Page 1 INTEGRATED SAFEGUARDS DATA SHEET CONCEPT STAGE Report No.: AC3514 Date ISDS Prepared/Updated: 08/27/2008 I. BASIC INFORMATION A. Basic Project Data Country: Iraq Project ID: P110862 Project Name: IRAQ: Public Financial Mgmt Reform Task Team Leader: Monali Chowdhurie-Aziz Estimated Appraisal Date: Estimated Board Date: January 8, 2009 Managing Unit: MNSED Lending Instrument: Emergency Recovery Loan Sector: Sub-national government administration (50%);Central government administration (50%) Theme: Public expenditure, financial management and procurement (P);Administrative and civil service reform (S);Decentralization (S) SPF Amount (US$m.): 0.00 GEF Amount (US$m.): 0.00 PCF Amount (US$m.): 0.00 Other financing amounts by source: Borrower 0.00 Iraq Reconstruction Trust Fund 18.00 18.00 B. Project Objectives [from section 2 of PCN] The Project Development Objective is to improve allocation, execution, transparency, and accountability in the mobilization and use of all public resources. Cross-cutting reforms in PFM will be addressed by the reforms to the national system. The aim will be to strengthen budget execution and control, improve public financial reporting, strengthen revenue administration, strengthen public procurement and develop capacity in PFM. The primary target group is resource managers and their superiors in MoF and MoPDC and the line ministries. In parallel reforms in subnational PFM will also be undertaken by this project. While there are many commonalities between the region and provinces especially in budget execution – there are also local differences. Weaknesses faced by one sub-national government, can be strengths in another. The project sets up a mechanism by which both the region and provinces can learn from each other. In addition, some provinces have been better able to negotiate the current set of arrangements and have undertaken capital spending more successfully than others. There will be two main components: (i) to strengthen PFM processes and systems; and (ii) civil service reform. Page 2 C. Project Description [from section 3 of PCN] The project will build on the analytical reports that have already been written by the Bank and those that are ongoing. These include the Subnational Public Financial Management Report which has been completed and the Public Expenditure and Institutional Assessment that is currently being finalized.. Both these activities have been undertaken with the Government of Iraq and reflect the priorities of the GOI. All EUR figures below are tentative – actual component amounts are TBD during ongoing Project preparation. Component 1. Strengthen budgeting formulation and implementation (Total approximately EUR 8.7 million). This includes the provision of technical support to all aspects of capital budgeting including formulation and procedures for implementation: execution including procurement. Activities include: • Improve budget strategy • Improve content of and adherence to Budget Call Circular (BCC) • Introduce budget ceilings for recurrent and capital expenditure as part of Budget Call Circular • Design and introduce a comprehensive Budget Manual as a point of reference and guidance for budget officials • Introduce a realistic medium-term policy-based perspective to planning and management of public finances at the national level • Strengthen Capital Investment Budgeting Procedures Component 2. Strengthen public sector procurement (Total approximately EUR 2.4 million). Improvements to the systems of Public Procurement are crucial to ensure successful budget execution. This Component would include: • Support the public sector procurement system • Develop sector specific standard bidding documents based on overall laws • Establish a procurement tracking, information and monitoring system includingpublishing a procurement bulletin • Strengthen the capacity of key Iraqi implementing institutions, NGOs and private sector in public procurement Component 3. Strengthen treasury operation, financial control, accounting and reporting. budget (Total approximately EUR 3.2 million). This includes the provision of technical support to Budget Preparation and Planning. Activities include: • Develop User Manual and guidelines for suite of reports (developed by IMF) • Strengthen the Financial Control framework • Strengthen Treasury Operation at the national and subnational level. • Modernize Accounting Procedures Component 4. Develop sustainable institutional arrangements to provide training in PFM at the level of the region and the provinces. (Total approximately EUR 1.5 million). The central ministries have training departments which need to be modernized. Trainers within these departments can be trained. This Component would include development of new coursework Page 3 and capacity to provide training as the budget system evolves and new entrants enter the system. The institutional strengthening of the existing training institute in Baghdad will be undertaken by twinning it with a similar institute outside Iraq. This institute and its international twin will also be used to provide training to build capacity described in components 1, 2 and 3 when appropriate. • Design and set up a system for assessment of training needs and planning of training activities • Prepare comprehensive training plan with strategies and modes for training • Assess the capacity of the existing training institute • Provide systems that support training • Identify target groups for training • Identify trainers who will be trained to provide training D. Project location (if known) The Project will be implemented throughout Iraq. E. Borrower’s Institutional Capacity for Safeguard Policies [from PCN] Safeguard policy in Iraq is directed by the Environmental and Social Screening and Assessment Framework (ESSAF) (as revised in April 2006), which proscribes special procedures to account for the continuing instability in the country. At this time, no safeguard policies are considered triggered. F. Environmental and Social Safeguards Specialists II. SAFEGUARD POLICIES THAT MIGHT APPLY Safeguard Policies Triggered Yes No TBD Environmental Assessment (OP/BP 4.01) X Natural Habitats (OP/BP 4.04) X Forests (OP/BP 4.36) X Pest Management (OP 4.09) X Physical Cultural Resources (OP/BP 4.11) X Indigenous Peoples (OP/BP 4.10) X Involuntary Resettlement (OP/BP 4.12) X Safety of Dams (OP/BP 4.37) X Projects on International Waterways (OP/BP 7.50) X Projects in Disputed Areas (OP/BP 7.60) X Environmental Category: C - Not Required III. SAFEGUARD PREPARATION PLAN A. Target date for the Quality Enhancement Review (QER), at which time the PAD-stage ISDS would be prepared: N/A Page 4 B. For simple projects that will not require a QER, the target date for preparing the PAD-stage ISDS: 04/30/2008 C. Time frame for launching and completing the safeguard-related studies that may be needed. The specific studies and their timing 1 should be specified in the PAD-stage ISDS. The Project is proposed as Category C, and therefore, no EA/EMP is required, and at this time, no safeguard related studies are proposed. IV. APPROVALS Signed and submitted by: Task Team Leader: Ms Monali Chowdhurie-Aziz 08/14/2008 Approved by: Regional Safeguards Coordinator: Mr Hocine Chalal 08/27/2008 Comments: Sector Manager: Mr Farrukh Iqbal 08/27/2008 Comments: 1 Reminder: The Bank's Disclosure Policy requires that safeguard-related documents be disclosed before appraisal (i) at the InfoShop and (ii) in-country, at publicly accessible locations and in a form and language that are accessible to potentially affected persons. Page 5