Document of The World Bank FOR OFFICIAL USE ONLY Report No: PAD2382 INTERNATIONAL DEVELOPMENT ASSOCIATION PROJECT APPRAISAL DOCUMENT ON A PROPOSED GRANT IN THE AMOUNT OF SDR7.3 MILLION (US$10 MILLION EQUIVALENT) TO THE CENTRAL AFRICAN REPUBLIC FOR A PUBLIC EXPENDITURE AND INVESTMENT MANAGEMENT REFORM PROJECT June 6, 2017 Governance Global Practice 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 disclosed without World Bank’s authorization. The World Bank Public Expenditure and Investment Management Project (P161730) CURRENCY EQUIVALENTS Exchange Rate Effective April 30, 2017 Currency Unit = CFA Franc (CFAF) US$1 = CFAF 600.85 US$1 SDR 0.72938396 FISCAL YEAR January 1 – December 31 ABBREVIATIONS AND ACRONYMS AfDB African Development Bank AIMF Association Internationale des Maires Francophones (International Association of Francophone Mayors) AFRITAC African Regional Technical Assistance Center ARAP Abbreviated Resettlement Plan ARMP Agence de Régulation des Marchés Publics (Public Procurement Regulatory Agency) BEAC Banque des Etats de l’Afrique Centrale (Central Bank of the States of Central Africa) CAAT Central Accounting Agency of the Treasury CEMAC Central African Economic and Monetary Community CEN Country Engagement Note CN Compensation Note CS-REF Cellule Chargée du Suivi des Réformes Economique et Financières (Economic and Financial Reforms Monitoring Unit) DA Designated Account DDR Demobilization, Disarmament, and Reintegration DGB Direction Générale du Budget (Directorate General of Budget) DGMP Direction Générale des Marchés Publics (Directorate General of Public Procurement) DGTCP Direction Génerale du Trésor et de la Comptabilité Publique (Directorate General of Treasury and Public Accounting) DPO Development Policy Operation ECOP Environmental Code of Practice EMP Environmental Management Plan ENAM Ecole Nationale d’Administration et de la Magistrature (National School of Administration and Judiciary) EPSR Emergency Public Services Response ESSAP Environmental and Social Safeguards Action Plan Page 1 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) ESMP Environmental and Social Management Plan EU European Union FCS Fragile and Conflict-Affected Situation FM Financial Management FMIS Financial Management Information System GDP Gross Domestic Product GESCO Système de gestion de la chaîne de dépense informatisée (IT System for the Management of Public Expenditure) GNI Gross National Income GRS Grievance Redress Service HR Human Resources IEG Independent Evaluation Group IFR Interim Financial Report IGF Inspection General of Finance IMF International Monetary Fund IPF Investment Project Financing LAN Local Area Network MAN Metropolitan Area Network M&E Monitoring and Evaluation MEPC Ministry of Economy, Planning and Cooperation MFB Ministry of Finance and Budget MTEF Medium-Term Expenditure Framework MINUSCA United Nations Multidimensional Integrated Stabilization Mission in the Central African Republic NGO Nongovernmental Organization PAP Project Affected People PDIA Problem - Driven Iterative Adaptation PDO Project Development Objective PEFA Public Expenditure and Financial Assessment PEIMRP Public Expenditure and Investment Management Project PFM Public Financial Management PIM Project Implementation Manual PMU Project Management Unit PPSD Project Procurement Strategy and Development RAP Resettlement Action Plan RCPCA National Recovery and Peace Building Plan SCDP State Consolidation Development Program SOE Statement of Expenditure SORT Systematic Operational Risk Tool STEP Systematic Tracking and Exchanges in Procurement TA Technical Assistance ToR Terms of Reference TSA Treasury Single Account UN United Nations UNICEF United Nations Children’s Fund Page 2 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) UNOPS United Nations Office for Project Services WHO World Health Organisation Regional Vice President: Makhtar Diop Country Director: Ahmadou Moustapha Ndiaye Senior Global Practice Director: Deborah L. Wetzel Practice Manager: Chiara Bronchi Task Team Leader(s): Ragnvald Michel Maellberg Page 3 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) BASIC INFORMATION Is this a regionally tagged project? Country(ies) Financing Instrument No Investment Project Financing [✔] Situations of Urgent Need of Assistance or Capacity Constraints [ ] Financial Intermediaries [ ] Series of Projects Approval Date Closing Date Environmental Assessment Category 19-Jun-2017 30-Jun-2021 B - Partial Assessment Bank/IFC Collaboration No Proposed Development Objective(s) To improve management and transparency of public expenditures and public investments Components Component Name Cost (US$, millions) Management and Transparency of Public Expenditures 5.00 Management and Transparency of Public Investments 4.00 Project Managment 1.00 Organizations Borrower : Central African Republic Implementing Agency : Ministry of Finance and Budget Page 1 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) Safeguards Deferral OPSTABLE Will the review of safeguards be deferred? [✔ ] Yes [ ] No PROJECT FINANCING DATA (US$, Millions) [ ] [ ] IBRD [ ] IDA Credit [ ✔ ] IDA Grant [ ] Trust [ ] Counterpart Funds Parallel Funding [ ] Crisis Response [ ] Crisis Response Financing Window Window [ ] Regional Projects [ ] Regional Projects Window Window FIN_COST_OLD Total Project Cost: Total Financing: Financing Gap: 10.00 10.00 0.00 Of Which Bank Financing (IBRD/IDA): 10.00 Financing (in US$, millions) FIN_SUMM_OLD Financing Source Amount IDA Grant 10.00 Total 10.00 Expected Disbursements (in US$, millions) Fiscal Year 2017 2018 2019 2020 2021 2022 Annual 0.00 0.66 1.23 2.59 4.20 1.31 Page 2 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) Cumulative 0.00 0.66 1.90 4.49 8.69 10.00 INSTITUTIONAL DATA Practice Area (Lead) Governance Contributing Practice Areas Climate Change and Disaster Screening This operation has been screened for short and long-term climate change and disaster risks Gender Tag Does the project plan to undertake any of the following? a. Analysis to identify Project-relevant gaps between males and females, especially in light of country gaps identified through SCD and CPF No b. Specific action(s) to address the gender gaps identified in (a) and/or to improve women or men's empowerment No c. Include Indicators in results framework to monitor outcomes from actions identified in (b) No SYSTEMATIC OPERATIONS RISK-RATING TOOL (SORT) Risk Category Rating 1. Political and Governance High 2. Macroeconomic High 3. Sector Strategies and Policies  Moderate 4. Technical Design of Project or Program  Moderate 5. Institutional Capacity for Implementation and Sustainability High 6. Fiduciary  Substantial Page 3 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) 7. Environment and Social  Moderate 8. Stakeholders  Substantial 9. Other High 10. Overall  Substantial COMPLIANCE Policy Does the project depart from the CPF in content or in other significant respects? [ ] Yes [✔] No Does the project require any waivers of Bank policies? [ ] Yes [✔] No Safeguard Policies Triggered by the Project Yes No Environmental Assessment OP/BP 4.01 ✔ Natural Habitats OP/BP 4.04 ✔ Forests OP/BP 4.36 ✔ Pest Management OP 4.09 ✔ Physical Cultural Resources OP/BP 4.11 ✔ Indigenous Peoples OP/BP 4.10 ✔ Involuntary Resettlement OP/BP 4.12 ✔ Safety of Dams OP/BP 4.37 ✔ Projects on International Waterways OP/BP 7.50 ✔ Projects in Disputed Areas OP/BP 7.60 ✔ Legal Covenants Sections and Description Section I.C.2. The Recipient shall furnish to the Association, not later than November 30 of each year, the annual work plans and budgets approved by the PSC for the Association’s review and approval; except for the annual work plan and budget for the Project for the first year of Project implementation, which shall be furnished no later than one (1) month after the Effective Date. Only the activities included in an annual work plan and budget Page 4 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) expressly approved by the Association (each an “Annual Work Plan and Budget”) are eligible to a financing from the proceeds of the Financing. Sections and Description Section 1.E.3. The Recipient shall ensure that for each activity under the Project of a type for which the ESSAP provides that an ESMP should be prepared, such ESMP shall within four (4) months of the Effective Date be prepared, in form and substance satisfactory to the Association, and disclose it locally and at the Bank’s InfoShop, before the implementation of such activity, in accordance with the provisions of the ESMF, and the relevant activity is implemented in accordance with its ESMP. Sections and Description Section 1.E.4. The Recipient shall, moreover, ensure that for each activity of a type for which the ESSAP provides that a RAP should be prepared, such RAP shall within four (4) months of the Effective Date be prepared in form and substance satisfactory to the Association, (including without limitation to the above, the provision of funds for resettlement compensation when and if required under said RAP), and disclosed locally and at the Bank’s InfoShop, before the implementation of such activity, in accordance with the provisions of the ESSAP, and the relevant activity is implemented in accordance with its RAP. Sections and Description Section II.A.1. The Recipient shall monitor and evaluate the progress of the Project and prepare Project Reports in accordance with the provisions of Section 4.08 of the General Conditions and on the basis of indicators acceptable to the Association. Each Project Report shall cover the period of one calendar semester and shall be furnished to the Association not later than 45 days after the end of the period covered by such report. Sections and Description Section II.B.2. The Recipient shall prepare and furnish to the Association not later than 45 days after the end of each calendar quarter interim unaudited financial reports for the Project covering the quarter, in form and substance satisfactory to the Association. Sections and Description Section II.B.3.The Recipient shall have its Financial Statements audited in accordance with the provisions of Section 4.09 (b) of the General Conditions. Each audit of the Financial Statements shall cover the period of one fiscal year of the Recipient. The audited Financial Statements for each such period shall be furnished to the Association not later than six months after the end of such period. Sections and Description Section II.B.4. The Recipient shall not later than six (6) months after the Effective Date recruit and thereafter retain an external auditor. Page 5 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) Sections and Description Section II.B.5. The Recipient shall, not later than three (3) months after the Effective Date install a customized accounting software. Conditions Type Description Effectiveness ARTICLE IV — EFFECTIVENESS; TERMINATION 4.01. The Additional Conditions of Effectiveness consist of the following: (a) The Recipient has established the PMU and the PSC with mandates, compositions, staff and resources satisfactory to the Association. Type Description Effectiveness ARTICLE IV — EFFECTIVENESS; TERMINATION 4.01. The Additional Conditions of Effectiveness consist of the following: (b) The Recipient has adopted the PIM in form and substance acceptable to the Association. PROJECT TEAM Bank Staff Name Role Specialization Unit Team Leader(ADM Ragnvald Michel Maellberg GGO13 Responsible) Procurement Specialist(ADM Haoussia Tchaoussala GGO07 Responsible) Financial Management Tahirou Kalam GGO26 Specialist Beatrice Toubarot Team Member AFMCF Mossane Benjamin Burckhart Safeguards Specialist GSU01 Cem Dener Peer Reviewer GGO19 Cheikh A. T. Sagna Safeguards Specialist GSU01 Diana-Alisson Balikouzou- Team Member AFMCF Hinna Dolele Sylla Team Member GGO13 Donald Herrings Mphande Peer Reviewer GGO31 Page 6 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) Emeran Serge M. Menang Safeguards Specialist GEN07 Evouna Emilie Sandrine Celine Peer Reviewer GCFMR Jourdan Emma Clarisse Bouba- Team Member AFMCF Koumatou Leppa Fabienne Mroczka Team Member GGO22 Faly Diallo Team Member Finance Officer WFALA Francesca Recanatini Peer Reviewer GGO17 Herimpamonjy Mavoarisoa Team Member GGO13 Ranaivoarivelo Kolie Ousmane Maurice Team Member GGO23 Megnan Laurene Ndjimanguele Team Member ITSCR Biadou Michael Christopher Public Sector Governance Team Member GGO19 Jelenic Consultant Patrice Sade Team Member GGO13 Siobhan McInerney- Counsel LEGAM Lankford Yoko Kagawa Team Member GGO13 Extended Team Name Title Organization Location Page 7 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) CENTRAL AFRICAN REPUBLIC PUBLIC ADMINISTRATION MODERNIZATION PROJECT TABLE OF CONTENTS I. STRATEGIC CONTEXT ...................................................................................................... 9 A. Country Context ................................................................................................................. 9 B. Sectoral and Institutional Context ................................................................................... 10 C. Higher Level Objectives to which the Project Contributes ............................................. 16 II. PROJECT DEVELOPMENT OBJECTIVES ............................................................................ 17 A. PDO ................................................................................................................................... 17 B. Project Beneficiaries ......................................................................................................... 17 C. PDO-Level Results Indicators ........................................................................................... 18 III. PROJECT DESCRIPTION.................................................................................................. 18 A. Project Components ......................................................................................................... 18 B. Project Cost and Financing (in million US$) ..................................................................... 23 C. Lessons Learned and Reflected in the Project Design ..................................................... 23 IV. IMPLEMENTATION........................................................................................................ 25 A. Institutional and Implementation Arrangements ........................................................... 25 B. Results Monitoring and Evaluation ................................................................................. 27 C. Sustainability .................................................................................................................... 27 D. Role of Partners ................................................................................................................ 28 V. KEY RISKS ..................................................................................................................... 28 A. Overall Risk Rating and Explanation of Key Risks ........................................................... 28 VI. APPRAISAL SUMMARY .................................................................................................. 30 A. Economic and Financial (if applicable) Analysis .............................................................. 30 B. Technical ........................................................................................................................... 31 C. Financial Management ..................................................................................................... 32 D. Procurement ..................................................................................................................... 33 E. Social (including Safeguards) ............................................................................................ 35 F. Environment (including Safeguards) ................................................................................ 36 G. Other Safeguard Policies (if applicable) .......................................................................... 37 H. World Bank Grievance Redress ....................................................................................... 37 VII. RESULTS FRAMEWORK AND MONITORING .................................................................... 38 ANNEX 1: DETAILED PROJECT DESCRIPTION ......................................................................... 68 ANNEX 2: IMPLEMENTATION ARRANGEMENTS .................................................................... 76 ANNEX 3: IMPLEMENTATION SUPPORT PLAN ...................................................................... 94 ANNEX 4: ENVIRONMENTAL AND SOCIAL SAFEGUARDS ACTION PLAN ................................. 97 ANNEX 5 MAPPING OF TECHNICAL ASSISTANCE 2017......................................................... 120 ANNEX 6: PEIMRP RESULTS CHAIN / THEORY OF CHANGE .................................................. 122 Page 8 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) I. STRATEGIC CONTEXT A. Country Context 1. The Central African Republic is a landlocked and highly fragile country with a history of recurrent conflict and domestic political instability. Most recently, the Central African Republic underwent a civil war and widespread sectarian violence following the fall of the Bozizé régime in March 2013. As a result of the conflict, roughly one-fourth of the population was internally displaced or had to flee as refugees to neighboring countries. While active conflict has now largely come to an end, the Central African Republic remains politically fragile, with armed groups still present on the territory and relations between communities remaining tense. As noted by the National Recovery and Peace Building Plan 2017-2021 (RCPCA), fragility in the Central African Republic stems not only from the most recent crisis, but also from the long-term deterioration of the economic, social, governance, and security situation.1 2. As the Central African Republic was still recovering from the effects of the 2008 global recession, the 2012-2013 political crisis devastated economic activity, with the gross domestic product (GDP) falling by an unprecedented 36.7 percent in 2013. The agricultural sector, representing almost 45 percent of the Central African Republic’s GDP and the main source of livelihood for the rural population, was particularly affected, with a 46 percent drop in food production and a 55 percent drop in livestock production, resulting in half of the country being in a state of food insecurity. At the same time, the conflict drove forest and mining firms to close their operations, and the Central African Republic was suspended from the Kimberly Process Certification Scheme, which cut mining exports in half and decreased tax revenue by two-thirds. With a widening fiscal gap, the Government was unable to pay wages during the crisis, paralyzing government administration. At the same time, the conflict severely degraded the capacity of the public administration in core areas, including revenue collection, expenditure management, and public investment. Infrastructure remains extremely limited, with a network of less than 25,000 km of roads for the entire country in 2010, and mobile telecommunications networks that only cover 59 percent of the population at the end of 2015. The Doing Business 2016 report ranks the Central African Republic as the fifth worst place to conduct business in the world. 3. Despite a wealth of natural resources such as uranium, oil, gold, diamonds, cobalt, lumber, wildlife, significant areas of arable land and hydropower, the Central African Republic is one of the poorest countries in the world. During the crisis, gross national income (GNI) per capita fell sharply between 2012 and 2014, from US$917.4 to US$569.3, the lowest in the world. Recent estimates indicate that the Central African Republic’s poverty rate—at the international poverty line of US$1.90 per day in 2011 purchasing-power parity terms—increased from 66 percent in 2008 to 76 percent in 2013. In addition, the Central African Republic is ranked among the most unequal countries in Sub-Saharan Africa and has the fourth-highest Gini coefficient in the region2. In 2015, the Central African Republic ranked last out of 188 countries in the Human Development Index of the United Nations (UN). In 2010, the 1 The RCPCA is grounded in recognition of the need to address the five core drivers of fragility and crisis over time to break the cycle of violence: a) a lack of social cohesion; b) political power and the capture of scare resources concentrated in the hands of a small elite that manages a state with very little legitimacy; c) imbalances between Bangui and the rest of the country, notably the north-east, which have fueled a sense of marginalization and exclusion; d) a cycle of violence and trauma and a population in distress; and e) a lasting state of insecurity. 2 World Bank, Policy Note, Poverty, 2016 and World Development Indicators 2015. Page 9 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) infant mortality rate was 116 deaths per 1,000 live births, and the under-five mortality rate was 179 deaths per 1,000 live births, both far above the Sub-Saharan Africa averages of 65.8 and 101.2. Nearly half the population lacks access to safe drinking water, and more than three-fourths do not have access to adequate sanitation facilities or electricity. 4. Since the end of the crisis, a progressive return to political stability has brought a significant opportunity to consolidate peace, build stability and resilience, as well as lay the groundwork for economic recovery and development. The peaceful transition to a democratically elected President, who was inaugurated on March 30, 2016, and the parliamentary elections held on March 31, 2016, marked the end of a political transition, giving the Central African Republic an opportunity to overcome the highly fragile situation which has prevailed for many years. The new Constitution, adopted during the December 13-14, 2015 referendum, includes provisions for the election of local authorities, introduces a second chamber (Senate) to the Parliament, limits the president’s tenure to two terms, establishes mechanisms to fight institutional corruption, and includes provisions for the declaration of assets by high-level officials. As security and humanitarian conditions have stabilized, early signs of an economic recovery have emerged: macroeconomic balances are slowly moving closer to an equilibrium; private investment has attained pre-crisis levels; public services have been gradually restored nationwide; and aid flows have turned attention to development challenges. 5. Originally considered an aid orphan, the Central African Republic is currently heavily reliant on support from the international community, with emergency aid gradually giving way to long-term development assistance. At a donor conference in Brussels held on November 17, 2016, the international community pledged an unparalleled US$2.2 billion to cover the most urgent needs and priorities for the period 2017–2021 as reflected in a prioritized, sequenced, and costed National Recovery and Peacebuilding Plan, the RCPCA. This five-year plan is based on a gradual increase of development aid, a progressive improvement of the security situation, gradual redeployment of public administration throughout the country, and steady increase of fiduciary, administrative, and absorptive capacity required for the Government to take full charge of its implementation. In particular, the RCPCA is structured around three priority pillars: (a) promote peace, security, and reconciliation; (b) renew the social contract between the state and the population; and (c) promote economic recovery and boost productive sectors. The RCPCA also includes a number of cross-cutting themes that are critical in addressing drivers of fragility, conflict, and violence, including promoting gender equality in all interventions. B. Sectoral and Institutional Context 6. To successfully implement the RCPCA’s strategic objectives, the Government of the Central African Republic will need to address key weaknesses, which impede the management of public finances as well as the country’s capacity to absorb the added resources provided by the RCPCA. Based on analytical work prepared with the support of development partners including the World Bank and the International Monetary Fund (IMF), the authorities implemented a 2016–2017 Public Financial Management (PFM) reform plan organized around five pillars: (a) revitalizing revenues; (b) securing and managing the state treasury; (c) unblocking and normalizing budgetary management; (d) reestablishing trust in fair accounting; and (e) reestablishing the credibility of the state. While the authorities have Page 10 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) implemented a number of these reforms in a challenging context and with limited capacity,3, several mutually- reinforcing challenges in the PFM environment persist, which urgently need to be addressed. 7. A 2017–2020 PFM reform action plan focusing on consolidating basic PFM functions is under preparation. With support from the World Bank and the IMF, the authorities have prepared a new 2017–2020 PFM reform action plan organized around four pillars: (a) introduce good governance of public finances; (b) continue efforts to mobilize resources; (c) improve the credibility of the budget; and (d) strengthen the treasury function. The reforms build on recent achievements in PFM. The focus on the reforms in the short to the medium term is on consolidating basic functions to improve budgeting, budget execution, accounting and reporting, public investment management, and internal and external oversight. Emphasis is also given to increasing revenue mobilization. Transparency and improved access to information to the public are cross-cutting areas of reform. Inadequate Budget Planning, Management, and Execution 8. Budget execution is hampered by lack of predictability both due to a lack of resources and the absence of commitment ceilings, highly centralized processes, an inefficient internal control system, and cumbersome procedures. Consequently, the use of extraordinary spending procedures remains high and there is little oversight on the use of imprest accounts and temporary cash advances. As noted in the medium-term action plan for the governance of public finances4, the budget preparation, management, and execution only improved marginally in 2016. The authorities have adopted a new budget preparation calendar that seeks to improve the budget preparation process but this is yet to be implemented. Some, insufficient measures have been adopted to improve budget management and execution including the adoption of commitment plans and a cash plan. Budget documentation is limited and the classification of the budget does not allow to clearly identify compulsory and priority spending. Access to budget information is limited both within the administration, to the public, and to the Parliament, hence weakening oversight. In addition, there is no use of medium-term expenditure frameworks (MTEFs) to structure the medium term budget process, which undermines budget reliability and credibility. 9. The wage- bill continues to be the main budget item, but challenges exist with respect to human resource (HR) record keeping and payroll control systems. The 2010 Public Expenditure and Financial Assessment (PEFA) report rated payroll controls as ‘D,’ the lowest possible score, and identified numerous inconsistencies in the reconciliation of the HR database and the public payroll. Since the end of the most recent crisis, significant improvements have been made in HR management and wage-bill control since 2014 which has allowed both the redeployment of core personnel of the administration and the reduction in the wage-bill. Supported by the Central African Republic’s development partners including through the Emergency Public Services Response (EPSR)5 Project and the Development Policy 3 Over the period there have been some improvements in terms of cash management, accounting, reporting and transparency. Internal arrears have been contained and the authorities have started paying accumulated arrears of salaries and pensions. The total level of spending, including salaries and debt, using extraordinary procedures was reduced to about 7.9 percent in the third quarter of 2016. Improved human resources management have contributed to contain expenditures, to ensure timely payment of salaries and for the resumption of work of a large number of civil servants. The authorities have started publishing budget expenditure reports and the draft and enacted budget. 4 Central African Republic, medium-term action plan for the governance of public finances, April 2017, IMF 5 P149884 Page 11 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) Operation (DPO)6, a census was conducted that verified the identities of 92 percent of all civil servants. The authorities validated the employment of another 4 percent through alternative means, while the remaining 4 percent were identified as ghost workers and removed from the payroll system. In addition, the Government began monitoring the physical presence of civil servants based on a bimonthly sample, and this exercise has already significantly reduced absenteeism among education and health sector staff.7 Overall, the efforts have resulted in the reduction of the number of civil servants, reducing the overall wage-bill from 6.5 percent of GDP in 2014 to 5.2 percent of GDP in 2016. 10. Given the weight of the wage-bill in the budget and the necessity to maintain presence of civil servants to ensure provision of basic services and the execution of core functions of the public administration, continued efforts in wage-bill management and HR management are needed. Going forward, continued efforts to contain the wage-bill including payroll audits, the implementation of the recently adopted organic frameworks, improvement of the strategic workforce planning, and revisions to the wage and benefits structure will be necessary. Furthermore, efforts to harmonize wages need to be complemented with a streamlining of advantages including per-diems. To ensure improvements in attendance and to minimize absenteeism, continued controls and audits of presence will be required. Finally, reforms will need to be implemented to improve the accountability of civil servants and promote competitive and transparent recruitment. Low Procurement Capacity: 11. While the national procurement system had seen significant improvements as a result of reforms undertaken with support by development partners, the crisis led to a significant reduction in public procurement and complete breakdown of the public procurement system. In the current context of an increase of public investments and spending, it has become urgent to rebuild capacity in the national procurement institutions including the Procurement Regulatory Agency (Agence de Regulation des Marches Publics, ARMP), the Directorate General of Procurement (Direction Générale des Marches Publics, DGMP) in the Ministry of Finance and Budget (MFB), and the procurement bodies in line ministries. There is a significant lack of qualified procurement personnel, which has resulted in procurement plans not being prepared or prepared with significant delays, which further delays budget execution. Likewise, the lack of transparency and integrity of the procurement system, including the lack of systematically published procurement opportunities, contribute to reduce the trust in the administration. Degraded Financial Management Information System (FMIS): 12. Property damage and widespread looting took a heavy toll on public facilities and equipment, including the systems and processes used to prepare, execute, monitor, and control the budget. The system for budget and financial information management (Système de gestion de la chaîne de la dépense informatisé, GESCO) had previously been deployed by the Treasury and the Budget Directorates 6 P160123, State Consolidation Development Program 7 This positive effect on attendance has been confirmed by United Nations Children’s Fund (UNICEF) and World Health Organization (WHO) cluster reports. See: UNICEF, 2015a, Education Cluster assessment on the state of education in the Central African Republic, end of the first semester, April 2015, UNICEF, 2015b, Education Cluster assessment of the academic year 2015 – 2016, November 2015, and WHO, Heath Resource Availability Mapping System (Herams) 2015 Page 12 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) of the MFB, but during the crisis it ceased to function, and after 2013, budget preparation and execution processes were either performed manually or not at all. Since the end of the crisis, GESCO functioning has been reestablished with support by the EPSR project financed by the World Bank, the European Union (EU) and France. Under the existing EPSR Project, major achievements in PFM have been accomplished to improve the situation. The setting up of a Treasury Unit is underway and the work toward clearing the backlog in the production of trial balances for financial years 2010, 2011, 2012, and 2013 and opening balances have been completed. In addition to this, technical expertise has been mobilized to find and fix the remaining software bugs and finalize the production of the financial statements. On this basis, the management account and the account of the general administration of finance of 2015 is expected to be finalized by the end of July 2017. 13. Despite this progress, the system continues to encounter significant challenges and urgently needs to be replaced by a new system. In particular, the connections between the different modules (for example budget preparation, budget execution, cash management, and accounting) remain challenging and the system encounters significant, unpredictable, and regular dysfunctions that require continuous interventions to repair. Thus, the system is unable to produce reliable and timely financial information on budget execution, which has a significant adverse impact on expenditure management and accounting. Moreover, a recent audit8 found that GESCO was technologically outdated and that the system was extremely fragile given that the technical team at the MFB fully relies upon continuous and sometimes remote support from the application developer (a single person) to maintain and debug the system. The audit strongly recommended: (a) the urgent replacement of the existing system by a Financial Management Information System (FMIS) adapted to the fragile environment and to the existing and emerging needs of the administration; and (b) in the short term (18–36 months), support to stabilize GESCO while a new system is being acquired, customized, and implemented. The report9 produced by the benchmarking team has identified SIMBA (developed by the International Association of Francophone Mayors [Association International des Maires Francophones, AIMF]) as a suitable solution for the Central African Republic10. Other systems, such as those for fixed asset management, debt management, tax and customs administration, payroll and pension systems, will need to be interfaced to the core system. SIMBA supports the functional processes for the budget implementation and accounting and financial reporting and will cover processes for both the investment and current budgets.11 8 Audit of GESCO, July 2016 undertaken by Expertise France for the MFB and financed by the EU. 9 The report determines the overall purpose of the system, ensures feasibility of the scope, proposes sequencing modalities considering the capacity constraints, and provides approximate cost, and a timeline. It also includes a procurement strategy for the new system. 10 SIMBA, a FMIS, has been identified as possible rapid and cost-efficient solutions covering all required budget and accounting functions including payroll and budget-programs in conformity with CEMAC PFM Directives. As the software has been developed, is guaranteed by and would be deployed by the AIMF, an international public-utility organization, the procurement, deployment and maintenance of the software will be significantly simplified. Furthermore, the training center for SIMBA is in Douala, Cameroon, a destination which is well serviced with international flights from Bangui at a reasonable price, will facilitate cost-efficient access to training and technical assistance (TA). The software has been recently deployed, with World Bank support, to manage public finances in the Union of the Comoros. 11 This would include: (a) Budget Management - Budget Apportionment, Budget Allotment, Budget Releases, Budget Transfers;(b) Commitment Management – Recording all commitments relating to intended government expenditures;(c) Payment Management- Processing all government payments relating to: Procurement of goods and services; Salary and Pension Payments; Debt servicing payments; Fiscal transfers to sub-national level;(d) Receipts Management - Recording tax and Page 13 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) 14. The new system will focus on modules providing support to budget preparation and execution, accounting, cash management and fiscal reporting, which are considered to be the core elements of an FMIS system in view of their central place in the Government’s financial management (FM) cycle. These systems form the centerpiece of the Government FM systems and are used to carry out the budget execution process and monitor and evaluate overall budget implementation. They are the primary repository of the financial data that serves as the basis of the Government’s FM. They include the information on resource levels expected to be available during the course of the year and how these resources are to be allocated, as specified by the systems for macroeconomic forecasting and budget preparation as well as the balances available for use at a given time during the fiscal year. 15. The overall regulatory framework for operating the various components of the system will be based on the new Central African Economic and Monetary Community (CEMAC) Directives. Many of the basic controls that are to be applied to the use of government funds will be derived from the Organic Law on Finance Laws and national public financial management regulation. This law and regulations specify the roles and responsibilities of the Treasury, MFB, and sector ministries as well as the authorities and responsibilities for receipt and custody of public funds. Moreover, it details the control processes related to public expenditure management and the management of public debt, as well as the standards to be used for accounting, financial reporting, and audit. The process of internalizing the new CEMAC directives into the Central African Republic law is well advanced. The new system will be built in compliance with this regulatory framework. The new FMIS should support the new budget classification structure and chart of accounts. Inadequate Treasury Management, Accounting, and External Oversight Capacities: 16. With support from the EPSR and DPO as well as from other development partners such as the IMF, the EU, the African Development Bank (AfDB), and France, a number of notable improvements in treasury management have been achieved.12 Despite these improvements, 27 percent of budget expenses were executed using exceptional procedures in 2016, compared to 80 percent in 2015. In particular, treasury management remains challenging because of low technical capacity of staff, deficiency in the information management systems, including lack of interconnections between the Treasury and the banks, the continued use of exceptional spending procedures, and insufficient regulation and tools. A significant back-log in the production of treasury balances, financial statements and Settlement Laws of the Finance Law has accrued, with the last and only Settlement Law (Loi de Règlement) of the Finance Law (Loi des Finances) dating back to 2008. Budget execution regulation could be improved by strengthening the design and use of the cash plans and by re-introducing procurement and commitment plans. The improved budget implementing regulation will allow the Government gradual movement from cash- based toward a commitment- based budget regulation. 17. The authorities have also taken measures to improve the implementation of the convention with banks that collect revenue on behalf of the Government and the timely transfer of para fiscal taxes collected by line ministries to the Treasury Single Account (TSA). The authorities have also taken Non tax revenues and Receipts; (e) Accounting (posting all transactions as they occur); and (f) Bank Reconciliation, Cash Management; and Fiscal and Financial Reporting. 12 Since April 2014, a Treasury Committee and a PFM Committee have been established and tasked with monitoring the implementation of PFM reforms, including the treasury plan. This has been a useful tool for the authorities to manage revenue and expenditure flows with a view to avoid accumulation of payment arrears. Page 14 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) measures to limit the creation of new government accounts in banks. However, the TSA is not yet fully operational because significant amounts of revenues are still not recorded. A TSA is required to prevent fragmentation of the Government’s financial resources in multiple bank accounts outside the control of the treasury and a build-up of idle balances which can become quite significant. Currently, all the institutional arrangements have been completed for the implementation of a TSA and, as of December 31, 2016, of 500 bank accounts inventoried, 40 bank accounts, housed at the Bank of Central African States (Banque des Etats de l’Afriques Centrales, BEAC) and 14 bank accounts housed in the commercial banks representing CFAF 31.7 billion (89 percent in value) are now included in the scope of the TSA. The work to integrate about 446 bank accounts located at the commercial banks for a net balance of CFAF 4.1 billion (11 percent) in the TSA is underway. The pace of this work must be accelerated to finalize the implementation of the TSA. 18. Internal controls have been improved with the increase of activities of the General Inspection of Finance and with the operationalization of the Central Accounting Agency of the Treasury (CAAT), but the progress is fragile and will require significant support to be consolidated and enhanced. The Government, with funding from development partners including the World Bank through the EPSR project, established the CAAT, which is staffed by agents recruited through a competitive hiring process. This agency is tasked with: (a) ensuring that cash inflows are properly recorded and reconciled on a daily basis; (b) reviewing payment vouchers to maintain compliance with PFM regulations; and (c) developing monthly treasury plans and producing annual financial statements on time. Together with the updated General Accounting Rules (2015) and the introduction in 2016 of a nomenclature of supporting documents of public expenditures, there has been a reduction in the use of exceptional spending procedures. The adoption of an updated manual of procedures of public spending will further contribute to re-establish budget execution orthodoxy. The CAAT has also been crucial in the ongoing efforts to reduce the back-log of financial accounts and in the regular production of monthly treasury balances. It is expected that it will result in the submission of the Settlement Law of the Finance Law for 2015 in 2017 (the submission of the Settlement Law of the Finance Law 2015 is a policy measure supported by the DPO for FY18). Other reforms include the census of bank accounts and the implementation of measures to establish a single treasury account as well as the operationalization of a Treasury Committee to improve cash management. 19. External oversight remains insufficient with a Court of Auditors and Parliament with very limited capacity. Given the importance of improving accountability in the current context, providing support to these institutions to improve their capacity to provide oversight will be crucial. Likewise, budget transparency in the Central African Republic has been opaque, and the public administration has traditionally been governed by a small elite group operating with little accountability, undermining trust in national leaders. Since 2011, initial measures have led to the publication of the 2010–2017 enacted Finance Laws. The authorities have also, with support from the World Bank financed DPO, for the first time, published the draft Finance Law 2017 and have started publishing budget execution reports; however, the quality of the information in the Finance Laws and in the budget execution reports needs to be improved. Also, to further improve accountability, additional budget information including procurement opportunities as well as audit reports on service delivery should be provided through the use of a citizen’s budget and citizen’s budget reports. Need to Improve Public Investment Management and Absorptive Capacity: Page 15 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) 20. At the Brussels conference, the Central African Republic authorities presented the RCPCA, which comprises the main development priorities for the next five years; however, the framework will need to be operationalized and capacity to do this within the Ministry of Economy, Planning and Cooperation (MEPC) is highly inadequate. Accordingly, an RCPCA secretariat is in the process of being established, which will have an important role in translating the pledges made by development partners to actual results. The secretariat, which is being established with support from development partners including the World Bank, will require significant and continuous support in the short- to medium- term. Following the success of the Brussels conference, there exists a realistic possibility that public service delivery will indeed be scaled up. Bringing services to citizens in the Central African Republic requires innovative solutions that consider the low capacity and reach of the public sector and low population density13. To facilitate such service delivery requires urgent support for at least three elements: (a) setting of standards by the state; (b) payment for services by the state when services are delivered; and (c) verification of whether standards are met and services delivered. 21. Addressing deficiencies in planning, budgeting, budget execution and monitoring and evaluation (M&E) will be critical for the implementation of the RCPCA. As overall expenditures, by 2021, are expected to increase by 73 percent and capital expenditures are expected to increase by 116 percent, the latter mostly externally financed, it becomes urgent to address these weaknesses. Capacity in the MEPC and the MFB in planning and budgeting, including of public investments, is low after four years with hardly any investments. The current public investment framework does not provide a clear set of public investment project selection criteria which could be used to prioritize public investments. Also, the rules and procedures organizing the selection process need to be clarified and, finally, public investment documentation such as standard project documents need to be established. In addition, the lack of technical capacity limits the use of current regulation and tools. Accordingly, some of the existing regulation and tools need to be updated including for the reporting, monitoring, and execution of projects. C. Higher Level Objectives to which the Project Contributes 22. The proposed operation is fully aligned with the current objectives of the new Government in its post-transition phase. In particular, the operation fully supports the strategic objectives of Pillar 2 of the RCPCA, which include (a) redeploying of the administration across the country; (b) providing basic services to the population across the country by initiating a progressive transfer of capacities and resources to national structures; and (c) strengthening macroeconomic stability and good governance, including PFM and controls, revenue generation, and anti-corruption measures. 23. Likewise, the proposed operation is fully aligned with the World Bank’s engagement strategy. As the country emerged from the crisis, the World Bank, in July 2015, adopted a Country Engagement Note (CEN) for FY16–FY17 which describes the continuation of the crisis response and potential next steps for recovery and development. The CEN's three overarching objectives are (a) restauration of core public sector institutions; (b) support to livelihoods; and (c) support basic social service delivery. Following the elections of the new president in February–March 2016 and subsequent establishment of 13 It can be foreseen that in addition to services provided by public institutions, many services will need to be provided by non- state actors: private sector (forestry companies for example), nongovernmental organization (NGOs) and religious organizations (many services are already provided by humanitarian agencies), and private individuals (parent-teachers for instance). Page 16 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) the constitutional government, the World Bank, at the end of 2016, adopted a US$250 million Turn- Around Program for FY17–19. The program, designed to address the fragility factors of the Central African Republic and combining stabilization efforts alongside early recovery, focuses on: (a) Improving state capacity and allocation of resources; (b) supporting the stability and peace process; (c) rebuilding the state-population social contract; and (d) supporting economic recovery and livelihoods. A Systematic Country Diagnostic is under preparation and will be followed by a Country Partnership Framework in mid-FY18. Finally, the operation is also aligned with recent World Bank analytical underpinnings and strategies in fragile and conflict-afflicted situations (FCS) engagement, including the 2011 World Development Report on Conflict Security and Development, IDA-17 emphasis on FCS, as well as the Independent Evaluation Group (IEG) evaluation of engagement in fragile states, which notes that the World Bank’s comparative advantage is the provision of support to early reconstruction and economic recovery. 24. At a higher level, the objectives of the project support the World Bank’s twin goals of reducing poverty and boosting shared prosperity. By targeting reforms to support improved budget management, execution, control, and oversight, the operation seeks to increase efficiency in public spending allowing for a greater portion of scarce resources to be directed toward priority growth sectors, including education, health, agriculture, and public works. Likewise, by improving the public investment management capacity of the Government as well as the RCPCA Secretariat, the project aims at increasing the absorptive capacity in the Government, given the forthcoming resources pledged during the Brussels conference. Cutting across the operation are reforms and activities designed to strengthen capacity for the effective use of public resources, which will be a critical factor to improve service provision, and to improve trust and legitimacy in the Government through increased transparency, accountability, and citizen’s engagement, which is a prior requirement to rebuild the social compact. II. PROJECT DEVELOPMENT OBJECTIVES A. PDO 25. The Project Development Objective (PDO) is to: Improve management and transparency of public expenditures and public investments. B. Project Beneficiaries 26. The three primary beneficiaries of the project are the MFB, MEPC, and Ministry in charge of Civil Service, which will benefit directly from Technical Assistance (TA), structured training, as well as equipment and materials to build capacity in the management and oversight of public expenditures and public investments. Entities that will benefit from support include the General Budget Directorate (Direction Générale du Budget, DGB), the DGMP, the ARMP, Financial Control Directorate, the Directorate General of Treasury and Public Accounting (Direction Générale du Trésor et de la Comptabilité Publique, DGTCP), General Inspectorate of Finances (Inspection Générale des Finances, IGF), the Ministry in charge of Civil Service (Ministère de la Fonction Publique), and the Court of Auditors (Cour des Comptes). Additional primary beneficiaries include the Project Management Unit (PMU), which will be set up in the MFB, as well as the RCPCA Secretariat, which will be supported under Component 2. Local training institutes, including the National School of Public Administration and Page 17 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) Judiciary (Ecole Nationale d’Administration et de la Magistrature, ENAM), could be involved in delivering critical capacity building for government employees. 27. Secondary beneficiaries will include entities involved in PFM and expenditure planning within the Ministry of Education, the Ministry of Health, the Ministry of Agriculture, and the Ministry of Public Works. Additional secondary beneficiaries will include other government ministries, departments, and agencies in Bangui as well as in in certain regional cities14. Finally, other indirect beneficiaries include citizens of the Central African Republic, who will ultimately benefit from the more efficient and transparent use of public finances. C. PDO-Level Results Indicators  Percentage (in value) of exceptional expenditures, excluding salaries and debt (Baseline: 27 percent in 2016; Target: 15 percent in 2021).  Timely submission of annual financial statements (Compte de Gestion, Compte Administrative, and Loi de Règlement) (Baseline: Backlog 2009-16; Target: Submission of 2019 annual financial statements to Court of Auditors within 9 months and to Parliament within 12 months of the end of the fiscal year in 2021)15.  Transparency composite indicator (Composite indicator Specific to the Central African Republic based on 21 core budget reports16. Baseline: 7 (2016); Target: 15 in 2021).  Investment Budget Execution Rate (Baseline: 39 percent in 2016; Target: 50 percent in 2020). III. PROJECT DESCRIPTION A. Project Components 28. The proposed operation, the Public Expenditure and Investment Management Reform Project (PEIMRP), will adopt a problem-driven iterative adaptation (PDIA) approach to address key binding constraints that affect the Government’s institutional capacity to better manage expenditures as well as strategic planning and oversight capacities. As noted in the preceding sections, key constraints that the project will address include the following: (a) inadequate budget planning, management, and execution; (b) inadequate procurement capacity; (c) need for an improved FMIS; (d) inadequate treasury management, accounting, and external oversight capacities; and (e) need to improve public investment management to increase absorptive capacity. To this end, the project is structured around three components: (i) management and transparency of public expenditures; (ii) management and transparency of public investments; and (iii) project management. 14 The project will finance the rehabilitation of MFB buildings in at least two regional cities. The cities could be Mbaïki, Bouar, Berberatti, Bambari or Kaga Bandero. The security situation will determine in which of the cities the rehabilitation will be undertaken. 15 The current organic finance law stipulates that the submission to Parliament of annual financial statements of year N should occur during the first Parliamentary session in year N+1. The target of the indicators has been set to be aligned with the provisions of the CEMAC organic finance law which stipulates that the submission to Parliament of annual financial statements of year N should occur by the end of year N+1. 16 In the absence of a recent PEFA and given that there is not Open Budget Index for the Central African Republic as it is not yet member of the Open Budget Initiative a transparency composite indicator has been defined. The detailed definition is presented in the results framework in Section VII. Page 18 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) 29. With respect to the management of public expenditures, Component 1 of the project aims at consolidating core functions across the expenditure chain, from budgeting to oversight. To this end, the component will provide support for strengthening the budget preparation, management, and execution process to improve budget predictability and credibility. Capacity- building activities and TA will be provided for the improvement of procurement, treasury, and wage bill management, as well as for improved internal control and external oversight functions. Likewise, Component 1 will provide training to civil servants engaged in key PFM activities, including accounting, cash management, budgeting, procurement, and public investment management. Finally, the component will support improvements to the existing but outdated budget and accounting information management system to stabilize its functioning over the next two to three years. 30. In addition to addressing expenditure management, the operation aims to enhance the overall capacity for public investment management through Component 2. Given the weaknesses encountered in investment planning and its subsequent execution, this component will finance the operationalization of the RCPCA Secretariat, established to enhance the country’s ability to coordinate development assistance, and respond to strategic priorities as outlined in the National Strategic Plan. In parallel, this component will finance the strengthening of the MEPC. Finally, this component will complement on-going and new activities funded by the World Bank and other development partners, providing support to strengthen strategic planning, project preparation, coordination, M&E, including citizen’s engagement, and transparency of public investments. 31. Cutting across these two components, project activities will support enhanced transparency and accountability, capacity building in core PFM functions, and project management. First, transparency will be monitored by a PDO indicator that tracks the production of key documents for public disclosure, to improve transparency and oversight functions of key accountability institutions. Second, the project will address capacity building in a sustainable manner by providing training to civil servants in a structured manner and which could involve national training institutions, including the ENAM which can provide ongoing and customized capacity building for core PFM functions. Finally, the project will provide overall support for project management under Component 3, which will enable the operationalization of a dedicated project implementation unit under the Ministry of Finance, as well as provide for a contingency fund for unexpected studies and TA to allow for PDIA. 32. While the aforementioned components are designed to target some of the most critical constraints facing Central African Republic’s PFM and strategic planning needs, the project does not include other important sectors, which will receive support through other World Bank- and donor- funded programs. In particular, the project does not explicitly address reforms related to improved revenues and reducing arrears, which will be addressed under the ongoing State Consolidation Development Program (SCDP) DPO series and with support from other development partners. Support from other development partners include policy based support such as the IMF’s Extended Credit Facility and Budget Support Operations from the EU, AfDB and France. The support also includes technical assistance, training and capacity building activities from the EU, African Regional Technical Assistance Center (AFRITAC), the IMF, AfDB, the UN and France. The Public Expenditure and Investment Management Reform Project (PEIMRP) will provide complementary support to the SCDP DPO as well as to TA, training and capacity building activities supported by other Development Partners. Finally, given the modest size of the project, it is anticipated that additional financing will be needed to extend a number of the project activities defined in the proceeding section. To this end, the project will work to Page 19 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) complement the ongoing activities of other donors under the RCPCA and providing support to the implementation of the PFM reforms in the Central African Republic. Annex 5 presents a mapping of donor support. A detailed presentation of the components is presented in annex 1. Component 1: Management and Transparency of Public Expenditures (US$5,000,000) 33. This component of the project aims to consolidate core functions across the expenditure chain, from budgeting to oversight. The activities that will be supported under this component are highly related to activities supported under Component 2 including the support to the RCPCA Secretariat, to improve planning and M&E as well as to strengthen public investment management. The support will be complementary to activities funded by other development partners such as the IMF and AFRITAC, the EU, the AfDB, and France. Sub-component 1.1: Strengthened Budget Preparation, Management, and Execution (US$1,172,500) 34. Given persistent challenges related to budget planning, management, and execution as well as limited access to budget information, the objective of this sub-component is to provide targeted support to address weaknesses in the budget cycle and the expenditure chain. A critical part of the reform, and a pre-requisite to the acquisition and deployment of a new FMIS, will be to update the legal and regulatory framework as well as redesign the procedures and processes of PFM in the Central African Republic to ensure that the system is better functioning. Accordingly, the project will support an audit of the expenditure chain and associated TA, as well as training and capacity building to implement the audit recommendations. The support will include the definition and validation of business process and procedures based on the CEMAC PFM Directives. 35. Related to this –given the persistent weaknesses of the administration –is the need to improve the budget preparation and execution, as well as budget documentation and information. This component will consequently fund activities that will provide TA, training, and capacity building to institutions involved in the preparation and execution of the budget. Support will be provided to the MFB and the MEPC, as well as to four priority ministries: Agriculture, Public Works, Health and Education. It will also support reforms to improve information in the Finance Law and budget reporting including information to stakeholders through the production of citizen’s budgets. This will also include support to improve the quality of the budget execution report and the preparation of the administrative account. Finally, the component will support the cost related to a non-resident and a resident advisor concerning the implementation of the reforms for the Minister of Finance. 36. Over the past two years, progress has been made to improve HR management and the wage- bill. To support the consolidation of previous HR and wage bill reforms, which in large part were supported by the World Bank funded EPSR project,17 the project will provide support to continue the control of presence of civil servants and to undertake regular HR and payroll audits. To this end, support will also be provided to ensure that the HR and payroll databases can be updated systematically for personnel movements. Finally, to further improve the management of the wage bill, the project will support reforms, including a study and implementation of its recommendations of benefits and top-up and per- diem mechanisms. 17 P149884 Page 20 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) Sub-component 1.2: Strengthened Procurement Management (US$325,000) 37. The ub-component will support procurement management reforms in in the ARMP, the DGMP, and the procurement units in the four pilot ministries (Health, Education, Agriculture, and Public Works) as well as in the MFB and the MEPC. The component will fund activities that will address some of the issues related to low level of compliance with the procurement code which has resulted in low levels of competitive bidding and inefficiencies in procurement management. Hence, the sub- component will aim to sensitize participants in the procurement process and provide TA, office and computer equipment and training and capacity building to strengthen the procurement processes, systems, and capacities. Support will be provided to establish a simple procurement monitoring system within the DGMP and in the procurement units of the targeted ministries. Furthermore, support will be provided to the ARMP to undertake mandatory procurement audits. Sub-component 1.3: Financial Management Information System (US$2,570,000) 38. A critical weakness of the current PFM system is the outdated budget and accounting information management system (GESCO). The situation contributes to create delays in the execution of the budget as well as delays in producing reports. While a new FMIS is warranted, the process to replace the existing system with a new one will take time. Consequently, this sub-component will provide support to activities aiming to stabilize GESCO, the existing FMIS. Support will also be provided, to prepare for the acquisition, implementation, and deployment of a new FMIS. This support will include TA, training, studies including the technical specifications of the new FMIS, required governance structures, the procurement and deployment in the MFB of the new FMIS, office, computer and information technology equipment, including fiber-optic cable and maintenance costs. The project will support the finalization of the Metropolitan Area Network (MAN) in Bangui as well as the Local Area Networks (LAN) in selected departments of the MFB and the MEPC. Sub-component 1.4: Strengthened Treasury Management, Accounting, and External Oversight (US$932,500) 39. The sub-component will support activities targeting the consolidation of reforms undertaken to improve treasury management, accounting, and external oversight. The support will include financing of the recurrent costs associated with the position of the Head of the CAAT and his deputy and technical assistant and training and capacity- building activities to improve the quality, coverage and timeliness of accounting and reporting. Activities, such as studies, audits, and TA to improve the coverage of the TSA, will also be supported. To strengthen external oversight, support will include some basic rehabilitation of the building of the Court of Auditors and provide it with basic office and information technology equipment as well as energy provisions. The subcomponent will also help consolidating the platform of dialogue established between the CAAT, the General Directorate of Budget (Direction Générale du Budget, DGB), the Court of Auditors, and the Parliament to improve the quality of public spending. Finally, to support the efforts of the MFB to reestablish its services, particularly the Treasury, in strategically important areas, the project will fund the rehabilitation and provision of office, information technology and energy equipment of existing MFB buildings in two cities. The final decision of which city and where the rehabilitation will take place will depend on the security situation but the cities could include Mbaïki, Bouar, Berberatti, Kaga Bandoro, or Bambari. Page 21 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) Component 2: Management and Transparency of Public Investments (US$4,000,000) 40. Given the weaknesses encountered in investment planning and its subsequent execution, this component aims to improve the performance of the public administration in managing public investments and development assistance. This component will complement on-going activities funded by the World Bank and on-going and new activities from other development partners. Support will target strengthening strategic planning, project preparation, coordination, M&E, including citizen’s engagement, as well as transparency of public investments and development assistance. Sub-component 2.1: Establishing and Operationalizing an RCPCA Secretariat (US$2,500,000) 41. The objective of this sub-component is to support the operationalization of the RCPCA Secretariat in order to improve coordination and M&E, including citizen’s engagement and transparency of development assistance. Activities that will be funded include supporting the RCPCA by financing part of the establishment of the Secretariat, rehabilitation of the offices of the RCPCA secretariat, recurrent cost associated with the Permanent Secretary of the Secretariat, office equipment, information technology equipment and transport, operating costs, and TA for better coordination, preparation of projects (this will include technical support to formulate projects and estimate their cost), and monitoring of results. Further, the project will finance TA, training and capacity building to improve coordination mechanisms between the Government, stakeholders, and development partners including through bi- annual and annual RCPCA reports, stakeholder surveys, municipality censuses, studies and assessments. Studies, audits, assessments and evaluations including in those in strategic areas and sectors will also be financed. Finally, the project will fund activities related to improving access to information. Sub-component 2.2: Strengthened Management of Public Investments (US$1,500,000) 42. In parallel to the establishment of the RCPCA Secretariat, this sub component will aim to strengthen the capacity of the MEPC in the preparation and management of public investments to ensure that they are selected, prioritized, and executed in a manner that will contribute to the development of priority sectors. Accordingly, the project will initiate stocktaking of existing investment projects agreed during the Brussels conference to identify projects, which can be used as a basis for the preparation of the three- year investment plan. Likewise, this component will define and implement public investment activities, in particular in relation to project identification, preparation, and selection. In addition, this component will strengthen the MEPC and the four priority sector ministries (Education, Health, Public Works, and Agriculture) with the provision of office equipment and other material for the normal functioning of the departments and units. Finally, this component will finance a monitoring system of public investments and service delivery to improve access to information by making publicly available investment projects information in frequent, easy-to-understand briefs, which will assist the RCPCA Secretariat in its communication strategy. Component 3: Project Management (US$1,000,000) 43. This final component aims to support the project management functions of the Government, particularly the MFB, in implementing the proposed project. Page 22 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) Sub-Component 3.1: Management Support for the Project Management Unit (PMU) (US$787,600) 44. The objective of this sub component is to support the PMU in coordinating and managing the implementation of the project. Accordingly, the project will support the following activities: (a) develop annual work programs, budgets and Procurement Plans; (b) ensure proper fiduciary management and monitoring; (c) coordinate technical work and support to the technical units within the relevant ministries; and (d) monitor and report on project’s implementation. The component will fund costs related to personnel (fees to consultants) and proper functioning of the PMU including annual audits and required reports. Sub-Component 3.2: Contingency Fund (US$212,400) 45. The objective of this sub component is to enable the PMU to be flexible and highly responsive to emerging opportunities to support initiatives that increase public sector management effectiveness and efficiency. The use of the contingency funds would be subject to prior validation by the World Bank and the Steering Committee. The component may finance scale-up of existing activities, pilots, TA or cross-cutting analytical studies, for example related to the integration of CEMAC PFM Directives into the Central African Republic legislation and regulation; implementation of the DPO; and/or a PEFA evaluation. B. Project Cost and Financing (in million US$) IBRD or IDA Counterpart Project Components Project cost Trust Funds Financing Funding Management and Transparency of Public 5.00 5.00 0.00 0.00 Expenditures Management and Transparency of Public 4.00 4.00 0.00 0.00 Investments Project Managment 1.00 1.00 0.00 0.00 Total Costs 10.00 10.00 0.00 0.00 Total Project Costs 10.00 10.00 0.00 0.00 Front End Fees 0.00 0.00 0.00 0.00 Total Financing Required 10.00 10.00 0.00 0.00 C. Lessons Learned and Reflected in the Project Design Page 23 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) 48. The third lesson drawn from previous experience from fragile states suggests that close donor coordination and alignment to Government development objectives is extremely important for the success of reforms, as cohesion among donors helps to maintain focus and resources on reforms. To address this, it is necessary that the Government take the lead in driving the discussions and ensuring that mutually reinforcing programs are in place. Likewise, it is necessary that the World Bank and donors have an effective relationship to intermediate the supply- and demand- side conditions regarding certain reforms, so that there are no duplications or gaps in critical areas. Drawing on this lesson, ongoing support provided by other partners has been harmonized through the RCPCA, which will maximize synergies and complementarities of development objectives. Moreover, in addition to building partnerships and donor support to the Central African Republic, donors are providing a combination of budget support and TA to ensure a smooth flow of resources while providing targeted capacity support. 49. The fourth lesson drawn from previous experience from fragile states suggests that in many post- conflict environments there are windows of opportunity for significant progress on budget execution reforms, and that reforms should work across the PFM cycle including budget planning. The design of the PEIMRP has taken into account this lesson through its combined focus on the execution of the budget, including its support to reforms of the chart of accounts, budget classification and improved recording and reporting system while also supporting reforms to improve planning, budgeting and Public Investment Management. Page 24 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) 50. The fifth lesson learned is that capacity building on an institutional level cannot be viewed as just a one-off intervention, but rather, demands ongoing support given that adequate human resources can evaporate quickly. To further capacity development, the World Bank needs to support sustainable capacity building by empowering and improving the capacity of training institutions. It should be noted that capacity building activities in project design need to go beyond producing a manual or a strategic action plan, and need to provide ongoing resources to support implementation. Accordingly, the follow-on PEIMRP will when possible use the ENAM or other local training and capacity building as a means to provide demand driven capacity building support for the Government, which is more sustainable than one-off training programs offered abroad. 51. The sixth and final lesson learned is that FMIS—and other largescale systems upgrades—need to be underpinned by addressing incentive and behavioral changes. Drawing on key messages of the 2017 World Development Report on Governance and the Law, it is necessary to “think not only about the form of institutions, but also about their functions.” With respect to IT systems, the key lesson learned in this respect is that IT improvement does not necessarily change behaviors of civil servants if the IT upgrade only reproduces manual procedures. Accordingly, for the rollout of the FMIS system to succeed, civil servants’ incentives and behaviors need to be addressed through parallel capacity building and a change in management activities. Accordingly, the PEIMRP is supporting PDIA approaches in the roll out of the reforms, as it will be necessary to adopt a modular approach, consolidating, adapting, and reapplying approaches at each stage of the integration process. IV. IMPLEMENTATION A. Institutional and Implementation Arrangements 52. The project will be implemented under the overall leadership of the MFB and the MEPC. A Project Steering Committee will be established by an Inter-Ministerial Decision of the MFB and the MEPC. The Steering Committee will be chaired by a representative of the MFB and co-chaired by a representative of the MEPC. It will be composed of representatives of targeted ministries. This committee will meet at least two times per year and will review and approve the annual work program and budget of the project, as well as ensure coordination across sectors during implementation of the project. The annual work program and budget of the project for year N+1 will be approved no later than November 15 of year N. The annual work program and budget of year N+1 will be accompanied by a preliminary implementation report of the project for the year N. The Project Steering Committee will also review and approve the final implementation report which will include the audit report of year N-1 and the bi-annual implementation report of year N no later than June 30th of each year of the project implementation. The first annual work program and budget will cover the first six months of 2017 as well as 2018 and will be due no later than three months after project effectiveness. 53. An institutional reform is currently ongoing to improve the functioning of the institutional mechanisms of the oversight and implementation of economic and financial reforms. In the case that this reform leads to the establishment of an Economic and Financial Reforms Oversight Committee, this committee will be used as the overall Steering Committee of the project as well. The Project Steering Committee chaired by a representative of the MFB and co-chaired by a representative of the MEPC will nevertheless continue to exercise technical oversight of the project implementation and retain the responsibility of reviewing and approving annual work programs and budgets as well as annual and bi- Page 25 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) annual execution reports. The committee will also ensure coordination across sectors in the implementation of the activities of the project. This committee will also review and approve the mid- term review of the project, as well as any other reports, studies, or audits that might be required during project implementation. 54. A Project Management Unit (PMU) dedicated to the implementation of the project including its fiduciary management will be established by a Ministerial Decision within the MFB, with a direct reporting line to the Minister of Finance and Budget. The PMU will be composed of personnel recruited on a competitive basis with terms of references (ToRs), qualifications, and experience acceptable to the World Bank. The PMU will comprise, at a minimum, (a) a project manager; (b) a deputy project manager with a specific responsibility for overseeing the implementation of the activities in Component 1 of the project; and (c) a manager with a specific responsibility of overseeing the implementation of activities in Component 2 of the project. The fiduciary staff including safeguards staff, a procurement officer, a finance officer, and a social and environmental specialist, will be consultants recruited on a competitive basis and with ToRs, qualifications and experience acceptable to the World Bank. These specialists will work with the World Bank Fiduciary and Safeguards Specialists to ensure that due diligence is done. The PMU will implement the project in close collaboration with the project beneficiaries. 55. The PMU will be fully responsible for project implementation including fiduciary management and will be established and staffed before effectiveness of the project. The fiduciary team embedded in the Economic and Financial Reforms Monitoring Unit (Cellule Chargée du Suivi des Réformes Economiques et Financières, CS-REF) in charge of implementing the EPSR Project,18 which will close in December 2017, will provide guidance and support to the PMU fiduciary team in the transition period. The PEIMRP will also benefit from the existing manual of procedures which will be updated to be aligned to the new project. The PMU will be equipped and provided with necessary systems for adequate fiduciary management such as an accounting software. The track- record of the CS-REF is good (three World Bank projects closed with no major issues); however, as part of the ongoing reform to improve the implementation of economic and financial reforms, it has been decided that the CS-REF will focus on its core activities and no longer have the responsibility for implementing projects. The support from the fiduciary team of the EPSR Project is expected to ensure implementation with a minimal fiduciary risk. 56. The PMU will report directly to the MFB and will produce and present monthly implementation reports which will be submitted to the MFB and the MECP as well as to core beneficiaries. It will present the project’s annual work program and budget, implementation reports, mid-term reports and any other reports, studies or audits that might be required during project implementation. The PMU will liaise and coordinate the implementation of the project with all the beneficiaries of the project including the unit in charge of coordinating the implementation of economic and financial reforms. 57. To ensure more ownership of activities and knowledge transfer to beneficiary entities, counterparts will be designated within the respective responsible ministry and will have dual reporting lines (to the PMU Manager and the Cabinet of their respective ministry). The manager of the PMU, with a specific responsibility of overseeing the implementation of activities in Component 2 of the project, will be included in the MEPC and will have dual reporting lines (to the PMU Coordinator and the 18 P149884 Page 26 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) Cabinet of MEPC). 58. Implementation arrangements for the World Bank portfolio. In view of improving implementation efficiency of the Bank portfolio in the Central African Republic, the Turn-Around Engagement notes that “Institutional arrangements should be harmonized into one mechanism that comprises two fiduciary agencies and the various technical units that are housed in various relevant ministries.” The Fiduciary agencies will be housed within the Ministry of Finance and Budget, and the Ministry of Infrastructure. The PMU of the PEIMRP will be the fiduciary agency housed in the Ministry of Finance and Budget. 59. As a fiduciary agency, the PMU of the PEIMRP will coordinate fiduciary management for projects in the areas including governance, conflict, human development and social, urban, rural and resilience. Each institution in charge of implementing a project will have technical and fiduciary responsibility for the implementation of the project but will do fiduciary reporting on a regular basis to the PMU of the PEIMRP, including but not limited to annual budgets and work plans, procurement plans, Interim Financial Reports (IFRs), audit reports and procurement progress reports for quality review. The PMU will also have a responsibility to provide fiduciary support, including coaching and technical assistance as needed to other projects. For smaller projects and for the management of project preparation advances in these sectors, the PMU could assume full fiduciary management. A multi- project, multi- site accounting software will also be procured by the PMU of the PEIMRP for the use of projects for which it will coordinate fiduciary management. A procedures manual will be prepared, defining in detail the role, mission and responsibilities of PMU of the PEIMRP and of the remaining stakeholders involved in the technical and fiduciary implementation of the projects in the areas including governance, conflict, human development and social, urban, rural and resilience. B. Results Monitoring and Evaluation 60. Project M&E will occur at three levels in the project structure to ensure that different results areas are monitored in an integrated fashion by the entities responsible. As such, the PMU will be responsible for the M&E of results specific to the project; the RCPCA Secretariat will be responsible for the M&E of the RCPCA program, which extends beyond the scope of the project; and the MEPC will be responsible for the M&E related to projects in the investment budget. To improve transparency and social accountability, the M&E framework will include citizen engagement mechanisms and indicators, particularly for the monitoring of public investments, as well as the overall satisfaction with the RCPCA implementation. Moreover, to ensure harmonization with other programs, the project will use indicators—to the extent possible—included in the ongoing DPO series, the RCPCA project documents, and the current IMF program to ensure that project results are closely linked and can be more easily monitored during joint supervision missions. C. Sustainability 61. The proposed project will take an integrated approach to ensuring that the sustainability of results is achieved. First, the project is closely aligned with the objectives of the ongoing SCDP DPO series, which seeks to By providing relevant TA and capacity building to PFM aspects of the DPO, the current project will ensure that the Government is empowered to deliver on both the policy triggers Page 27 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) committed to under the DPO program as well as the related results indicators of the proposed project in the larger context of the RCPCA. At the same time, the proposed project seeks to support the Ministries of Education, Health, Agriculture, and Public Works, which will further bolster support to poverty reduction in key growth and human development sectors. The use, when possible of the ENAM to provide training will contribute to strengthen the Government’s capacity to build capacity, even after project closing. Finally, the proposed project is an integral part of the World Bank’s Turn-Around Facility, as well as programming under the RCPCA. As a result, these supporting initiatives will build on the synergies created by the proposed project and ensure that programmatic results are maintained in the medium term. D. Role of Partners 62. The proposed operation has been prepared to ensure that it is complementary with ongoing recovery and development activities of development partners, including the IMF, EU, AfDB, UN, and the French Development Agency. As noted, the project is fully aligned to the RCPCA, which was a joint effort between the World Bank, EU, UN and multiple bilateral donors. The project is also aligned with other operations including the 11th European Development Fund, which is expected to provide US$220 million during the 2016- 2020 period. Likewise, the project is aligned with the French Development Agency (Agence Française de Développement, AFD) portfolio in the Central African Republic, which is currently just over US$40 million and focuses on economic recovery, social protection, and reconciliation in the form of general budget support. In addition, the project is aligned with support from the AfDB, which amounts to approximately US$80 million and includes: (a) a multi-sectoral emergency project in support of economic recovery from the crisis; (b) a community reconstruction support program; (c) a governance institutional support program; and (d) a capacity building project. Finally, the IMF has scaled up its support to fiscal administration reforms and is expected to remain highly engaged in this area through support provided by AFRITAC, Trust Funds managed by the IMF, and its new pilot capacity building program. 63. Likewise, the proposed IDA-funded project seeks to complement the objectives of ongoing and upcoming World Bank operations. The project is a continuation of activities implemented with support from the EPSR Project, which will close by the end of 2017, as well as other World Bank- funded projects including the ongoing SCDP DPO series, the statistics for decision- making project, the mining and forest governance project, and the World Bank’s support to the establishment of the RCPCA Secretariat. V. KEY RISKS A. Overall Risk Rating and Explanation of Key Risks 64. The overall risk rating for the proposed operation is Substantial due to several interrelated risks, which may jeopardize the achievement of the PDO. All High and Substantial risks are discussed in the following paragraphs. 65. Political and Governance risk is High. The Central African Republic has a fragile political environment with weak institutions, which are often captured by elite interests. While political settlement has solidified following the recent elections, there is still a high risk of political instability Page 28 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) given the country context. Moreover, although most active conflict has come to an end, it remains uncertain whether the state effectively controls all of the national territory, because pockets of instability and conflict continue to emerge in the north and northwest areas of the country. As a result, continued political instability and conflict may have an impact on implementation, particularly in areas outside of Bangui, as well as the execution of budgeted activities in the health, education, agriculture, and public works sectors. The Government’s focus on post-conflict economic recovery, with support from development partners, demobilization, disarmament, and reintegration (DDR); and reforms to improve governance and institutional capacity contributes to mitigate the risk. 66. Macroeconomic risk is High. The Central African Republic remains highly exposed to external and domestic macroeconomic factors, which may affect revenue, investment and growth. A deterioration of the security conditions could severely limit the momentum for the economic recovery as could delays in the full lifting of the export ban on diamonds or the implementation of structural reforms. The delays in the full lifting of the export ban on diamonds would both have an impact on economic growth because diamond production is a potentially important economic sector and on government revenues. A reduction in government revenues could contribute to an increase in the use of exceptional spending procedures, adversely affect the investment budget execution rate and hamper the proper functioning of core institutions including institutions in charge of external control and oversight which could delay submission of financial statements and audit reports. There is also a Moderate risk related to delays in the delivery of external financial assistance based on pledges already made by development partners to provide budget support in 2017 as well as under the RCPCA. Mitigating measures include, if necessary, expenditure cuts and delayed hiring of new staff, and a less ambitious arrears-clearance strategy. Moreover, strong leadership, a credible reform strategy, and a sustained political commitment to reform will be critical to foster a robust economic recovery and mitigate the risk of a return to conflict. 67. Institutional Capacity for Implementation and Sustainability risk is High. Capacity constraints also present a serious challenge that could delay reform implementation and the achievement of the PDO. In particular, core PFM capacity remains weak in the MFB, including accounting, procurement, and budgeting functions. In the MEPC, capacity for public investment management is likewise weak and projects are often not prepared or prioritized based on proper appraisal techniques and selected projects are not adequately monitored at an operational and financial level. The Government’s implementation of its public sector reforms with support, including TA, from the donor community can help to mitigate this risk. Moreover, the operation and the related DPO series will support reforms targeting the improvement of the Government’s core public PFM functions, which is crucial to an effective public administration. Finally, using existing training facilities such as the ENAM will contribute to provide a sustainable source of capacity building support to the Government over the life of the project and beyond. Implementing a new FMIS presents a number of risks including those related to: (a) delayed procurements due to their complex nature as well as inadequate quality of IT equipment, (b) delayed implementation due to low technical capacity; (c) delays in the procurement of required IT equipment; (d) delays in the implementation of other reforms that are preconditions for the FMIS, such as the adoption of the new chart of accounts, the budget classification and reengineering of budget procedures and processes; and (e) resistance to change. These risks are mitigated by the identification of the FMIS, SIMBA, which will be procured using a single source method from the AIMF, which will also provide training and TA to undertake the reengineering of PFM processes and procedures; the use of United Nations Office for Project Services (UNOPS) for the procurement of IT equipment; and the Page 29 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) recruitment of a consultant that will provide TA and quality control of the implementation of the FMIS. TA and training to support the implementation of the PFM reforms and to provide TA for change management and adequate communication will also be funded. Furthermore, the Government has already made progress in the adoption of the chart of accounts and the budget classification, which is in line with the CEMAC PFM Directives, as well as with the implementation of other CEMAC PFM Directives such as the Transparency Code. 68. Fiduciary risk is Substantial. Both FM and procurement risk has been assessed as substantial given the country context and institutional capacity (see section C and D as well as annex 2). The proposed mitigating measures are expected to reduce the fiduciary risk to a moderate level. 69. Stakeholder risk is Substantial. Risks exist with respect to the various number of donors involved in the Central African Republic’s post-conflict recovery, which may result in competing priorities and duplication of efforts. To mitigate these risks, the Government prepared a development strategy and a multilateral conference was successfully organized in Brussels in November 2016 to facilitate harmonization of donor interventions in the medium term through the RCPCA. Finally, the RCPCA will also contribute to the smoothing of aid cycles, improvement of donor coordination, and strategically contribute to address risks linked to security, political capture, and institutional capacity. 70. Other risks related to the program are High. The Central African Republic’s volatile security situation is a transversal risk affecting all components of the project. As a result of instability and violence, the UN’s Office for Coordination of Humanitarian Affairs estimates that about 1 million people are internally displaced, including over 500,000 in the capital city of Bangui alone. About 2.6 million people are currently estimated to require humanitarian assistance and 1.3 million people are food- insecure. The scarce presence of security forces outside of Bangui, as well as a lack of access to basic police and judicial services contributes to insecurity, which is especially acute in areas outside of the capital region. Recent fighting and conflict in the rural areas outside of Bangui may have further impacts on economic activity, administrative capacity, and social service provision. The UN peace-keeping mission, as well as government reform of the security sector and the DDR process are mitigating these risks. VI. APPRAISAL SUMMARY A. Economic and Financial (if applicable) Analysis 71. Given the nature of the proposed project, which focuses on capacity building and TA, it is difficult to present a pro forma financial analysis to quantify the financial gains from the project. However, given the components of the project, and the improvements they aim to make in the management of public finances in the Central African Republic, it is possible to conduct an economic analysis of the project, which considers the qualitative benefits and costs associated with changes in economic welfare arising from the project. Beyond financing activities that will contribute to improve PFM and PIM in the Central African Republic, the World Bank’s value added include the technical expertise it brings in. Furthermore, the World Bank contributes to ensure coordination between the activities of the development partners in the sector. The reforms are expected to improve PFM and PIM in the Central African Republic which are public goods and, consequently, justifying the use of public financing of the project. Key areas of potential economic benefits from the project include the following: Page 30 of 121 The World Bank Public Expenditure and Investment Management Project (P161730)  Support for improved budget preparation and management, including the preparation of an MTEF, will allow for more predictable and credible budgeting in the mid-term. As a result, these activities may allow for better strategic, multi-year planning of public resources to ensure adequate allocations and execution in the most strategic sectors. As noted in the RCPCA, increasing investments in the health, education, agriculture, and infrastructure may in-turn have the potential to support greater economic growth and poverty reduction. In addition, improved expenditure management such as the publication of budget ceilings and strengthened cash management may also help to reduce arrears accumulation in the medium-term.  Support to improving procurement systems, capacity, and processes are expected to led to greater competition in public procurement. Accordingly, greater competition in bidding processes, may help to reduce the value of sole source contracts awarded by the Government, which supports to better value for money in public procurements, better quality outputs, and less scope for corrupt behavior.  Support for improved FMIS will improve the accuracy and timeliness of financial reporting. Timelier reporting is necessary for both the internal and external oversight processes, which can subsequently reduce the scope for corruption. In addition, once the Government installs the necessary fiber optic network for the FMIS system, it may even devise usage agreement contracts with the private sector, particular local banks, which can represent additional sources of revenues. Support for an improved treasury management and accounting function will likewise allow for more accurate and timely production of financial reporting as well as significant efficiencies stemming from better cash management. Improved cash management will decrease the amount of idle funds by consolidating them into an account which could have a positive financial impact.  Support to improving the HR management may help to reduce ghost workers from the Government payroll. Project activities include updating data on civil servants in the HR database and the payroll database, the cross comparison of which can identify potential discrepancies. In addition, payroll audits and controls to verify the physical presence of civil service can help to further reduce incidences of ghost workers.  Support for improving the capacity for internal control is expected to result in a decrease in extraordinary expenditures. Likewise, support for external control functions, including the role played by the Court of Auditors, is intended to improve transparency and oversight, thereby reducing the scope for corrupt activities to go undetected.  Support for improving public investment management capacity is expected to improve the efficiency and efficacy of capital expenditures and ultimately the output growth in the Central African Republic. Public investment supports the delivery of key public services, connects citizens and firms to economic opportunities, and can serve as an important catalyst for economic growth. B. Technical 72. The design of the operation has been informed by analytical work undertaken by the World Bank, and other development partners. In particular, there is a significant amount of existing analytical work both from before the crisis, which remains relevant. These include the 2010 PEFA Assessment, the Page 31 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) 2010 Training and Capacity Building in Procurement Strategy, and the 2012 Bank Public Expenditure Review. Since March 2016 there has also been a significant production of analytical work including the World Bank’s PFM Policy Note and Security Sector Public Expenditure Review, the IMF concerted plan to improve the resilience of the PFM system 2016- 2017 and 2017- 2020, piloting of the budget execution report and mobilization of tax and customs revenues report prepared with support from the IMF, and the EU-funded audit of the FMIS system and identification of TA needs. There has also been a significant production of analytical work through the EPSR Project including a diagnostic of the organization and capacity of the Court of Accounts, a report of the preparation, execution and monitoring of the public investment program, an audit on fiscal expenses, a study on the use of payment modalities of civil servants, a study on the revisions of the salary structure and strategic HR management, and a study on the General Inspection of Finance. These and additional studies under preparation have served to inform the design of the project. C. Financial Management 73. The overall FM risk of the PEIMRP is rated substantial before mitigating measures. It is considered that the FM will satisfy the World Bank’s minimum requirements under OP/BP 10.00 (Investment Project Financing), and therefore will be adequate to provide, with reasonable assurance, accurate and timely FM information on the status of the project required by the World Bank. To maintain the continuous timely and reliability of information produced by the PMU, the following mitigation measures will be taken. Before effectiveness of the operation : (a) Recruitment on a competitive basis of a project manager, a deputy project manager, and a program manager responsible for Component 2 of the project with ToRs, qualifications, and experience satisfactory to the World Bank; (b) Issuance of a Ministerial Decision by the Minister of Finance and Budget creating the PMU within the MFB; (c) Issuance of a joint Ministerial Decision by the Minister of Finance and Budget and the Minister of Economy, Planning, and International Cooperation for creating the Project Steering Committee: and (d) recruitment of the procurement officer and the financial management officer on a competitive basis, with ToRs, qualifications and experience satisfactory to the World Bank. The preparation and adoption of a Project Implementation Manual (PIM) satisfactory to the World Bank is also an effectiveness condition. The PIM will detail the roles and responsibilities of all involved stakeholders, as well as the project implementation mechanism. The PIM will describe the governance and oversight arrangements, including FM procedures required for the project such as staffing, budgeting, accounting, reporting, funds flows, and disbursement arrangements. The PIM will clarify the role, mission and responsibility of the PMU as a fiduciary agency for other World Bank Projects. The role, mission and responsibility of other stakeholders of these World Bank projects will also be defined in the PIM. Additional measures will be taken following project effectiveness, including: (a) customization of an accounting software within three months of effectiveness; and (b) recruitment of external auditors no later than six months after effectiveness. 74. An FM assessment of the CS-REF -responsible for the implementation of the ongoing EPSR Project (P149884) as the fiduciary unit of this project has been designated to provide support to the fiduciary unit of the of the PEIMRP (P161730), was carried out in March 2017. The objective of the assessment was to determine whether the fiduciary unit had acceptable FM arrangements in place to ensure that the project funds will be used only for intended purposes, with due attention to considerations of economy and efficiency. Arrangements are acceptable if they are capable of accurately recording all transactions and balances, supporting the preparation of regular and reliable financial Page 32 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) statements, safeguarding the project’s assets, and are subject to auditing arrangements acceptable to the World Bank. During a six-month transition phase, the fiduciary unit of the EPSR will provide support to the fiduciary team of the PEIMRP. 75. The irregularities and corruption risk within the project activities is Substantial given the country context. Corruption and poor service delivery are recognized as key challenges in the Central African Republic’s public sector and, more specifically, for a project that involves several entities with relatively diverse interests. In addition, the lack of appropriate oversight and adequate operational tools could jeopardize the project implementation. It is thought that the FM will satisfy the World Bank’s minimum requirements under OP/BP 10.00, once mitigating measures have been implemented. An FM Action Plan to enhance FM arrangements for the project is included in annex 2. The overall FM risk rating for the project is assessed as Substantial before implementation of mitigation measures. Table 1 Categories of eligible expenditures Category Amount of the Financing Percentage of Expenditures to Allocated (expressed in SDR) be Financed (inclusive of Taxes) (1) Goods, works, non-consulting services and consulting services, 7,300,000 100 recurrent, operating costs and training for the project Total amount 7,300,000 100 D. Procurement 76. Procurement for this project will be carried out in accordance with ’World Bank Procurement Regulations for Investment Project Financing (IPF) Borrowers, July 2016 (procurement regulations) and the World Bank’s Anti-Corruption Guidelines: ’Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loads, IDA Credits and Grants (revised as of July 1, 2016) ’ as well as the provisions stipulated in the Financing Agreement. All works, goods and consulting and non- consulting services required for the project and to be financed out of the proceeds of the Grant shall be procured in accordance with the requirements set forth or referred to in the Section VI. Approved Selection Methods: Goods, Works and Non-Consulting Services of the ’Procurement Regulations’, the consulting services will be procured in accordance with the requirements set forth or referred to in the Section VII. Approved Selection Methods: Consulting Services of the ’Procurement Regulations’, the Project Procurement Strategy for Development (PPSD), and Procurement Plan approved by the World Bank. The Procurement Plan, including its updates, shall include for each contract (a) a brief description of the activities/contracts; (b) the selection methods to be applied; (c) the cost estimates; (d) time schedules; (e) the World Bank’s review requirements; and (f) any other relevant procurement information. The Procurement Plan covering the first 18 months of the project implementation has been agreed by the World Bank at negotiations. Any updates of the Procurement Plan shall be submitted to the World Bank for approval. The Recipient shall use the World Bank’s online procurement planning and tracking tool to prepare, clear, and update its Procurement Plans and conduct all procurement Page 33 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) transactions. 77. A PPSD was prepared to ensure the procurement activities are packaged and prepared as to minimize risk. The PPSD concluded that the environment is favorable for the procurement of the activities envisaged under the proposed project. The activities include: (a) procurement of consulting services from firms; (b) procurement of consulting services from individuals; (c) procurement and the deployment of an accounting and budget information management software; (d) procurement of office equipment and supplies; (e) procurement of information technology equipment including fiber optic cable; (f) procurement of vehicles; and (g) procurement of works to: (a) undertake minor rehabilitation of public buildings (Court of Accounts in Bangui, the building that will house the RCPCA Secretariat, buildings of the MFB in selected cities); and (b) install the fiber- optic cable between key buildings of the MFB and the MEPC in Bangui. The assessment found that there is an acceptable offer for certain goods and services and works on the national market. Hence, the procurement of services from individual consultants such as consultants for surveys, the procurement of small quantities of office equipment and supplies and information technology equipment and the procurement of works will be done on a national level. The procurement of services from firms and individual consultants with expertise in PFM and Public Investment Management will be recruited on an international or regional level. The procurement of the new FMIS, will be procured using a single source method from the AIMF, which will also provide training and TA to undertake the reengineering of PFM processes and procedures. The United Nations Office for Project Services (UNOPS) will be used for the procurement of IT equipment; and the recruitment of a consultant that will provide TA and quality control of the implementation of the FMIS. To simplify procurement, 60 percent of the project will be implemented through five key procurement activities. 78. A summary assessment of the MFB’s capacity to implement procurement activities for the project was carried out by the World Bank’s Procurement Specialist in January 2017. This assessment showed that there is a Procurement Unit in the MFB currently in charge of procurement activities in the EPSR project (P149884). There is also a Procurement Unit attached to the Directorate of Resources within the Cabinet of the MFB with some knowledge of national procurement procedures. The Procurement unit of the EPSR Project is staffed with qualified and experienced procurement staff. It has extensive experience of managing procurement using World Bank rules and procedures as well as knowledge of national procurement regulation and procedures. A filing and archiving system of procurement documentation exists. 79. The PMU of the PEIMRP is responsible for the implementation of all fiduciary activities comprising procurement and FM. This will include (a) managing all the project’s procurement process, including the signing and approval of contracts during the project implementation; (b) anticipating all procurement activities as indicated in the PPSD and the Procurement Plan; and (c) supervising closely all procurement activities. These measures will be pursued during the implementation of project. To mitigate risks, the PMU of the PEIMRP will recruit a procurement specialist with ToRs, qualifications and experience acceptable to the World Bank before project effectiveness. Furthermore, during a six-month transition phase, the procurement specialist in the EPSR Project will be providing support to the PMU of the PEIMRP. A summary risk assessment of the Procurement Unit of the EPSR Project was carried out and the procurement risk was rated “Moderate”. Page 34 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) E. Social (including Safeguards) 80. The project is being classified as a Category B operation because of the moderate level social risks and impacts of its foreseen activities, the scope of which will be rather site- specific, and thus easily manageable. The project has national coverage with a specific focus on Bangui and five urban areas (Mbaïki, Berberatti, Bouar, Kaga Bandoro and Bambari). Most of the project activities involve training, TA and capacity building activities. Project activities will include rehabilitation of the building belonging to the public administration that will house the RCPCA Secretariat and the rehabilitation of the building of the Court of Auditors in Bangui. The activities will not involve new land acquisition nor any potential for physical resettlement. The building of the Court of Auditors is partly (upper floor) used by a non- governmental organization (NGO) and appropriate measures will have to be taken to accommodate this NGO during work, which will include repairs of the roof, electric and IT cabling, and fencing and draining of the ground floor. Other work will include digging trenches in urban areas of Bangui to deploy a fiber optic cable on approximately 3 kilometer distance. Finally, the project could, pending the security situation, fund rehabilitation activities of public buildings used by MFB as well as MEPC staff in each of the abovementioned five urban areas. These activities will not involve new land acquisition, nor are they expected to result in huge risks and negative impacts on people. Adequate guidance will be provided through the Environmental and Social Management Plan (ESMP) to ensure that basic hygiene and worker health and safety rules are observed during building rehabilitation phase. The rehabilitation of public buildings could use methods and approaches used in other World Bank funded projects in the Central African Republic such as Londo or the Central African Republic Service Delivery and Support to Communities. A specific agreement will in that case be signed between the PMU of the MFB and the Project Implementation Unit that will be used. The agreement will have to specify that the safeguards of the project implementing the activities will apply. 81. The project is expected to bring positive social impacts to its beneficiary populations, while carrying some negative impacts for which specific mitigation measures will be designed. However, given the emergency situation in the Central African Republic and the country’s relative fragility, and the limited technical capacity in the country, World Bank regional management decided to defer the preparation of safeguards instruments before project implementation. Consequently, and in light of the provisions of paragraph 12 of OP/BP 10.00, an Environmental and Social Safeguards Action Plan (ESSAP), consistent with the World Bank operational policies and procedures for investment operations, Projects in Situations of Urgent Need of Assistance or Capacity Constraints, was prepared. The objective of the ESSAP is to ensure that planned project activities and related social and environmental assessment and management instruments and processes meet the required technical quality and are in compliance with the national legislation of the Central African Republic and the World Bank’s operational safeguards policies and standards. 82. Given the abovementioned detailed description, and the unlikelihood that expected project activities related to deploying the fiber-optic cable might require land acquisition, the social safeguard policy: OP/BP 4.12 (Involuntary Resettlement) will not be triggered. Provision will be made in the ESMP to ensure that adequate and transparent measures are set forth to avoid any such land acquisition leading to either physical or economic displacement during the implementation of civil works. For rehabilitation activities in general, the project will ensure that sufficient consultations with all affected civil servants is undertaken and details of the schedule of works, risks and constraints involved (that is dust, noise, free movements, health, security and safety and so on) are discussed in detail and options Page 35 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) of either (a) a temporarily displacement in other government buildings or shelters/transitional offices/workplaces is offered, or (b) civil servants are being officially authorized to work from home without any prejudice of losing their jobs or pensions during the course of the rehabilitation; and (c) they are all re-assured of full re-entry guarantee (that is of pursuing their jobs). As for the NGO in a rental contract in the Court of Auditors, the project is expected to explore the following two options: (a) to be permanently displaced into a new rental facility and provided with a three to four months of rental allowance, or (b) be temporary relocated to either a similar government facility or rental facility for which the project will cover all costs related to both moves (out/in) as well as a rental allowance in case of a transitional rental. For either of these two options, the project will ensure that a comprehensive and well-consulted upon Compensation Note (CN) is embedded in the ESMP. All these proceedings should be properly documented and files in the project folder. In compliance with paragraph 12 of OP/BP 10.00, the Government will prepare the relevant safeguards instrument within four months of project effectiveness and before the physical start of the civil works that could imply involuntary resettlement of people. F. Environment (including Safeguards) 83. The project is being classified as an Environmental Category B operation due to the Moderate environmental risks and impacts of its foreseen activities, which scope will be rather site- specific, and thus easily manageable. Two environmental safeguards policies were triggered: OP/BP 4.01 (Environmental Assessment); and OP/BP 4.11 (Physical Cultural Resources). However, given the emergency situation in the Central African Republic and the country’s relative fragility, and the limited technical capacity in the country, the management decided to defer the preparation of safeguards instruments prior to project implementation. Consequently, and in light of the provisions of paragraph 12 of OP/BP 10.00, an ESSAP, consistent with World Bank operational policies and procedures for investment operations, Projects in Situations of Urgent Need of Assistance or Capacity Constraints, was prepared. The objective of the ESSAP is to ensure that planned project activities and related social and environmental assessment and management instruments and processes meet the required technical quality and are in compliance with the national legislation of the Central African Republic and the World Bank’s operational safeguards policies and standards. 84. OP/BP 4.01 Environmental Assessment: This policy is triggered because the project activities to be financed are expected to have environmental adverse impacts. The activities that could generate adverse impacts are the following: rehabilitation of the state building that will house the RCPCA secretariat; rehabilitation of the building of the Court of Auditors in Bangui; digging of trenches in urban areas of Bangui to deploy a fiber- optic cable for approximately 3 kilometers distance; and rehabilitation activities of public buildings used by the MFB as well as MEPC staff in each of the abovementioned five urban areas (Mbaïki, Berberatti, Bouar, Kaga Bandoro and Bambari). Because the locations of these activities are known, ESMPs will be prepared and disclosed in-country and at the World Bank, no late than four months after effectiveness. 85. OP/BP 4.11 Physical Cultural Resources: This policy is triggered as digging activities under the optic fiber works involve excavation and movement of earth. The ESSAP and ESMPs will include clear procedures required for identification, protection of cultural property from theft, and treatment of discovered artifacts that may be identified during implementation. Page 36 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) 86. Institutional arrangement for safeguards implementation: The PMU will responsible for the safeguards compliance and will recruit an Environmental Safeguards Specialist who will coordinate all safeguards works during the whole project live. Periodic environmental safeguards implementation reports will be produced. The World Bank safeguards team will provide support to the PMU during the implementation support missions. 87. Consultation: To ensure an effective consultation process, the PMU will prepare a consultation plan that will be implemented during the project implementation including during the preparation of each specific ESMP. Particular attention will be given for the trenches being dug within Bangui. All consultation will be adequately documented. 88. The preparation of the ESMP, including the training modules is estimated to be completed within four months of project effectiveness, including World Bank review and approval, disclosure, consultations and finalization. 89. Climate change screening was done for this project. The results show that drought and extreme temperature, precipitation, and flooding pose a Moderate risk as future drivers of risk in the country context. However, the project outcome itself is a low risk from these events. All urban infrastructure will be constructed to be resilient to future risk posed by climate changes, and the project’s contribution to preparing a national social protection and safety nets strategy will also contribute to increasing resilience of vulnerable communities to climate shocks. G. Other Safeguard Policies (if applicable) 90. Not applicable. H. World Bank Grievance Redress 91. Communities and individuals who believe that they are adversely affected by a World Bank (WB) supported project may submit complaints to existing project-level grievance redress mechanisms or the WB’s Grievance Redress Service (GRS). The GRS ensures that complaints received are promptly reviewed in order to address project-related concerns. Project affected communities and individuals may submit their complaint to the WB’s independent Inspection Panel which determines whether harm occurred, or could occur, as a result of WB non-compliance with its policies and procedures. Complaints may be submitted at any time after concerns have been brought directly to the World Bank's attention, and Bank Management has been given an opportunity to respond. For information on how to submit complaints to the World Bank’s corporate Grievance Redress Service (GRS), please visit http://www.worldbank.org/en/projects-operations/products-and-services/grievance-redress- service. For information on how to submit complaints to the World Bank Inspection Panel, please visit www.inspectionpanel.org. . Page 37 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) VII. RESULTS FRAMEWORK AND MONITORING Results Framework COUNTRY : Central African Republic Public Expenditure and Investment Management Reform Project Project Development Objectives To improve management and transparency of public expenditures and public investments Project Development Objective Indicators Unit of Responsibility for Indicator Name Core Baseline End Target Frequency Data Source/Methodology Measure Data Collection Name: Percentage (in value) Percentage 27.00 15.00 BI-Annually Report from Directorate DGB and DGTCP of exceptional expenditures, General of Budget (DGB) excluding salaries and debt. and Directorate General of Treasury and Public Accounting (DGTCP). Percentage (in value) of Percentage 27.00 25.00 exceptional expenditures, excluding salaries and debt. Percentage (in value) of Percentage 27.00 22.50 exceptional expenditures, Page 38 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) Unit of Responsibility for Indicator Name Core Baseline End Target Frequency Data Source/Methodology Measure Data Collection excluding salaries and debt. Percentage (in value) of Percentage 27.00 20.00 exceptional expenditures, excluding salaries and debt. Percentage (in value) of Percentage 27.00 17.50 exceptional expenditures, excluding salaries and debt. Description: Adjusted for wage and debt expenditures and compared to total budget expenditures. Name: Timely submission of Text Backlog of Financial Annual Report from DGTCP and DGTCP and DGB. annual financial statements 2009-2016 Statements DGB. (Compte de Gestion, Compte Compte de for 2019 Administrative, and Loi de Gestion, submitted Règlement). Compte within 9 Administrat months to ive, and Loi Court of de auditors Règlement. and to Parliament within 12 months. Timely submission of Text Backlog of Backlog annual financial statements 2009-2016 2009-2016 (Compte de Gestion, Compte de submitted Page 39 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) Unit of Responsibility for Indicator Name Core Baseline End Target Frequency Data Source/Methodology Measure Data Collection Compte Administrative, Gestion, to Court of and Loi de Règlement). Compte Auditors. Administrat ive, and Loi de Règlement. Timely submission of Text Backlog of Financial annual financial statements 2009-2016 statements (Compte de Gestion, Compte de for 2017 Compte Administrative, Gestion, submitted and Loi de Règlement). Compte within 12 Administrat months to ive, and Loi Court of de Auditors. Règlement. Timely submission of Text Backlog of Financial annual financial statements 2009-2016 Statements (Compte de Gestion, Compte de for 2018 Compte Administrative, Gestion, submitted and Loi de Règlement). Compte within 12 Administrat months to ive, and Loi Court of de Auditors. Règlement. Timely submission of Text Backlog of Financial annual financial statements 2009-2016 Statements Page 40 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) Unit of Responsibility for Indicator Name Core Baseline End Target Frequency Data Source/Methodology Measure Data Collection (Compte de Gestion, Compte de for 2019 Compte Administrative, Gestion, submitted and Loi de Règlement). Compte within 9 Administrat months to ive, and Loi Court of de auditors Règlement. and to Parliament within 12 months. Description: The current organic finance law stipulates that the submission to Parliament of annual financial statements of year N should occur during the first Parliamentary session in year N+1. The target of the indicators has been set to be aligned with the provisions of the CEMAC organic finance law which stipulates that the submission to Parliament of annual financial statements of year N should occur by the end of year N+1. Annual Financial Statements include the "Compte de Gestion, Compte Administrative, and Loi de Règlement". Name: Transparency Number 7.00 15.00 Bi-Annually Information published on Ministries in charge composite indicator the web-page of the of Finance, (Composite indicator Specific Ministries in charge of Planning, Health, to the Central African Finance and Planning. Education, Republic based on 21 core Agriculture, Public budget reports. Works, RCPCA Secretariat. Transparency composite Number 7.00 7.00 indicator (Composite indicator Specific to the Central African Republic Page 41 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) Unit of Responsibility for Indicator Name Core Baseline End Target Frequency Data Source/Methodology Measure Data Collection based on 21 core budget reports. Transparency composite Number 7.00 9.00 indicator (Composite indicator Specific to the Central African Republic based on 21 core budget reports. Transparency composite Number 7.00 11.00 indicator (Composite indicator Specific to the Central African Republic based on 21 core budget reports. Transparency composite Number 7.00 13.00 indicator (Composite indicator Specific to the Central African Republic based on 21 core budget reports. Description: In the absence of a recent PEFA and given that there is not Open Budget Index for the Central African Republic as it is not yet member of the Open Budget Initiative a transparency composite indicator has been defined. The documents include the following: 1. Draft Finance Law Page 42 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) Unit of Responsibility for Indicator Name Core Baseline End Target Frequency Data Source/Methodology Measure Data Collection 2. Enacted Finance Laws 3. Budget Annexes containing: 4. Forecast of the fiscal deficit or surplus 5. Previous year’s budget outturn presented in the same format as the Budget proposal 6. Current (initial or revised) year’s budget outturn presented in the same format as the Budget proposal 7. Aggregated budget data for revenue and expenditures using the main heads of classification, including data for previous and current fiscal year 8. Macroeconomic assumptions (Growth, Inflation, exchange rate, interest) 9. Deficit financing including key assumptions 10. Debt stock with presentation of the situation at the beginning of the current fiscal year and in according with GFS standard 11. Table listing posts by grade, department, and place of assignment. 12. Fiscal expenses 13. Quarterly Budget execution Reports 14. Bi annual and annual Report of the execution of the RCPCA 15. Annual report on public investments 16. Legal and regulatory documents, including standard bid documents, instructions for bidders and complaints mechanisms 17. Annual Procurement Plans for at least four priority Ministries (Education, Health, Agriculture, Public Works) 18. Bid opportunities 19. Bid Awards 20. Annual Procurement Statistics 21. Procurement Audit Name: Investment Budget Percentage 39.00 50.00 Bi-Annually Investment Budget Ministry of Finance , Execution Rate. Execution Report. Ministry of Planning and RCPCA secretariat. Investment Budget Percentage 39.00 40.00 Execution Rate. Page 43 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) Unit of Responsibility for Indicator Name Core Baseline End Target Frequency Data Source/Methodology Measure Data Collection Investment Budget Percentage 39.00 42.50 Execution Rate. Investment Budget Percentage 39.00 45.00 Execution Rate. Investment Budget Percentage 39.00 47.50 Execution Rate. Description: In MFB, MEPC, Ministry of Health, Ministry of Agriculture, Ministry of Education. Intermediate Results Indicators Unit of Responsibility for Indicator Name Core Baseline End Target Frequency Data Source/Methodology Measure Data Collection Name: New regulation, Text Regulation, New Chart Annually Report from the MFB procedures and processes procedures of Account MFB/Directorate General of adopted (Process) and and budget Budget. processes classificatio in need of n applied. updating. New regulation, Text Regulation, New Chart procedures and processes procedures of Account adopted (Process) and and budget Page 44 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) Unit of Responsibility for Indicator Name Core Baseline End Target Frequency Data Source/Methodology Measure Data Collection processes classificatio in need of n in updating. conformity with CEMAC directives on PFM adopted. New regulation, Text Regulation, New Chart procedures and processes procedures of Account adopted (Process) and and budget processes classificatio in need of n applied. updating. New regulation, Text Regulation, New Chart procedures and processes procedures of Account adopted (Process) and and budget processes classificatio in need of n applied. updating. Description: Name: Improved budget Text Budget Execution Bi-Annually Budget execution report. DGB/DGTCP reporting and information to execution reports line ministries (Process) reports published Page 45 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) Unit of Responsibility for Indicator Name Core Baseline End Target Frequency Data Source/Methodology Measure Data Collection produced. using a functional and administrat ive, nomenclat ure within eight weeks of the end of the quarter and commitme nt ceiling communica ted to sector ministries quarterly Improved budget reporting Text Budget Execution and information to line execution reports ministries (Process) reports published produced. quarterly using a functional nomenclat ure. Improved budget reporting Text Budget Execution and information to line execution reports Page 46 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) Unit of Responsibility for Indicator Name Core Baseline End Target Frequency Data Source/Methodology Measure Data Collection ministries (Process) reports published produced. using a functional nomenclat ure and commitme nt ceiling communica ted to sector ministries quarterly. Improved budget reporting Text Budget Execution and information to line execution reports ministries (Process) reports published produced. using a functional nomenclat ure and commitme nt ceiling communica ted to sector ministries quarterly. Improved budget reporting Text Budget Execution and information to line execution reports Page 47 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) Unit of Responsibility for Indicator Name Core Baseline End Target Frequency Data Source/Methodology Measure Data Collection ministries (Process) reports published produced. using a functional and administrat ive nomenclat ure and commitme nt ceiling communica ted to sector ministries quarterly. Description: Name: Improved HR Text Audits of Audit of Annually Audit Reports DGB and Ministry in Management (Process) the HR - the HR and charge of Civil payroll Payroll Service undertaken database – HR and Payroll database in the process of being interconne cted. Page 48 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) Unit of Responsibility for Indicator Name Core Baseline End Target Frequency Data Source/Methodology Measure Data Collection Improved HR Management Text Audits of - (Process) the HR - payroll undertaken – HR and Payroll database in the process of being interconne cted. Improved HR Management Text Audits of Audit of (Process) the HR - the HR and payroll Payroll undertaken database – HR and Payroll database in the process of being interconne cted. Improved HR Management Text Audits of Survey of (Process) the HR - presence of payroll civil undertaken servants – HR and and state Page 49 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) Unit of Responsibility for Indicator Name Core Baseline End Target Frequency Data Source/Methodology Measure Data Collection Payroll employees. database in the process of being interconne cted. Improved HR Management Text Audits of Benefits, (Process) the HR - top-ups payroll and per- undertaken diem are – HR and harmonize Payroll d database in the process of being interconne cted. Description: Name: Transparency of Text N/A Public Annually Report from Directorate Directorate General public procurement procureme General of Public of Public nt plans for Procurement. Procurement all concerned ministries and at least 30% of bid opportuniti Page 50 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) Unit of Responsibility for Indicator Name Core Baseline End Target Frequency Data Source/Methodology Measure Data Collection es and awards published Transparency of public Text N/A - procurement Transparency of public Text N/A Public procurement procureme nt plans for all concerned ministries and at least 15% of bid opportuniti es and awards published. Transparency of public Text N/A Public procurement procureme nt plans for all concerned ministries and at least 20% of bid opportuniti es and Page 51 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) Unit of Responsibility for Indicator Name Core Baseline End Target Frequency Data Source/Methodology Measure Data Collection awards published. Transparency of public Text N/A Public procurement procureme nt plans for all concerned ministries and at least 25% of bid opportuniti es and awards published. Description: In MFB, MEPC, Ministry of Health, Ministry of Agriculture, Ministry of Education. Name: Audit of public Text N/A Yes (at Annually Report from Public Public Procurement procurement published least one in Procurement Regulatory Regulatory Agency the past Agency. three years) Audit of public Text N/A Yes (at procurement published least one in the past three years). Page 52 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) Unit of Responsibility for Indicator Name Core Baseline End Target Frequency Data Source/Methodology Measure Data Collection Description: In MFB, MEPC, Ministry of Health, Ministry of Agriculture, Ministry of Education, Ministry of Public Works. Name: FMIS Rollout Text Degraded All core Bi-Annually Information Technology Information (Process) GESCO still modules Unit in MFB Report. Technology Unit in in place. operational MFB. in the MFB FMIS Rollout (Process) Text Degraded - GESCO still in place. FMIS Rollout (Process) Text Degraded Define GESCO still Macro in place. Processes to and Technical Specificatio ns. FMIS Rollout (Process) Text Degraded Tender and GESCO still procure in place. system. FMIS Rollout (Process) Text Degraded Test of the GESCO still core in place. modules. Page 53 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) Unit of Responsibility for Indicator Name Core Baseline End Target Frequency Data Source/Methodology Measure Data Collection Description: Name: In-year financial Text N/A Intermedia Bi-Annually Report produced by Directorate General accounts reporting (Process) ry Directorate General of of Treasury and accounting Treasury and Public Public Accounting reports are Accounting. prepared quarterly within six weeks of the end of the quarter In-year financial accounts Text N/A - reporting (Process) In-year financial accounts Text N/A Intermedia reporting (Process) ry accounting reports prepared bi- annually. In-year financial accounts Text N/A Intermedia reporting (Process) ry accounting reports Page 54 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) Unit of Responsibility for Indicator Name Core Baseline End Target Frequency Data Source/Methodology Measure Data Collection prepared quarterly. In-year financial accounts Text N/A Intermedia reporting (Process) ry accounting reports prepared quarterly. Description: The report will contain: (i) the status of the production of accounts class IV, V, VI and VII; (ii) the class V account will be accompanied by a certificate from the national director of the BEAC establishing the entry and exit position of the Bank balance; and (iii) the reconciliation of active central government bank accounts, suspense account and advance accounts. Name: Annual and bi-annual Yes/No N Y Bi-Annually RCPCA implementation RCPCA Secretariat reviews of RCPCA report. Annual and bi-annual Yes/No N N reviews of RCPCA Annual and bi-annual Yes/No N Y reviews of RCPCA Annual and bi-annual Yes/No N Y reviews of RCPCA Page 55 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) Unit of Responsibility for Indicator Name Core Baseline End Target Frequency Data Source/Methodology Measure Data Collection Annual and bi-annual Yes/No N Y reviews of RCPCA Description: Name: Public investment Text No Yes Annually Report on Public Ministry of Economy projects are prioritized on Investments. and Planning the basis of published standard criteria for project selection Public investment projects Text No Standard are prioritized on the basis Criteria of published standard published. criteria for project selection Public investment projects Text No Yes are prioritized on the basis of published standard criteria for project selection Public investment projects Text No Yes are prioritized on the basis of published standard criteria for project selection Page 56 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) Unit of Responsibility for Indicator Name Core Baseline End Target Frequency Data Source/Methodology Measure Data Collection Public investment projects Text No Yes are prioritized on the basis of published standard criteria for project selection Description: Name: Public Investment Yes/No N Y Bi-Annually Report on Public Ministry of report (bi-annual and Investments. Economy, Planning annual) publicly disclosed and Cooperation Public Investment report Yes/No N N (bi-annual and annual) publicly disclosed Public Investment report Yes/No N Y (bi-annual and annual) publicly disclosed Public Investment report Yes/No N Y (bi-annual and annual) publicly disclosed Page 57 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) Unit of Responsibility for Indicator Name Core Baseline End Target Frequency Data Source/Methodology Measure Data Collection Public Investment report Yes/No N Y (bi-annual and annual) publicly disclosed Description: Name: Annual reviews of Yes/No N Y RCPCA incorporating feedback from citizens' consultations Annual reviews of RCPCA Yes/No N N incorporating feedback from citizens' consultations Annual reviews of RCPCA Yes/No N Y incorporating feedback from citizens' consultations Annual reviews of RCPCA Yes/No N Y incorporating feedback from citizens' consultations Annual reviews of RCPCA Yes/No N Y incorporating feedback from citizens' consultations Page 58 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) Unit of Responsibility for Indicator Name Core Baseline End Target Frequency Data Source/Methodology Measure Data Collection Description: Page 59 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) Target Values Project Development Objective Indicators FY Indicator Name Baseline End Target Percentage (in value) of exceptional expenditures, excluding salaries and debt. 27.00 15.00 Percentage (in value) of exceptional expenditures, excluding salaries and debt. 27.00 25.00 Percentage (in value) of exceptional expenditures, excluding salaries and debt. 27.00 22.50 Percentage (in value) of exceptional expenditures, excluding salaries and debt. 27.00 20.00 Percentage (in value) of exceptional expenditures, excluding salaries and debt. 27.00 17.50 Financial Statements for 2019 Backlog of 2009-2016 Compte de Timely submission of annual financial statements (Compte de Gestion, Compte submitted within 9 months to Gestion, Compte Administrative, Administrative, and Loi de Règlement). Court of auditors and to and Loi de Règlement. Parliament within 12 months. Backlog of 2009-2016 Compte de Timely submission of annual financial statements (Compte de Gestion, Compte Backlog 2009-2016 submitted to Gestion, Compte Administrative, Administrative, and Loi de Règlement). Court of Auditors. and Loi de Règlement. Backlog of 2009-2016 Compte de Financial statements for 2017 Timely submission of annual financial statements (Compte de Gestion, Compte Gestion, Compte Administrative, submitted within 12 months to Administrative, and Loi de Règlement). and Loi de Règlement. Court of Auditors. Backlog of 2009-2016 Compte de Financial Statements for 2018 Timely submission of annual financial statements (Compte de Gestion, Compte Gestion, Compte Administrative, submitted within 12 months to Administrative, and Loi de Règlement). and Loi de Règlement. Court of Auditors. Page 60 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) Indicator Name Baseline End Target Financial Statements for 2019 Backlog of 2009-2016 Compte de Timely submission of annual financial statements (Compte de Gestion, Compte submitted within 9 months to Gestion, Compte Administrative, Administrative, and Loi de Règlement). Court of auditors and to and Loi de Règlement. Parliament within 12 months. Transparency composite indicator (Composite indicator Specific to the Central African 7.00 15.00 Republic based on 21 core budget reports. Transparency composite indicator (Composite indicator Specific to the Central African 7.00 7.00 Republic based on 21 core budget reports. Transparency composite indicator (Composite indicator Specific to the Central African 7.00 9.00 Republic based on 21 core budget reports. Transparency composite indicator (Composite indicator Specific to the Central African 7.00 11.00 Republic based on 21 core budget reports. Transparency composite indicator (Composite indicator Specific to the Central African 7.00 13.00 Republic based on 21 core budget reports. Investment Budget Execution Rate. 39.00 50.00 Investment Budget Execution Rate. 39.00 40.00 Investment Budget Execution Rate. 39.00 42.50 Investment Budget Execution Rate. 39.00 45.00 Investment Budget Execution Rate. 39.00 47.50 Page 61 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) Intermediate Results Indicators FY Indicator Name Baseline End Target Regulation, procedures and New Chart of Account and budget New regulation, procedures and processes adopted (Process) processes in need of updating. classification applied. New Chart of Account and budget Regulation, procedures and classification in conformity with New regulation, procedures and processes adopted (Process) processes in need of updating. CEMAC directives on PFM adopted. Regulation, procedures and New Chart of Account and budget New regulation, procedures and processes adopted (Process) processes in need of updating. classification applied. Regulation, procedures and New Chart of Account and budget New regulation, procedures and processes adopted (Process) processes in need of updating. classification applied. Execution reports published using a functional and administrative, nomenclature within eight weeks Improved budget reporting and information to line ministries (Process) Budget execution reports produced. of the end of the quarter and commitment ceiling communicated to sector ministries quarterly Execution reports published Improved budget reporting and information to line ministries (Process) Budget execution reports produced. quarterly using a functional nomenclature. Execution reports published using Improved budget reporting and information to line ministries (Process) Budget execution reports produced. a functional nomenclature and commitment ceiling Page 62 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) Indicator Name Baseline End Target communicated to sector ministries quarterly. Execution reports published using a functional nomenclature and Improved budget reporting and information to line ministries (Process) Budget execution reports produced. commitment ceiling communicated to sector ministries quarterly. Execution reports published using a functional and administrative Improved budget reporting and information to line ministries (Process) Budget execution reports produced. nomenclature and commitment ceiling communicated to sector ministries quarterly. Audits of the HR - payroll undertaken – HR and Payroll Audit of the HR and Payroll Improved HR Management (Process) database in the process of being database interconnected. Audits of the HR - payroll undertaken – HR and Payroll Improved HR Management (Process) - database in the process of being interconnected. Audits of the HR - payroll undertaken – HR and Payroll Audit of the HR and Payroll Improved HR Management (Process) database in the process of being database interconnected. Audits of the HR - payroll Survey of presence of civil servants Improved HR Management (Process) undertaken – HR and Payroll and state employees. Page 63 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) Indicator Name Baseline End Target database in the process of being interconnected. Audits of the HR - payroll undertaken – HR and Payroll Benefits, top-ups and per-diem are Improved HR Management (Process) database in the process of being harmonized interconnected. Public procurement plans for all concerned ministries and at least Transparency of public procurement N/A 30% of bid opportunities and awards published Transparency of public procurement N/A - Public procurement plans for all concerned ministries and at least Transparency of public procurement N/A 15% of bid opportunities and awards published. Public procurement plans for all concerned ministries and at least Transparency of public procurement N/A 20% of bid opportunities and awards published. Public procurement plans for all concerned ministries and at least Transparency of public procurement N/A 25% of bid opportunities and awards published. Audit of public procurement published N/A Yes (at least one in the past three Page 64 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) Indicator Name Baseline End Target years) Yes (at least one in the past three Audit of public procurement published N/A years). All core modules operational in the FMIS Rollout (Process) Degraded GESCO still in place. MFB FMIS Rollout (Process) Degraded GESCO still in place. - Define Macro Processes to and FMIS Rollout (Process) Degraded GESCO still in place. Technical Specifications. FMIS Rollout (Process) Degraded GESCO still in place. Tender and procure system. FMIS Rollout (Process) Degraded GESCO still in place. Test of the core modules. Intermediary accounting reports In-year financial accounts reporting (Process) N/A are prepared quarterly within six weeks of the end of the quarter In-year financial accounts reporting (Process) N/A - Intermediary accounting reports In-year financial accounts reporting (Process) N/A prepared bi- annually. Intermediary accounting reports In-year financial accounts reporting (Process) N/A prepared quarterly. Intermediary accounting reports In-year financial accounts reporting (Process) N/A prepared quarterly. Page 65 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) Indicator Name Baseline End Target Annual and bi-annual reviews of RCPCA N Y Annual and bi-annual reviews of RCPCA N N Annual and bi-annual reviews of RCPCA N Y Annual and bi-annual reviews of RCPCA N Y Annual and bi-annual reviews of RCPCA N Y Public investment projects are prioritized on the basis of published standard criteria for No Yes project selection Public investment projects are prioritized on the basis of published standard criteria for No Standard Criteria published. project selection Public investment projects are prioritized on the basis of published standard criteria for No Yes project selection Public investment projects are prioritized on the basis of published standard criteria for No Yes project selection Public investment projects are prioritized on the basis of published standard criteria for No Yes project selection Public Investment report (bi-annual and annual) publicly disclosed N Y Public Investment report (bi-annual and annual) publicly disclosed N N Public Investment report (bi-annual and annual) publicly disclosed N Y Page 66 of 121 The World Bank Public Expenditure and Investment Management Project (P161730) Indicator Name Baseline End Target Public Investment report (bi-annual and annual) publicly disclosed N Y Public Investment report (bi-annual and annual) publicly disclosed N Y Annual reviews of RCPCA incorporating feedback from citizens' consultations N Y Annual reviews of RCPCA incorporating feedback from citizens' consultations N N Annual reviews of RCPCA incorporating feedback from citizens' consultations N Y Annual reviews of RCPCA incorporating feedback from citizens' consultations N Y Annual reviews of RCPCA incorporating feedback from citizens' consultations N Y Page 67 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) ANNEX 1: DETAILED PROJECT DESCRIPTION COUNTRY: Central African Republic Public Expenditure and Investment Management Reform Project 1. The proposed operation will adopt a PDIA to address key binding constraints that affect the Government’s institutional capacity to better manage expenditures as well as strategic planning and oversight capacities. As noted in the preceding sections, key areas that the project will address include the following: (a) inadequate budget planning, management, and execution; (b) inadequate procurement capacity; (c) need for an improved FMIS; (d) inadequate treasury management, accounting, and external oversight capacities; and the (e) need to improve public investment management to increase absorptive capacity. The total project cost in this phase is US$10,000,000 but given the financing needs for activities such as the full deployment of the FMIS the project could require additional financing. The project is structured around three components:  Management and Oversight of Public Expenditures (US$5,000,000);  Management and Oversight of Public Investments (US$4,000,000); and  Project Management (US$1,000,000). 2. To address these interrelated and mutually reinforcing challenges, the proposed operation has been designed to make selective interventions to simultaneously improve expenditures, as well as strategic planning and oversight capacities. With respect to the management of public expenditures, Component 1 of the project aims to consolidate core functions across the expenditure chain, from budgeting to oversight. To this end, the component will provide support for strengthening the budget preparation, management, and execution process to improve budget predictability and credibility. Capacity-building activities and TA will be provided for the improvement of procurement, treasury, and wage bill management, as well as for improved internal control and external oversight functions. Likewise, Component 1 will provide training to a cadre of functionaries engaged in key PFM activities, including accounting, cash management, budgeting, procurement, and public investment management. Finally, the component will support improvements to the existing but outdated budget and accounting information management system to stabilize its functioning over the next two to three years. 3. In addition to addressing expenditure management, the operation aims to enhance the overall capacity for public investment management. Given the weaknesses encountered in investment planning and its subsequent execution, Component 2 will finance the operationalization of the RCPCA Secretariat, established to enhance the country’s ability to coordinate development assistance and respond to strategic priorities as enumerated in the National Strategic Plan. In parallel, this component will finance the strengthening of the MEPC. This component will complement ongoing activities funded by the World Bank and ongoing and new activities from other development partners. Support will target strengthening strategic planning, project preparation, coordination, M&E, including citizen’s engagement, and transparency of public investments. Page 68 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) 4. Cutting across these two components, project activities will support enhanced transparency and accountability, capacity building in core PFM functions, and project management. First, transparency will be monitored by a PDO indicator that tracks the production of key documents for public disclosure, to improve transparency and oversight functions of key accountability institutions. Second, the project will address capacity building in a sustainable manner by providing TA and materials to key training institutions, including ENAM, which can provide ongoing and customized capacity building for core PFM functions. Finally, the project will provide overall support for project management under Component 3, which will enable the operationalization of a dedicated Project Implementation Unit under the Ministry of Finance, as well as provide for a contingency fund for unexpected studies and TA to allow for PDIA. 5. While the aforementioned components are designed to target the most critical constraints facing the Central African Republic’s PFM and strategic planning needs, the project does not include other important sectors, which will receive support through other World Bank- and donor-funded programs. In particular, the project does not explicitly address reforms related to improved revenues and reducing arrears, which will be addressed under the ongoing SCDP DPO series and with support from other development partners. Finally, given the modest size of the project, it is anticipated that additional financing will be needed to extend a number of the project activities defined in the proceeding section. To this end, the project will work to leverage the ongoing activities of other donors under the RCPCA and providing support to the implementation of the PFM reforms in the Central African Republic. Annex 5 presents a mapping of donor support. Component 1: Management and Transparency of Public Expenditures (US$5,000,000) 6. This component of the project aims to consolidate core functions across the expenditure chain, from budgeting to oversight. To this end, the component will provide support for strengthening the budget preparation, management, and execution process to improve budget predictability and credibility. The activities that will be supported under this component are highly related to activities supported under Component 2 including the support to the RCPCA Secretariat, to improved planning and M&E as well as to strengthened public investment management. The support will be complementary to activities funded by other development partners such as the IMF, AFRITAC, EU, AfDB, and France. Subcomponent 1.1: Strengthened Budget Preparation, Management, and Execution (US$1,172,500) 7. Given persistent challenges related to budget planning, management, and execution as well as limited access to budget information, the objective of this subcomponent is to provide targeted support to address weaknesses in the budget cycle and the expenditure chain. Accordingly, the project will support the following activities:  Activity 1.1.1. Audit of the expenditure chain; support to implement its recommendations and support to design; adoption and implementation of new regulations, procedures, and processes including budget nomenclature and expenditure classification as required before the deployment of the new budget and accounting information system. This will include the definition and validation of business process and procedures based on CEMAC’s directives on PFM and institutional reforms (US$572,500). Page 69 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730)  Activity 1.1.2. Support to strengthen the preparation, management, and execution of the budget including implementation of the redesigned budget calendar, and updates as necessary; improvements to budget documentation including citizen’s budgets and improvements to the quality and use of budget management tools such as budget circular, commitment plans and budget execution reports. The support will include targeted TA and training for civil servants involved in budget preparation, management, and execution in four key ministries: Agriculture, Public Works, Education, and Health. An audit will be undertaken to assess the efficiency and independence of the financial controller and to identify actions to address weaknesses. Furthermore, support will be provided to implement the audit recommendations. Finally, support will be provided to undertake an audit of imprest accounts and temporary cash advances (régies et caisses d’avances). (US$450,000).  Activity 1.1.3. Support and TA to improve the wage bill management including (a) control of presence of civil servants; (b) an annual audit of the wage bill and HR database; (c) systematic update of civil servant staff movements in the HR database and its reflection in the wage bill database; (d) a study to identify and harmonize all benefits, top-up regimes, per diems and so on; and (e) operationalization of a sanctions mechanism for civil servants. (US$150,000). Subcomponent 1.2: Strengthened Procurement Management (US$325,000) 8. Given the weaknesses encountered in compliance with the procurement code, resulting in low competitive bidding, this subcomponent will aim to sensitize participants in the procurement process, and strengthen the procurement processes, systems, and capacities. To this end, the project will support the following activities:  Activity 1.2.1. Strengthen capacity and creating awareness for participants in the procurement process, including certification training for procurement specialists (in DGMP and line ministries, particularly in Health, Education, Agriculture, and Public Works); workshops to create awareness for staff or DGMP, ARMP, MFB (particularly IGF, financial controllers, and budget specialists), administrators in line ministries, and the designations of decision makers in the Government and staff to participate in evaluation committees. Workshops will also be organized for the private sector and civil society to create more awareness about public procurement and encourage their participation in the process. (US$125,000).  Activity 1.2.2. Establish a simple procurement monitoring system within the DGMP and the procurement units in the four line ministries and TA for the undertaking of annual procurement audits. (US$125,000).  Activity 1.2.3. Strengthen the institutions participating in the procurement process, namely the ARMP, DGMP, and the Procurement Units in the four priority sector ministries (Education, Health, Public Works, and Agriculture) with the provision of office equipment and other material for the normal functioning of the units, thus enabling them to be more effective in carrying out their work. This will include equipment for strengthening the Page 70 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) archive system used for procurement activities at the DGMP and line ministries. (US$75,000). Subcomponent 1.3 Financial Management Information Systems (US$2,570,000) 9. A critical weakness of the current PFM system is the outdated GESCO. The situation contributes to create delays in the execution of the budget as well as delays in producing reports. While a new FMIS is warranted, the process to replace the existing system with a new one will take time. Consequently, this subcomponent will provide support to activities aiming to stabilize GESCO, the existing FMIS. Support will also be provided, to prepare for the acquisition, implementation, and deployment of a new FMIS. This support will include TA, training, studies including the technical specifications of the new FMIS, required governance structures, procurement, and deployment in the Ministry of Finance of the new FMIS, office, computer, and information technology equipment, including fiber-optic cables and maintenance costs. The project will support the finalization of the MAN in Bangui as well as the LAN in selected departments of the MFB and the MEPC. 10. Accordingly, the project will support the following activities:  Activity 1.3.1. Stabilization of GESCO for 18 to 24 months. (US$72,750).  Activity 1.3.2. Services of a quality assurance consultant to strengthen the Government’s technical and functional staff’s due diligence capacity in verifying the ‘delivered’ as against the ‘deliverables’ of the implementation partner and assuring implementation quality from both the technical and functional perspectives. (US$233,000).  Activity 1.3.3. Establish required governance structures and FMIS project management organization, with the required expertise and skills. Turn-key implementation of the FMIS modules (including the services of the implementation partner, procurement of software licenses and their annual support over a three-year period will be conducted. All required capacity-building and change management activities including training of technical and functional specialists, and systems’ end-users; technical and functional consultants to strengthen the technical organization for project management, including communication and change management activities will be carried out. (US$1,420,000).  Activity 1.3.4. MAN and LAN in selected departments of the MFB and the MEPC and their annual maintenance costs during project life, as well as the procurement of the soft and hardware including computers, printers, servers, routers and other accessories necessary for the deployment of the new FMIS in at least the MFB. This will also include the fiber- optic network between key Ministry of Finance buildings. (US$844,250). Subcomponent 1.4: Strengthened Treasury Management, Accounting, and External Oversight (US$932,500) Page 71 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) 11. The objective of this subcomponent is to support the consolidation of the reforms undertaken to improve treasury management, accounting, and external oversight. Accordingly, the project will support the following activities:  Activity 1.4.1. Support for the recurrent cost associated with the position of the Head of the CAAT and his deputy. This will include an exit audit of the Head of the CAAT at the end of his/her term. (US$467,500).  Activity 1.4.2. TA, training, and support to improve the quality and timeliness of the production of financial statements and reports. TA and training to improve cash management. Further, support to the continued implementation of the TSA including audits, TA and training will be provided. Support to improve the capacity of the Court of Auditors to exercise its external oversight function. This will include support to carry out some basic rehabilitation of the building of the Court of Auditors and provide it with basic office and information technology equipment as well as energy provisions. It will also include consolidating the platform of dialogue established between the CAAT, the Directorate of Budget, the Court of Auditors, and the Parliament to improve the quality of public spending. (US$265,000)  Activity 1.4.3. Finally, to support the efforts of the Ministry of Finance to reestablish its services, particularly the Treasury in strategically important areas, the project will fund the rehabilitation and provision of office, information technology, and energy equipment in existing Ministry of Finance buildings in selected cities (The final decision of which city and when the rehabilitation will take place will depend on the security situation but the cities could include Mbaïki, Bouar, Berberatti, Kaga Bandoro, or Bambari). The rehabilitation could use existing mechanisms in other ongoing World Bank Projects such as the Londo project. (US$200,000). Component 2: Management and Transparency of Public Investments (US$4,000,000) 12. Given the weaknesses encountered in investment planning and its subsequent execution, this component aims to improve the performance of the public administration in managing public investments and development assistance. This component will complement ongoing activities funded by the World Bank and ongoing and new activities from other development partners. Support will target strengthening strategic planning, project preparation, coordination, M&E, including citizen’s engagement, as well as transparency of public investments and development assistance. Subcomponent 2.1: Establishing and Operationalizing an RCPCA Secretariat (US$2,500,000) 13. The objective of this subcomponent is to support the operationalization of the RCPCA Secretariat to improve coordination and M&E, including citizen’s engagement and transparency of development assistance. Activities that will be funded include supporting the RCPCA by financing part of the establishment of the Secretariat, rehabilitation of the offices of the RCPCA Secretariat, recurrent cost associated with the Secretary of the Secretariat, office equipment, information technology equipment, and transport, operating costs, and TA for better coordination, preparation of projects (this will include technical support to formulate projects and estimate their cost), and monitoring of results. Page 72 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) Further, the project will finance TA, training, and capacity building to improve coordination mechanisms between the Government, stakeholders, and development partners including through biannual and annual RCPCA reports, stakeholder surveys, municipality censuses, studies, and assessments. Finally, the project will fund activities related to improving access to information. 14. Accordingly, the project will support the following activities:  Activity 2.1.1. Support the RCPCA by financing part of the establishment of the Secretariat, rehabilitation of the offices of the RCPCA Secretariat, recurrent cost associated with the Secretary of the Secretariat, office equipment, information technology equipment, and transport, operating costs, and TA for better coordination, preparation of projects (this will include technical support to formulate projects and estimate their cost), monitoring of results, studies, audits, assessments and evaluations including in strategic areas and sectors. (US$1,600,000).  Activity 2.1.2. Improve coordination mechanisms between the Government, stakeholders, and development partners through half-yearly reviews of pillars and sectors progress, and the planning and updating of pillar/sectoral objectives in line with the National Plan. (US$250,000).  Activity 2.1.3. Conduct one round of the municipality census to facilitate the closing of the feedback loop from policy making to implementation, monitoring, and adapted policy making. In addition, beneficiaries’ feedback will be gathered to monitor and improve the effectiveness of projects’ implementation. (US$250,000).  Activity 2.1.4. Improve access to information by making publicly available donors’ projects information in frequent, easy-to-understand briefs, which will inform the communication strategy of the National Plan. (US$200,000).  Activity 2.1.5. Support for analysis of the strategic relevance and impact of programs (for example, impact evaluation and expenditure reviews) to offer higher-level feedback for policy decisions. (US$200,000). Subcomponent 2.2: Strengthened Management of Public Investments (US$1,500,000) 15. In parallel to the establishment of the RCPCA Secretariat, this subcomponent will aim to strengthen the capacity of the MEPC in the preparation and management of public investments to ensure that they are selected, prioritized, and executed such that it will contribute to the development of priority sectors. Accordingly, the project will support training, TA, capacity building as well as procurement of office and information technology equipment to contribute to improved public investment management. Key beneficiaries of this support will be the MEPC and the MFB as well as four priority sector ministries; Health, Education, Agriculture, and Public Works. Particularly, the project will fund a stocktaking of existing projects, update the existing project database, and establish criteria and a mechanism for selecting investment projects. The PEIMRP will also provide support to define and implement public investment activities such as updating the existing government public investment manual as well as budgeting and monitoring of public investments. Page 73 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) 16. Accordingly, the project will support the following activities:  Activity 2.2.1. Initiate stocktaking of existing investment projects agreed during the Brussels conference to identify projects to be supported from appraisal to selection and updating of the existing database of project in the MEPC which can be used as a basis for the preparation of the three-year investment plan. (US$250,000).  Activity 2.2.2. Define and implement public investment activities, in particular, in relation to project identification,19 preparation, and selection (this will include assistance for the review and modification to the existing manual governing public investments in the Central African Republic, as well as the development of clear prioritization criteria), as well as budgeting and monitoring (this will include TA to improve monitoring mechanisms through half-yearly reviews, the preparation and dissemination of monitoring reports by the MEPC, and a procedure to facilitate financial monitoring of investment projects). (US$200,000).  Activity 2.2.3. Strengthen the MEPC and the four priority sector ministries (Education, Health, Public Works, and Agriculture) with the provision of office and IT equipment and other material for the normal functioning of the departments and units. (US$200,000).  Activity 2.2.4. Strengthen the institutions and units participating in the investment planning cycle, particularly in the MEPC and the Planning Directorates of the four priority line ministries (Education, Health, Agriculture, and Public Works) with training in formulating and monitoring investment projects. (US$250,000).  Activity 2.2.5. Establish a monitoring system of public investments and service delivery with the hiring of 16 controllers, one based in each prefecture, as well as the participation of non-state actors and citizens.20 (US$500,000).  Activity 2.2.6. Improve access to information by making publicly available investment projects information in frequent, easy-to-understand briefs, which will assist the RCPCA Secretariat in its communication strategy. (US$100,000). Component 3: Project Management (US$ 1,000,000) 17. This final component aims to support the project management functions of the Government, particularly the Ministry of Finance, in implementing the proposed project. Subcomponent 3.1: Management Support for the Project Management Unit (PMU) (US$787,600) 18. The objective of this subcomponent is to support the PMU in coordinating and managing the implementation of the project. Accordingly, the project will support the following activities: (a) develop annual work programs and Procurement Plans; (b) ensure proper fiduciary management and 19 The project will coordinate with the new project assisting the communities affected by displacement (Bambari, Batangafo, Bria, and Kaga Bandoro) in line with project identification and local development plans prepared in those communities. 20 The project will establish a system of simple community monitoring and reporting through SMS and coordinate with the new infrastructure project to use on a pilot basis the community groups formed under the project. Page 74 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) monitoring; (c) coordinate technical work and support to the technical units within the relevant ministries; and (d) monitor and report on project implementation. The component will fund costs related to personnel and operating costs for the proper functioning of the PMU including annual audits and required reports. Subcomponent 3.2: Contingency Fund (US$212,400) 19. The objective of this subcomponent is to enable the PMU to be flexible and highly responsive to emerging opportunities to support initiatives that increase public sector management effectiveness and efficiency. The use of the contingency funds would be subject to prior validation by the World Bank. The component may finance scale-up of existing activities, pilots, TA or cross-cutting analytical studies, for example, related to the integration of CEMAC PFM Directives into the Central African Republic legislation and regulation; implementation of the DPO; and/or a PEFA evaluation. Page 75 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) ANNEX 2: IMPLEMENTATION ARRANGEMENTS COUNTRY: Central African Republic Public Expenditure and Investment Management Reform Project Implementation Arrangements 1. The project will be implemented under the overall leadership of the MFB and the MEPC. A Project Steering Committee will be established by an Inter-Ministerial Decision of the Minister of Finance and Budget and the Minister of Economy, Planning and Cooperation. The Steering Committee will be chaired by a representative of the MFB and co-chaired by a representative of the MEPC. It will be composed of representatives of key beneficiaries. This committee will meet at least two times per year and will review and approve the annual work program and budget of the project as well as ensuring cross-sector coordination in the implementation of the project activities. The annual work program and budget of the project for year N+1 will be approved no later than November 15 of year N. The annual work program and budget of year N+1 will be accompanied by a preliminary implementation report of the project for the year N. The Project Steering Committee will also review and approve the final implementation report which will include the audit report of year N-1 and the biannual implementation report of year N no later than June 30 of each year of project implementation. The first annual work program and budget will cover the first six months of 2017 as well as 2018 and will be due no later than three months after project effectiveness. 2. An institutional reform is currently ongoing to improve the functioning of the institutional mechanisms of the oversight and implementation of economic and financial reforms. In the case that this reform leads to the establishment of an Economic and Financial Reforms Oversight Committee, this committee will be used as the overall Steering Committee of the project too. The Project Steering Committee chaired by the MFB and co-chaired by the MEPC will nevertheless continue to exercise technical oversight of the project implementation and retain the responsibility of reviewing and approving annual work programs and budgets as well as annual and biannual execution reports. This committee will also review and approve the midterm review of the project as well as any other reports, studies, or audits that might be required during project implementation. 3. A PMU dedicated to the implementation of the project, including its fiduciary management, will be established by a Ministerial Decision within the MFB, with a direct reporting line to the Minister of Finance and Budget. The PMU will be composed of personnel recruited on a competitive basis with ToRs, qualifications, and experience acceptable to the World Bank. The PMU will be comprised, at a minimum, (a) a project manager; (b) a deputy project manager with a specific responsibility for overseeing the implementation of the activities in Component 1 of the project; and (c) a program manager with a specific responsibility of overseeing the implementation of activities in Component 2 of the project. The fiduciary staff including a safeguards specialist, a procurement officer and a finance officer, will be consultants recruited on a competitive basis and with ToRs, qualifications, and experience acceptable to the World Bank. The PMU will implement the project in collaboration with the beneficiaries. 4. The PMU will be fully responsible for project implementation including fiduciary management and will be established and staffed before effectiveness of the project. The fiduciary team embedded Page 76 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) in the CS-REF in charge of implementing the EPSR Project21 , which will close in December 2017, will provide guidance and support to the PMU fiduciary team in the transition period. The PEIMRP will also benefit from the existing manual of procedures which will be updated to be aligned to the new project. The PMU will be equipped and provided with necessary systems for adequate fiduciary management such as an accounting software. The track record of the CS-REF is good (three World Bank projects closed with no major issues); however, as part of the ongoing reform to improve the implementation of economic and financial reforms, it has been decided that the CS-REF will focus on its core activities and no longer have the responsibility for implementing projects. The support from the fiduciary team of the EPSR project is expected to ensure implementation with a minimal fiduciary risk. 5. The PMU will report directly to the MFB. It will produce and present monthly implementation reports which will be submitted to the MFB and the MECP as well as to core beneficiaries. It will present the project’s annual work program and budget, implementation reports, midterm reports and any other reports, studies, or audits that might be required during project implementation. The PMU will liaise and coordinate the implementation of the project with all the beneficiaries of the project including the unit in charge of coordinating the implementation of economic and financial reforms. 6. To ensure more ownership of activities and knowledge transfer to beneficiary entities, counterparts will be designated within the respective responsible ministry and will have dual reporting lines (to the PMU project manager and the Cabinet of their respective ministry) to help build ownership and capacity in each beneficiary ministry. The manager of the PMU with a specific responsibility of overseeing the implementation of activities in Component 2 of the project will be included in the MEPC and will have dual reporting lines (to the PMU coordinator and the Cabinet of their respective ministry). 7. Implementation arrangements for the World Bank portfolio. In view of improving implementation efficiency of the Bank portfolio in the Central African Republic, the Turn-Around Engagement notes that “Institutional arrangements should be harmonized into one mechanism that comprises by establishing one mechanism that comprises two fiduciary agencies and the various technical units that are housed in various relevant ministries.” The Fiduciary agencies will be housed within the Ministry of Finance and Budget, and the Ministry of Infrastructure. The PMU of the PEIMRP will be the fiduciary agency housed in the Ministry of Finance and Budget. 8. As a fiduciary agency, the PMU of the PEIMRP will coordinate fiduciary management for projects in the areas including governance, conflict, human development and social, urban, rural and resilience. Each institution in charge of implementing a project will have technical and fiduciary responsibility for the implementation of the project but will do fiduciary reporting on a regular basis to the PMU of the PEIMRP, including but not limited to annual budgets and work plans, procurement plans, IFRs, audit reports and procurement progress reports for quality review. The PMU will also have a responsibility to provide fiduciary support, including coaching and technical assistance as needed to other projects. For smaller projects and for the management of project preparation advances in these sectors, the PMU could assume full fiduciary management. A multi- project, multi- site accounting software will also be procured by the PMU of the PEIMRP for the use of projects for which it will coordinate fiduciary management. A procedures manual will be prepared, defining in detail the role, mission and 21 P149884 Page 77 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) responsibilities of PMU of the PEIMRP and of the remaining stakeholders involved in the technical and fiduciary implementation of the projects in the areas including governance, conflict, human development and social, urban, rural and resilience. Results Monitoring and Evaluation 9. Project M&E will occur at three levels in the project structure to ensure that different results areas are monitored in an integrated fashion by the entities responsible. As such, the PMU will be responsible for the M&E of results specific to the project; the RCPCA Secretariat will be responsible for the M&E of the RCPCA program, which extends beyond the scope of the project; and the MEPC will be responsible for the M&E related to projects in the investment budget. To improve transparency and social accountability, the M&E framework will include citizen engagement mechanisms and indicators, particularly for the monitoring of public investments as well as the overall satisfaction with the RCPCA implementation. Moreover, to ensure harmonization with other programs, the project will use indicators—to the extent possible—included in the ongoing DPO series, the RCPCA project documents, and the current IMF program to ensure that project results are closely linked and can be more easily monitored during joint supervision missions. Page 78 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) Page 79 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) Financial Management 10. The overall FM risk for the PEIMRP is rated Substantial. It is considered that the FM will satisfy the World Bank’s minimum requirements under OP/BP 10.00, and therefore will be adequate to provide, with reasonable assurance, accurate and timely FM information on the status of the project required by the World Bank. To maintain the continuous timely and reliability of information produced by the PMU; the following mitigation measures will be taken. Before effectiveness of the operation: 12. An FM assessment of the CS-REF, responsible for the implementation of the ongoing EPSR Project and designated to provide support to the fiduciary unit of the PEIMRP, was carried out in March 2017. The objective of the assessment was to determine whether the fiduciary unit had acceptable FM arrangements in place to ensure that the project funds will be used only for intended purposes, with due attention to considerations of economy and efficiency. Arrangements are acceptable if they are capable of accurately recording all transactions and balances, supporting the preparation of regular and reliable financial statements, safeguarding the project’s assets, and are subject to auditing arrangements acceptable to the World Bank. The fiduciary arrangements of the PEIMRP will be in place Page 80 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) before project effectiveness. During a transition phase, the fiduciary unit of the EPSR Project will provide support to the fiduciary team of the PEIMRP. 13. The irregularities and corruption risk within the project activities is Substantial given the country context. Corruption and poor service delivery are recognized as key challenges in the Central African Republic’s public sector and, more specifically, for a project that involves several entities with relatively diverse interests. In addition, the lack of appropriate oversight and adequate operational tools could jeopardize the project implementation. It is thought that the FM will satisfy the World Bank’s minimum requirements under OP/BP 10.00, once mitigating measures have been implemented. An FM Action Plan to enhance FM arrangements for the project is included Table 2.2 below. The overall FM risk rating for the project is assessed as Moderate after implementation of mitigation measures Financial Management and Disbursements Arrangements 14. The assessment concluded that the FM of the PMU satisfies the World Bank’s minimum requirements under OP/BP 10.00, and therefore is adequate to provide, with reasonable assurance, accurate and timely FM information on the status of the project required by the World Bank. Risk after Remarks Risk Risk Mitigating Measures Incorporated into Risk Mitigation Rating Project Design Measures Country Level H Significant commitment by the authorities H Inadequate capacity in PFM. The to reform PFM. Substantial support to PFM capacity was inadequate before the reforms for development partners including recent crisis and worsened during through TA and policy-based operations. the crisis. Several reforms have been implemented which have improved the situation and a new three-year PFM reform plan is being prepared. Entity Level S A dedicated PMU with an experienced M The MFB has substantial fiduciary unit in the MFB will be established. experience in implementing World Fiduciary staff will be trained and additional Bank projects. Its capacity does, staff could be recruited if necessary. however, remain relatively weak. The capacity of the MEPC was adversely affected by the recent crisis. TA and reforms have contributed to increase its capacity but it remains weakened and it could lead to weak oversight of the project. Project Level S A Project Steering Committee will be M Project resources may not be used established. Counterparts will be designated for the intended purposes. A within core beneficiary entities. A dedicated complex reform and numerous PMU with an experienced fiduciary unit in stakeholders could adversely affect the MFB will be established. Fiduciary staff Page 81 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) Risk after Remarks Risk Risk Mitigating Measures Incorporated into Risk Mitigation Rating Project Design Measures project implementation. will be trained and additional staff could be recruited if necessary. Inherent Risk S M Budgeting S Annual work program and budget will be M Inaccurate budget figures due to elaborated every year and approved by the unreliable forecasting and delays in Project Steering Committee. The PIM will preparing the budget. define the arrangements for budget control. Interim Financial Reports (IFRs) will provide information on budget execution and analysis of variances. Accounting M An experienced accountant is in place. M Delay in Designated Account (DA) Accounting procedures are documented in reconciling and keeping records. the procedures manual which will be Lack of qualified accountant. updated. Training on IDA procedures will be provided to PMU staff as needed Internal Controls/Internal Audit M An experienced accountant is in place. M Noncompliance of transactions Accounting procedures are documented in with Financing Agreement. PIM not the procedures manual which will be fully adapted to current operation. updated. Training on IDA procedures will be provided to PMU staff as needed. Ex post verification by the World Bank FM Team Fund Flow M An experienced accountant will be recruited M Delay in the fund release. Risk of before effectiveness. During a transition misuse of funds. Inefficient use of period, the EPSR Project’s fiduciary unit will funds. provide assistance to the new PMU. Accounting procedures will be documented in the procedures manual. The basis of the manual will be the existing manual of the EPSR Project which will be updated. Training on IDA procedures will be provided to PMU staff as needed. Ex post verification by the World Bank FM Team. Anticorruption Guidelines will be incorporated in the updated PIM Page 82 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) Risk after Remarks Risk Risk Mitigating Measures Incorporated into Risk Mitigation Rating Project Design Measures Financial Reporting M An experienced accountant will be recruited M Delay in producing acceptable IFRs before effectiveness. During a transition and end-year financial reports due period, the EPSR Project’s fiduciary unit will to an accounting system that is not provide assistance to the new PMU. adapted to the needs of the Accounting procedures will be documented project. in the procedures manual. The basis of the manual will be the existing manual of the EPSR Project which will be updated. Training on IDA procedures will be provided to PMU staff as needed. Ex post verification by the World Bank FM Team. Anticorruption Guidelines will be incorporated in the updated PIM. The accounting system will be updated within three months of effectiveness Auditing M An independent auditor will be recruited M Delay in submission of audit within six months of project effectiveness to reports. External auditor selected conduct annual financial audits. The may not be of acceptable quality to recruitment will follow World Bank rules IDA or may not conduct their and procedures for procurement and will be assignment professionally. done according to ToRs acceptable for the World Bank. Audit submission deadlines will be monitored closely by the World Bank FM Team. Fraud and Corruption M The ToR of an external auditor will include a M Possibility of circumventing the specific chapter on corruption auditing. internal control system with Measures to improve transparency will be colluding practices such as bribes encouraged such as the publishing on the and abuse of administrative webpage of the Ministry of Finance of positions. Misprocurement can procurement opportunities and notices, occur. project progress reports, the annual audit report as well as outreach. Control Risk S M Overall Financial Management Risk S M Note: H = High; S = Substantial; M= Moderate 15. The overall fiduciary risk rating is assessed as substantial before mitigating measures and moderate with proposed mitigation measures which (see FM Action Plan) will strengthen the internal control environment and maintain the continuous timeliness and reliability of information produced by the PMU. Page 83 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) Responsible Action Deadline and Conditionality Party 1- Recruit on a competitive basis a project manager, a deputy MFB Effectiveness condition project manager, and a program manager responsible for Component 2 of the project with ToRs, qualifications and experience satisfactory to the World Bank 2- Issue a Ministerial Decision of the Minister of Finance and MFB Effectiveness condition Budget creating the PMU within the MFB 3- Issue a joint Ministerial Decision of the Minister of Finance MFB/ MEPC Effectiveness condition and Budget and the Minister of Economy, Planning and International Cooperation creating the Project Steering Committee 4- Recruit on a competitive basis a procurement officer and a MFB Effectiveness condition finance officer with ToRs, qualifications and experience acceptable to the World Bank 5- Prepare and adopt an updated PIM satisfactory to the MFB Effectiveness condition World Bank 6- Customize accounting software PMU Three months after effectiveness 7- Recruit an external auditor PMU Six months after effectiveness 16. Internal control system. The internal control system will comprise a Steering Committee to oversee the project activities and an FM procedures manual to define control activities. The General Inspection of Finance can also undertake internal control and audits of the management of the project as needed. 17. Planning and budgeting. The PMU will prepare a detailed annual work plan and a budget, which should be approved by the Project Steering Committee. The PMU will submit not later than November 30 of each year the approved annual work plan and budget to the World Bank, for no-objection. 18. Accounting. The Accounting system of the Organization for the Harmonization of Business Law in Africa (Système Comptable de l’Organisation pour l'Harmonisation en Afrique du Droit des Affaires), assigned accounting system in the Central African Republic, will be applicable. The PMU will customize the existing accounting software to meet project requirements. 19. IFRs. The unaudited IFRs are prepared every quarter and submitted to the World Bank regularly (for example, 45 days after the end of each quarter) on time. The frequency of IFR preparation as well as its format and content will remain unchanged. 20. Annual financial reporting. In compliance with International Accounting Standards and IDA requirements, the project will produce annual financial statements. These include (a) a Balance Sheet that shows assets and liabilities; (b) a Statement of Sources and Uses of Funds showing all the sources of project funds, expenditures analyzed by project component and or category; (c) a DA Activity Statement; (d) a Summary of Withdrawals using Statements of Expenditure (SOEs), listing individual withdrawal applications by reference number, date, and amount; and (e) notes related to significant accounting policies and accounting standards adopted by management and underlying the preparation of financial statements. Page 84 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) 21. Auditing. The PMU will submit audited project financial statements satisfactory to the World Bank every year within six months after closure of the fiscal year. A single opinion on the audited project financial statements in compliance with the International Federation of Accountants will be required. In addition, a Management Letter will be required. The Management Letter will contain auditor observations and comments and recommendations for improvements in accounting records, systems, controls, and compliance with financial covenants in the Financial Agreement. The PMU will recruit a technically competent and independent auditor by six months after the project effective date. Report Deadline Responsible Audited financial statements including audit report 6 months after the end of the fiscal year MFB/PMU and Management Letter 22. The project will comply with the World Bank disclosure policy of audit reports and place the information provided on the official website within one month of the report being accepted as final by the team. Disbursement 23. Upon Grant effectiveness, transaction-based disbursements will be used. A new DA will be opened in a commercial bank under terms and conditions acceptable to IDA. An initial advance up to the ceiling of the DA will be made and subsequent disbursements will be made against submission of SOEs reporting on the use of the initial/previous advance. The option to disburse against submission of quarterly unaudited IFRs (also known as the report-based disbursements) could be considered, as soon as the project meets the criteria. The other methods of disbursing the funds (reimbursement, direct payment, and special commitment) will also be available to the project. The minimum value of applications for these methods is 20 percent of the DA ceiling. The project will sign and submit Withdrawal Applications electronically using the eSignatures module accessible from the World Bank’s Client Connection website. IDA Direct payments Replenishments Withdrawal Applications PMU Designated Account (commercial bank) Special Commitment Payments Supporting documents Contractors, Consultants, Suppliers Page 85 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) 24. Based on the outcome of the FM risk assessment, the following implementation support plan is proposed. The objective of the implementation support plan is to ensure the project maintains a satisfactory FM system throughout its life. FM Activity Frequency Desk reviews IFRs review Quarterly Audit report review of the program Annually Review of other relevant information such as interim internal Continuous as they become available control systems reports On-site visits Review of overall operation of the FM system (Implementation Twice a year Support Mission) Monitoring of actions taken on issues highlighted in audit reports, As needed auditors’ Management Letters, internal audits, and other reports Transaction reviews As needed Capacity-building support FM training sessions During implementation and as and when needed Procurement 25. PPSD. A PPSD was prepared to ensure the procurement activities are packaged and prepared in such a way as to minimize risk. The PPSD concluded that the environment is favorable for the procurement of the activities envisaged under the proposed project. The activities include (a) procurement of consulting services from firms, (b) procurement of consulting services from individuals, (c) procurement and the deployment of an accounting and budget management software, (d) procurement of office equipment and supplies, (e) procurement of information technology equipment including fiber-optic cable, (f) procurement of vehicles, (g) procurement of works to undertake minor rehabilitation of public buildings (Court of Accounts in Bangui, the building that will house the RCPCA Secretariat, buildings of the Ministry of Finance in selected cities) and install the fiber-optic cable between key buildings of the Ministry of Finance in Bangui. The assessment found that there is an acceptable offer for certain goods and services and works on the national market. Hence, the procurement of services from individual consultants such as consultants for surveys, the procurement of small quantities of office equipment and supplies and information technology equipment and the procurement of works will be done on a national level. The procurement of services from firms and individual consultants with expertise in PFM and Public Investment Management will be recruited on an international or regional level. The procurement of the new FMIS, will be procured using a single source method from the AIMF, which will also provide training and TA to undertake the reengineering of PFM processes and procedures. The United Nations Office for Project Services (UNOPS) will be used for the procurement of IT equipment; and the recruitment of a consultant that will provide TA and quality control of the implementation of the FMIS. To simplify procurement, 60 percent of the project will be implemented through five key procurement activities. Page 86 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) 26. Applicable procurement rules and procedures. Procurement for this project will be carried out in accordance with ‘World Bank Procurement Regulations for Investment Project Financing Borrowers, July 2016’ (Procurement Regulations) and the World Bank’s Anticorruption Guidelines: ‘Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants’ (revised as of July 1, 2016) as well as the provisions stipulated in the Financing Agreement. All works, goods, and consulting and non-consulting services required for the project and to be financed out of the proceeds of the Grant shall be procured in accordance with the requirements set forth or referred to in the following sections: 27. Assessment of the MFB’s capacity to implement procurement procedures. A summary assessment of the MFB’s capacity to implement procurement activities for the project was carried out by the World Bank’s procurement specialist in January 2017. This assessment showed that there is a Procurement Unit in the MFB currently in charge of procurement activities in the EPSR project (P149884). There is also a Procurement Unit attached to the Directorate of Resources within the Cabinet of the MFB with some knowledge of national procurement procedures. The Procurement Unit of the EPSR is staffed with qualified and experienced procurement staff. It has extensive experience of managing procurement using World Bank rules and procedures. It also has knowledge of national procurement regulation and procedures. A filing and archiving system of procurement documentation exists. 28. Institutional arrangement for procurement. A PMU will be established in the MFB. The Procurement Unit of the EPSR Project will provide guidance and assistance to the new PMU during a transition phase of six months. The PMU is responsible for the implementation of all fiduciary activities comprising procurement and financial management. This will include (a) managing all the project’s procurement process, including the signing and approval of contracts during the project implementation, (b) anticipating all procurement activities as indicated in the PPSD and the Procurement Plan, and (c) supervising closely all procurement activities. These measures will be pursued Page 87 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) during the implementation of project. 29. Procurement risk assessment. A summary procurement risk assessment of the Procurement Unit of the EPSR Project which will be in charge of providing support to the implementation of procurement activities for the project during a transition phase was carried out and the overall procurement risk rating is Moderate. It will be important to reveal that the unit has handled implementation of three World Bank Projects without any issues and it has great experience working with the World Bank and applying related policies and procedures. 30. Measures to mitigate procurement risk. The main procurement-related risks identified are (a) lack of knowledge and practice in application of the New Procurement Framework and (b) lengthy government approval processes. The following mitigation measures are proposed: (a) the PMU will apply the procurement procedures detailed in the revised PIM and will develop detailed checklists to ensure consistent and compliant project procurement and (b) the PMU will also develop a contract management system to ensure that all contracts under the project are effectively and efficiently managed; this will include the tracking of key contract milestones and performance indicators as well as capturing all procurement and contract records. 31. National procurement arrangement. In accordance with paragraph 5.3 of the Procurement Regulations, while approaching the national market (as specified in the Procurement Plan tables in Systematic Tracking and Exchanges in Procurement [STEP]), the country’s own procurement procedures may be used. When the beneficiary uses its own national open competitive procurement arrangements as set forth in Public Procurement Code, such arrangements shall be subject to paragraph 5.4 of the Procurement Regulations and the following conditions : (a) the procurement is open to eligible firms from any country; (b) the Request for Bids/Request for Proposals document shall require that bidders/proposers submitting bids/proposals present a signed acceptance at the time of bidding, to be incorporated in any resulting contracts, confirming application of, an compliance with, the World Bank’s Anticorruption Guidelines, including without limitation the World Bank’s right to sanction and the World Bank’s inspection and audit rights; and (c) maintenance of records of the procurement process. When other national procurement arrangements other than national open competitive procurement arrangements are applied by the beneficiary, such arrangements shall be subject to paragraph 5.5 of the Procurement Regulations. 32. Procurement methods. The various procurement methods to be used for activities financed by the proposed Grant will be set in the Procurement Plan. 33. Procurement of works. Works are envisaged to construct or rehabilitate infrastructure (digging trenches and covering them along urban roads to install fiber-optic cables and public buildings (painting exterior and interior facades and walls, roofing, cabling, fencing, building interior walls, repair exterior walls, installing power generators or solar panels, installing windows and doors, and other activities necessary for the rehabilitation of the building). 34. Procurement of goods and non-consulting services. Procurement of goods will include information technology and computer equipment, vehicles, furniture, office supplies, office equipment, and so on. Page 88 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) 35. Procurement of consulting services (firms and individuals). Procurement of consulting services will be carried out in accordance with the World Bank Procurement Regulation for IPF Borrowers. Consulting services also include the services of training, the recruitment of NGOs, UN agencies, national or international consultants (firms) and individual comprising a procurement specialist, financial management specialist, and accountant and so on. 36. Use of UN agencies. UN agencies such as UNOPS may be selected directly in situations where their expertise or rapid mobilization on the ground is critical, in particular, in circumstances of urgent need of assistance or capacity constraints. When entering into a contract with a UN Agency, the standard form of agreement between the borrower and the UN agency or a case-specific template approved by the World Bank. In circumstances in which the World Bank and a UN agency have established a Financial Agreement, the borrower may take advantage of the Financial Agreement when entering into a contract with the UN agency. 37. Frequency of procurement implementation support. In addition to the prior review to be carried out by the World Bank, implementation support missions will be undertaken at least once per year. One in five procurement packages not subject to World Bank prior review will be examined ex post on an annual basis. 38. Procurement Plan. The draft Procurement Plan for the first 18 months was prepared and agreed upon at negotiations. The Procurement Plan will be updated by the PMU of the MFB on an annual or as- needed basis to reflect actual project implementation need. Updated Procurement Plans will be submitted for the World Bank’s no-objection and the PPSD will be updated accordingly. 39. Procurement planning and tracking tool. In accordance with paragraph 5.9 of the Procurement Regulations, the World Bank’s STEP system will be used to prepare, clear, and update Procurement Plans and conduct all procurement transactions for the project. 40. PPSD summary. A PPSD was prepared during the appraisal mission to ensure the procurement activities are packaged and prepared in such a way as to minimize the risk. 41. PIM. The updated PIM will define the project’s internal organization and its implementation procedures, and will include, among other things: (a) the procedures for calling for bids, selecting consultants, and awarding contracts; (b) the procedures for community-based procurement and sample contracts; (c) the internal organization for supervision and control, including operational guidelines defining the role of the service provider and reporting requirements; and (d) disbursement procedures. Works Goods, IT and non-consulting services Shortlist of national consultants Open Open Request Open Open Request Consulting Engineering & International national for International National for Services Construction Page 89 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) Quotations Quotations supervision ≥ 5,000 <5,000 ≤200 ≥500 ≥500 ≤100 <100 ≤200 Social (including safeguards) 42. The project is being classified as a Category B operation because of the Moderate level social risks and impacts of its foreseen activities, which scope will be rather site-specific, and thus easily manageable. The project has national coverage with a specific focus on Bangui and five urban areas (Mbaïki, Berberatti, Bouar, Kaga Bandoro and Bambari). Project activities are not expected to have any significant adverse environmental and social impacts. Most of the project activities involve training, TA, and capacity-building activities. Project activities will include rehabilitation of the building that will house the RCPCA Secretariat and the rehabilitation of the building of the Court of Auditors in Bangui. The activities will not involve new land acquisition nor any potential for physical resettlement. The building of the Court of Auditors is however partly (upper floor) used by a NGO and will include repairs of the roof, electric and IT cabling, and fencing and draining of the ground floor. Appropriate measures will be presented in detail in the PIM and will have to be taken to accommodate this NGO during civil works, with possibility of (a) temporarily relocating them at a nearby government building, free of charges, for the duration of the rehabilitation civil works; or (b) temporary relocation in a rental facility whereby both the physical move in/out and the rental costs for the duration of the rehabilitations works are beard by the project, or finally, (c) a permanent relocation into another rental facility whereby both a shifting and 3 to 4 months rental allowance are provided to the NGO as a compensation/financial assistance. These arrangements would have to be carefully documented into a CN embedded/generated from the ESMP and filed in the project system. Finally, the project could, pending improvement of the security situation, fund rehabilitation activities of public buildings used by MFB as well as MEPC staff in each of the abovementioned five regions. These activities will not involve new land acquisition. Nonetheless, with regard to Government civil servants working in these Government buildings that would undergo rehabilitation (light/heavy), depending on the constraints/risks, impacts, and duration of the undertaking, the project will ensure all potentially affected civil servants are duly consulted upon on the proposed rehabilitation civil works, risks, constraints, and impacts involved (in terms of human health, security, and safety) and a reasonable time table in light of which a determination will be made to either (a) accommodate Government workers without disturbance (that is, guidance will be provided to ensure that basic hygiene and worker health and safety rules are observed during building rehabilitation). This guidance will be detailed in the PIM, or (b) accommodate them by physically moving them to a temporary shelter-office facility where they can pursue their activities; to another nearby Government office building; or by allowing them to work from home with a secured agreement that staff will have their re-entry guaranteed and keep all of their pensions/benefits safe. 43. Other civil works will include digging trenches in urban areas of Bangui to deploy a fiber-optic cable for a distance of about 3 km where no land acquisition is foreseen, especially since civil works will only occur during weekends and holidays when side-walk streets are all empty and free of any claim. A similar approach was used when deploying fiber-optic cable under French cooperation funding, and it was agreed that this will be replicated accordingly. Consequently, all the social development issues will be fully captured by and addressed through a comprehensive CN/Memorandum of Understanding in the ESMP that the Borrower will prepare in compliance with the triggered OP/BP 4.01 (Environmental Assessment). The PMU will hire an environmental and social specialist who will be responsible for following up on all safeguards concerns and would also ensure that all safeguard screening and Page 90 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) mitigation requirements to each subproject will be applied 44. The project is expected to bring positive social impacts to its beneficiary populations, while carrying some negative impacts for which specific mitigation measures will be designed. However, given the emergency situation in the Central African Republic and the country’s relative fragility, and the limited technical capacity in the country, the management decided to defer the preparation of safeguards instruments before project implementation. Consequently, and in light of the provisions of paragraph 12 of OP/BP 10.00, an ESSAP, consistent with World Bank operational policies and procedures for investment operations, Projects in Situations of Urgent Need of Assistance or Capacity Constraints, has been prepared by the World Bank to guide the processing of this emergency operation. 45. The objective of the ESSAP is to ensure that planned project activities and related social and environmental assessment and management instruments and processes meet the required technical quality and are in compliance with the national legislation of the Central African Republic and the World Bank’s operational safeguards policies and standards. 46. Because none of the expected project activities is expected to lead to land acquisition, no social safeguard policy is triggered, rather, some of the foreseen social development related risks and impacts will be easily addressed through the triggering of OP/BP 4.01 (Environmental Assessment). In compliance with paragraph 12 of OP/BP 10.00, Projects in Situations of Urgent Need of Assistance or Capacity Constraints, that allows for condensed procedures and deferral of the safeguards instruments in situations of urgent need for assistance, the Government will prepare relevant safeguards instruments, namely ESMP within four months of project effectiveness. 47. Institutional arrangement for safeguards processing. The overall responsibility of safeguards processing relies on the MFB technical unit, working closely with the Ministry of Environmental Affairs. The PMU will hire an environmental and social specialist who will be responsible for following up on all safeguards concerns and would also ensure that all safeguard screening and mitigation requirements to each subproject will be applied. The social and environmental safeguards specialist will be responsible for following up on all safeguards concerns. S/he will also ensure that all safeguard concerns are properly dealt with. S/he will further be supported by the World Bank social and environmental safeguards specialists who will ensure his/her technical capacity are further strengthened. S/he will lead the systematic screening of all subprojects as well as the development of any related additional safeguards instrument. The safeguards documents will be properly consulted upon and publicly disclosed both in-country and at the World Bank’s InfoShop before the physical start of the civil works. 48. Public consultation and disclosure of safeguards instruments. The project safeguards instruments (ESMPs) will also be consulted upon and publicly disclosed both in-country and at the World Bank’s InfoShop before the start of the project’s civil works. Each of these instruments, including the ESSAP, requires a participatory Grievance Redress Mechanism, well-grounded in local practices that project- affected peoples (PAPs) and stakeholders could make good use of to seek redress. 49. Social inclusion, gender equality, and citizen engagement. During implementation, the project will use a participatory approach, involving stakeholders in design and planning for implementation. Gender and vulnerability issues have been factored in, and the project is meant to bring more value to women, youth, and elderly people, both with regard to internally displaced peoples, as well as their local Page 91 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) hosts. Environment (including Safeguards) 50. The project is being classified as a Category B operation due to the low environmental risks and impacts of its foreseen activities, which scope will be rather site specific, and thus easily manageable. Two environmental safeguards policies are triggered: OP/BP 4.01 (Environmental Assessment) and OP/BP 4.11 (Physical Cultural Resources). 51. OP/BP 4.01 (Environmental Assessment). This policy is triggered as the project activities to be finance are expected to have environmental adverse impacts. The activities that could generate adverse impacts are the following: rehabilitation of the state building that will house the RCPCA Secretariat; rehabilitation of the building of the Court of Auditors in Bangui, digging trenches in urban areas of Bangui to deploy a fiber-optic cable on approximately 3 km distance, rehabilitation activities of public buildings used by the MFB as well as MEPC staff in each of the abovementioned five urban regions (Mbaïki, Berberatti, Bouar, Kaga Bandoro, and Bambari). As the locations of these activities are known, specific ESMPs will be prepared and disclosed in-country and at the World Bank, no late than four months after effectiveness. 52. OP/BP 4.11 (Physical Cultural Resources). This policy is triggered as digging activities under the fiber-optic works will involve excavation and movement of earth with possible physical cultural resources. The ESSAP and ESMPs will include clear chance-finds procedures required for identification, protection of cultural property from theft, and treatment of discovered artifacts that may be identified during implementation. 53. Preparation time for safeguards instruments, including World Bank review, revisions, clearance, and approval steps. The preparation of the ESMPs and Resettlement Action Plans (RAPs), including the training modules is estimated to require a maximum time period of about four months, including World Bank review and approval, consultations, finalization, and public disclosure. 54. Implementation of safeguards instruments. The ESMPs will clearly define who is responsible for what and when actions need to be undertaken including consultation and capacity building. 55. Responsibilities for safeguard screening and mitigation. The PMU of the MFB and in close collaboration with the Ministry in charge of Environment, will be responsible for following up on all safeguards concerns and will also ensure that all safeguard screening and mitigation requirements to each subproject will be applied. The PMU will hire an environmental and social specialist who will be responsible for following up on all safeguards concerns and will also ensure that all safeguard screening and mitigation requirements to each subproject will be applied. 56. Consultation and disclosure. The ESSAP will be translated into French and shared with the Government of the Central African Republic and concerned NGOs and development partners, and will be disclosed in-country and at the World Bank’s InfoShop. The implementing agency will consult project- affected groups and local NGOs on the project's environmental and social aspects, and will take their views into account. The implementing agency will initiate these meaningful consultations as early as possible, and will provide relevant material on time before the series of consultation, in a form and in Page 92 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) languages that are understandable and accessible to the groups being consulted. The ESMP will be disclosed after World Bank review as final draft version, for a period no less than 30 days, during which the recipient will organize consultations for the affected stakeholders. 57. Climate change screening was done for this project. The results show that drought and extreme temperature, precipitation, and flooding pose a moderate risk as future drivers of risk in the country context. However, the project outcome itself is a low risk from these events. All urban infrastructure will be constructed to be resilient to future risk posed by climate changes. Monitoring and Evaluation 58. The project’s M&E approach reflects the significant capacity constraints and operational challenges associated with implementation of proposed activities in the Central African Republic. As such, it relies on systems and procedures set up by the main service provider as well as other service providers such as the controllers that will be recruited under Component 2. A consultant with the necessary capacity will be recruited and set up M&E systems to monitor implementation progress and achieved results against the PDO and intermediate level indicators on a quarterly basis. These systems will rely on data collected directly by the main service providers or provided by other service providers or the controllers recruited under Component 2. The quarterly reports will be shared with the PMU and the World Bank. If security constraints limit access to some project sites by World Bank teams, or for any other reason, the project could retain a third-party monitoring agency to provide complementary information on project activities and results. 59. Systems, procedures and tools set up by the main service provider for M&E will be described in detail in the updated PIM. Biannual reports will be prepared by the main service provider and transmitted by the PMU of the MFB to the Steering Committee. Role of Partners 60. Project implementation will be closely aligned with ongoing activities financed by development partners to expedite preparation of investments, to facilitate complementarity of investments, to avoid burdening communities with multiple requests, and to minimize disruption of already weak national institutions. Coordination with partners will happen for activities undertaken both under Components 1 and 2. Of particular interest to the project are services provided by United Nations Multidimensional Integrated Stabilization Mission in the Central African Republic (MINUSCA). In particular, the project may rely on the civil engineer battalion to support execution of works when needed, including the use of MINUSCA’s heavy equipment, and on security patrols in neighborhoods of project activity. MINUSCA’s role in securing contractors and transportation of cash is also relevant. Finally, close collaboration with MINUSCA’s political affairs department in the urban areas where the project will undertake rehabilitation work will hopefully mitigate security risks. The project will also work with United Nations Office for Project Services (UNOPS) for the procurement of information technology and computer equipment. UNOPS could also be used for other procurement activities, if necessary. Page 93 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) ANNEX 3: IMPLEMENTATION SUPPORT PLAN COUNTRY: Central African Republic Public Expenditure and Investment Management Reform Project Strategy and Approach for Implementation Support 1. The Implementation Support Plan aims to address the support requirements to implement risk mitigation measures and achieve the PDO. Overall, the design of the project and its implementation arrangements intend to respond to the identified issues through the following measures and arrangements: (a) Procurement. Procurement implementation support by the World Bank will include: (i) providing training to the PMU; (ii) providing detailed guidance on the World Bank’s Procurement Regulations to the procurement staff; (iii) reviewing procurement documents and providing timely feedback to the procurement staff; and (iv) monitoring procurement progress against the Procurement Plan. (b) FM. The World Bank implementation support team will (i) provide training to the PMU FM staff and the project team and (ii) regularly review the project’s FM system and its adherence to the PIM, including but not limited to, accounting, reporting, and internal controls. (c) Safeguards. Given that the project may have environmental and social impacts, two safeguards specialists will be needed, primarily in the early stages of project implementation to ensure that the necessary studies are conducted with respect to the project’s environmental and social impacts. Throughout the life of the project, a safeguards specialist will need to monitor the project to ensure all relevant policies are adequately complied with. (d) General supervision inputs. There will be two formal missions per year complemented by a regular liaison by Bangui-based staff to respond to upcoming demands by the Government. In addition, team members based in the country office and at headquarters will provide day-to-day implementation support of all operational aspects, as well as coordination with the client and among World Bank team members. (e) Sector and technical inputs. The sector specialists for PFM, public sector governance, and safeguards will provide advice in their areas of expertise during implementation as needed. The objective of the team is to maintain continuity and a regular dialogue between Government counterparts and the technical specialists. The main focus of implementation support is summarized below. Page 94 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) Implementation Support Plan 2. Implementation will be supported by the World Bank team through the following activities: Resource Estimate Time Focus Skills Needed Partner Role (Staff Weeks) Task management/implementation Public sector - operations 25 – support and monitoring Technical support PFM 15 FM and procurement capacity FM and procurement 12 development specialists Education, Health, Year 1 Sector specialists 4 Agriculture, Public Works Operational - FM FM specialist 6 n.a. Operational - procurement Procurement specialist 6 M&E Operations specialist 6 Environment and social Environment and social monitoring 6 specialist US$200,000 Year 2–4 Task management/implementation Public sector - operations 20 support and monitoring Technical support PFM 15 FM and procurement capacity FM and procurement 8 development specialists Sector specialists Education, Health, 8 Agriculture, Public Works n.a. Operational - FM FM specialist 6 Operational - procurement Procurement specialist 6 M&E Operations specialist 4 Environment and social monitoring Environment and social 6 specialist US$150,000 annually Other Skills Mix Required Skills Needed Number of Staff Number of Trips Comments Weeks Task management/implementation support 20 2–3 HQ-based and monitoring PFM specialist 15 1–2 HQ-based HQ- based/Within Africa Sectoral specialists 10 1-2 Region Procurement 6 2–3 Within Africa Region FM specialist 6 1–2 Within Africa Region Environment specialists 2 1–2 Within Africa Region Social specialist 2 1–2 Within Africa Region Page 95 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) Operations specialist 4 1–2 Consultant Page 96 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) ANNEX 4: ENVIRONMENTAL AND SOCIAL SAFEGUARDS ACTION PLAN COUNTRY: Central African Republic Public Administration Revival and Modernization Project Objectives 1. Based on the nature of the activities planned, the project is environmentally and socially classified as a Category B operation. Two safeguard policies are triggered: OP/BP 4.01 Environmental Assessment and OP/BP 4.11 Physical Cultural Resources. Owing to the fragility and emergency situation in the Central African Republic, mainly due to the post-conflict context, OP/BP 10.00,22 paragraph 12, Projects in Situations of Urgent Need of Assistance or Capacity Constraints, was invoked and therefore an ESSAP has been prepared by the World Bank team, consistent with World Bank operational policies and procedures in preparation of IPF operations. The ESSAP provides a time-bound planning framework for the environmental and social safeguards instruments, the production of which has been deferred into the project implementation period under paragraph 12 of OP/BP 10.00. The ESSAP is supplemented by information on policies, guidelines, codes of practice, and procedures to be adhered to and mainstreamed into the project. The objective of the ESSAP is to ensure that the planned project activities and related environmental and social assessment and management instruments and processes will be in compliance with the national legislations of the Central African Republic and the World Bank’s operational safeguards policies and are duly and diligently implemented in a logical sequence with environmentally and socially relevant project activities. General Principles 2. Recognizing the emergency nature of the proposed emergency operation and the related need for providing immediate assistance, while at the same time ensuring due diligence in managing potential environmental and social risks and impacts, the ESSAP is based on the following principles:  The proposed operation will support multiple subprojects, the detailed designs of which were not known during the combined preparation and appraisal missions. To ensure effective application of the World Bank’s safeguard policies, the ESSAP provides guidance on the approach to be taken during project implementation for the selection and design of subprojects and the planning of mitigation measures.  No land-taking leading to involuntary resettlement issues are expected in any of the proposed subprojects under the emergency project.  The proposed emergency operation will finance feasibility and detailed design studies for these subsequent investments, which will include environmental and social assessments along with additional social studies as required by the World Bank safeguard policies.  Employment opportunities within the subproject areas will be targeted and extended, as much as possible, to the affected communities and households that lost their livelihoods 22 OP/BP 10.00, paragraph 12, Projects in Situations of Urgent Need of Assistance or Capacity Constraints allows for condensed procedures and deferral of the safeguards instruments in situations of urgent need for assistance. Page 97 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) due to the crisis. In all subprojects which require consultations with local communities and/or beneficiaries, participatory consultations will be conducted to equally elicit the views of the male and female population.  Public participatory consultation and disclosure requirements will be simplified to meet the special needs of these operations. This approved ESSAP will be disclosed in-country (that is, the MFB and in the concerned sector ministries) and other public places and at the World Bank’s InfoShop. Environmental and Social Safeguards Action Plan (ESSAP) 3. This ESSAP has been developed specifically for these proposed operations to ensure due diligence, to avoid causing harm, and to ensure consistent treatment of social and environmental issues by the Government of the Central African Republic and the World Bank. The purpose of this Action Plan is also to assist the Government’s project implementation team in properly screening all the subprojects for their likely social and environmental impacts and risks, identifying documentation and preparation requirements, and prioritizing the investments based on the scale of the risks. 4. OP/BP 4.01 (Environmental Assessment). Most of the proposed subprojects will focus on the rehabilitation of public administration buildings. The project will also finance a fiber-optic MAN to connect key buildings of the MFB and the MEPC. The work in these areas will be done under OP/BP 4.01. It is anticipated that OP 4.09, OP 4.04, OP/BP 4.36, OP/BP 4.37, OP/BP 7.50 and OP/BP 7.60 will not be triggered in this project. 5. As an emergency operation, a site-specific ESMP preparation will be deferred no later than four months after effectiveness. At the same time, before project implementation, the implementing unit will agree to apply the following minimum standards during implementation: Inclusion of standard Environmental Code of Practice (ECOP) in the rehabilitation, improvement, and construction bid documents of all subprojects; review and oversight of any major reconstruction works by specialists; implementation of environmentally and socially sound options for disposal of debris; and provisions for adequate budget, a grievance redress mechanism, and satisfactory institutional arrangements for monitoring effective implementation. 6. The impact of the conflict has disproportionately displaced people internally, hence increasing the vulnerability gap among urban dwellers. The ESMPs will include a vulnerability assessment to help provide better understanding of the social dynamism on the ground for more sustainable impacts on stakeholders and beneficiary communities 7. OP/BP 4.11 (Physical Cultural Resources). The proposed operation is not expected to pose risks of damaging cultural property, however the policy is triggered as the city of Bangui may have potential cultural resources, which may be affected because of project interventions. Nevertheless, proposed subprojects will be reviewed for their potential impacts and/or risks on cultural property and clear procedures will be required for identification, protection of cultural property from theft, and treatment of discovered artifacts, and will be included in standard bidding documents. While not damaging cultural property, subproject preparation may later identify and include assistance for preservation of historic or Page 98 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) archeological sites. Though these are not expected to occur, however a ‘chance-find procedure’ will already be included in the ESMPs. Sequencing and, if Practical, Tentative Implementation Schedule for Safeguards Processing 8. Before the commencement of project activities, the implementing agencies will agree to apply the following minimum standards during implementation:  Development of a negative list of activities and goods/substances that will not be financed by the project  Inclusion of standard ECOPs (Attachment 5) in the rehabilitation, improvement, and reconstruction bid documents of all subprojects 9. Sequencing of safeguards instruments during project implementation. The following time- bound deployment of the above described safeguards instruments is anticipated to manage and mitigate the potential adverse impacts. (a) Immediately after project effectiveness. Development of ToR for the training modules on environmental and social sustainability to be integrated into the overall sensitization and training activities. Development of ESMPs with training plan activities, and including a monitoring plan. (b) During implementation of project activities. Capacity building for environmental and social management (including training on ESMPs) and development of sites specific ESMPs. (c) Before the start of implementation of project infrastructure activities. Implementation of site-specific ESMP. 10. Preparation time for safeguards instruments, including World Bank review, revisions, clearance, and approval steps. The preparation of the ESMP, including the training modules is estimated to be completed within four months of project effectiveness, including World Bank review and approval, disclosure, consultations, and finalization. Safeguard Screening and Mitigation 11. The selection, design, contracting, M&E of subprojects will be consistent with the following guidelines, ECOPs, and requirements. The safeguard screening and mitigation process to be considered include the following:  A list of negative characteristics rendering a proposed subproject ineligible for support, attachment 1  A proposed checklist of likely environment and social impacts to be filled out for each subproject or group of subprojects, attachment 2 Page 99 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730)  Procedures for the protection of cultural property, including the chance discovery of archaeological artifacts, unrecorded graveyards, and burial sites, attachment 3  Relevant elements of the ECOP for the prevention and mitigation of potential environmental and social impacts, attachment 4  A sample Environmental and Social Safeguards Procedures for Inclusion in the Technical Specifications of Contracts, attachment 5. Responsibilities for Social and Environmental Safeguard Screening and Mitigation 12. The PMU will hire an environmental and social specialist who will be responsible for following up on all safeguards concerns and will also ensure that all safeguard screening and mitigation requirements to each subproject is applied. The overall responsibility for the implementation of the above described safeguards instruments and processes will be with the Project Implementation Unit, institutionally the team under the MFB will be responsible for compliance with environmental and social regulations and safeguards compliance. Capacity-Building and Monitoring of Safeguard Implementation 13. As part of the capacity-building to be provided for implementation of the proposed operations, the PMU which will have a qualified professional as a focal person to apply the ESSAP provisions will also receive training in the ESSAP’s application from the World Bank’s social and environmental safeguards specialists. The latter will ensure that the PMU Safeguards Focal Point is properly trained both through a face-to-face meeting and on the spot during a field mission. 14. To assist in this capacity building, and to provide subsequent guidance and review of the ESSAP’s application, the World Bank environmental and social safeguard specialists in the project task team will provide guidance to the PMU. During supervision of these operations, the World Bank will review the reports from the PMU Safeguards Focal Point, assess the implementation status of the ESSAP, and recommend additional strengthening, if required. Public Consultation and Disclosure 15. This ESSAP will be shared with the Government of the Central African Republic and concerned NGOs and development partners, upon project approval and will be disclosed, both in-country at specific locations and at the World Bank’s InfoShop. The implementing agency will consult project- affected groups and local NGOs on the project's environmental and social aspects and will take their views into account. The implementing agency will initiate these public consultations as early as possible, and for meaningful consultations, will provide relevant material on time before consultation, in a form and in language s that are understandable and accessible to the groups being consulted. The ESMP will be disclosed after World Bank review as final draft version, for a period no less than 30 days, during which the recipient will organize consultations for the affected stakeholders. Page 100 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) Attachment 1: List of Negative Project Attributes Sub-projects with any of the attributes listed below will be ineligible for this project support. Attributes of Ineligible Sub-projects Natural Habitats Concerning Activities that involve significant conversion or degradation of critical natural habitats, regardless of their formal legal protection status. Such habitats may e.g. include:  Wildlife Reserves  Ecologically-sensitive marine and terrestrial ecosystems  Parks or Sanctuaries  Protected areas, natural habitat areas  Forests and forest reserves  Wetlands  National parks or game reserves  Any other environmentally sensitive areas Physical Cultural Resources Damage physical cultural resources, notwithstanding the type of PCR and the scale of the damage. Such PCR may e.g. include, but would not be limited to:  Archaeological sites, structures or objects  Religious monuments or structures  Works of art, artifacts  Natural sites or objects, e.g. trees, rocks, rock formations, hills, forests, rivers (or their sources) or lakes with cultural or religious values  Cemeteries, graveyards, and graves  Sites of any other cultural or religious significance Irrigation New large scale irrigation and drainage schemes, as well as the significant expansion of irrigated agricultural areas. Page 101 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) Attachment 2: Environmental and Social Assessment Screening Form This section outlines the selection criteria and associated Environmental and Social Assessment procedures to be applied when screening subprojects. This form is to be used by the PMU Safeguards Focal Point of the relevant sector ministry to screen all proposed subprojects. Environmental and Social Assessment Screening Form I Basic Data Sector: Line Ministry: Name of Project: Name of Subproject: Subproject Objective: Subproject Location: Scope of Civil Works: Estimated Subproject Costs: Proposed Date for Commencement of Work: Technical Specifications Reviewed: Yes __ No __ II Site Description Site Features Description Physical description of the site Site drainage Proximity of existing wells Types of soil Presence and type of vegetation What is the current land use? Who identified the site? Who is the owner of the land? Who occupies the land? Page 102 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) III Project and/or Subproject Site Related Considerations Issues Yes No Comments Is the subproject located in an area with endangered or conservation worthy ecosystems, fauna or flora? Is the subproject located in an area within 500 meters of national forests, protected areas, wilderness areas, wetlands, biodiversity, critical habitats, or sites of historical or cultural importance? Is the subproject located in an area which would create a barrier for the movement of conservation- worthy wildlife? Is the subproject located close to groundwater sources, surface water bodies, water courses or wetlands? Is the subproject in an area that would require land acquisition or restriction of access to natural resources in a protected area? Is the subproject located in an area with designated cultural properties such as archaeological, historical and/or religious sites? Is the subproject in an area with religious monuments, structures and/or cemeteries? Is the subproject in a polluted or contaminated area? Is the subproject located in an area of high visual and landscape quality? Is the subproject located in an area susceptible to landslides or erosion? Is the subproject located in an area of seismic faults? Is the subproject located in a densely populated area? Is the subproject located on prime agricultural land? Is the subproject located in an area of tourist importance? Is the subproject located near a waste dump? Does the subproject have access to potable water? Is the subproject located far (1-2 km) from accessible roads? Is the subproject located in an area with a wastewater network? Is the subproject located in the urban plan of the city? Is the subproject located outside the land use plan? Page 103 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) IV Project and/or Sub-project Environmental and Social Considerations Zoning and Land Use Planning Issues Yes No Comments Will the subproject affect land use zoning and planning or conflict with prevalent land use patterns? Will the subproject involve significant land disturbance or site clearance? Will the subproject land be subject to potential encroachment by urban or industrial use or located in an area intended for urban or industrial development? Utilities and Facilities Issues Yes No Comments Will the subproject require the setting up of ancillary production facilities? Will the subproject make significant demands on utilities and services? Will the subproject require significant levels of accommodation or service amenities to support the work force during construction (e.g., contractor will need more than 20 workers)? Page 104 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) Water and Soil Contamination Issues Yes No Comments Will the subproject require large amounts of raw materials or construction materials? Will the subproject generate large amounts of residual wastes, construction material waste or cause soil erosion? Will the subproject result in potential soil or water contamination (e.g., from oil, grease and fuel from equipment yards)? Will the subproject lead to contamination of ground and surface waters by herbicides for vegetation control and chemicals (e.g., calcium chloride) for dust control? Will the subproject lead to an increase in suspended sediments in streams affected by road cut erosion, decline in water quality and increased sedimentation downstream? Will the subproject involve the use of chemicals or solvents? Will the subproject lead to the destruction of vegetation and soil in the right-of-way, borrow pits, waste dumps, and equipment yards? Will the subproject lead to the creation of stagnant water bodies in borrow pits, quarries, encouraging for mosquito breeding and other disease vectors? Noise and Air Pollution Hazardous Substances Issues Yes No Comments Will the subproject increase the levels of harmful air emissions? Will the subproject increase ambient noise levels? Will the subproject involve the storage, handling or transport of hazardous substances? Fauna and Flora Issues Yes No Comments Will the subproject involve the disturbance or modification of existing drainage channels (rivers, canals) or surface water bodies (wetlands, marshes)? Will the subproject lead to the destruction or damage of terrestrial or aquatic ecosystems or Page 105 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) endangered species directly or by induced development? Will the subproject lead to the disruption/destruction of wildlife through interruption of migratory routes, disturbance of wildlife habitats, and noise-related problems? Destruction or Disturbance of Land and Vegetation Issues Yes No Comments Will the subproject lead to unplanned use of the infrastructure being developed? Will the subproject lead to long-term or semi- permanent destruction of soils in cleared areas not suited for agriculture? Will the subproject lead to the interruption of subsoil and overland drainage patterns (in areas of cuts and fills)? Will the subproject lead to landslides, slumps, slips and other mass movements in road cuts? Will the subproject lead to erosion of lands below the roadbed receiving concentrated outflow carried by covered or open drains? Will the subproject lead to long-term or semi- permanent destruction of soils in cleared areas not suited for agriculture? Will the subproject lead to health hazards and interference of plant growth adjacent to roads by dust raised and blown by vehicles? Physical Cultural Resources Issues Yes No Comments Will the subproject have an impact on archaeological or historical sites, including historic urban areas? Will the subproject have an impact on religious monuments, structures and/or cemeteries? Have Chance Finds procedures been prepared for use in the subproject? Expropriation and Social Disturbance Issues Yes No Comments Will the subproject involve land expropriation or demolition of existing structures? Will the subproject lead to induced settlements by workers and others causing social and Page 106 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) economic disruption? Will the subproject lead to environmental and social disturbance by construction camps? Other Social Impacts Issues Observations Number of project affected people (PAPs) How will PAPs be affected by the proposed interventions and what is the magnitude of the impact? Will there be any new permanent or temporary job opportunities created for local residents? What are the potential impacts on human health? What are the potential impacts on vulnerable or marginalized groups? Planning Phase Will the project involve acquisition of a new plot(s) of land? If yes, explain arrangements for replacing assets with the same or better in terms of quantity and quality. If no, find alternate site or prepare a Resettlement Action Plan (RAP) or Abbreviated Resettlement Action Plan (ARAP) according to OP 4.12. Construction Phase 1. Will construction or operation of the Project use large amounts of local natural resources such as water, timber, gravel from river beds, stones or any resources which are non-renewable or in short supply? Yes No 2. Will the Project involve use, store, transport or hand substances harmful to human health or the environment? Yes No 3. Will the Project produce solid waste during construction or decommissioning? Yes No Page 107 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) 4. Will construction require the use of heavy machinery or equipment? Yes No Operation Phase 5. Will the Project result in the production of solid waste during the operational phase? Yes No 6. Will the Project result in the production of hazardous waste during the operational phase? Yes No 7. Will the Project produce waste water that requires drainage? Yes No 8. Will the Project accumulate rain water that requires drainage? Yes No 9. Will the Project require more than basic community management of the services? Yes No Recommended Action Are all of the answers ‘NO’? Are any of the answers ‘YES’? If all the above answers are ’NO’, then there is no need for further action and the proposed action is to proceed with the proposed project intervention or subproject activity following ESSAP guidelines. If there is at least one ‘YES’ answer, are there appropriate mitigation measures that can be adopted so as to minimize the adverse impacts of the activity? If so, please describe the mitigation measures to be adopted as part of the implementation procedures of the proposed project intervention or subproject activity is to be financed: Page 108 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) The completed form should be sent for review and approval to the Project Manager of the relevant PMU. If any of the aforementioned answers are “Yes”, then the Project Manager will take the final decision as to whether to clear the proposed project intervention or subproject activity for implementation, based on the safeguards specialists screening and set of recommended mitigation measures. Recommendation Signatures Signed by Safeguards Specialist Signed by Project Manager Note: One copy of the completed and signed form and accompanying documentation will be filed and kept in the PMU office. Page 109 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) Attachment 3: Procedures for the protection of cultural property, including the chance discovery of archaeological artifacts, unrecorded graveyards and burial sites Chance finds procedures should be incorporated into the ESMP and civil works contracts. The following wording is proposed: If the Contractor discovers archeological sites, historical sites, remains and objects, including graveyards and/or individual graves during excavation or construction, the Contractor shall: - Stop the construction activities in the area of the chance find; - Delineate the discovered site or area; - Secure the site to prevent any damage or loss of removable objects. In cases of removable antiquities or sensitive remains, a night guard shall be arranged until the responsible local authorities or the [Relevant Ministry] take over; - Notify the supervisory Project Environmental Officer and Project Engineer who in turn will notify the responsible local authorities and the [Relevant Ministry] immediately (within 24 hours or less); Responsible local authorities and the [Relevant Ministry] would then be in charge of protecting and preserving the site before deciding on subsequent appropriate procedures. This would require a preliminary evaluation of the findings to be performed by the archaeologists of the [Relevant Ministry]. The significance and importance of the findings should be assessed according to the various criteria relevant to cultural heritage, namely the aesthetic, historic, scientific or research, social and economic values. Decisions on how to handle the finding shall be taken by the responsible authorities and the [Relevant Ministry]. This could include changes in the layout (such as when finding irremovable remains of cultural or archeological importance) conservation, preservation, restoration and salvage. Implementation for the authority decision concerning the management of the finding shall be communicated in writing by relevant local authorities. Construction work may resume only after permission is given from the responsible local authorities or the [Relevant Ministry] concerning safeguard of the heritage. Page 110 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) Attachment 4: Codes of Practice for Prevention and Mitigation of Adverse Environmental and Social Impacts The World Bank Group’s General Environmental Health and Safety (EHS) Guidelines include comprehensive treatment in the following areas: Environment, Air Emissions and Ambient Air Quality, Energy Conservation, Wastewater and Ambient Water Quality, Water Conservation, Hazardous Materials Management, Waste Management, Noise, Contaminated Land, Occupational Health and Safety, General Facility Design and Operation, Communication and Training, Physical Hazards, Chemical Hazards, Biological Hazards, Radiological Hazards, Personal Protective Equipment, Special Hazard Environments, Monitoring, Community Health and Safety, Water Quality and Availability, Structural Safety of Project Infrastructure, Life and Fire Safety, Traffic Safety, Transport of Hazardous Materials, Disease Prevention, Emergency Preparedness and Response, Construction and Decommissioning, Environment, Occupational Health & Safety, Community Health & Safety. These guidelines should be applied in order to ensure compliance with Bank policies. Adverse Environmental and Social Sector Mitigation Measures Impacts Housing and Public Disease caused by inadequate Environmentally appropriate site Buildings provision of water and sanitation selection led by application of the Construction or services. environmental and social screening rehabilitation of Deforestation caused by form provided in Annex 4, design and public office unsustainable use of timber and construction guidance, and a procedure building or housing wood-firing of bricks. for ensuring that this guidance is Generation of waste materials. followed before construction is Disturbances during construction approved. (dust, noise) and contamination from inadequate sanitation facilities. Replace timber beams with concrete Acquisition of land. where structurally possible. Ensure fired bricks are not wood-fired. Where technically and economically feasible, substitute fired bricks with alternatives, such as sun-dried mud bricks, compressed earth bricks, or rammed earth construction. Ensure engineering designs include adequate sanitary latrines and access to safe water. Handling of waste during building renovation will require appropriate disposal of waste materials and the protection of the workforce in the event of asbestos removal or that of other toxic materials. Page 111 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) Preparation of a RAP or ARAP. Sanitation Water supply contaminations, Where pit latrines are used they should Latrines including: Groundwater be located more than 10m from any contamination due to seepage and water source. The base should be contamination of surface waters due sealed and separated vertically by not to flooding or over-flowing. less than 2m of sand or loamy soil from Disease caused by poor handling the ground water table. practices of waste, including inadequate excreta disposal or Where latrines or septic tanks are built inappropriate use of latrines. they should be sealed. Outflows should drain either to an appropriate channel located at least 10m from any water source or be connected to a working drain. Septic tanks should not be constructed nor septic waste collected unless primary and secondary treatment and safe disposal is available. Due diligence to siting requirements for construction of Ventilated Improved Pit latrines to avoid contamination of wells and the water table. Waste should be handled using protective clothing to prevent any contamination of workers’ skin or clothes. Protective clothing and appropriate containers for waste transportation to be provided. Where waste is collected for agricultural use it should be stored for a sufficient period to destroy pathogens through composting. At the minimum it should be stored in direct sunlight and turned regularly for a period of at least 6 weeks. Health and hygiene capacity building program to be provided for all latrine users. Maintenance training to be delivered along with new latrines. Page 112 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) Solid Waste Disease caused by inadequate Solid waste management plan to Solid waste collection and disposal, including include the following elements: generation across health risks from: pests, burning of Safe waste disposal awareness sectors solid waste and industrial waste. program. Contamination of water supply. Lateral seepage into surface waters. Sufficient frequency of collection from Seepage of contaminants into transfer stations. aquifers. Contamination from clandestine Containment of waste during collection dumping. and transfer. Promote separation at source to reduce spreading by waste-pickers during recycling. Minimize burning of plastics. Separate collection and disposal system for medical or hazardous waste. Assess requirement for additional investment in final disposal site. Site transfer stations should have sealed base and be located at least 15m away from water sources with the base separated vertically by not less than 2m of sand or loamy soil from the ground water table. Monitoring of disposal site to prevent illegal dumping. Fiber optic cable Displacement of communities. Preparation of an Environmental installation Loss of shelter, income and assets. Assessment (EA), Environmental Potential conflict over land use. Management Plan (EMP) and RAP or Child labor. ARAP, with the following elements Health and HIV AIDs concerns with considered: the influx of labor. Degradation of roads and basic Design to prevent soil erosion and transport infrastructure maintain slope stability. Physical Degradation and erosion of lands. stabilization of erodible surfaces Accumulation of sediments in through turf establishment, planting a streams, increase in runoff and wide range of vegetation, and creating flooding, disturbance of vegetation. slope breaks. Disruption of drainage. Page 113 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) Design to ensure minimum degradation of roads and basic transport infrastructure and appropriate measures to repair any damage/rehabilitate Construction in the dry season. Protection of soil surfaces during construction. Rehabilitation and re-grading of borrow pits and material collection sites. Minimize loss of natural vegetation during construction. Design to include accessibility to road sides in case roadbed is raised. Alternative alignments to avoid bisecting villages by road widening. Provision of fuel at work camps to prevent cutting of firewood. Provision of sanitation at work camps. Removal of work camp waste, proper disposal of oil, bitumen and other hazardous wastes. Management of construction period worker health and safety. Water Supply Contamination by seepage from Preparation of an EA, EMP, RAP or Repair and latrines, municipal waste or ARAP, with the following measures rehabilitation of agricultural areas. considered: existing water Poor absorption, frequent runoff and schemes. contamination of water sources are Test water supply on a regular basis to among the major negative impacts detect contamination and ensure the that might arise from inappropriate adequacy of water quality. siting and engineering design. Siting of boreholes and open water Discharge of raw sewage to water reservoirs decided through a screening bodies can adversely affect water and consultative process. Page 114 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) quality and aquatic life. Removal of debris by screening at the Displacement of people from their discharge point or use of settlement homes and land, a reduction or loss ponds prior to discharge. of livelihood activities and incomes; interruption or inconvenience of Connection to an existing sewage services rendered facility should not be conducted without ensuring that the capacity of High mineral concentrations. the existing system is adequate to accommodate the additional collected Creation of stagnant pools of water. sewage. Accident to human and livestock. Increase incidence of water borne disease. Impact on cultural and religious sensitive areas. Erosion Page 115 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) Attachment 5: Sample Environmental and Social Safeguards Procedures for Inclusion in the Technical Specifications of Contracts. I. General 1. The Contractor and his employees shall adhere to the mitigation measures set down and take all other measures required by the Engineer to prevent harm, and to minimize the impact of his operations on the environment. 2. The Contractor shall not be permitted to unnecessarily strip clear the right of way. The Contractor shall only clear the minimum width for construction and diversion roads should not be constructed alongside the existing road. 3. Remedial actions which cannot be effectively carried out during construction should be carried out on completion of each Section of the road (earthworks, pavement and drainage) and before issuance of the Taking over Certificate:  these sections should be landscaped and any necessary remedial works should be undertaken without delay, including grassing and reforestation;  water courses should be cleared of debris and drains and culverts checked for clear flow paths; and  borrow pits should be dressed as fish ponds, or drained and made safe, as agreed with the land owner. 4. The Contractor shall limit construction works to between 6 am and 7 pm if it is to be carried out in or near residential areas. 5. The Contractor shall avoid the use of heavy or noisy equipment in specified areas at night, or in sensitive areas such as near a hospital. 6. To prevent dust pollution during dry periods, the Contractor shall carry out regular watering of earth and gravel haul roads and shall cover material haulage trucks with tarpaulins to prevent spillage. II. Transport 7. The Contractor shall use selected routes to the project site, as agreed with the Engineer, and appropriately sized vehicles suitable to the class of road, and shall restrict loads to prevent damage to roads and bridges used for transportation purposes. The Contractor shall be held responsible for any damage caused to the roads and bridges due to the transportation of excessive loads, and shall be required to repair such damage to the approval of the Engineer. 8. The Contractor shall not use any vehicles, either on or off road with grossly excessive, exhaust or noise emissions. In any built up areas, noise mufflers shall be installed and maintained in good condition on all motorized equipment under the control of the Contractor. Page 116 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) 9. Adequate traffic control measures shall be maintained by the Contractor throughout the duration of the Contract and such measures shall be subject to prior approval of the Engineer. III. Workforce 10. The Contractor should whenever possible locally recruit the majority of the workforce and shall provide appropriate training as necessary. 11. The Contractor shall install and maintain a temporary septic tank system for any residential labor camp and without causing pollution of nearby watercourses. 12. The Contractor shall establish a method and system for storing and disposing of all solid wastes generated by the labour camp and/or base camp. 13. The Contractor shall not allow the use of fuel wood for cooking or heating in any labor camp or base camp and provide alternate facilities using other fuels. 14. The Contractor shall ensure that site offices, depots, asphalt plants and workshops are located in appropriate areas as approved by the Engineer and not within 500 meters of existing residential settlements and not within 1,000 meters for asphalt plants. 15. The Contractor shall ensure that site offices, depots and particularly storage areas for diesel fuel and bitumen and asphalt plants are not located within 500 meters of watercourses, and are operated so that no pollutants enter watercourses, either overland or through groundwater seepage, especially during periods of rain. This will require lubricants to be recycled and a ditch to be constructed around the area with an approved settling pond/oil trap at the outlet. 16. The contractor shall not use fuel wood as a means of heating during the processing or preparation of any materials forming part of the Works. IV. Quarries and Borrow Pits 17. Operation of a new borrow area, on land, in a river, or in an existing area, shall be subject to prior approval of the Engineer, and the operation shall cease if so instructed by the Engineer. Borrow pits shall be prohibited where they might interfere with the natural or designed drainage patterns. River locations shall be prohibited if they might undermine or damage the river banks, or carry too much fine material downstream. 18. The Contractor shall ensure that all borrow pits used are left in a trim and tidy condition with stable side slopes, and are drained ensuring that no stagnant water bodies are created which could breed mosquitoes. 19. Rock or gravel taken from a river shall be far enough removed to limit the depth of material removed to one-tenth of the width of the river at any one location, and not to disrupt the river flow, or damage or undermine the river banks. Page 117 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) 20. The location of crushing plants shall be subject to the approval of the Engineer, and not be close to environmentally sensitive areas or to existing residential settlements, and shall be operated with approved fitted dust control devices. V. Earthworks 21. Earthworks shall be properly controlled, especially during the rainy season. 22. The Contractor shall maintain stable cut and fill slopes at all times and cause the least possible disturbance to areas outside the prescribed limits of the work. 23. The Contractor shall complete cut and fill operations to final cross-sections at any one location as soon as possible and preferably in one continuous operation to avoid partially completed earthworks, especially during the rainy season. 24. In order to protect any cut or fill slopes from erosion, in accordance with the drawings, cut off drains and toe-drains shall be provided at the top and bottom of slopes and be planted with grass or other plant cover. Cut off drains should be provided above high cuts to minimize water runoff and slope erosion. 25. Any excavated cut or unsuitable material shall be disposed of in designated tipping areas as agreed to by the Engineer. 26. Tips should not be located where they can cause future slides, interfere with agricultural land or any other properties, or cause soil from the dump to be washed into any watercourse. Drains may need to be dug within and around the tips, as directed by the Engineer. VI. Historical and Archaeological Sites 27. If the Contractor discovers archaeological sites, historical sites, remains and objects, including graveyards and/or individual graves during excavation or construction, the Contractor shall: (a) Stop the construction activities in the area of the chance find. (b) Delineate the discovered site or area. (c) Secure the site to prevent any damage or loss of removable objects. In cases of removable antiquities or sensitive remains, a night guard shall be present until the responsible local authorities and the Ministry of Culture take over. (d) Notify the supervisory Engineer who in turn will notify the responsible local authorities and the Ministry of Culture immediately (less than 24 hours). (e) Contact the responsible local authorities and the Ministry of Culture who would be in charge of protecting and preserving the site before deciding on the proper procedures to be carried out. Page 118 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) (f) This would require a preliminary evaluation of the findings to be performed by the archaeologists of the Ministry of Culture (within 72 hours). The significance and importance of the findings should be assessed according to the various criteria relevant to cultural heritage, including the aesthetic, historic, scientific or research, social and economic values. (g) Ensure that decisions on how to handle the finding be taken by the responsible authorities and the Ministry of Culture. This could include changes in the layout (such as when the finding is an irremovable remain of cultural or archaeological importance) conservation, preservation, restoration and salvage. (h) Implementation for the authority decision concerning the management of the finding shall be communicated in writing by the Ministry of Culture; and (i) Construction work will resume only after authorization is given by the responsible local authorities and the Ministry of Culture concerning the safeguard of the heritage. VII. Disposal of Construction and Vehicle Waste 28. Debris generated due to the dismantling of the existing structures shall be suitably reused, to the extent feasible, in the proposed construction (e.g. as fill materials for embankments). The disposal of remaining debris shall be carried out only at sites identified and approved by the project engineer. The contractor should ensure that these sites (a) are not located within designated forest areas; (b) do not impact natural drainage courses; and (c) do not impact endangered/rare flora. Under no circumstances shall the contractor dispose of any material in environmentally sensitive areas. 29. In the event any debris or silt from the sites is deposited on adjacent land, the Contractor shall immediately remove such, debris or silt and restore the affected area to its original state to the satisfaction of the Supervisor/Engineer. 30. Bentonite slurry or similar debris generated from pile driving or other construction activities shall be disposed of to avoid overflow into the surface water bodies or form mud puddles in the area. 31. All arrangements for transportation during construction including provision, maintenance, dismantling and clearing debris, where necessary, will be considered incidental to the work and should be planned and implemented by the contractor as approved and directed by the Engineer. 32. Vehicle/machinery and equipment operations, maintenance and refuelling shall be carried out to avoid spillage of fuels and lubricants and ground contamination. An oil interceptor will be provided for wash down and refuelling areas. Fuel storage shall be located in proper bounded areas. 33. All spills and collected petroleum products shall be disposed of in accordance with standard environmental procedures/guidelines. Fuel storage and refilling areas shall be located at least 300m from all cross drainage structures and important water bodies or as directed by the Engineer. Page 119 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) Annex 5 MAPPING OF TECHNICAL ASSISTANCE 2017 Budget Budget Procurement Public HR – Accounting – Revenue Oversight RCPCA IT Governance/Othe Preparatio Execution Investment Wage- Treasury Management and Secretaria r areas of n Managemen bill Management Accountabil t support t Mgmt. ity EU One Long-Term TA (two Support to improve Support to One Long-Term Support to 2 TA One years) prior control of introduce TA (two years); the Long- Medium-Term Expenditure procurement + multi-year Financing of the Parliament Term Frameworks (MTEF) for 4 general support to commitments Deputy CAAT and the TA priority Ministries the Directorate (one year) Court of (Agriculture, Public Works, General of Building of the Auditors Global Health and Education), Procurement + new building of IT Global MTEF and global Procurement the CAAT Blue- Medium-Term Budget Portal Print Framework IMF / Support to improve Support to improve Support to Fiscal Policy Support to prepare AFRITAC/ macroeconomic/budget procurement plans improve the + TA to national accounts, Capacity forecasting / MTEF – link to preparation of the Customs + trade statistics, Building Support to improve sector commitment plans Table of TA to Tax debt management Framework and global commitment Financial Administratio plans Operations of the n State France Capacity Support to 1 TA Suppo One Long-Term building of finance a TA of rt to Resident Advisor General the CAAT the to the Minister of Inspection Web- Finance of Finance Support to Page rehabilitate of the Capacity building buildings of the Ministr plans + support to Ministry of y of change Finance in Financ management + selected cities e. training of middle management + project management in selected ministries: Planning, Education, Housing, Environment and Municipality of Bangui Page 120 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) Support to Decentralization AfDB Constructio Support to Rehabilitation of Building and Support to 1 TA n of a new Debt the Directorate equipment of Information building of Manageme General of Public a new systems for the nt Procurement and building for tax and Directorate the Public the Ministry customs General of Procurement of Economy, department Budget Regulatory Agency Planning and New Building Cooperation of the tax department UN/UNDP 2 TA Page 121 of 121 The World Bank Public Expenditure and Investment Management Reform Project (P161730) Annex 6: PEIMRP Results Chain / Theory of Change PDO: Improve Management and Transparency of Public Expenditures and Public Investments 1.1 1.2 Component 1 1.3 1.4 2.1 Component 2 2.2 3.1 Component 3 3.2 Greater Transparency and Accountability Page 122 of 121