The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) Maldives: PFM Systems Strengthening Project (P145317) SOUTH ASIA | Maldives | Governance Global Practice | IBRD/IDA | Investment Project Financing | FY 2014 | Seq No: 11 | ARCHIVED on 25-Feb-2021 | ISR45538 | Implementing Agencies: Ministry of Finance and Treasury, Ministry of Finance and Treasury Key Dates Key Project Dates Bank Approval Date: 26-Jun-2014 Effectiveness Date: 02-Oct-2014 Planned Mid Term Review Date: 16-Apr-2017 Actual Mid-Term Review Date: 10-Apr-2017 Original Closing Date: 31-Jul-2019 Revised Closing Date: 31-Jul-2022 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The proposed project development objectives (PDO) are to enhance budget credibility, transparency, and financial reporting of central government finances. Has the Project Development Objective been changed since Board Approval of the Project Objective? Yes Board Approved Revised Project Development Objective (If project is formally restructured) The PDO (project development objectives) for the proposed AF is to enhance budget credibility, transparency, and financial reporting of public sector finances. The PDO remains relevant and the likelihood of achieving it remains high in view of the project’s implementation progress, disbursement performance, and results achieved to date. Components Table Name Policy-based fiscal strategy and budget credibility:(Cost $2.73 M) Controlled budget execution:(Cost $6.08 M) Accounting, reporting and internal audit:(Cost $1.70 M) External scrutiny and audit:(Cost $0.42 M) Project and Change Management:(Cost $1.07 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Satisfactory Overall Risk Rating High Substantial Implementation Status and Key Decisions The likelihood of achieving the Project Development Objective (PDO) continue to remain “Satisfactory” and implementation progress (IP) remains “Moderately Satisfactory”. The project has met three out of the five Disbursement Linked Results (DLR) that were due to be achieved by 2/25/2021 Page 1 of 9 The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) 30th June 2019. With regards to transparency and financial reporting, like publication of audit report on the 2018 consolidated annual financial statements, efforts are on track as Ministry of Finance (MoF) has submitted the 2019 annual financial statements on 12th October 2020 and Auditor General’s Office (AGO) plans to complete the audit by 28th April 2021. The public has access to key fiscal information in a timely manner. Domestic and foreign debt records are updated monthly, and debt bulletin is published semi-annually. Similarly, public disclosure of review of audited financial reports for state-owned enterprises (SOEs) is being enhanced through the SOE Gateway that scheduled to be launched in February 2021. However, efforts ae needed to meet the credibility of the budget project target of five percent deviation between aggregate expenditure out-turn and the original approved budget. The project is experiencing disbursement lag with only 10 percent of the additional financing executed with eighteen months remaining for project closure in July 2022. Implementation progress has slowed down slightly with low disbursement for the results-based component and moderate progress on policy-based fiscal strategy and budget credibility caused in part as a result of the COVID-19 pandemic that is limiting international travel for most consultants. Component 4 dealing with accounting, reporting and internal audit and component 5 on external audit of the public sector have both not registered any expenditure to date. In addition, attention is needed to start making progress on the public investment management; payroll management and control; and procurement reform activities. Focus is needed to achieve the outstanding disbursement linked results that were to be achieved by June 30, 2019 and 2020. With flexibility to allow for and closely monitor home-based work by consultants, some activities can be initiated with provision to travel later for in-country training where applicable. PFM diagnostics. Preparation of PFM Strategy and Reform Action Plan is planned to be completed by April 2021. The mission observed that the target for completion is very ambitious and advised about the need for active involvement of the broad set of stakeholders (line-departments, local councils, academia, civil society, chamber of commerce). The reform strategy and prioritized action will be used as the rallying point for development partner’s support. The authorities reiterated commitment to Open Government Data (OGD) and plan to undertake the Open Data Readiness Assessment (ODRA) in collaboration with the USAID technical assistance project. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance -- High High Macroeconomic -- High High Sector Strategies and Policies -- Moderate Moderate Technical Design of Project or Program -- Moderate Moderate Institutional Capacity for Implementation and -- High High Sustainability Fiduciary -- Moderate Moderate Environment and Social -- Low Moderate Stakeholders -- Substantial Substantial Other -- -- -- Overall -- High Substantial Results PDO Indicators by Objectives / Outcomes 2/25/2021 Page 2 of 9 The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) To enhance budget credibility, transparency, and financial reporting of public sector finances IN00954817 ►Deviation between aggregate expenditure out turn and the original approved budget (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 18.74 6.30 6.30 5.00 Date 31-Dec-2013 19-Jun-2020 03-Feb-2021 31-Jul-2022 Not met. Based on PEFA 2021 report 2017 – 1.3% Comments: 2018 – 6.5% 2019 – 6.3% IN00954818 ►Public Access to Key Fiscal Information (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Achieved. The Proposed Budget Book is available to Achieved. The Proposed the public on the MoF Budget Book is available website the same day to the public on the MoF it is submitted to website the same day it Parliament. is submitted to Parliament. The The approved budget approved budget (the (the Budget Book) is Budget Book) is made made available to the available to the public on public on the MoF the MoF website within website within two two weeks from the Documents not made weeks from the approval by Parliament. available to the public: approval by In-year budget execution (1) Year-end state Parliament. reports are made Public disclosure of financial statements of available to the public the following key fiscal the Republic of Maldives; In-year budget within a month of their information: (a) Annual (2) In-year budget execution reports are issuance on the MoF budget documentation, execution reports; made available to the Value website (b) In-year budget (3) Contracts awarded. public within a month (www.finance.gov.mv). execution reports, (c) of their issuance on Year-end financial Budget documents and the MoF website The audited Annual statements, (d) tenders resources available to (www.finance.gov.mv). Financial Report for above USD 100 000. primary service units are FY2018 dated 7 January available in public 2020 was published domain. The audited Annual accompanied by the Financial Report for External Auditor’s Report FY2018 dated 7 on the Auditor General’s January 2020 was Office website on 16 published January 2020 accompanied by the (www.audit.gov.mv) External Auditor’s Report on the Auditor General’s Office website on 16 January 2020 (www.audit.gov.mv) 2/25/2021 Page 3 of 9 The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) All tenders above USD 2,200 are advertised on the gazette portal as per Public Finance Regulations (PFR), chapter 10. https://beelan.egov.mv /bid-awards Date 28-Feb-2014 19-Jun-2020 19-Jan-2021 31-Jul-2022 PEFA PI 5.1: Budget documentation - all 4 basic elements and 4 additional elements out of 8 ae met by GoM. PEFA PI 9.1: Public access to fiscal information – GoM makes available to the public all nine elements, including all four basic elements in accordance with the specified timeframe – ‘A’. For the published in-year budget execution reports, WB proposes to disclose supplementary/virement and Comments: commitments. The PAS already has reports showing commitment – see Annex 3. Due to the COVID-19 situation, special dispensation was provided and the FY2019 financial statement was submitted for audit to Auditor General Office (AGO) on October 12, 2020. The FY2020 financial statement is expected to be submitted by Minister on April 14th to AGO barring any lockdown. Contracts above USD160,000 have been centralized at National Tender. IN00954819 ►Comprehensiveness of debt data recording and reporting (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value Annual statement of debt Achieved. Achieved. Domestic and foreign covering domestic and debt records are external debt is Domestic and foreign Domestic and foreign complete, includes prepared, but there are debt records are debt records are payable amount gaps and reconciliation complete in the CS- complete in the CS- updated and problems. DRMS and updated DRMS and updated reconciled quarterly. monthly. Explicitly monthly. Explicitly Comprehensive guaranteed contingent guaranteed contingent management and liability records are liability records are statistical reports updated and reconciled updated and (covering debt service, quarterly. reconciled quarterly. stock and operations) are produced at least Debt bulletin is annually. produced semi- annually, and public and publicly guaranteed stock figures are produced quarterly. Both reports are published on the Ministry’s website. Below are the links: https://www.finance.go v.mv/public/attachment s/nZySU62UwL33YTit YObmljYEdg4TwH034 PfS12Zf.pdf 2/25/2021 Page 4 of 9 The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) Date 28-Feb-2014 19-Jun-2020 19-Jan-2021 31-Jul-2022 99% of the debt service payments are done semi-annually. Currently publishing quarterly on the MoF website. Reporting as per IMF standards including recording of Comments: domestic debt started from Q1 2020 onwards. IN00954820 ►SOE financial reporting and disclosure (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 50.00 45.00 45.00 100.00 Date 05-Mar-2018 19-Jun-2020 19-Jan-2021 31-Jul-2022 Partially Met. The most recent published annual financial review as at January 2021 is for FY2018. 2019 SOE Financial Statement audit is not yet completed. Comments: PCB’s target is to publish its review within 60 days of receipt of quarterly reports. The SOE Gateway is now scheduled to be launched in February 2021 as the team responsible was working on some priorities for the Bandeyri portal. Intermediate Results Indicators by Components Project and Change Management IN00954859 ►Improved communication of PFM reforms (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The change The change management strategy management strategy is is yet to be developed. yet to be developed. One One Change Communication Change Management Management strategy exists Workshop was held. Workshop was held. Legal unit of Ministry of Legal unit of Ministry All planned Finance have undertaken of Finance have consultation several reviews of Public undertaken several workshops held for Finance Act, Fiscal reviews of Public legal and business Responsibility Act, PCB Finance Act, Fiscal No PFM communication process review Value Act, Public Finance Responsibility Act, strategy Regulation etc. PCB Act, Public Fifteen change Finance Regulation management Several changes were etc. workshops for key made to the Public Several changes were stakeholders held in Finance Regulation made to the Public total by end of FY5. through Circulars in the Finance Regulation stakeholders held in area of (i) Procurement, through Circulars in total by end of FY5. (ii) Budget Controls, (iii) the area of (i) Asset Management. Procurement, (ii) Budget Controls, (iii) Asset Management. 2/25/2021 Page 5 of 9 The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) Date 28-Feb-2014 19-Jun-2020 19-Jan-2021 31-Jul-2022 Draft ToR for Institutional Development Consultancy Firm was discussed with Permanent Secretary and State Minister Ismail. It is the view now that majority of the deliverables under this TOR does not represent an urgent need of the Ministry now. However, deliverables 7 and 8 (relating to change management Comments: strategy and client/beneficiary feedback mechanism) are critical, and MoF has commenced plans to attend to this in-house to be completed by end of Q1 2021. Therefore, this ToR will be cancelled External scrutiny and audit IN00954858 ►Inclusion of CPA techniques in Performance Audit (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Two pilot Performance Not done. ToR has been Not done. ToR has Value No use of CPA Audits conducted developed. been developed. using CPA Date 01-May-2018 19-Jun-2020 19-Jan-2021 31-Jul-2022 2 rounds of EOI was not responsive. AGO is considering approaching SAI Philippines for peer support. Comments: Accounting, reporting and internal audit IN00954860 ►Timely preparation of annual financial statements (AFS) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target AFS for FY2018 was AFS for FY2018 was submitted within four submitted within four System-generated AFS not accepted by months on April 2019. months on April 2019. AFS submitted to audit Value audit as complete and However, the AFS is not However, the AFS is within 4 months from ready for audit. yet directly system not yet directly system year end. generated. generated. Date 28-Feb-2014 19-Jun-2020 19-Jan-2021 31-Jul-2022 Audit of ‘whole-of-government’ financial statement for 2019 expected to be completed by 15th March Comments: 2021. Controlled budget execution IN00954857 ►Capacity building on procurement through the implementation of a new Procurement curricula (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target New Procurement curricula not yet in place. Around 150 participants New Procurement Value NIL have been trained curricula not yet in 15.00 through in-house place. curricula available within the MoF. However, these 2/25/2021 Page 6 of 9 The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) are not affiliated with any accreditation. Date 28-Feb-2014 19-Jun-2020 19-Jan-2021 31-Jul-2022 Around 150 participants have been trained through in-house curricula available within the MoF. The plan now is for National University to conduct the certified training in collaboration with the Public Finance Comments: Institute in MoF for the course development. IN00954862 ►BERs subjected to audit by internal auditors (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 100.00 Date 28-Feb-2014 19-Jun-2020 19-Jan-2021 31-Jul-2022 BERs exist but not subjected to internal audit. An audit plan for auditing financial reporting process of MOF has been prepared and will be executed during Quarter 2 of 2021. However, periodic review of Comments: BERs is planned to only start after the training of AIS module which will be conducted during 2021. IN00954863 ►Updated gender disaggregated statistics to inform fiscal policy (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Ongoing. Parts of the Ongoing. Preliminary HIES 2019 data are HHIES statistics as well now available for No recent data on as the labor force survey download, and the Findings from HHIES Value household are expected to be final datasets with have been published income/expenditures available in December estimates should be 2020. available at the end of February 2021. Date 01-May-2018 19-Jun-2020 19-Jan-2021 31-Jul-2022 The National Bureau of is planning to utilize savings from cancelled phone work to conduct at least 2 Comments: rounds of phone surveys with a sub-sample of households from the 2019 HIES. IN00954864 ►Improved asset management (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Asset Register not Asset Register not included as notes in included as notes in the the end-year Financial end-year Financial Statements. Asset Statements. Asset Register is maintained End year Financial Asset registry not Register is maintained Value but not fully integrated Statements with asset annexed to AFS but not fully integrated with SAP (model, registry with SAP (model, serial serial number and number and location are location are not not currently recorded in currently recorded in SAP by line ministries). SAP by line ministries) Date 01-May-2018 19-Jun-2020 19-Jan-2021 31-Jul-2022 Comments: Neelan Portal” - asset portal has been developed and is currently being rolled out and used to compile Asset Register. 2/25/2021 Page 7 of 9 The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) Neelan Poral is internal and used for disposal and transfers to do ‘announcements’ for public auction. Policy-based fiscal strategy and budget credibility IN00954856 ►Increased capacity on debt and cash management (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Medium-term Debt MTDS 2021–2023 Strategy (MTDS) 2020 – Credible DMS does not published: Debt management 2022 produced and exist. https://www.finance.go strategy produced published v.mv/public/attachment Value https://www.finance.gov. s/6Hea5HJx8k4CXsS8 mv/publications/reports- tLRRBaV7MOXVHoIIw and-analyses/fiscal-and- cXO7aAQ.pdf debt-strategy-report Date 28-Feb-2014 19-Jun-2020 19-Jan-2021 31-Jul-2022 Medium-term Debt Strategy (MTDS) is done on an annual rolling basis. Comments: IN00954861 ►Increased capacity on macro fiscal planning (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Macro fiscal forecasting 0% of staff trained on tool exists and was used Macro fiscal Production of a Macro macro fiscal planning. for MTFF to prepare forecasting tool exists fiscal forecasting tool Fiscal Strategy Paper and used for MTFF to to inform the annual Value No credible MTFF and that was sent to prepare Fiscal budget framework for assessing parliament and used for Strategy Paper and investment projects the preparation of 2020 the annual budgets. exists. budget. Date 28-Feb-2014 19-Jun-2020 19-Jan-2021 31-Jul-2022 MTFF was used for formulation of 2021 budget. Comments: Performance-Based Conditions Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P145317 IDA-62200 Effective USD 6.00 6.00 0.00 1.38 4.34 24% P145317 IDA-D2950 Effective USD 6.00 6.00 0.00 1.45 4.55 24% P145317 IDA-H9510 Effective USD 6.50 6.50 0.00 5.95 0.08 99% 2/25/2021 Page 8 of 9 The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P145317 IDA-62200 Effective 07-Jun-2018 31-Jul-2018 28-Sep-2018 31-Jul-2022 31-Jul-2022 P145317 IDA-D2950 Effective 07-Jun-2018 31-Jul-2018 28-Sep-2018 31-Jul-2022 31-Jul-2022 P145317 IDA-H9510 Effective 26-Jun-2014 17-Aug-2014 02-Oct-2014 31-Jul-2019 31-Jul-2022 Cumulative Disbursements PBC Disbursement Achievement Disbursed amount in Disbursement % PBC ID PBC Type Description Coc PBC Amount Status Coc for PBC Restructuring History There has been no restructuring to date. Related Project(s) P164322-Maldives Public Financial Management Systems Strengthening Project 2/25/2021 Page 9 of 9