Documentof The World Bank FOROFFICIAL USEONLY ReportNo: 47740-SN EMERGENCY PROJECTPAPER UNDERTHE GLOBALFOOD CRISIS RESPONSEPROGRAM ON A PROPOSEDGRANT FROMTHE MULTI-DONORTRUST FUND INTHEAMOUNT OFUS$8MILLION AND A PROPOSEDCREDIT INTHEAMOUNT OF SDR 6.8 MILLION (US$lO MILLIONEQUIVALENT) TO THE REPUBLIC OF SENEGAL FORA RAPIDRESPONSECHILD-FOCUSED SOCIAL CASHTRANSFER AND NUTRITION SECURITY.PROJECT April 20,2009 HumanDevelopmentI1 Country DepartmentAFCFl Africa Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosedwithout World Bank authorization. CURRENCY EQUIVALENTS (Exchange RateEffective February28,2009) Currency Unit = Franc CFA (FCFA) 517FCFA = US$1 US$0.67747 = SDR 1 FISCAL YEAR January 1 - December31 ABBREVIATIONS AND ACRONYMS AfDB African Development Bank AMC Arrondissement-level Monitoring Committee ARD Agence Rkgionale de De'veloppement (Regional Development Agency) BEN Bureau ExkcutifNational (National Executive Bureau) BER Bureau ExkcutifRkgional (Regional Executive Bureau) CADL Centre d 'Appui au Developpement Local (Center for Support to Local Development) CAS Country Assistance Strategy CBO Community-based Organization CEA Community Executing Agency CFAA Country Financial Accountability Assessment c-IMCI Community-based IntegratedManagement of ChildhoodIllnesses CLM Cellule de Lutte contre la Malnutrition (Coordination Unit for the Fight Against Malnutrition) CMAM CommunityManagement o fAcute Malnutrition COSFAM Comite' Se'nkgalais de Fortijkation des Aliments en Micronutriments (National FoodFortificationCommittee) DDI Direction de la Dette et de I'Investissement (Debt and Investment Directorate) DL Disbursement Letter ESAM Enqugte Sknkgalaise A u p r h des Mknages (National Household Survey) FM Financial Management FMA Financial Management Assessment GDP Gross Domestic Product GFRP Global FoodPrice Crisis ResponseProgram GPN General Procurement Notice IBRD International Bank for Reconstruction Development ICB International Competitive Bidding ICP InJirmier Chef de Poste (Health Post HeadNurse) IDA International Development Association IFAC International Federation o f Accountants IFR InterimUn-AuditedFinancial Reports ISR Implementation Status Report i FOR OFFICIAL USEONLY LG Local Government LIB LimitedInternationalBidding LSC Local Selection Committee LQAS Lot Quality Assurance Sampling MDG MillenniumDevelopment Goal MDTF Multi-Donor Trust Fund MEF MinistryofEconomy andFinance MI Micronutrient Initiative MOE Ministry o f Education MOHP MinistryofHealthandPrevention N C B National Competitive Bidding NGO Non-governmental Organization NSPS National Social Protection Strategy PCU Project Coordination Unit PDO Project Development Objective PEFA Public Expenditure andFinancial Accountability PFM Public Financial Management PIM Project Implementation Manual PRN Programme de Renforcement de la Nutrition (Nutrition Enhancement Program) PRSP Poverty Reduction Strategy Paper PSAOP2 Agricultural Services and Producers Organizations Project RFP Request for Proposals S A D S Service d 'Appuiau De'veloppementSocial (Department o f Support to Social Development) SA1 Supreme Audit Institution SBD Standard BiddingDocuments SMART Standardized MonitoringandAssessment for Reliefand Transition UNDB UnitedNations Development Business UNICEF UnitedNations Children's Fund USAID UnitedStates Agency o fInternationalDevelopment VAT Value Added Tax WFP World FoodProgram Vice President: Obiageli Katryn Ezekwesili Country Director: Habib Fetini Sector Manager: Eva Jarawan Task Team Leader: M e m o Mulder-Sibanda a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not be otherwise disclosed without World Bank authorization. SENEGAL RapidResponseChild-FocusedSocial CashTransfer andNutritionSecurityProject CONTENTS Page A. Introduction ........................................................................................................... 1 B . CountryContext andRationalefor ProposedBankEmergencyProject........ 1 C. BankResponse: The Project ............................................................................... 4 BriefdescriptionofBank's strategyof emergencysupport ................................... 4 ProjectDevelopmentObjectivesandExpectedOutcomes..................................... 5 Summaryof Project Components............................................................................ 6 Financinginstruments ............................................................................................. 7 Eligibility for Processingunder OPBP 8.0 ............................................................ 7 D. Appraisalof ProjectActivities............................................................................. 8 E. ImplementationArrangements andFinancingPlan....................................... 10 F . ProjectRisksandMitigatingMeasures ............................................................ 15 G. Terms andConditionsofProjectFinancing .................................................... 16 Annex 1: DetailedDescriptionof ProgramComponents............................................ 18 Annex 2: ResultsFrameworkandMonitoring............................................................ 27 Annex 3: Summaryof EstimatedProjectCosts........................................................... 31 Annex 4: FinancialManagementandDisbursementArrangements ......................... 32 Annex 5: ProcurementArrangements .......................................................................... 40 Annex 6: Implementation,Monitoring,andInstitutionalArrangements ................. 48 Annex 7: ProjectPreparation,AppraisalandNegotiationsTeamMembers ...........53 ... 111 EMERGENCY OPERATIONPROJECTPAPERDATA SHEET Senegal, Africa Region RapidResponseChild-FocusedSocialCashTransfer andNutritionSecurityProject Date: April 20, 2009 Team Leader: Menno Mulder-Sibanda Country Director: Habib Fetini Sectors: Health (80%); Other social services (20%) Sector Manager: Eva Jarawan Themes: Nutrition and food security (P); Child Lending instrument: Emergency op. health (S); Social safety nets (S) Project ID:P115938 Environmental screening category: C Proposed terms: IDA Credit / Grant Expectedimplementation period: 32 months Expectedeffectiveness date: M a y 15,2009 Expected closing date: December 3 1,2011 Recipient: Responsible agency: Cellule de Lutte contre la Government o f Senegal Malnutrition (CLM), Rue 7, Point E, Dakar; P.O.Box 45001Dakar-Fann, Tel: +221-869-0199 ;Fax: +221- 864-38 61, Email: ben@,clm.sn Source Local Foreign Total Recipient 0.0 0.0 0.0 Total IDA 0.0 10.0 10.0 Trust Funds 0.0 8.0 8.0 Total 0.0 18.0 18.0 2009 2010 2011 2012 Total IDA 0.4 4.1 3.O 2.5 Multi-Donor GFRP Trust Funds 0.4 3.6 2.4 1.6 Does the emergency operation require any exceptions from Bank policies? Yes [ ] N o [XI Have these been approved by Bank management? Yes [ 1 N o [ 1 Are there any critical risks rated "substantial" or "high"? Yes [ ] N o [XI What safeguardpolicies are tiggered, if any? None Significant, non-standard conditions, if any: None iv A. Introduction 1. This Project Paper seeks the approval for support to be provided to Senegal for a Rapid Response Child-Focused Social Cash Transfer andNutrition Security Project to be financed by a credit and grant totaling US$18 million. This project will be financed through the Multi-Donor Trust Fund (MDTF) in support o f the Global Food Price Crisis Response Program (GFRP) in the amount o f $8 million Grant, and the redeployment o f $10 million IDAresources for a Credit from Senegal's existingportfolio. 2. As a result o f the sharp increase o f food prices, living conditions o f the poorest households are deteriorating, with an increase inthe level o f household indebtedness and a reduction in the quality and frequency o f meals, thus increasing food insecurity and malnutrition. The proposed project will support two sets o f appropriate cost-effective programs: (i) one that offsets the income effect o f the shock through targeted social cash transfers; and (ii) one that seeks to mitigate its consequences on human development outcomes such as the health and nutrition status o f children (GFRP framework document 2008). Hence, the proposed grant and credit will help finance the costs associated with the accelerated scaling up o fthe GovernmentNutritionEnhancement Program (known by its French acronym PRN) and the broadening o f its current range o f activities by adding the development and implementation o f a child focused social cash transfer component. 3. The PRN is implemented in close coordination with other development partners, notably UNICEF, WFP, Micronutrient Initiative, WHO, USAID and the African Development Bank. For this project, UNICEF and WFP provide technical backstopping on safety net and social protection issues. UNICEF, WFP and Micronutrient Initiative co-finance the project in specific areas such as case management o f severe acute malnutrition (UNICEF), moderate acute malnutrition (WFP) and salt iodization (MI). Joint partnership implementation support missions are conducted twice a year under the leadership o f the Bank. B. Country Context andRationalefor ProposedBankEmergencyProject 4. Country context: Senegal has experienced two successive years o f agricultural production shortfalls owing to inadequate rainfall, which resulted in a 25 percent reduction in cereal production between 2006/07 and 2007/08. As a result, Senegal i s covering only 34 percent o f its cereal needs through its own production, at a time when prices for imported cereals, such as rice and wheat, have reached record highs. Above average harvest was recorded for the 2008/09 season. Nevertheless, the food outlook for 2009 remains uncertain due to several factors, including the very low cereal carry-over stocks at the beginning o f the marketing year due to previous year's reduced crop and above all, the high dependence on imported cereals.' Although coarse grain prices have declined since the beginning o f the harvest inSeptember, they still remainedmuch higher inDecember 2008 as compared to a year before. The situation is worse for rice prices which are determined by world prices. Senegal imports 80 percent of its rice. The price ' Cropprospects andfood situation. GIEWS, GlobalInformationandEarlyWarning SystemonFood andAgriculture. FAO, Rome, 2009 1 difference for rice between December 2008 and December 2007 i s a staggering 80 percent. The Consumer Price Index (CPI) for coarse grains by end o f January 2009 was 33 percent higher than in January 2008 and 48% higher than inJanuary 2007. Data from Niger, Burkina Faso and Mali show that prices o f coarse grains are starting to increase again since January 2009. 5. The impact o f the sharp rise in food prices on poverty has been estimated in a recently conducted poverty studya2A 30 percent increase inthe price o f rice, cooking oil, sugar, wheat, millet, and milk products alone would push poverty up by six percentage points from 51 percent in2005/06 to 57 percent today with little difference between rural and urban areas. Manypoor urbanhouseholds have seen their purchasing power dwindle rapidly over the past two years and are struggling to make ends meet while poor rural households are trapped in accumulated debt burdens forcing them to sell their harvest at low prices. As a result, the living conditions o f the poorest households are deteriorating, with an increase inthe level o fhousehold indebtedness and a reduction inthe quality and frequency o f meals, thus increasing food insecurity andmalnutrition. 6. Malnutrition is known to have long-term cognitive and productivity effects and may generate cumulative economic costs, up to three percent o f GDP annually. These deleterious consequences outweigh the short-term fiscal savings from direct nutrition action to prevent malnutrition and promote adequate growth in young children. Malnutrition during early childhood has lifelong impacts on human capital. A large body o f evidence illustrates that poor nutrition during this period can reduce a child's educational, cognitive, and physical potential, leading to lower wages and reduced lifetime earnings. Poor and malnourished children usually start school later, complete fewer years o f schooling, and attain lower achievement levels and poorer grades compared to well-nourished children3 Fewer years o f education, poor cognitive development, and smaller stature in childhood reduce adult earning potential. For example, in Brazil, a one percent increase in height was found to lead to a 1.4 percent increase inadult male earning. 7. The Government o f Senegal is committed to the fight against malnutrition as an integral part o f poverty-reduction efforts as evidenced in the Poverty Reduction Strategy Paper (PRSP; 2002 & 2007) and the National Social Protection Strategy (NSPS; 2005- 2015). The National Nutrition Development Policy, issued in 2001 and'updated in 2006, formed the basis for the PRN. Senegal has made considerable progress on MDG related targets and seen a 23 percent reduction inmalnutrition rates since 2000 after a decade o f stagnation. Similarly, child mortality has come down by 30 percent and maternal mortality by 21 percent reduction since 1990. The current crisis o f sharply risen food prices, if left unattended, has the potential to undo the progress o f the last 5-10 years and put Senegal rightback at pre-1990 levels. ' Ivanic M,W. Martin.Implications of Higher Global Food Pricesfor Poverty in Low-Income Countries. WorldBank,Washington, 2008; and Senegal: Diagnostique de lapauvretk. Rapportprkliminaire. World Bank, Washington, 2008. Repositioning nutrition as central to development: A strategy for large-scale action. The WorldBank, Washington, 2006 2 8. Government response: In response to the rising costs o f fuel and food, the government introduced in 2007 general tax breaks and subsidies on rice and other commodities that ensured availability but proved very expensive (between 3 and 4 percent o f GDP) and poorly targeted to the poor. Towards the end o f 2008, the government, under severe budget constraints, had no other choice than to lift most o f these general subsidies. This has heightened the government's interest to replace these subsidies with well targeted safety net programs, notably cash transfers. The NSPS was developed with an overall objective o f strengthening and extending, in an equitable manner, social protection instruments to achieve the following: extending health insurance coverage from 20 to 50 percent of the population and implementing a social protection regime that covered risks resulting from shocks, mainly affecting populations working in the informal sector (agriculture, crafts, etc.). In the annual progress report o f the PRSP (2008) the government recognizes that implementation o fthe strategic pillar on protecting vulnerable groups has been weak. Given existing financial and administrative constraints, it i s necessary to define concrete programs and interventions, such as the proposedoperation on malnutrition and child-focused social transfers, to mobilize actions andresources to implement the NSPS. 9. Project priorities: Concerned about possible negative effects o f high food prices on the nutrition status o f young children, the Ministry o f Health and Prevention conducted a series o f prevalence surveys inhighrisk areas and found highlevels o f acute malnutrition. The C L M (Cellule de Lutte contre la Malnutrition) together with the Ministry o f Health, UNICEF, WHO, WFP and University professors have started to introduce the concept o f community management o f acute malnutrition in these areas. For the same reasons, UNICEF and WFP have increased their support for the community-based nutrition component o f the PRN. Following current concerns about vulnerability and risk management, all development partners are showing increased interest in social protection programs, including safety nets. UNICEF has initiated analytical work on child-centered cash transfer programs and together with the Bank is intensifying the policy dialogue on safety net issues. The government i s in favor o f moving ahead with a cash transfer pilot but also wants the experience to be scaled up rapidly if shown successful. The Ministry o f Economy and Finance (MEF) has expressed an interest inbringingother donors like the AfDB and the European Union in the loop to see how the experience can eventually be scaled up. 10. Consistency with country strategy: The proposed activities are consistent with the current Country Assistance Strategy (CAS, 2003), the PRSP (2007), the Nutrition Development Policy (2006) and the NSPS (2005). This project is aligned with pillar I1 (accelerated development o f human capital through nutrition) and pillar 111(combating vulnerability through cash transfers) o f the PRSP. As a result o f the food price hikes, the government and the development partners have all become acutely aware o f the importance to develop and invest ineffective social protection programs including safety nets andnutrition. 3 C. BankResponse: The Project Briefdescriptionof Bank's strategyof emergencysupport 11. The Bank's strategy for emergency support to Senegal is aligned with the Government's strategic approach. The proposed support to Senegal will focus primarily on: (i)safety net provisions in the form o f targeted social cash transfers and the protection o f children's health and nutrition status through an investment operation in support o f the PRN; and (ii) increasing agricultural productivity, stabilizing production and improving household food security through an additional financing to the ongoing Agricultural Services andProducers Organizations Project (PSAOP2). 12. Inresponse to the need to protect children's nutrition status and develop cost- effective safety nets, the proposed emergency project engages in two sets o f appropriate cost-effective programs: (i)one that directly offsets the income effect o f the shock through targeted social cash transfers; and (ii) one that seeks to mitigate its consequences on human development outcomes such as the health and nutrition status o f children. The response focuses on measures that address the short andmedium to long term implication o f the global food crisis for Senegal, which i s fully consistent with the Bank's GFRP. The GFRP encompasses support for interventions in the following areas: (i) price food policy and market stabilization, (ii)social protection actions to ensure food access and minimize the nutritional impact o f the crisis on the poor and vulnerable, (iii) enhancing domestic food production and marketing response, and (iv) implementation support, communications and monitoring and evaluation (GFRP framework document, 2008). 13. The proposed Child-Focused Social Cash Transfer and Nutrition Security Project will build on achievements o f the PRN. The PRN is built on past community-based nutrition experiences and has enhanced synergy between various direct nutrition interventions. The program i s structured around three phases; Phase I(2002-2006) which developed the basic technical, organizational and institutional capacity; Phase 2 (2007- 2011) i s characterized by scaling up and broadening the scope; andPhase 3 (20012-2015) represents the consolidation phase.4 The PRN was launched in 2002 and by December 2005, the community nutrition program reached more than 200,000 children under the age o f two and their mothers, representing approximately 20 percent o f the total number o f children under-two. This result was obtained by enhancing the capacity o f the implementing agencies (NGOs) which set up a total o f 924 community sites in 34 Districts and trained almost 2,500 nutrition aides. Monthly monitoring data show that the proportion o f children under three with malnutrition was 27 percent in June 2004, gradually dropping to 18 percent in December 2004, to 13 percent in June 2005, and to just 10 percent in December 2005. Other results showed an increase in the rate o f exclusive breastfeeding by 28 percentage points, an increase in the number of children sleeping under bednets by 31percentage points, an increase inprenatal care (minimumo f three visits) by 15 percentage points, and an increase in the recognition o f the danger Programme de Renforcement de la Nutrition: Plan Stratigique Phase II2007-2011. CLM, Dakar, 2006. 4 signs o f childhood illnesses by 16 percentage points. The Bank's project in support o f Phase 1was rated as highly ~atisfactory.~ 14. As intended in Phase 2, the program i s expanding, geographically targeting the areas with the highest malnutrition rates, with a goal o f reaching over 70 percent o f children in the hardest hit areas and 50 percent o f children nationwide by 2011. Moreover, the second phase i s implemented through subprojects by Local Governments which contract NGOs. However, the program i s faced with acute funding constraints. IDA supports the program with a $15 million investment project (2007-2012) o f which $5 million came from the malaria booster program. The Government, which contributes approximately $12 million, i s faced with serious budget constraints and has been unable to make the necessary contributions to the program. These funding constraints are holding back the potential scope, intensity and coverage o fthe program. The IDA project i s rated satisfactory to highly satisfactory and the disbursement rate is 75 percent as o f December 2008. The proposed project will enable the community nutrition program to move instantly into all 58 Districts with subprojects in 251 Local Governments (see Annex 6). 15. The PRN already benefits from closely coordinated partnership support. UNICEF, WFP and the Micronutrient Initiative co-finance the program and implementation is coordinated with USAID and AfDB supported programs on child survival and health sector support. With the introduction o f the cash transfer component, the MEF will continue to present the experience to the EuropeanUnion and the AfDB as likely partners to join the partnership in support o f the PRN and the safety net operation. The Government's intention i s to quickly scale up the cash transfer component once an efficient mechanism i s developed under this project. ProjectDevelopmentObjectivesandExpectedOutcomes 16. The overall program objective o f the PRN i s to contribute to the attainment o f the first MDG o f eradicating extreme poverty and hunger through implementation o f the Nutrition Development Policy aimed at improving the nutrition status o f vulnerable groups, notably children andpregnant and lactating women. 17. The development objective o f the proposed Child-Focused Social Cash Transfer and Nutrition Security Project is to reduce the risk o f nutrition insecurity o f vulnerable populations, inparticular children under five inpoor rural and urban areas, by scaling up the Government Nutrition Enhancement Program and providing cash transfers to vulnerable mothers o f children under five. The PDO is being measured through four key outcome indicators: (i) the percentage o f the target population reached by the community nutrition program; (ii) the percentage o f mothers providing exclusive breastfeeding for the first six months; (iii) the number o f beneficiaries o f the cash transfer program; and (iv) the percentage o f selected beneficiarieswho receive all intended cash transfers. Implementation CompletionReport: Senegal Nutrition Enhancement Project Phase I, World Bank, Washington, 2007. 5 18. The expansion and intensification o f the PRN aims to (i) child growth and protect micronutrient status in targeted children; (ii)promote sectoral ownership and accountability for nutrition results, notably inhealth (nutrition services and supervision), education (micronutrients and deworming) and food fortification (with iodine, iron and vitamin A); and (iii) enhance awareness and monitoring o f nutrition in development by all levels o f government. With the addition o f the new child-focused social cash transfer component the PRN also seeks to increase household consumption in targeted, most vulnerable families with children under five and to provide a feasible and replicable instrument that can effectively mitigate adverse effects o f shocks on vulnerable populations. Ultimately the success o f the cash transfer program will be measured by the effectiveness o f the program in reaching the truly needy and the government adopting it as part o f their NSPS. A list o f indicators is available as part o f the Results Framework in Annex 2. Summary of ProjectComponents 19. This project consists o f four components. Components 1-3 focus on protecting and promoting the nutritional security o f mothers and young children by scaling up and intensifying the existing PRN package o f community-based nutrition and health services and activities. Component 4, the child-focused social cash transfer, i s a rapid response mechanism to mitigate the adverse effects o f high food prices on young children in vulnerable families by providing additional resources to these households (see Annex 1 for more details). 20. Component 1: Community-based Nutrition (IDA US$6.6 million; MDTF US$3.1 million): The cornerstone of this component is community-based growth promotion and Integrated Management o f Childhood Illnesses (c-IMCI) including the community management o f (severe) acute malnutrition (CMAM). This component i s implemented through subprojects with Local Governments and NGOs that act as community executing agencies (CEA). These subprojects provide for monthly growth monitoring for children under two, nutrition education for mothers, provision o f iron and vitaminA supplements, deworming andinsecticidetreated bednets. The behavior change communication strategy focuses on infant and young child feeding practices as recommended by WHO and UNICEF, disease preventive measures, home-based care, recognition o f danger signs, and care seeking for sick children and incorporates not only mothers but other influential caregivers such as grandmothers. Inaddition, arrangements have been secured to incorporate support from UNICEF and WFP for the management of acute malnutrition which is being rolled out in all the intervention areas. Community workers screen children regularly to identify cases o f acute malnutrition and provide behavior change counseling for mothers, home visits to children requiring special attention, and cooking demonstrations. To promote improved micronutrient status, community-level communication activities will convey messages about dietary diversification and create demandfor vitamin A and iron supplements and fortified foods (particularly iodized salt). Under this project, this component will be scaled up and have nation-wide coverage (see Annexes 1 and 6). In addition to subprojects, this component supports capacity buildingo f CEAs, Local Governments and their support systems. 6 21. Component 2: Sectoral Support for Nutrition Results (IDA US$1.3 million): This component will support sectoral efforts in health and education to improve growth and nutrition, notably the minimum intake o f micronutrients, which, although needed in small quantities, are essential for survival, growth and development. These activities are identified through the annual work plans and agreed upon in annual agreements. The global food price crisis has increased the risk o f compromised quality o f dietary intake, notably o f essential micronutrients. The proposed activities include periodic distribution o f micronutrient supplements and deworming medicines, supervision o f nutrition services, and scaling up o f food fortification. 22. Component 3: Support to Implementation, Monitoring and Evaluation of Nutrition Development Policy (IDA US$ 700.000): This component includes activities that strengthen the implementation and monitoring performance o f the CLM, local governments, and line ministries. The PRN has developed an efficient monitoring and evaluation system that will need to be adapted to include enhanced monitoring o fthe cash transfer program. This component will promote ownership and accountability o f stakeholders, including local government, which play an important role in the scaling-up o f the community activities (nutrition and cash transfers) o f the PRN, mainly through technical assistance, training andworkshop-related activities. 23. Component 4: Child-focused Social Cash Transfers (IDA US$1.4 million MDTF US$4.9million): The cash transfer component will utilize the PRN community organization structure to identify eligible beneficiaries (mothers o f young children in vulnerable families), who will receive small bimonthly payments for six months. The cash transfer will be accompanied by a strong communication campaign emphasizing messages about maternal and child nutrition, and close monitoring o f process and effect. This component will be implemented in 10 districts that have been identified by the MOHas having critical levels o fmalnutrition (see Annex 1). Financinginstruments 24. The proposed interventions will be financed by a US$ 8 million grant from the Food Price Crisis Response Program's Multi-Donor Trust Fund(MDTF) and $10 million credit from a redeployment o f IDA resources from Senegal's existing portfolio. The financing instrument is a new grantkredit facility for the proposed Child-Focused Social Cash Transfer andNutrition Security Project. 25. Another financing option that was considered by the government and the team included additional financing to the current IDA support to the PRN, which runs until 2012. However, this option was rejected because the introduction o f the new and untested component on cash transfers implies restructuring a highly satisfactory project. Eligibilityfor Processingunder OPBP 8.0 26. Due to the emergency nature o f the crisis, this project was prepared under OP 8.00, which provides the Bank's policy framework on Rapid Response to Crisis and 7 Emergencies and enables the Bank to provide a rapid response in support of, inter alia, the following objective: "establishing and/or preserving human, institutional, and/or social capital, including economic reintegration o f vulnerable groups." OP 8.00 further provides that: "in support o f this objective, emergency operations may include activities forming part o f the government's transitional social safety net programs including cash payments". Consistent with the guiding principles of OP 8.00, the project will address major adverse economic and social impacts resultingfrom the hike inprices, the reduced consumptioninpoor households, and risk o f increased childhood malnutrition. D. Appraisalof ProjectActivities 27. Economic andfinancial: The benefits from the proposed project are both direct andindirect as well as short- and longer-term. As highlighted inthe GFRP document, the urgency o f a response prohibits quantitative economic appraisal. Instead, the GFRP proposes a rapid appraisal o f the following factors, based on standard good practice for the economic evaluation o f public investments: (1) policy context; (2) target beneficiaries; (3) expected benefit, cost-effectiveness, and/or benefithost ratios; and (4) analysis o f fiscal sustainability. 28. The proposedprogram i s consistent with the framework set out inthe GFRP. The overall policy context recognizes the importance o f vulnerability to food insecurity and poverty and the need to increase investments in social protection programs. Targeting i s explicit inall components o f the project and focuses on vulnerable families with children under five years o f age (categorical and community-based targeting) inthe most affected urbanand rural areas (geographical targeting). The combination o f social cash transfers and nutrition security activities will ensure the program delivers both immediate program benefits and longer-term development gains. The 2008 Copenhagen Consensus by some o f the world's leading economists that looked at the world's best investments concluded that nutrition investments, notably micronutrients and community nutrition, generate returns among the highest o f 30 potential development investmenk6 Investments in micronutrients were rated above those in trade liberalization, malaria and water and sanitation. Community-based programs are also cost-effective inpreventing malnutrition. Overall the benefit-cost ratios for nutrition interventions range from 5 to 200.' Most aspects o f the program are sustainable. The proposed project does not give rise to the creation o f open-ended commitments o f public resources (e.g. for price support or for subsidies). The proposed components all buildon on-going Government policies and are aimed at providing short term financing and associated technical assistance to improve the efficiency and reach o f these programs. Subsequent support, where needed, can be provided within the fiscal envelope o f the country's macroeconomic program. The costs o f the community nutrition interventions are below $5 per child per year. 6 Copenhagen ConsensusResults. CopenhagenConsensus Center, Frederiksberg, Denmark, 2008. www.coDenhagenconsensus.com. 7 Repositioning Nutrition as Central to Development: A Strategyfor Large-Scale Action. World Bank, Washington, 2006 8 29. Technical: The government proposal builds on the global consensus o f the importance o f community nutrition programs as articulated in the Bank's strategy document "Repositioning Nutrition as Central to Development." A recent cross-country review o f successful programs has indeed shown that malnutrition can be reduced two to four times faster than inthe absence o f such a program.8 The main thrust o f community- based nutrition and health programs i s education and counseling regarding mother and child care practices, and links to essential health services. The first phase has shown the effectiveness o f the community-based communication and services strategy in reducing malnutrition through behavior change. 30. A range o f international examples o f cash transfer programmes indiverse regions o f the world, from Latin America to Africa, have shown their positive results on poverty reduction and, when targeted at children, on child poverty redu~tion.~Further, empirical evidence for Senegal usingnational household data presented inthis section shows that a cash transfer programme could have a positive impact on the reduction of child poverty. Senegal has made progress inrecent years inthe supply o f basic services, although there are still significant challenges in access to quality services, particularly in rural areas, where there are significant differentials in access with respect to urban areas, and where most o f the poor live. A cash transfer program to poor households with children could be a helpful mechanism to strengthen uptake o f services, so complementarities can be strengthened. 31. Fiduciary: A financial management assessment was carried out to determine whether the National Executive Bureau (BEN) o f the C L M in charge o f overseeing the implementation o f the project has acceptable financial management arrangements in place. The conclusion o f the assessment is that the financial management system o f the BEN, subject to the reinforcement measures, satisfies the Bank's minimumrequirements under OPA3P10.02, and therefore is adequate to provide, with reasonable assurance, accurate and timely financial management information on the status o f the project required by World Bank. The financial management arrangements will be strengthened with the implementation o f the action plan in annex 4. The fiduciary aspects o f the current emergency operation will be handled by the qualified fiduciary team o f the CLMA3ENwho has strong knowledge and experience inBank's fiduciary procedures. 32. Social: Many socio-cultural issues, notably social factors and traditional beliefs, determine mother and child care practices and behaviors and thereby nutritional status and growth. Therefore, the community nutrition program will invest incommunity-based communication to enhance awareness and capacity to prevent malnutrition and promote healthy growth in children. The project will advocate for nutrition to be included in Local Development Plans, which often is biased towards infrastructural development projects. A key feature o f the community-based component o f the project is the mobilization o f women. Issues are periodically discussed with community leaders, Mason, JB., D. Sanders, P. Musgrove, Soekirman, R. Galloway. "Community HealthandNutrition Programs" inDisease ControlPriorities in Developing Countries (2nd Edition), ed., 1,053-1,074. Oxford University Press, New York, 2006. BarrientosA, R. Holmes. Social Assistance in Developing Countries Database. IDS, Brighton, 2006. 9 bringingwomen's issues to the forefront o f community discussions. This puts the PRN ina unique position to channel women's voices all the way up to the level where Local Development Plans are conceived, elaborated, andimplemented. 33. The implementation o f the project will require high levels o f transparency and participation. The C L M has gained valuable experience duringthe implementation o f the PRN. A special communication strategy i s designed to accompany the cash transfer program, andtogether with the institutional and monitoring arrangements, will assurethat transparency is maintained for all stakeholders inthe program. 34. Safeguard policies: N o negative environmental and social consequences are anticipated. This operation falls under environment category C. SafeguardPoliciesTriggeredby the Project Yes N o Environmental Assessment (OP/BP 4.01) Natural Habitats (OPBP 4.04) PestManagement (OP 4.09) Cultural Property (OPN 11.03, being revised as OP 4.11) Involuntary Resettlement (OP/BP 4.12) Indigenous Peoples (OPBP 4.10) Forests (OP/BP 4.36) Safety o fDams (OPBP 4.37) Projects inDisputed Areas (OPBP 7.60) Projects on InternationalWaterways (OP/BP 7.50) E. ImplementationArrangementsandFinancingPlan 35. Implementation arrangements: The project will be implemented by the CLM, which already successfully implements the Nutrition Enhancement Project (PRN). The C L M is the overseeing inter-ministerial coordination committee under the Prime Minister's Office, assisted by the National Executive Bureau (BEN) as its technical secretariat. The BEN i s represented at regional level by three Regional Executive Bureaus (BER). The CLM's responsibilities are primarily to coordinate and supervise the various actors involved in the implementation o f the different components; Le., line ministries, local government, Community Executing Agency (CEA), decentralized public services, communities, and, for component 4, local payment service providers. Figure 2 summarizes the key stakeholders and the institutional set-up for the implementation o f the project. 36. The community-based nutrition program (component 1) i s at the heart o f the PRN. It is implemented through subprojects by Local Governments (Cornrnunaute` 10 rurale) and CEAs. The grounds for scaling up to 58 Districts has already been prepared between July 2008 and February 2009 with each newly participating Local Government having: (i) selected one CEA (through a competitive process with assistance from the CLM) to which it will contract out the community-based nutrition interventions; (ii) submitted a subproject proposal to C L M for funding; and (iii)signed a contractual agreement with the CLM. For the existing areas that were under Phase I,NGO performance has been evaluated and nine out o f 12 were allowed to continue in the program, but now under contract with Local Governments. Local Governments monitor and report on activities and are expected to start incorporating nutrition and nutrition indicators in their Local Development Plans. The CLM, through its regional representations will accompany Local Government authorities inthe process of increased responsibility o f the community-based nutrition component through formative workshops, frequent monitoring and supervision visits, and regional meetings. Figure2: Institutionalarchitecture fi Prime Minister's Office II I Line Ministries Local Government T \ (Health, Education, (Local Selection Decentralized Financial Family, Finance) Committee) Institutions I / \ / I \ Decentralized services (Arrondissement-level Community Executing Monitoring Committee) Agency (CEA) J I Vulnerable Mothers of Children under 5 I 37. As for the CEAs, they must have legal status (NGO, CBO, or other) and capacity to implement community-based nutrition interventions in an entire health district. On behalf o f the Local Government, the CEA will be incharge o f implementing the activities financed by the CLM. These activities are described in proposals prepared by the selected CEAs and the Local Governments and submitted to the C L M for approval and funding. CEAs signed a grant agreement with their respective Local Governments to implement the activities while reporting to the local authorities and the health district. According to the contractual agreement between the C L M and the Local Government, subproject funds are directly deposited into a separate account o f the CEA. 11 38. The role o f the communities i s to: (i) identify and mobilize members o f the community to operate as nutrition aides; (ii) appropriate sites for nutrition aides allocate to conduct monthly growth promotion activities; and (iii) set up management committees to oversee the activities and the community nutrition sites. The nutrition aides belong to (and will be supported by) the community. Technical support in the form o f training, formative supervision, and learning exchanges will be provided by the CEA in collaborationwith public health service providers and local authorities. 39. The process o f scaling-up the community-based nutrition program will employ two intervention models. An intensive model involving monthly contact with beneficiaries for growth monitoring and promotion and behavior change counseling will be used in communities that have more than 1,000 inhabitants. A less intensive model involvingmalnutrition screening and behavior change counseling provided on a quarterly basis will be employed in villages with fewer than 1,000 people, where the intensive model would not be cost-effective. After completing expansion to these smaller communities, the C L M will increase the intensity o f the intervention in areas that demonstrate greater need. 40. The second component o f multi-sectoral support for nutrition results involves sector ministries and public institutions with direct roles and responsibilities for nutrition outcomes, notably the Ministry o f Health and Prevention, the Ministryo f Education, the National Agency for Childhood Development, and those involved in food fortification (e.g., Ministry o f Industry, the Food Technology Institute). Discrete activities will be funded according to agreed-upon technical agreements and annual plans (Lettre d'Exe`cution Technique; see Annex 4). Many o f these activities have been underhnded under the PRN due to severe national budget constraints that affected all programs in Senegal. This project will support a minimum scale up o f these activities in anticipation o f a reacceleration o f Government contributions to the program. A more detailed description o f the institutional arrangements i s provided inAnnex 6. 41. The child-focused social cash transfer (component 4) will be implemented using the well-established and effective PRN structures involving actors at the national, regional, district, and community level. Once selected according to clearly-defined targeting criteria, beneficiaries will be entitled to pick up cash on a bimonthly basis at a specified cash distribution site for the period o f 6 months. The project will have a phased implementation with subsequent 6-month interventions in different communities (see Annex 6 for more details). Close monitoring and evaluation o f the cash transfer component will inform the C L M on the need for additional measures to enhance effectiveness. 42. Targeting: Like many other cash transfer programs worldwide, this component will utilize a combination o f targeting mechanisms to reach intendedbeneficiaries. These mechanisms are categorical, geographic, and community-based targeting. The community-based targetinginvolves the following organizations and committees: 12 the Local SelectionCommittee (LSC) organizedaround the Social Affairs Commission o f the Local Government and includingthe village chief, religious leaders, and community nutrition aides; the Community Executing Agency (CEA) which is involved inthe implementation o f the community nutrition program; the Arrondissement-level MonitoringCommittee (MC) including the "sous- prtfet ", the healthpost nurse, andrepresentatives o fthe Center for Support to LocalDevelopment (CADL), the Regional Development Agency (ARD)and the Department o f Support to Social Development (SADS). The community-based targeting process will use a standardized process which i s described indetail inAnnex 1. 43. Transfer amount: Recent simulations for Senegal show that a transfer size o f approximately 35 percent o f the adult poverty line per school-age child would reduce headcount poverty by 30 percent (ie., six percentage points) and the poverty gap by 40 percent.lo A recent comprehensive review o f cash transfer programs, including those that target under five children, indicates that successful programs provide 10 to 30 percent o f pre-transfer household expenditure or consumption, but also highlights variation across countries and the importance o f underlying objectives, duration, targeting, and other parameters.""* Using results from the 2004 Enqugte Senegalaise Aupres des Mtnages (ESAM 11) for household and per capita expenditures for the bottom quintile, and accounting inter alia for inflation and household size, the transfer value has been tentatively set at FCFA 7000 (uS$14; equal to 14% o f the average food basket for a householdcomposed o f four adults) per month per mother o f at least one child under five, regardless o f the number o f children inthe household. 44. Conditionality: The transfer will be unconditional for the following reasons: (i) the emphasis on developing an efficient targeting mechanism ensures that only the poorest and most vulnerable mothers with young children at risk o f malnutrition will be reached through the cash transfer component, thereby substantially reducing the chances o f improper use o f the cash amounts received; (ii) the high coverage o f the community- based nutrition program under the PRN, the high beneficiary participation, and the effective communication campaign strategy suggest that conditionality will be unnecessary; (iii) in other parts o f Africa (Zambia, Malawi, South Africa) have pilots shown good results with unconditional cash transfers (in terms o f reduction in hunger, increased dietary diversity, number o f meals and child height); and (iv) an important objective o f this pilot i s to develop an efficient mechanism that is capable o f reaching households affected by acute emergencies. Although conditionality will not be used withinthis project several positive externalities are expected as a result o f the strong link between the cash transfer component and the community nutrition program, which I O GassmannF, C. Behrendt. Cash benefits in low-income countries: Simulating the effects onpoverty reductionfor Senegal and Tanzania. Issues inSocial Protection. DiscussionPaper #15. ILO, Geneva, 2006. `I Conditional Cash Transfers: ReducingPresent and Future Poverty. World Bank, Washington DC, 2009. l2 SamsonM, C. Cherrier. Feasibility studyfor a social cash transferprogramme as a lead instrument in child-centered social protection in Senegal. Economic Policy Research Institute, Cape Town, 2009. 13 provides behavior change communication focusing on actions critical to the maintenance o f good maternal and child nutrition. These externalities will be monitored (see Annex 1). 45. Communication strategy: A well-developed communication strategy implemented at the national, regional, local, and community levels will be crucial for the success o f the cash transfer project. The strategy will include two,components: (i) information-sharing about project processes and parameters for key stakeholders and beneficiaries (ii) awareness-raising among the beneficiarypopulation about expected benefits. 46. Learning by doing: On the basis o f close monitoring and evaluation, lessons learned will be used to adapt project design features such as the transfer delivery mechanism, community-level targeting, beneficiary identification, designation o f proxy for transfer pick-up, size o f transfer, transfer supplement to cover transport cost, duration o f transfer, conditionalities and communication strategy. 47. Financial and disbursement arrangements: The C L M i s responsible for financial management and preparing audits o f accounts. Records are kept for all expenditures following generally accepted accounting principles. The annual financial statements prepared by the C L M are audited annually, following international auditing standards, by independent auditors acceptable to IDA. The C L M prepares Interim Un- Audited Financial Reports (IFR) and annual audited financial statements for its activities under the project. The Recipient will open two designated accounts in which the grant and the credit will be disbursed. The project costs are US$18 million (see Table 1). The C L M will also identify the financial institution deemed satisfactory to IDA that will be in charge o f transferring cash to the beneficiaries. Table 1: Budget allocation by component by calendar year US$ million Component 2009 2010 2011 Total YO 1. Community-based nutrition 2.4 4.2 3.1 9.7 54 2. Multi-sectoral support 0.5 0.6 0.2 1.3 7 3. Implementation M&E 0.3 0.2 0.2 0.7 4 4. Cash transfer 1.o 3.7 1.6 6.3 35 Total 4.2 8.7 5.1 18.0 100 48. Procurement: The procurement will be handled by the CLM. Its procurement unit is well experienced in handlingprocurement for Bank financed operations. The expected procurements are relatively small and simple to handle, and will be carried out in accordance with the World Bank's "Guidelines: Procurement under IBRDLoans and IDA Credits dated May 2004 and revised October 2006" and "Guidelines: Selection and Employment o f Consultants by World Bank Recipients, dated May 2004, revised October 2006. 14 49. Supervision: Frequent (at least six-monthly) supervision missions will be carried out, commencing with the first supervision mission after project signing. The Bank supervision team i s composed o f two technical specialists (including the TTL), a senior procurement specialist, a financial management specialist based, a senior operations specialist, a human development economist, a country economist, a lead economist, as well as a consultant inthe specific areas o f cash transfers and community nutrition. The procurement, financial management and operations specialists are based inthe field. F. Project Risks and Mitigating Measures Rating of Risk Riskmitigation measures residual Risk Description of risk Rating incorporated into program design risk Country-level risks Lack o f data for Lack of up-to-date S System builds on a strong Monitoring M geographical data onpoverty, food system that the PRNalready has in targeting insecurity, and place. Targeting willuse multiple malnutritionto sources o f data (SMART assessments, determine priority poverty map, Household Living areas for intervention Standard Surveys, VAM, etc.; and coordination withmultiplepartners with access to data (e.g. UNICEF, WFP, etc.). Newtools and advocacy to be developed (e.g. rapidnutrition assessment). Project-level risks Inefficient Errors o f inclusion M The targeting is based on cross- L targeting and exclusion due to referenced quantitative surveys political interference validated by communities and then and/or subjective use independently checked. Successful o f indicators for targeting i s a key outcome o f the community targeting project. Decentralization o f . responsibilities andparticipatory processeswill be usedto actively involve community leaders, Community nutrition aides, civil society organizations and health workers; independent validation o f beneficiary list. Perverse Cash payment L Short duration o f cash transfer L incentives targeting families distribution (6 months) and flat with young children payment irrespective of number o f could encourage children will likely preclude increased increased fertility fertility Limited Lack o f experience S Extensive consultations with M capacity1 on the part o f local decentralized savings institutions experience with payment service Decentralized savings institutions have cash delivery providers a strong presence in, and experience, systems working with target population. 15 Fostering Beneficiaries will L Short duration o f cash transfer (6 L dependency come to depend on months) will likely prevent long-term the cash transfer dependency on outside support Stigmatization Possible negative M Use o f discrete distribution system L repercussion o f (pick-up at local payment service identifying providers rather than public beneficiaries as poor distribution) will reduce publicity o f and vulnerable beneficiaries; communication and awareness-raising with financial institutions to reduce prejudice in dealing with poor beneficiaries Verification o f Riskof fraud in M Program i s developing an identification M beneficiary beneficiary identify systems and checks with financial identity at cashpick-up institutions as well as use o f certificate o f identity for beneficiaries without national identity cards. A key focus (outcome) o fprogrami s that those receiving the funds meet eligibility criteria. Monitoring and Quality and L The systemwill buildonthe already L evaluation timeliness o f project strong M&Esystemo f the CLM. A monitoring new IDFGrant will be submittedto further strengthen evaluationcapacity and consistent monitoring o fprogram interventions across all regions. A key focus is on quickly operationalizing evaluation findings ineach district. Overall riskrating: Moderate Abbreviations: L =Low; M=Moderate; S = Substantial; H=High G. Terms and Conditionsof ProjectFinancing 50. The followingproject-specific legal conditions apply: Conditions of Disbursement: i)UnderComponent1(communitynutritionsubprojects): relatedtoasatisfactoryfirst Grant Agreement furnished to IDA for its approval. The MDTF resources for Component 1 will be used exclusively for the Regions Matam, Kedougou, Tambacounda, Kaolack, Kaffrine, Sedhiou and Louga. The IDA resources will initially only be used for the other Regions. Only after written confirmation from the Bank that the MDTF resources for Component 1have been fully disbursed, can IDA resources be used for the Regions initially supported by the MDTF resources; ii)Under Component 4 (cash transfers): relatedto the elaboration of financial and administrative procedures specific to cash transfers and the establishment o f a Service Agreement with a local payment service provider both in form and substance satisfactory to IDA. 16 Dated Covenants: iii)relatedtoanupdatedProjectImplementationManualreflectingtheeligibilitycriteria and the implementation mechanisms o f Component 4 (Cash Transfer) in form and substance satisfactory to IDA within three months after the effectiveness date; iv) related to the recruitment o f an external auditor under terms o f reference satisfactory to IDA within three months after the effectiveness date. 17 Annex 1:DetailedDescriptionof ProgramComponents The negative nutrition and health effects caused by the food price crisis are o f particular concern for young children during the critical period when malnutrition causes irreparable damage to growth and development (physical, cognitive, and psychosocial). To reduce this risk, components 1-3 o f this project seek to protect the nutritional security o f mothers and young children by scaling up and intensifying a package o f existing community-based and sectoral nutrition and health services and activities. These three components already exist under the Government Nutrition Enhancement Program (PRN), which was rated highly satisfactory by the World Bank in its first phase (2002-2006; ICR, 2007). Component 4 seeks to directly offset the income effect o f the shock through targeted social cash transfers. Component1:Community-basedNutrition This component is the core o f the PRN. It integrates the activities o f community-based growth monitoring and promotion with Community-based Management o f Integrated Management o f Child Illness (c-IMCI) and Acute Malnutrition (CMAM). Activities include monthly monitoring o f the growth o f children under two years old with counseling for to mothers, home visits to children requiring special attention, and cooking demonstrations. The behavior change communication strategy will focus on infant and young child feeding practices as recommended by WHO and UNICEF, disease prevention measures, recognition o f danger signs, care-seeking for sick children and proper treatment of diarrhea (with oral rehydration therapy and zinc).13 Children will be screened regularly to identify cases o f acute malnutrition and will facilitate community- based treatment o f acutely malnourished children. The three primary strategies for reducing micronutrient malnutrition are dietary diversification, supplementation, and food fortification. The PRN community-level communication activities will disseminate messages on dietary diversification and create demand for vitamin A and iron supplements and fortified foods, particularly iodized salt. The Community nutrition aides will take part innational distribution days for vitamin A supplements and deworming medication, and refer children at risk o f vitamin A deficiency to health centers to receive a curative dose under the supervision o f health workers. The program will support the national health policy on anemia prevention by encouraging women to take iron supplements during pregnancy and two months post- partum, andreceive treated bednets for useby children andpregnant women. Component2: SectoralSupportfor NutritionResults This component will support sectoral efforts in health and education to improve growth and nutrition, notably the minimum intake o f micronutrients which, although needed in small quantities, are essential for survival, growth and development. The global food price crisis has increased the risk o f compromised quality o f dietary intake, notably o f l3 UNICEF/WHO. Global Strategvfor Infant and Young Child FeedingPromotion. UNICEF, NewYork; WHO, Geneva, 2003. 18 essential micronutrients. The proposed activities include periodic distribution o f micronutrient supplements and deworming medicines, supervision o f nutrition services, and scaling up o f food fortification. The C L M together with the Ministryo f Health andPrevention (MOHP) and the Ministry o f Education will review and enhance annual strategic work plans to ensure inclusion o f priority nutrition activities. This project will support priority activities that cannot currently be assured by these sectors, specifically the distribution o f micronutrient supplements and deworming medication at primary schools. This project will also provide support to activities identified by the National Committee for Food Fortification (COSFAM) under the CLM. Fortification o f oil with vitamin A and cereals with iron is under preparation and salt iodization, which started more than a decade ago, will be further enhanced. This project will support selected activities identified by COSFAM, including social marketing and quality control. Component3: Supportto Implementation,MonitoringandEvaluation This component includes activities that strengthen the implementation and monitoring performance o fthe CLM, local governments, and line ministries. The PRNhas developed an efficient monitoring and evaluation system that will need to be adapted to include enhanced monitoring o f the cash transfer program. This component will promote ownership and accountability o f stakeholders, including local government, which play an important role inthe scaling-up o f the community activities (nutrition and cash transfers) o f the PRN. Activities that will be supported include training o f actors and stakeholders at all levels, coordination o f the project at national and sub-national levels, and monitoring and evaluation, including improving the various data bases for targeting. Component4: Child-focusedsocial cash transfers The cash transfer component will utilize the PRN community organization structure to identify eligible beneficiaries (mothers o f young children in vulnerable families), who will receive abimonthlypayment for six months. The success o f the program depends on the quality of targeting and the efficient transfer o f cash. Many cash transfer programs runinto trouble because ofovercomplicated designs. Therefore, this component adopts a learning-by-doing approach to start relatively simple and gradually improve program parameters. Targetingmechanism: Like many other cash transfer programs worldwide, this component will utilize a combination o f targeting mechanisms to reach intended beneficiaries. These mechanisms are categorical, geographic, and community-based targeting. Categorical targeting will limit eligibility to mothers o f children 0-5 years o f age. This target group was selected because the greatest immediate human development risk from 19 the food price crisis is the likelihood o f negative impacts on the health and nutritional status o f young children. Geographical targeting i s based on the most recent data on rates o f poverty, malnutrition, and household food insecurity. Data on malnutrition are available via Standardized Monitoring and Assessment for Relief and Transition (SMART) surveys conducted by the Ministry o f Health with support from UNICEF. SMART surveys have been conducted in 13 districts representing the country's different ago-ecological zones and the data are representative at the district level. Poverty data will come from a poverty map created by a World Bank team in 2008, representative at the level o f Local Government. Currently, there is no national data available on food insecurity, so geographical targeting will be conducted using a two-step process. First, districts categorized as having "critical" levels o f malnutrition (global acute malnutrition o f 15 percent or higher, or 10 percent or higher with exacerbating factors) will be selected. Of the 13 districts where SMART surveys were conducted, 10 districts were identified as "critical." These are: Bakel, Darou Mousty, Dianke Makha, Kidira, Louga, Goudiry, Goudoump, Guinguineo, Kebemer, and Matam. Plans for the current project involve intervention in all ten o f the "critical" districts. Because these areas represent different ago-ecological zones and therefore experience shocks differently, this will provide valuable lessons about the feasibility and effectiveness o f cash transfers under varying conditions. Second, within the selected districts, communities with the highest levels o f poverty, according to data from the 2008 World Bank Poverty Map, will be selected and this will determine whether universal or community-based targeting will be used. Over the course o f the project, as the community nutrition program widens its national coverage, malnutrition data provided by community-level screening will also be used to prioritize geographical areas. Community-based targeting will utilize the following criteria: 0 Presence o f children 0-5 years o f age 0 Inadequate household food consumption (absence o f food stocks, difficulty meeting minimumnumber o f meals per day) 0 Limited householdpossessions (e.g. number o f livestock, type o fhouse) According to local specificities, other criteria can be added if these can be justified and objectively assessed. The community-based targeting involves the following organizations and committees: the Local Selection Committee (LSC) organized around the Social Affairs Commission o f the Local Government and including the village chief, religious leaders, and community nutrition aides; 0 the Community Executing Agency (CEA) which i s involved inthe implementation o fthe community nutrition program; 20 the Arrondissement-level MonitoringCommittee (MC) including the "sous- prkfet ", the healthpost head nurse, and representatives o f the Center for Support to Local Development (CADL), the Regional Development Agency (ARD)and the Department o f Support to Social Development (SADS). The community-based targeting process will use a standardized process outlined as follows (see Figure2 below): Preparation phase: The C L M prepares and sends to the LSC with copy to the Governor, the "Prtfet" and the MC, a list o f the estimated number o f beneficiaries per district and explains the beneficiary selection criteria. An information-sharing gathering is organized at the district level with the participation o f the representatives o f the Local Government, the "sous-prtfet "andlocal development workers. Figure 1.1:Community-basedTargetingProcess Cellule de Lutte Convey the number ofbeneficiariesper district andgive targetingguidance Relayinformation about beneficiary targetingcriteria and Monitoring Committee selection process (Sous-prifet, ICP, ARD, Feedbackregarding adequacy of budget allocationand overall functioning beneficiaries, Submit beneficiary list for approvaland update about implementation Verify the list of selected beneficiaries Beneficiary identzjkation: The M C meets with the LSC to share information about the targeting process and selection criteria. The Local Selection Committee then identifies eligible beneficiaries in the most vulnerable households based on the targeting criteria listed above. The list o fpotential beneficiariesis submitted to the CEA for verification. Verzjkation of beneficiary list: The CEA conducts a rapid assessment (with questions reflecting the criteria for beneficiary se1,ection) in a sample of selected households. The 21 results are reported back to the Local Selection Committee and in case o f discrepancies, the selection process isrepeated. Approval of beneficiary list: The LSC approves the beneficiary list and sends it to the "sous-prkfet" who, along with the MC, authorizes the final list and sends it to the CLM. Cash TransferringMechanism Transfer recipient: The designated beneficiary is the mother o f a child 0-5 years. This decision reflects considerable evidence that resources received by women contribute more to children's wellbeing in terms o f food consumption, health, nutrition, and education outcomes than resources received by men. Transferfrequency: Transfers will be provided on a bimonthly basis. This frequency was selected because it will provide beneficiaries with cash often enough to affect short-term consumption, while minimizing the transaction costs associated with picking up the transfer (cost o f transportation and opportunity costs) andmonitoring payment. Duration: As an emergency response to the current crisis, the initial duration o f the transfer was set at six months in each community, with the option to extend to a maximum o f twelve months. This length o f time has been shown to have impacts on food consumption (e.g. in Malawi) and therefore should prevent the deterioration o f the nutritional status o f the children. This duration is also deemed short enough so as not to create dependency. Transfer amount: The generosity o f cash transfers is always a complex matter since the benefits should balance adequacy, affordability, and acceptability. l4Recent simulations for Senegal show that a transfer size o f approximately 35 percent o f the adult poverty line per school-age child would reduce headcount overty by 30 percent (i.e., six percentage points) and the poverty gap by 40 percent."A recent comprehensive review o f cash transfer programs indicates that successful programs provide 10 to 30 percent o f pre- transfer household expenditure or consumption, but also highlights variation across countries and the importance o f underlying objectives, duration, targeting, and other parameters. l6>l7 Using results from the 2004 Enqugte Senegalaise Aupres des Mknages (ESAM 11) for household and per capita expenditures for the bottom quintile, and accounting inter alia for inflation and household size, the transfer value has been tentatively set at FCFA 7000 (US$14; equal to 14% o f the average food basket for a household composed o f four adults) per month per mother o f at least one child under five, regardless o fthe number o f children inthe household. l4 GroshM.,C. delNinno, E. Tesliuc, A. Ouerghi.For Protection and Promotion: TheDesign and Implementation of Efective Safety Nets. World Bank, Washington DC, 2008. 15 GassmannF, C. Behrendt. Cash benefits in low-income countries: Simulating the efects onpoverty reductionfor Senegal and Tanzania.Issues inSocial Protection.DiscussionPaper #15. ILO, Geneva, 2006. l6 Conditional Cash Transfers: Reducing Present and Future Poverty. World Bank, WashingtonDC, 2009. SamsonM, C. Cherrier. Feasibility studyfor a social cash transfer programme as a lead instrument in child-centered social protection in Senegal. Economic Policy ResearchInstitute, Cape Town, 2009. 22 Delivey mechanism: The C L M will identify ineach zone the outfit that will be incharge of delivering the cash to the beneficiary, e.g., local paymentservice providers such as local banks and the post office. Once the list o f beneficiaries i s compiled the CEA calculates the amount o f cash required which is validated by the District-level Monitoring Committee. The CEA then prepares a request for funds based on the list o f beneficiaries by Local Government to be sent to the CLM. The C L M transfers the funds into the account o f the selected cash dispensing outfit together with the list o f beneficiaries. Beneficiaries will be allowed a window o f 15 days to pick up their bimonthly cash transfer at the designated pay-point. Payments not picked.up will be lost. Verijkation of the benepciay at the cash pay-point: Cash will be provided only to the specified beneficiary (mother o f child 0-5 years). The identity o f the recipient will be verified by her national identity card and finger prints. Conditionality: The transfer will be unconditional for the following reasons: (i)the emphasis on developing an efficient targeting mechanism ensures that only the poorest and most vulnerable mothers with young children at risk o f malnutrition will be reached through the cash transfer component, thereby substantially reducing the chances o f improper use o f the cash amounts received; (ii) the high coverage o f the community- based nutrition program under the PRN, the high beneficiary participation, and the effective communication campaign strategy suggest that conditionality will be unnecessary; (iii) pilots in other parts o f Africa (Zambia, Malawi, South Africa) have shown good results with unconditional cash transfers (in terms o f increased dietary diversity, increased number o f meals, reduction in hunger and increased child height); and (iv) an important objective o f this pilot is to develop an efficient mechanism that is capable o f reaching households affected by acute emergencies. Although conditionality will not be used within this project several positive externalities are expected as a result o f the strong link between the cash transfer component and the community nutrition program, which provides behavior change communication focusing on actions critical to the maintenance o f good maternal and child nutrition. The following externalities will be monitored: Improvements in health and nutrition indicators (use o f prenatal services, immunizations, and consumption o f iodized salt); and 0 Birthregistration Communication strategy: A well-developed communication strategy implemented at the national, regional, local, and community levels will be crucial for the success o f the cash transfer project. The strategy will include two components: (i) information-sharing about project processes and parameters for key stakeholders and beneficiaries (ii) awareness- raising among the beneficiary population about expected benefits. Table 1.1summarizes communication actions plannedover the project duration to maximize impact. The information-sharing component will provide information about the processes and functioning of the cash transfer project inorder to establish a clear understanding among participating actors and to clarify roles and responsibilities o f each stakeholder from the 23 local to the national level. This component will also include the communication o fproject objectives and activities (including targeting criteria, payment mechanism, duration, etc.) to the beneficiary population. Table 1.1: Communicationplan Dbjective Action I Audience I Responsible National Level 1 I 0 Lineministries Orientationmeeting e Association of ElectedLocal BEN/CLM at national level Representatives I Development Partners (WB, UNICEF, WFP, MI, NGoS) I Regional-level 0 Governors Orientation meeting Regional Development with regional-level Agency (ARD) BER authorities 0 Heads of decentralized services ~~ e Center for Support to Local Orientation meeting Development (CADL) W O R MATION- with Monitoring Community Executing SHARING Committee (at the Agency (CEA) Sous-prefet level of e Health Post HeadNurse (ICP) Arrondissement) e Department of Support to Social Development (SADS) Local-level I 0 Electedlocalrepresentatives I Orientation meeting e Community andreligious President of Rural with Local Selection leaders Municipality Committee e Community-based I organizations (women and youth) Communitv-level Orientation meeting Local Selection with target Community Committee communities Communitv-level AWARENESS - RAISING Meetings, interviews Community Beneficiaries and home visits (nutrition) aides The awareness-raising component will involve communicating to beneficiaries the importance o f this type o f intervention as well as the expected secondary outcomes in 24 terms o f improved nutritional status o f women and children under-five. Communication messages will emphasize immunization, prenatal visits, use o f iodized salt, and birth registration. The existing PRN outreach system and support o f the CEA and Community nutrition aides, which provide solid experience with communication campaigns, will facilitate the implementation o f these communications approaches. The communication campaign for the cash transfer component will be implemented at three different levels: national-, district- and community-level. Learning-by-doing Lessons learned during the first phase o f the cash transfer will be used to adapt the project design for hture implementation. The following topics will be explored: Transfer delivery mechanism: Alternative delivery mechanisms will be considered. Other mechanisms could include centralized payment in the village, and payment via cell phones or smartcards. Program experience will also help determine whether it is more efficient to usepa single delivery system countrywide or to vary the mechanism depending on the particularities o f the region. Community-level targeting: The balance between targeting and coverage will be evaluated with help from the CEA by reviewing the targeting exclusion error (percentage o f the target population meeting eligibility requirements, but not selected for the cash transfer). This may make the case for expanding project coverage. BeneJiciary identzjkation: Experience with the identification o f beneficiaries at pay-points will help determine whether the combination o f identity cards and beneficiary signatures is sufficient or whether it is important to introduce biometric identitycards and institutionalize a single identificationprocess across regions. Designation of proxy for transfer pick-up: Based on the experience o f beneficiary access to pay-points and the identification o f beneficiaries by local payment service providers, an institutionalized process o f proxy designation for beneficiaries who are unable to pick up the cash due to disability or illness will be considered. Size of transfer; According to beneficiary experiences and prevailing economic conditions, the adequacy o f the cash transfer size and the need to adjust the transfer to reflect inflation will be examined. Transfer supplement to cover transport costs: Cash uptake rates and interviews with beneficiarieswill help determine whether the provision o f a supplementary payment to cover the cost o f transport for beneficiaries to reach the cash pick-up point would increase project impact. 25 Duration of transfer: In light o f the impacts noted after a six-month period o f implementation, the possibility o f extending the duration o f the project in certain areas that demonstrate continued need will be considered. Conditionalities: The program starts on the basis o f very soft conditions (e.g., communication on objectives and monitoring o f key indicators). Close monitoring and evaluation o fthe cash transfer component will informthe C L M on the need for additional measures to enhance effectiveness. Such measures may refer to closer supervision, enhanced communication and training, improved targeting and verification as well as the possibility o f introducing (non-punitive) conditionalities for activities for which utilization rates are low and supply and quality are sufficient (e.g. prenatal care, immunizations, utilization o f iodized salt, vitamin A supplementation, birthregistration, and assisted delivery). 0 Communication strategy: Lessons learned about the effectiveness o f different communications channels and messages will be incorporated into future communications strategies. 26 Annex 2: ResultsFramework and Monitoring Table 2.1: ResultsFramework 1.PDO ProjectOutcomeIndicators Use of ProjectOutcome Information Reduce the risk o f Target population (children under Rapid mobilization o f nutrition insecurity o f 5) reached by the community targeted assistance to the most vulnerable populations, in nutrition program (%) vulnerable groups (especially particular children under children) intimes o f crisis. five inpoor rural and Mothers targeted providing urban areas, by scaling up exclusive breastfeeding (%) the GovernmentNutrition Enhancement Program Number o f beneficiaries and providing cash (individuals) o f cash transfer transfers to vulnerable program mothers o f children under five Selectedbeneficiaries who receive all intended cash transfers (%) 2. Intermediate Use of ImmediateOutcome Outcomes IntermediateOutcome Indicators Indicators Component I: Children 6-59 months screened for To determine ifthe project Community nutrition acute malnutrition (%) adequately increases coverage program and maintains highservice Children 0-24 months showing quality Adequate case adequate weight gain (%) management of acute To demonstrate progress malnutrition without Pregnant women making at least towards protecting and complications among four prenatal care visits (%) promoting child growth. targeted children Mothers o f target children who Adequate growth among participate inmonthly information To monitor adherence to targeted children and education sessions ("A) vitamin A supplementation targets Improved access to Targeted children 6-59 months information on nutrition receivingvitamin A and health among supplementation (%) targeted mothers Improvedmicronutrient status among targeted children aged 6-59 months Component 2: Sectoral Targeted children inprimary To demonstrate active and supportfor nutrition education receiving weekly results-oriented sectoral results micronutrient supplements (%) commitment to nutrition Sectoral ownership and Targeted children inprimary accountability for education receiving deworming nutrition results medication twice ina one-year 27 period (%) Quantity o f salt adequately iodized by small producers (tons) Quantity o f adequately fortified oil with vitaminA by oil industry (litres) Component 3: Support to Local governments incorporating To demonstrate the long-term Implementation, nutrition objectives and institutional and financial Monitoring and interventionsinLocal Development sustainabilityo f the PRN Evaluation of the Plans (%) National Nutrition Policy Fullawarenessand effective monitoring of nutrition outcomes by all levels of government Component 4: Child- Selectedbeneficiaries who do not To demonstrate targeting focused cash transfer meet eligibility criteria (inclusion efficiency error) (%) Efficientchild-focused social cashtransfer Transfers made by local payment To demonstrate the feasibility scheme established service providers (%) and reliability of the cash transfer protocol Development and adoptionby the government of an efficient child- focused social cash transfer scheme as part of the NSPS 28 u i$ i $ $ u u 2u i$ u a a a sw s s sw sw m s4 m sU 3z 4E 0 \o \o rsb W rsE g W + g r4 + s 2 + s g 2 00 r0 c, 8 .I '5( e .I B Y0 s E L c) 8 3E 0 M Annex 3: Summaryof EstimatedProjectCosts Table 3.1: Budgetallocationby componentby calendaryear US$ million Component 2009 2010 2011 Total YO 1.Community-based nutrition 2.4 4.2 3.1 9.7 54 2. Sectoral support 0.5 0.5 0.3 1.3 7 3. ImplementationM&E 0.3 0.2 0.2 0.7 4 4. Cashtransfer 1.o 3.7 1.6 6.3 35 _ _ _ _ ~ ____ ____ ~~ ~ ~ ~ Total 4.2 8.7 5.1 18.0 100 Table 3.2: Budgetallocationby componentby fundingsource US$ million Component MDTF IDA Total 1.Community-basednutrition 3.1 6.6 9.7 2. Sectoral support 1.3 1.3 3. ImplementationM&E 0.7 0.7 4. Cashtransfer 4.9 1.4 6.3 Total 8.0 10.0 18.0 31 Annex 4: FinancialManagementandDisbursementArrangements Introduction The Bank policy requires that the Recipient put inplace adequate financial management arrangements including budgeting, accounting, internal controls, hnds flow, financial reporting and auditing arrangements. These arrangements need to be in place before project implementation begins, and should be maintained during project implementation. According to the Bank Operation Policy OP 8.00, Emergency Operations, as is the case here, are processed under accelerated, consolidated, and simplified procedures and are subject to streamlined ex-ante requirements, including infiduciary and safeguards areas. The Child-Focused Social Cash Transfer and Nutrition Security Project will be implemented by the CLM, which adequately manages the ongoing Bank-financed nutrition project (PRN2). Under the PRN2, a financial management assessment (FMA) was carried out inaccordance with the Financial Management Practices Manual issuedby the Financial Management Board on November, 2005. The objective o f the assessment was to determine whether the implementing entity in place has acceptable financial management arrangements, which will ensure that: (i)h d s are used only for the intended purposes in an efficient and economical way; (ii) periodic financial reports are prepared accurately, reliably and timely; and (iii)the entity's assets are adequately safeguarded. The conclusion o f this assessment i s that, the fiduciary arrangements o f the C L M meet the Bank's minimum requirements under its operation policy OPh3P10.02. The capacity i s adequate to easily accommodate the additional responsibilities arising from the implementation o f the proposed project. However, in the context o f this emergency operation, specific actions need to be taken to strengthen the projects' internal control system inorder to bettermeet the development objective assigned to the project. The overall Financial Management risk rating for this project i s moderate subject to the C L M effectively implementing the mitigation measures associated with the inherent substantial risk o f this emergency operation. Particular attention will be paid during supervision to the flow o f hnds to beneficiaries at community level in order to ensure that cash transfers effectively reach the intendedbeneficiaries. Executivesummary The Country Financial Accountability Assessment (CFAA) o f Senegal was conducted in 2003. The overall risk rating o f the public financial management (PFM) system was high. Since that exercise, the Government has created an Executive Secretariat under the MEF to monitor the implementation o f the CFAA action plan. Following the above mentioned CFAA review, a PEFA exercise has been undertaken in2007. The report concluded that although some improvements inPFMreform have beenput inplace, significant progress is still needed in internal and external controls o f budget execution and state-owned enterprises. Key risks and challenges remain the same and require improvement in area 32 such as: (i)effectiveness o f the internal audit system by the Supreme Audit Institution (SAI, Cour des Comptes); (ii) reliability o f data for monitoring the stock o f arrears; and (iii)addressing the backlog o f State accounts. The government has given priority to improvements in these areas as well as local governance finance reforms. A Multi-Donor Trust Fund (MDTF) was set up to support the implementation of reforms. A new Procurement Code has been adopted and enacted inJanuary 2008. The Government o f Senegal i s committed to conducting the PFM reform through the creation o f a specific body, i.e., the PFMReform Steering Committee (under the Ministry of Finance) with representation by all Governmental departments responsible for specific reforms. The role o f the Steering Committee is to: (i)coordinate the reforms to be undertaken; (ii) harmonize Government actions; (iii) monitor the implementation o f the action plan; and (iv) hold different actors accountable for progress. In dialogue with external partners, the Government will implement the action plan resulting from the last PEFA framework to track progress in strengthening public financial management and identify areas where country fiduciary systems are not yet in line with international standards. The use o f the country system, notably the Treasury Department and the SA1 Cour des Comptes, will be implemented progressively. In the meantime, project implementation will be coordinated by the C L M which was set up to oversee the Government Nutrition Enhancement Program (PRN). SummaryProjectDescription The project development objective of the proposed Child-Focused Social Cash Transfer and Nutrition Security Project i s to reduce the risk o f nutrition insecurity o f vulnerable populations, inparticular children under five inpoor rural and urban areas, by scaling up the Government Nutrition Enhancement Program and providing cash transfers to vulnerable mothers o f children under five. This will be achieved through the scaling-up and intensification o f the existing components o f the PRN and the introduction o f a new component composed o f child-focused social cash transfers. The proposed interventions will be financed by a US$8 million grant from the FoodPrice Crisis Response Program's Multi-Donor Trust Fund (MDTF) and a reallocation o f US$10 million cancelled IDA resources. The financing instrument i s a new granthredit facility for the proposed Child- Focused Social Cash Transfer and Nutrition Security Project. The project will comprise four components set as follow: RiskAssessment andMitigation The objectives o f the project's financial management system are to: (i) that funds ensure are used only for their intended purposes in an efficient and economical way; and (ii) enable the preparation o f accurate and timely financial reports from community level to 33 central level and vice versa. Inthe context o f this program which includes cash transfers to beneficiaries, misappropriation o f funds by nonbeneficiaries i s a key risk that needs to be mitigated appropriately. The table below shows the results o f the risk assessment from the Risk Rating Summary. This identifies the key risks project management may face in achieving project objectives and provides a basis for determining how management should address these risks. Table 4.1: Financial Management Risk assessment Conditionsof RiskMitigating Negotiations, Measures Board or Risk incorporatedinto the Residual Effectiveness Risk Rating Project Design Risk (Yesor No) Remarks Inherent Risk H S Country H The CFAA and PEFA S No The MDTF to Level action plan is under support PFMreform implementation and the is currently government has created administrated by the an Executive Secretariat Bank. to follow up. EntityLevel S While legal and M No institutional framework is inplace, implementation may be hamper-red by political interference on which attention will be paid. ~ ~ Project Level S CDD activities andcash M No FMarrangement o f transfer operations are thls emergency risky from the fiduciary operation will rely perspective given the o n the existing CLM nature o f activities administrative and involved. However, financial procedures. implementing entity has Attention will be experience with Bank paid to reporting, financed project flow of fund and auditing process that will needto be judged satisfactory to the Bank. Multiple layers o f verification are introduced to make sure that only selected beneficiaries received the cash and unintended usage will have to be reimbursed. 34 Control Risk M I M Budgeting M Annual work plans will M No be prepared, approved by the steering committee and sub- mittedto the Bank by Dec 15 o f each year. ~ ~ ~ Accounting M Accounting function i s L No Project staff will be ledby qualified trained inknowledge financial staff with updating perspective relevant experience in on Bank FM, accountancy and audit. disbursement and procurement procedures. Internal M C L M has an Internal M No The Bankwill pay Control Audit function attention to the arrangement inplace. internal control A Financial andthe systemduring Administrative Manual supervision mission, i s inplace. However, inparticular the documentation o f process o f transaction at identification o f community level will beneficiaries and the needto be strengthened. process o f transfer o f cash to relevant beneficiaries at community level. FundsFlow S Transfer o f cash to non M No Attention will be beneficiaries i s a key paidto the internal riskinthis operation. controlprocess put Thus, two separate inplace bythe Designated Accounts payment service will be opened by provider to process DDUMEF(Direction de the cash transfer at la dette et de community level. l'investissement) for the purpose o fthe Project. A financial payment service provider acceptable to the Bank will be selected to handle with the cash transfer operation at community level. Financial M A consolidated L No The Bankwill assist Reporting reporting package will the C L M in be preparedat C L M improving the level (including specific format o fthe statement relevant to quarterly reports the cash transfer (IFR). operation). 35 An external Auditor with experience and qualifications satisfactory to the Bank will be recruited. The TOR ofthe Auditor will include specific assignment relevant to the Cashtransfer operation at community level. Inview ofthe general country financial management issues andthe issues peculiar to the CLM, the overall financial management residual risk rating for the Rapid Response Child-Focused Social Cash Transfer and Nutrition Security Project is Moderate. Strengths The financial management capacity built in the C L M under the ongoing PRN will be consolidated andused to manage the Financial Management System o f the project. Table4.2 Weakness andFMActionPlan Weaknesses Action Responsible CompletionDate 1. Information system Update existing software with CLM By effectiveness not tailored to host the adequate analytical code to host new project the project, including financial and M&E modules 2. Specific Update the existing CLM Firstquarter o f Administrative and Administrative and Financial effectiveness Financialprocedures Procedures Manual to factor o f the CFSCTFNSP specific procedures relevant to the project 3. Absence o f an Recruitment o f an External CLWCAP Firstquarter o f External Auditor Auditor with experience and effectiveness qualifications satisfactory to the Bank ImplementingEntity The Financial Manager o f the C L M will oversee the Financial Management aspects o f the project including the consolidation o f financial statements for project activities, providing quarterly Interim Financial Reports (IFR), monitoring financial transactions on the project's accounts through the Direction de la Dette et de Z'lnvestissement (DDI) and making the necessary arrangements for the annual financial audit. DDI is the entity o f MEF in charge o f Designated Account management. All requests for funds under the Project will be validated by the DDI/MEF. 36 Budgeting The Financial and Administrative Manual will be updated to describe the budgeting process. The BEN will finalize the Annual Action Plan and Budget, which will be submitted to the C L M for approval. Also, the no objection o f the Bank will be required before implementing the annual actionplan. Accounting The current accounting standards in use in Senegal for on-going Bank-financed project will be applicable. SYSCOHADA is the assigned accounting system in West African Francophone countries. The Credit will be accounted for by the project on a cash or accrual basis. This will be documented with appropriate records and procedures to track commitments and to safeguard assets. Accounting records will be maintained in local currency. The Chart o f accounts will facilitate the preparation o f relevant quarterly and financial statement including information on the total project expenditures, the financial contribution from IDA and other Donors and expenditure by component/category. Annual Financial statements will be prepared in accordance with International Accounting Standards issued by the InternationalFederationo f Accountants (IFAC). An update o f the Information System will allow production o f all accounting and financial data required : Financial Statement, Bank reconciliation statements, all the books o f accounts and all financial reports including the Interim Un-audited Financial Reports (IFR). Accounting procedures will be documented in the Financial and Accounting manual. InternalControland InternalAuditing The C L M has an Internal Audit function arrangement and a Financial and the Administrative Manual in place. However, documentation o f transaction at community level will need to be strengthened. The Bank will pay attention to the internal control system during supervision mission, in particular the process o f identification o f beneficiaries and the process o f cash transfers to relevant beneficiaries at community level. At the national level, the DDI/MEF controls ex ante all withdrawal applications before sending them to the Bank. ReportingandMonitoring The Recipient shall prepare and furnish to the Association not later than 45 days after the end o f each calendar quarter, un-audited financial reports (IFR) for the Project covering the quarter, in form and substance satisfactory to the Association. The first IFR shall be furnished to the Association not later than 45 days after the end o f the first calendar quarter after the Effective Date, and shall cover the period from the incurrence o f the first expenditure under the Project through the end o f such first calendar quarter; thereafter, each IFR shall be furnished to the Bank not later than 45 days after each subsequent calendar quarter, and shall cover such calendar quarter. 37 FundsFlow andDisbursementArrangements Disbursement Methods: The disbursement method under the Child-Focused Social Cash Transfer and Nutrition Security Project will rely on the existing arrangement under the ongoing Nutrition Enhancement Project. The Project will use the report-based disbursement method. Designated Account: The designated account will be managed by the BENKLMunder the supervision of the DDUMEF. The designated accounts will be held in XOF and located in a Commercial Bank acceptable to IDA. The Designated Accounts' proposed ceiling will be CFAF 1.0 billion and will be indicated in the Disbursement Letter (DL) once it has been agreed upon during negotiations. (See flow o f fund arrangement in appendix 1) Counterpart Funding: The Government counterpart finding may be mobilized in form o f fiscal revenue (contribution to the VAT). Disbursements by category: The table below sets out the expenditure categories and percentages to be financed out o f the Credit proceeds. Table4.3: Disbursementby category Percentageof Amount of the Amount of the expendituresto IDA Credit MDTFGrant be financed allocated in allocated in (inclusive of Category million US$' millionUS$ taxes) (1) Sub-project local government 5.2 3.1 100 (2) Equipment, pharmaceutical products, consultant services, includingthe fees due to the Payment Service Providers pursuant to the terms of the 4.1 100 relevant Service Agreement (butexcluding CashTransfers), audits and Training (3) OperatingCosts 0.7 100 (4) CashTransfer 4.9 100 TotalAmount 10.0 8.0 1 Amount expressedinSDR inthe FinancingAgreement Supervision Plan: The Project will be subject to periodic supervisionmissions. Given the Moderate FM risk rating, supervision will be intense the first year o f the project and at least one supervision mission per year for the rest o f the project life cycle. Supervision 38 activities will include review o f quarterly IFR; review of annual audited financial statements as well as timely follow-up of issues arising; transaction review with focus on Cash transfer operation at community level (this will need a field visit on a random and sample basis); participation inproject supervision missions as appropriate; and updating the FMrating inthe Implementation Status Report (ISR). Figure 4.1: Flow of Fundarrangement IDA _ _ _ _ _ _ _ _ _ _ _ - _ _ _ _ _ _ _ _ _ _ _ - _ _ _ _CLM_ _ - - - _ - _ _ Designated Designated Account (MDTF) Account (IDA) L I J L I J ,Community _ _ _ _ _ _ Local Executing + Agency I . - I ' Local payment _ _ _ _ _ _ _ _ _-I 1' b SeNice provider _ _ _ .-.-.-.-.-._ _ _ _ _ _ _ _-.-*I J f Cash transfer r Beneficiaries ' Other Beneficiaries & Suppliers 39 Annex 5: ProcurementArrangements A. General Nationalprocurementsystem andongoingreforms Senegal adopted a Public Procurement Law in June 2006 and Public Procurement Code inApril 2007 (decree No2007-545, date April 25th, 2007), as part of the action planof the Country Procurement Assessment Review (CPAR) for Senegal carried out in FY03. The legal framework is in line with the international standard and the West African Monetary Union's (WAEMU) guidelines. The independent regulatory body (ARMP) responsible for policy and handling complaints from bidders and the Procurement Department (DCMP) responsible for controls o f procurements transactions are fully operational and appropriately deal with their respective missions. Controls within the contracting authorities (CA) are effective through their respective Procurement Commission and Procurement Units. A system (SIGMAP) for collecting, disseminating, managing procurement information and monitoring procurement statistics has been developed and i s operational at the level o f the DCMP. The Government intends to spread the SIGMAP over the contracting authorities to improve efficiency and monitoring o fprocurement transactions. Key decisions with regards to sanctions, contract awards, sole source justifications and complaints are posted on the Public Procurement Website (m.marchespublics.sn). National Standard Bidding documents (NSBD) have been drafted and are being used by the CA. However there is a need to ensure regular external andinternal procurement compliance reviews. In general, Senegal's procurement laws and regulations do not conflict with IDA guidelines. However provisions related to the restriction o f the eligibility o f bidders to those coming from WAEMU countries only will not be applied. No special exceptions, permits, or licenses need to be specified in Credit documents since IDA procedures take precedence other those laws and regulations. Use of BankGuidelines Procurement for the proposed project will be carried out in accordance with the World Bank's "Guidelines: Procurement under IBRDLoans and IDA Credits", dated M a y 2004, revised in October 2006, and "Guidelines: Selection and Employment o f Consultants by World Bank Recipients", dated M a y 2004, revised in October 2006, and provisions stipulated in the Legal Agreement. The various items under different expenditure categories are described ingeneral below. For each contract to be financed by the Credit, or any different procurement or consultant selection methods, need for pre-qualification, estimated costs, prior review requirements, andtime frame are to be agreed upon between the Recipient and the Bank in the Procurement Plan. The Procurement Plan will be prepared to cover at least the initial 18 months o f the project implementation and will be updated at least annually or as requiredto reflect actual project implementation needs and improvements in institutional capacity. The procurement process and the Standard BiddingDocuments (SBD) to be usedby the executive agencies will be well defined in the Project Implementation Manual (PIM), which will include a ProcurementModule. 40 Advertising A General Procurement Notice (GPN) has been prepared and will be published in the United Nations Development Business (UNDB), in the Development Gateway (dgMarket), and inat least one national newspaper after the project is negotiated with the Recipient or after it i s approved by the Bank's Executive Board. The GPNwill show all International Competitive Bidding for works, goods, and contracts and all consulting services involving international firms. It will also include all other contracts that are identifiedbefore the preparation o f the procurement plan. Specific Procurement Notices for all goods and works to be procured under I C B and Expressions o f Interest for all consulting services to cost the equivalent o f US$200,000 and above will be published in UNDB,dgMarket, andinnationalpresswith wide circulation. B. Procurementmethods Procurement o f Works: This project is not likely to include works contracts as the focus i s on health and nutrition education and related services. However, at appraisal, the project teams on both the Recipient's and the Bank's side have agreed to include procurement o f works just in case the need arises. Such works may include emergency repairs in case o f emergency events and small works in the context o f community sub- projects under component 1. Works procured under this project, if any, will be procured using the Bank's SBD for all ICB and National SBD agreed to or satisfactory to the Bank. Those works are likely to be simple civil works o f small value, and they can be procuredby shopping inaccordance withparagraph3.5 o fthe procurement Guidelines. Procurement o f Goods: Goods procured under this project will include weighing scales, pharmaceutical products, and motorbikes for the CEA under component 1 and cars (for supervision), office material, computers, and fuel under component 1, 2, 3 and 4 o f the project. Weighing scales and pharmaceutical products may be procured from the United Nations Agencies (ie., UNICEF warehouse) or the National Pharmaceutical Warehouse (PNA). The procedures to be used by the PNA would be consistent with the Legal Agreement and the Procurement Plan. Procurement will be done using the Bank's SBD for all ICB and National SBD agreed to or satisfactory to the Bank.For readily available off-the-shelf goods or standard specification commodities o f small value, shopping may be usedinaccordance with paragraph 3.5 o f the procurement Guidelines. Procurement o f Non-consultina Services: Non-consulting services to be financed under the Credit will include mainly communication campaign under component 3 and 4 o f the project. Those services are likely to be o f small values, and as such, they may be procured by shopping inaccordance with paragraph 3.5 o f the procurement Guidelines. Selection and Employment o f Consultants: The consultant services include studies; support to project implementation; audits; financial management support; capacity building; training o f communities, training o f service providers (NGOs, individual consultants, local administrations and other public administrations) to provide technical advice, nutrition monitoring, evaluation and monitoring and implementation of an IEC 41 program. The implementation o f component 1 at community level is mainly delegated to NGOs already selected on a competitive basis in the context o f the existing program. Periodic technical and financial performance evaluation o f NGOs will be conducted to ensure compliance with contractual agreements. For small assignments (less than US$75,000 and to be determined on a case by case basis), the selection based on the consultants' qualifications method may be used in accordance with paragraphs 3.7 and 3.8 o f the Consultants Guidelines. Short lists o f consultants for services estimated to cost less than $200,000 equivalent per contract may be composed entirely o f national consultants in accordance with the provisions o f paragraph 2.7 o f the Consultant Guidelines, provided that a sufficient number o f qualified firms are available at competitive costs. If, however, foreign firms have expressed an interest, they will not be excluded from consideration. The Standard Request for Proposals (FWP), as developed by the World Bank, will be used for requestingproposals and for selection and appointment o f consulting firms. Simplified contracts may be used for short-term assignments. Operating costs: The Credit will finance part o f the operating costs o f the BEN o f the C L M and remuneration o f consultants for implementing the program. An important part o f the hnds will be used for supervision by the CLM. Operating costs will be procured using the executive agency's administrative procedures that were reviewed and found acceptable to the IDA. Sub-proiects for communitv-based nutrition: the project will finance under component 1 sub-projects that will benefit communities and are implemented by CEAs under the responsibility o f Local Governments. The total budget for sub-projects i s US$8.6 million. Those sub-projects are granted through financing conventions with the responsible and implementing institutions, and their cost may vary from less than US$lO,OOO to about US$50,000 per year for the duration o f the project. A small part o f the grants may be usedto procure small items: inthis regard, the procedures described in the Project Implementation Manual / Project operational Manual approved by the Bank in December 2006, will be used. Specialrequirementsfor this project Use o f the national procurement code for N C B and shopping procedures: National Competitive Bidding (NCB) advertised locally will be carried out in accordance with Senegal's procurement laws and regulations, acceptable to IDA provided that they assure economy, efficiency, transparency, and broad consistency with key objectives o f the Bank Guidelines. For N C B procedures, the following principles have been adhered to: (i) bids should be advertised in national newspapers with wide circulation"; (ii)any bidder i s given sufficient time to submit bids (4 weeks); (iii)bid evaluation and bidder qualifications criteria are clearly specified in the bidding documents; (iv) no preference margin is granted to domestic manufacturers; (v) eligible firms are not precluded from the competition; (vi) prior to issuing the first call for bids, a draft standard bidding 42 document i s submitted to and deemed acceptable to IDA; and, (vii) the procedures also include the publication o f the results o f evaluation and o f the award o f the contract, and provisions for bidders to protest. With regard to shopping procedures, as stated above, this procedure should be satisfactory to the Bank. This will include the following requirements: (i) to beFirms Invited: the recipient exercises due diligence to satisfy itself that the firms invited to quote are reputable, well established, and are suppliers of the goods or services being purchased as part o f their normal business. In case the recipient receives unsolicited quotations, these may be accepted after carrying out a similar due diligence exercise to verify the nature and reputation o f the firms; (ii)Number o f firms to invite: Interpretation o f shopping procedure as per the Guidelines requires the purchaser to obtain and compare at least three quotations to establish reasonableness o f price. To minimize the risk o f getting only one or two quotations, clients are advised to request more than three quotations; (iii) Form o f Requests: The purchaser requests quotations by writing with proof o f receipt and record keeping. The request includes the description and quantity o f the goods, as well as the required delivery time and place for the goods or services, including any installation requirements, as appropriate. C. Assessmentof the agency's capacityto implementprocurement Procurement activities will be carried out by the CLM, which includes a procurement unit staffed with a Procurement Specialist. The procurement unit is well experienced in handlingprocurement inBank financed operations. The expected procurement operations are relatively small and simple to handle as i s being successfblly handled with the ongoing nutrition project. The C L M i s staffed by a Coordinator, a Financial Management Specialist, an Operation and Monitoring Officer, a Procurement Specialist, a Communication Specialist, and a Public Health Nutrition Specialist, and all staff actively participated in the evaluation o f the program and felt concerned with the procurement function as key for the project implementation. The procurement specialist's responsibilities include preparation and execution o f the procurement plan, preparation of biddingdocuments or requests for proposals, monitoring of the biddingprocess, assisting the team in the evaluation process, and contract award and follow-up contract management andreporting. The assessment o f the capacity o f the Implementing Agency to implement procurement actions for the project has been done on February llth, 2009, by Cheick A. T. Traore, Senior Procurement Specialist in the Dakar Country Office. The assessment, which i s an update o f the previous one done on March 2006 for the 2"d phase o f the nutrition enhancement project, reviewed the organizational structure for implementing the project andthe interactionbetween the project's staff responsible for procurement andthe Prime Minister's office. The assessment confirmed that the Procurement Specialist has significant experience with World Bank procedures and is comfortable in applying them, as it canbe seen through the procurement activities inthe ongoing project. 43 However, some events have been identified as key issues and risks concerning procurement for implementation. They include the important size o f the budget allocated to sub-projects that benefit communities with the involvement o f Local Governments and CEAs in the procurement process. Meanwhile the Bank i s raising its prior review thresholds inprocurement which means that many operations under this project are likely not to be prior reviewed. The corrective measures which have been agreed to with the recipient to mitigate the risks are the following: 0 The Procurement Officer will continue to assist and advise Local Governments and CEAs on the procurement process; The Procurement Specialist will conduct frequent supervision o fprocurement at community level; 0 The Bank may conduct close and frequent procurement supervision and post reviews duringthe first year o fthe project implementation. After one year, the Bankmay assess how procurement was handled; 0 A technical audit is recommendedto review the procurement under the projectwith an emphasis on community level implementation and on the project implementation ingeneral. The overall project risk for procurement is low for the procurement unit, but is high at community level. Inthis context, the overall risk i s high. D. ProcurementPlan At appraisal, the Recipient developed a Procurement Plan for project implementation which provides the basis for the procurement methods. This plan has been agreed between the Recipient and the Project Team on March 13th, 2009, and i s available at the C L M office, and on its external website. It will also be available inthe project's database and in the Bank's external website. The procurement planwill be updated in agreement with the Project Task Team annually or as required to reflect actual project implementation needs and improvements ininstitutional capacity. E. Frequencyof ProcurementSupervision In addition to the prior review by the Bank, the capacity assessment of the CLM recommendedtwo supervision missions per year to visit the field to carry out post review o fprocurement actions. F. Detailsof ProcurementArrangements General Projectinformation:Senegal RapidResponse Child-Focused Social CashTransfer andNutrition Security Project Implementingagency: Cellule de LutteContre laMalnutrition. Bank's approvaldate of procurement plan:Original: March 13th,2009; First revision scheduled in6 months, i.e. approximately September, 15th, 2009 44 Dateof GeneralProcurementNotice:immediately after negotiations Periodcoveredby this procurementplan:April 2009 to July 2010 GoodsandWorks andnon-consultingservices Prior Review Threshold: Procurement Decisions subject to Prior Review by the Bank as stated inAppendix 1to the Guidelines for Procurement: ProcurementMethod Prior Review Threshold Comments 1. ICB and LIB (Goods), =or >US$500,000 ICB and LIB for goods will be ifany usedfor US$500,000 and above 2. NCB (Goods) The first two contracts, NCB for goods will be usedfor irrespective of their cost less than US$500,000 estimate 3. ICB (Works), if any =or >US$5,000,000 ICB for works will be usedfor US$5,000,000 and above 4. NCB (Works), ifany The first two contracts, NCB for works will be usedfor irrespective o f their cost less than US$5,000,000 estimate 5. ICB (Non-Consultant =or >US$500,000 ICB for non-consultant services Services), if any willbe usedfor US$500,000 and above 6 NCB (Non-Consultant The first two contracts, NCB for non-consultants Services), ifany irrespective o f the cost services will be usedfor less estimate than US$500,000 7 Shopping =or >US$50,000 andthe first Shopping for works if any, goods two contract under and non-consultants services, US$50,000 will be usedfor less than or equivalent to US$50,000. If more than US$50,000, prior clearance is needed from IDA withrelevantjustifications. The cost estimate will not exceed us$loo,ooo. 8 Direct contracting All, irrespective ofthe cost None estimate 9 Community The first two contracts, None participationin irrespective of the cost procurement estimate Prequalification: Not applicable, Proposed procedures for CDD components (as per paragraph. 3.17 o f the Guidelines: Refer to the Project Implementation Manual. 45 Reference to Project Operational Manual: Approved by the Bank,December 2006 Any other specialprocurement arrangements: None. ProcurementPackageswith MethodsandTime Schedule: ,. Contract Estimated (Description) Purchase of three 150,000 I NCB I I I Prior I 19/06/09 cars for supervision No No Purchase of IT 1 I 1 I I material 30,000 Shopping No No Prior 19/06/09 Audiovisual support 40,000 Shopping No No Post 08/01/10 Selectionof Consultants Prior Review Threshold: Selection decisions subject to Prior Review by Bank as stated inAppendix 1to the Guidelines Selection andEmployment ofConsultants: Selection Method Prior Review Threshold Comments 1. Competitive Methods (Firms) =or >US$200,000 None 2. Single Source (Firms) All, irrespective ofthe None cost estimate 3. Individual Consultants = or >US$lOO,OOO None 4. Single source for Individual All, irrespective o fthe None Consultants cost estimate 5. Contracts for elaboration manuals o f All, irrespective o fthe These contracts are not procedures, contracts for monitoring cost estimate selection methods; due and evaluation assignments ; to their sensitivity, contracts for financial assistance if they will be subject to any, contract for financial audit; prior review contracts for technical; contract for environmental and social issues 6. Contracts awarded with communities The first two contracts, These contracts are not participationifany irrespective o f their cost selection methods; due estimate to their sensitivity, they will be subject to Drior review Short list comprising entirely of national consultants: Short list of consultants for services, estimated to cost less than $ 200,000 equivalent per contract, may comprise entirely o f national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines. 46 Any Other Special Selection Arrangements: None ConsultancyAssignments with SelectionMethods andTime Schedule: 1 2 3 4 5 6 Expected Estimate Review by Proposals cost Selection Bank(Prior / Submission No. Descriptionof Assignment (US$) Method Post) Date 1 Development and implementation of 1 1 1 Prior 01 JunO9 audiovisual campaign 220,000 QcBs 2 Impact evaluation cashtransfer I 1 I 120,000 QCBS Post comuonent 15 Sept 09 3 Beneficiary satisfaction survey on cash I I 1 40,000 IC Post 12Oct 09 transfer component 4 Academic write-upof the nutritiodcash IC Post 15 Apr 09 transfer program 20,000 Assessment andreview oftargeting I I 1 I process I mechanism 30,000 IC Post 29Apr09 Evaluation of cashtransfer I I I 1 16Nov09 II 1I 1 communication strategy 12,000 IC Post ~ Production of audiovisual 100,000 QCBS Post 01 JunO9 communication materials Techmcal and financial audit of Local 35,000 Lcs Prior 15 Jun 10 Government subprojects 1 47 Annex 6: Implementation,Monitoring,andInstitutionalArrangements The project will be implemented using the existing PRN institutional structure. Under this arrangement, the C L Moversees district- and community-level entities which, inturn, implement and supervise project implementation. Implementationof communitynutritionactivities The PRN scale-up process will employ two intervention models. In communities that have more than 1,000 inhabitants, the PRN will replicate its existing intervention model, involving monthly contact with beneficiaries for growth monitoring and promotion and behavior change counseling. This is considered the "intensive" model. In villages with fewer than 1,000 people, where such an intensive model would not be cost-effective, Community nutrition aides will conduct malnutrition screenings and provide behavior change counseling on a quarterly basis. Because of the less frequent contact inherent in this model, particular emphasis will be placed on strengthening communication campaigns in these areas and conducting rigorous monitoring and evaluation o f program communications. After completing expansion to these smaller communities, the community nutrition program o f the PRN will increase the intensity o f the intervention in those areas that demonstrate greater need. In 2009, the program will increase the coverage in25 new HealthDistricts and 136 new Local Government areas. Table 6.1: Evolutionincoverage of scalingupthe community nutritionprogram 2009 2011 Number ofchildren underfive 320,000 710,000 Number ofcommunitysites 925 3,000 Number ofLocalGovernments 115 251 Numberofhealthdistricts 34 58 Coverage of children under five 22% 45% Implementationof cash transfer activities The ability o f the innovative child-focused social cash transfer component to respond effectively to the crisis and to become a model fast-track mechanism to reach the poor and ensure nutrition security will depend heavily on project implementation. In areas where existing PRN structures are in place, these structures will provide a strong foundation for the cash transfer rollout. In non-PRN areas, the same cash transfer mechanisms will be used accompanied by communication activities but without the monthly community nutrition activities. Phased approach: The cash transfer will be provided to each target community for an initial period o f 6 months. The program will be rolled out gradually following an implementation plan developed by consensus with all stakeholders, particularly Elected 48 Local Representatives. The first communities selected for the cash transfer will be those inwhich the PRNhas beenpresent for at least 6 months so that complementary nutrition activities and community structures will have been put in place. Over time, the cash transfer project will be implemented in both PRN and non-PRN areas to allow for a comparison o f the two implementation models. After the first six-month phase, a reprioritization o f target areas (based on degree o f nutrition insecurity) will guide the rollout o f each subsequent phase. Note that a second round o f six months can begin while the first one is still ongoing. Transparency: As the cash transfer i s a new delivery mechanism in the country and potential scale-up i s envisaged, transparency will be critical throughout the process. Whistleblowers will thus be set up at many stages o f the implementation process, such as targeting andpayment. As for community targeting(indistricts where universal targeting was not possible), a public disclosure o f the eligibility criteria and o f the selected list o f beneficiarieswill be crucial. Monitoring and evaluation of outcomes/results Monitoring: The PRN has an efficient and effective integrated monitoring and information system using data collected monthly at the community level on project activities, service quality, outcome indicators and costs. Moreover, this system i s integrated into the CEAs' own monitoring arrangements to ensure flexibility between CEAs' needs and standardized information needs at aggregated (higher) levels. This system alerts key program actors when corrective measures are needed. At the central level, the monitoring system also will integrate information on the implementation progress o fhealth and education sector plans. Monitoring o f the cash transfer component will be integrated into the existing PRN monitoring system. Bothprocess and programmatic outcomes will be monitored to allow for ongoing adjustment (learning-by-doing) to ensure project quality and performance. The CEA will prepare a report on the cash transfer activities ineach target area after each cash payment (every two months). The C L M will synthesize these reports and share them with relevant stakeholders. This way, the C L M can track the development o f the project. The compiled report will present results based on expected outcomes (percentage o f beneficiaries that meet the selection criteria, percentage o f beneficiaries that receive their transfer on time, and percentage of beneficiaries that participate in communication activities). Evaluation: Project evaluation will focus on the cash transfer component because it is a new element o f the program. There will be two types o f evaluation: (i)a process evaluation that will assess the effectiveness o f cash delivery to beneficiaries, the level o f beneficiary satisfaction, the utilization o f services, the validity o f the targeting process, and the effectiveness of the communication strategy (see Table 6.2); and (ii) impact an evaluation that will focus on the degree o f achievement o f positive externalities associated with the project, particularly household consumption o f food and o f iodized salt, birth registration, prenatal care, and immunizations. To facilitate the impact 49 evaluation, a proper baseline survey will be undertaken in both intervention and control communities to collect information on pre-intervention conditions. Follow-up surveys will be conducted at the end of the two-year intervention for a total of 6 pre-post surveys. Furthermore, data from the LQAS - collected every six months as part of the community nutrition component of the PRN - will be used to track changes in other outcomes reflecting nutrition security. This will enable a rigorous impact evaluation that will be able to identify the added value of the cash transfer component in the presence of the PRN intervention. Table 6.2: Process evaluation Study Frequency and duration Observations -- - - - - Targeting validity After each community-based This will provide an opportunity to targeting experience adjust selection criteria if necessary Communication activities After 6 months of intervention This will determine whether communication channels are effective Availability of funds After 6 months of intervention Evaluation of payment system (efficiency, security, etc.) Beneficiary satisfaction 12months into the project Lessons learned will be applied in future (halfway point) intervention phases. Institutional Arrangements The project will be implemented by the CLM, which already successfully implements the Nutrition Enhancement Project (PO97181). The CLM's responsibilities are primarily to coordinate and supervise the various actors involved in the implementation of the different components; i.e., line ministries, local government, CEA, decentralized public services, communities, and, in the case of the cash transfer component, local payment service provider. Sector Ministries, notably the Ministry of Health and Prevention, assist the CLM with the formulation of policies, norms and protocols, contribute to the implementation of the program, and ensure the quality of interventions. The health and education ministries will not directly manage financial funds, but work according to agreed-upon technical agreements and annual plans (see Annex 4). Figure 6.1 summarizes the key stakeholders and the institutional set up for project implementation. The CEAs must have legal status (NGO, CBO, or other) and a capacity to implement community-based nutrition interventions in an entire health district. On behalf of the local government, the CEA will be in charge of implementing activities financed by the CLM. Therefore, the selected CEAs will work with the local governments to prepare proposals, which the local government will then submit to CLM for approval and funding. CEAs will sign a grant agreement with their respective local governments to implement the technical and financial aspects of project activities, while reporting to the local authorities and the health district. Hence, the local government will not manage funds, which according to the contractual agreement between BEN and the local government will be directly deposited into a separate account of the CEA. Figure 6.1: Institutional architecture I \ Prime Minister's Office CLM Line Ministries Local Government Decentralized Financial (Health,Education, (Local Selection Institutions Family, Finance) Committee) Decentralized services Community Executing (Arrondissement-level Agency (CEA) MonitoringCommittee) I I I 1 VulnerableMothers of Childrenunder 5 The role of the communities will be to: (i) identify and mobilize members of the community to operate as nutrition aides; (ii) determine appropriate sites for nutrition aides to conduct monthly growth promotion activities; and (iii) set up management committees to oversee the community nutrition activities and sites. The nutrition aides belong to (and will be supported by) the community. Technical support in the form of training, formative supervision, and learning exchanges will be provided by the CEA in collaboration with public health serviceproviders and local authorities. (See Table 6.3 for all roles and responsibilities.) Table 6.3: Roles and Responsibilities Entity Roles and responsibilities CLM Prepare agreements with local entities, line ministries according to respective roles and responsibilities Provide strategic guidance on priority projects Develop key documents in collaboration with line ministries Provide technical assistance Monitor and evaluation, notably the cash transfer component Check compliance with agreed procedures during implementation Undertake studies about nutrition in Senegal Manage the overall project Disburse funds Ministry of Approve agreement between CLM and the Local Payment Service Economy and Providers Finance Monitor collaboration between these entities Ministry of the Monitor the overall process of the cash transfer project with emphasis Family, National on targeting Solidarity,Women's Entrepreneurship and Microfinance Ministry of Health Monitor indicators related to nutritional status of target children and Prevention Arrondissement- InformLocal Governments on objectivesand process of cash level Monitoring transfers Committee Validate the list of beneficiaries Monitor cash transfer activities Local Government Select CEAs Identify PRN intervention areas In collaboration with the CEA, prepare and validate proposals and submit to the CLM Supervisecommunity-based activities Inform local authoritiesabout project objectives and processes Organize Local Selection Committee to identifybeneficiaries for cash transfers Local Selection Organizecommunity information and planning meetings for cash Committee transfer component Oversee and validate the identification of cash transfer beneficiaries Decentralized Ensure that funds are available in a timely manner at agreedpay- Payment Service points Providers Verify beneficiaries' identity Disburse cash payments to beneficiaries Prepare and provide financial statements to the CLM Community Implement PRN activities Execution Agencies Facilitateproject execution at district and communitylevel (CEA) Implement communication strategyat community level Verify the beneficiary list for cash transfers and ensure proper community targeting Support Local Selection Committee with targeting activities Report on the statusof project implementation Annex 7: Project Preparation, Appraisal and Negotiations Team Members Menno Mulder-Sibanda SeniorNutrition Specialist(TTL) AFTH2 Saidou Diop Financial Management Specialist AFTFM Cheick Traore Senior Procurement Specialist AFTPC Ronnie Harnrnad Senior Operations Specialist AFTRL ~udo&csubran Economist ARD Lucy Bassett Nutrition and Cash Transfer Consultant AFTH2 Mamadou Ndione Economist AFTP4 Alain d'Hoore Lead Economist AFTP4 Mademba Ndiaye Senior CommunicationsOfficer AFREX Moukim Temourov SeniorHuman Development Economist AFTH2 Nathalie Munzberg Senior Counsel LEGAF Aphrodite Smagadi Consultant LEGAF Wolfgang Chadab SeniorFinance Officer LOAFC Marietou Toure Language Program Assistant AFTH2 Astou Diaw-Ba Program Assistant AFCF1