments: for FY18-19. The targets have also been verified by the TPV reports. 12/23/2020 Page 3 of 10 The World Bank Implementation Status & Results Report PK Sindh Public Sector Management Reform Project (P145617) Intermediate Results Indicators by Components Component 1: Results-based financing to provide an incentive for achieving eligible PSM reforms. IN00922502 ►Approval and initial implementation of Sindh Tax Revenue Mobilization Reform Plan (DLI) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Target is already met. (i) FD has publicly (i) FD has publicly disclosed the Sindh disclosed the Sindh Tax Revenue Tax Revenue Tax Reform Plan Sindh Tax Revenue Mobilization Reform Mobilization Reform approved in Feb 2014; Mobilization Plan has Value Plan FY16-17. Plan. 2012-13 STS collection been disclosed. FY 16- (ii) SRB’s collection of (ii) SRB’s collection of is PKR 34 billion. 17. Target is already met. STS for FY2013/14 STS for FY2013/14 reached PKR 39.43 reached PKR 39.43 billion. billion. Date 30-Jun-2014 04-Jun-2020 04-Jun-2020 31-Aug-2020 The target is already met. Comments: IN00922503 ►Enhanced SRB human resources capacity for administration (DLI) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target All targets have been All targets have been achieved. The Board SRB has approved a achieved. The Board of of SRB has approved revised staffing plan as Staffing and training plan SRB has approved the Value the revised staffing per the is under development revised staffing plan as plan as per the recommendation of the per the recommendation recommendation of the third-party review. of the third-party review. third-party review. Date 30-Jun-2014 04-Jun-2020 04-Jun-2020 30-Jun-2019 Targets for this indicator were revised during the restructuring. Comments: The revised staffing plan was approved by the Board of SRB. IN00922504 ►Increased automation of SRB systems (DLI) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target As per the TPV reports, All targets have been all targets have been achieved SRB has issued all Zero automated notices; achieved notices to at least 90% Unique taxpayer SRB has issued of non-compliant Value identification system SRB has issued notices notices to at least 90% registered taxpayers in does not exist; No third to at least 90% of non- of non-compliant FY2018/19 through party linkages. compliant registered registered taxpayers automated systems. taxpayers through through automated automated systems. systems. Date 30-Jun-2014 04-Jun-2020 04-Jun-2020 30-Jun-2019 All targets have been achieved as per the TPV reports. SRB has issued e-notices to at least 90% of non- Comments: compliant registered taxpayers. 12/23/2020 Page 4 of 10 The World Bank Implementation Status & Results Report PK Sindh Public Sector Management Reform Project (P145617) As per the TPV report, notices have been issued to 99.82% of non-filing taxpayers through the automated syste and e-notices have been issued to 99.57% short payment registered taxpayer during FY18-19. IN00922505 ►Increased tax base (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 4,800.00 307.00 307.00 25.00 Date 30-Jun-2014 04-Jun-2020 04-Jun-2020 30-Jun-2019 All targets have been achieved and the indicator has significantly exceeded its original targets. This indicator is measured as the cumulative % increase from the baseline of FY13/14. (4,800 which is the actual number of taxpayers). According to the targeted values, number of taxpayer should be 9,563 (i.e. 25% increase from previous year tax base). As per the TPV report FY18-19, the number of registered taxpayers has reached to 31,144, as of June 30th, 2019 (which is a 307% increase) FY14-15 FY15-16 FY16-17 FY17-18 FY18-19 Target: 5,544 Target: 6,376 Target: 7,650 (20% Target: 9,563 (25% Target: 5,040 (5% (10% increase (15% increase increase from increase from increase from previous from previous from previous previous year tax previous year tax Comments: year tax base) year tax base) year tax base) base) base) Actual: 15,919 Actual: 20,906 Actual: Actual: 31,144 (as of Actual: 11,234 (actual (actual (actual 26,289 (actual June 30, 2019) (actual percentage increase percentage percentage percentage percentage increase was 134%) increase was increase was increase was was 307%) 215%) 277%) 312%) *Source: Draft TPV *Source: Draft TPV report *Source: Draft *Source: Draft *Source: Final TPV report TPV report TPV report report IN00922506 ►Risk based audits of taxpayers implemented (DLI) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value System Absent All targets have been All targets have been SRB has: (i) issued achieved as per TPV achieved. SRB has: (i) and communicated report issued and audit observations to communicated audit the concerned observations to the taxpayers; (ii) finalized concerned taxpayers; the audits initiated in (ii) finalized the audits FY2017/18; (iii) initiated in FY2017/18; initiated assessment (iii) initiated (by SRB Operations assessment (by SRB Wing) under the Operations Wing) relevant provisions of under the relevant the law; (iv) selected provisions of the law; audit cases according (iv) selected audit to revised risk-based cases according to criteria updated revised risk-based according to the criteria updated feedback obtained according to the from the completed feedback obtained audit cases initiated in from the completed FY2017/18. 12/23/2020 Page 5 of 10 The World Bank Implementation Status & Results Report PK Sindh Public Sector Management Reform Project (P145617) audit cases initiated in FY2017/18 Date 30-Jun-2014 04-Jun-2020 04-Jun-2020 30-Jun-2019 Targets for this indicator were revised during the 2018 restructuring. Comments: All targets have been achieved and they have also been confirmed by the TPV report IN00922507 ►Improved SRB performance transparency (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target All targets have been All targets have been achieved. achieved. Four quarterly reports Four quarterly reports Annual report irregular, and one annual report and one annual report Four quarterly reports Value quarterly reports not are published are published and one annual report published published. Date 30-Jun-2014 04-Jun-2020 04-Jun-2020 30-Jun-2019 All targets have been achieved. Four quarterly reports and one annual report are published Comments: IN00922508 ►Debt management systems instituted (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target All targets have been All targets have been achieved. a) FD conducts a debt achieved. Debt sustainability sustainability analysis. Debt sustainability analysis conducted Debt Management analysis conducted and Value and published on FD’s b) Publication of the Systems do not exist. published on FD’s website with the above on the FD website with the approval approval of Finance website approved by of Finance Secretary on Secretary on 26 June FS. 26 June 2019. 2019. Date 30-Jun-2014 04-Jun-2020 04-Jun-2020 30-Jun-2019 Targets for this indicator were revised during the restructuring. All targets have been achieved. Debt sustainability analysis conducted and published on FD’s website with the approval of Finance Comments: Secretary on 26 June 2019. (https://fd.sindh.gov.pk/elfinder/connector?_token=&cmd=file&target=fls2_RFNBIFJFUE9SVC9TaW5kaC 1EU0EucGRm) IN00922509 ►Establishment of internal audit (DLI until Restructuring, IRI thereafter) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value Internal audit function FY17-18 targets (i) is in All targets for have (i) Four (4) does not exist. progress and (ii) is been achieved. Government achieved. (i) Four (4) Departments including Three department Government Finance Department (Finance, Home and Departments including have conducted Health) have submitted Finance Department internal audits and 12/23/2020 Page 6 of 10 The World Bank Implementation Status & Results Report PK Sindh Public Sector Management Reform Project (P145617) an Internal Audit report to have conducted submitted internal PAO and the validation of internal audits and audit reports to their the actions have been submitted internal PAOs. undertaken for the audit reports to their Finance department. The PAOs. (ii) Remaining three other department (3) PAOs have (Education) will submit (ii) Remaining three (3) undertaken actions in the Internal Audit report PAOs have response to the to PAO by July 2020. undertaken actions in forgoing internal audit response to the reports, within a month FY18-19 targets (i) and forgoing internal audit of such report. (ii) are in progress. reports, within a month Three department of such report (Finance, Home and Health) have submitted the Internal Audit reports to PAO and the validation of the actions have been undertaken for the Finance department. The other department (Education) will submit the internal audit report to PAO and the validation of the actions undertaken for the three departments (Home, Health and Education) will be achieved by August 2020. Date 30-Jun-2014 04-Jun-2020 26-Nov-2020 30-Jun-2019 All targets have been achieved. Comments: IN00922510 ►Transparency in budget formulation, allocation and execution (DLI) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target FD has: (i) submitted to the Cabinet the According to the TPV All targets have been Budget Strategy Paper reports, targets for year achieved. for FY2019/20; and (ii) 1, 2, 3, 4 and 5 have FD has: (i) submitted submitted all four (4) been achieved. to the Cabinet the budget execution FD has: (i) submitted to a) Budget Strategy Paper Budget Strategy Paper reports for FY 2018/19 the Cabinet the Budget not prepared for FY19/20; and (ii) to the Provincial Strategy Paper for submitted all four (4) Assembly and Value FY19/20; and (ii) b) One quarterly report budget execution published them on submitted all four (4) submitted to the reports for FY18/19 to FD’s website. budget execution reports provincial assembly the Provincial for FY18/19 to the Assembly and Note: The indicator Provincial Assembly and published them on was upgraded to a published them on FD's FD's website PDO indicator during website the Restructuring. There are no changes in substance. Date 30-Jun-2014 04-Jun-2020 04-Jun-2020 30-Jun-2019 Comments: According to the TPV reports, all targets for this indicator have been consistently achieved in FY14-15, FY15-16, FY16-17, FY17-18 and for FY18-19 12/23/2020 Page 7 of 10 The World Bank Implementation Status & Results Report PK Sindh Public Sector Management Reform Project (P145617) IN00922511 ►Procurement officials certified (DLI) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Targets have been Targets have been achieved and SPPRA has: achieved and surpassed. surpassed. (i) 696 (i) certified at least five (i) 624 officers certified officers certified as of hundred (500) officers No certification as of December 5th, November 25th, 2020. of grade BPS-16 or Value mechanism exists. 2019. (ii) TPV has been (ii) TPV has been above; and carried out and confirmed carried out and (ii) carried out a third- the achievement of the previously confirmed party review of the target. the achievement of the certification process. target. Date 30-Jun-2014 04-Jun-2020 25-Nov-2020 30-Jun-2019 Targets for this indicator were revised during the restructuring. Targets for FY14-15, FY15-16, FY16-17, FY17-18 and FY18-19 have been achieved. Total persons Mode of certification BS-16 & above certified In-Class five day course 424 350 Comments: Online Certification MOOC 544 271 Half Day Orientation for BS-20 75 75 & Above. Total 1043 696 IN00922512 ►Quarterly developmental development plan monitoring reports prepared and published (DLI) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target All targets have been P&DD has: (i) All targets have been achieved. prepared and achieved. (i) Quarterly progress published at least (i) Quarterly progress reports for six (6) twelve (12) quarterly reports for six (6) departments (i.e. 17 reports on departments (i.e. 17 reports in total) implementation of reports in total) prepared prepared and Value Zero development schemes and published. (ii) TPV published. (ii) TPV for at least four (4) report was conducted report was conducted Government and confirmed the and confirmed the Departments achievement the targets. achievement the collectively; and (ii) targets. carried out a third- party review. Date 30-Jun-2014 04-Jun-2020 04-Jun-2020 30-Jun-2019 Comments: This indicator was revised during the restructuring. As per the TPV reports, all targets have been achieved. 12/23/2020 Page 8 of 10 The World Bank Implementation Status & Results Report PK Sindh Public Sector Management Reform Project (P145617) Quarterly progress reports for six departments (i.e. 17 reports in total) were prepared and published on the MEC (Monitoring & Evaluation Cell) – P&DD website for public oversight (http://www.mecsindh.gov.pk/resource-center/adp-progress-reports.html) IN00922513 ►Departments where geo-tagging of development schemes is implemented and information published. (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 6.00 6.00 6.00 Date 30-Jun-2014 04-Jun-2020 04-Jun-2020 30-Jun-2019 Targets for FY14-15, FY15-16, FY16-17, FY17-18 and FY18-19 have been achieved MEC has implemented geo-tagged photos enforced monitoring of development schemes in following six Comments: departments of Government of Sindh as at 30 June 2019: Irrigation; Public Health Engineering; Works and Services; Education; Energy; and Sport and Youth Affairs. IN00922514 ►Departments with proactive feedback mechanisms established (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target All targets have been All targets have been Collection of achieved. achieved. community feedback MEC has collected MEC has collected for at least 10% of community feedback community feedback for provincial ADP Value Zero for at least 10% of at least 10% of provincial schemes costing over provincial ADP ADP (costing over PKR 1 PKR 1 billion in at least (costing over PKR 1 billion) from five (5) four (4) Government billion) from five (5) departments Departments. departments Date 30-Jun-2014 04-Jun-2020 04-Jun-2020 30-Jun-2019 Targets for FY14-15, FY15-16, FY16-17, FY17-18 and FY18-19 have been achieved. MEC has collected 16 community feedback from five (5) departments of Government of Sindh: Education, Comments: Energym Irrigation, Public health Engineering and Work and Services (ADP schemes costing over PKR one (01) billion): Performance-Based Conditions Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P145617 IDA-55840 Effective USD 50.00 50.00 0.00 47.38 0.00 100% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date 12/23/2020 Page 9 of 10 The World Bank Implementation Status & Results Report PK Sindh Public Sector Management Reform Project (P145617) P145617 IDA-55840 Effective 28-Jan-2015 11-Mar-2015 28-Apr-2015 31-Aug-2020 28-Feb-2021 Cumulative Disbursements PBC Disbursement Achievement Disbursed amount in Disbursement % PBC ID PBC Type Description Coc PBC Amount Status Coc for PBC Restructuring History Level 2 Approved on 16-Jun-2018 ,Level 2 Approved on 01-Jun-2020 Related Project(s) There are no related projects. 12/23/2020 Page 10 of 10