Report No. PID9362 Project Name Bulgaria-Child Welfare Reform Project (@) Region Europe and Central Asia Region Sector Social Assistance Project ID BGPE64536 Borrower(s) MINISTRY OF FINANCE Implementing Agency Address MOLSP Ministry of Labor and Social Protection (MOLSP) 2 Triyaditza Street, 1000 Sofia, Bulgaria Contact Person: Mr. Tasko Ermenkov Tel: 359-2-933-24-04; 088-527-597 Fax: 359-2-980-65-69 Email: ncsc-pmu@mlsp.government.bg Environment Category F Date PID Prepared October 18, 2000 Projected Appraisal Date September 18, 2000 Projected Board Date December 7, 2000 1. Country and Sector Background Children's Rights: Bulgaria ratified the UN CRC in 1991. Despite the fact that over the past ten years efforts have been made by Bulgarian Governments to bring child welfare and protection services in line with international standards derived from the UN CRC, and the obligations of Member States of the Council of Europe, the institutionalization of children is still the mainstay of child protection services in Bulgaria. Unfortunately, children are not the priority of the current residential care system and there are conflicts of interest, between maintaining the institutions and staff employed, the budget for such purposes, and the true welfare of the child.Institutionalization: The percentage of institutionalized children in Bulgaria is among the highest in Europe at 2.15 percent. At present, 35,123 children are in public institutionalized care (see Table 1). Most of these children are abandoned for economic or social reasons, some are physically or mentally disabled, less than 1 percent are orphans. Conditions in the institutions for infants and for older children vary, ranging from the reasonably good, to the simply appalling. Children brought up in poor conditions in these institutions, without preparation for independent living are vulnerable to become involved in crime, prostitution, drugs and exploitation, underdevelopment, mental disability, unemployment, homelessness and even suicide, and find it difficult to integrate effectively in society once they leave at age 18. Table 1. Children in InstitutionsInstitutionsAge of ChildrenNumber of Childrenl. Ministry of Health (MOH) 0 - 74,2652. Ministry of Education and Science (MES) 3 - 1827,1483. Ministry of Labor and Social Policy (MOLSP) 3 - 183,4054. Ministry of Justice (MOJ) 14 - 181455. Shelters and Day Centers for Street Children* 3 - 16160 TOTAL35,123Source: Compiled from official data *Data provided by NGOsSchool Drop-outs: According to information provided by the MES a further 45,000 children are dropping out of school each year, and the number of children at risk of severe social and family marginalisation is almost 90,000. In 1992, there were 87,000 new-borns, of which only 63,000 enrolled in first grade in 1999. School drop-out rates are presented in Table 2. The primary reasons for institutionalization, the phenomenon of street children and the growing number of school drop-outs include: social exclusion, economic hardship, unemployment, family break-down, alcoholism, and domestic violence. Table 2. Drop-Out Rates School Yearl98919901991199219931994199519961997 Drop-out rate 03.03.02.93.53.33.33.53.43.3Source: 'Out-of-School Youth in Bulgaria', Mission Report, Sofia, February 1999, UNICEF Regional Office for CEE, CIS and the Baltics. Street Children: The past ten years have seen the emergence of the phenomenon of street children. At present, some 3,000 to 5,000 are estimated to be living or working in the streets. Recently, there has been a tendency to limit institutionalization of children from families, who resort to placement in institutions for reasons of low income only. At the same time, no alternatives to family support are offered. Together these factors have led to the emergence of street children. The public care system has proved unable to address the issues stemming from the economic transition and a growing number of children are living and working in the street. Ethnic Minorities: Although official statistics do not exist, it is generally observed that some 60-80 percent of institutionalized and street children are Roma. The Roma in particular, have been particularly affected by unemployment and impoverishment during the years since transition. The Roma have a larger number of children than ethnic Bulgarians, and a much higher incidence of poverty: in 1997, 84 percent of the Roma were living in poverty compared to 36 percent of the population as a whole (Bulgaria-Poverty during the Transition, Report No 18411, 07/06/99).High Costs of the Current System: In addition to the social and economic costs of institutionalization of children, there are also significant financial costs. The annual cost per child, placed in an institution under the MOH was US$ 1,357 in 1998, and US$ 1,046 in an institution under the MOLSP. These costs are substantially higher than the cost per child in a family, which was estimated at US$ 631 in 1998 according to the Statistical Yearbook 1998 (National Statistical Institute). There is a high financial and social cost of sustaining the current public care system of childcare institutions. Some of Bulgaria's most valuable human resources are being marginalised as children emerge from the public care system with inadequate education and insufficient skills to find productive employment, emotionally scarred, and unable to fully participate in society. Lack of Standards and Regulations: There is no standardized national set of criteria for child welfare, which has lead to low quality of care, lack of monitoring and assessment and misplacements in certain cases. There is no unified and standardized database or MIS on institutionalized children, which makes access to information and efficient interventions difficult.Limited Alternative Services: There are few other services available for families in economic and social distress. The alternatives to institutional care do not reach the larger part of people in need of care. There are only very limited social work services, inadequate cash or in-kind benefits and few community-based preventative resources such as counseling and family support centers. Foster family care has not yet become popular in Bulgaria. Day care -2 - centers for children with or without disabilities and other forms of care and prevention are not widely accessible. Over the past years, efforts have been made by NGOs, donors and some municipalities to develop community-based services as alternatives to institutionalization and to address the phenomenon of street children. Despite these efforts, improvement in the overall situation of child welfare has been small.Insufficient Staff Skills: The institutional childcare system suffers from an acute shortage of experienced and well-trained professionals with the necessary knowledge and skills relevant to the specific needs of the child and the modern childcare requirements. The professional structure, training and skills of staff working in public care institutions, are not responsive to the specific needs of children in care. There is a significant deficit of skilled social workers, managers and para-professionals in for example, needs assessment, fostering and adoption, and family support. Negative Public attitudes: To a large extent, poor child care practices in institutions are due to public perceptions, inherited from the past and a consequence of the lack of options other than institutionalization. There is a lack of information and understanding in society of the problems of children brought up in social care institutions. These children are often marginalized, because of negative public attitudes. Diffusion of Responsibility: The responsibility for child welfare issues is divided between five ministries and municipal authorities, making intervention and coordination very difficult and creating institutional structures, which do not address the overall needs of children. During their lifetime children in public care go from one institution to another governed by different ministries, none of which put the child's interest first.Government Initiatives To Date:Recognizing the social and economic costs, as well as the general negative impact of the current public care system on children, the Bulgarian Government and the Parliament have demonstrated increasing interest in addressing these issues, abiding by the principles of the UN CRC. On May 31, 2000, the Child Protection Act (CPA) was adopted by the Bulgarian Parliament. The CPA creates the GACP, the NCCP (as a mechanism to involve all stakeholders in policy formulation) and the CPDs at the local level to deliver services. The CPA defines those responsible for the organization, provision and monitoring of the child and family support services and the measures for child protection and the decision-making process. The CPA introduces police protection, for missing, abused and street children. It also addresses the issue of the position and representation of the child in administrative and court proceedings. The decision-making process regarding the measures for child protection is a combination of administrative and court procedures, which presupposes a new role for the courts. A CWR Strategy, supported by the Bank, is being approved by the Council of Ministers (COM), which will reform child care in Bulgaria in line with UN CRC and EU standards and which will be supported by this project. COM's approval of the De-institutionalization Master-plan (draft attached as Annex 12) is a condition of Loan Negotiations. The Government has established a Project Steering Committee (PSC), comprising Deputy Ministers of all 5 ministries involved, to oversee the implementation of the CWR.The updated Program of the Government (Bulgaria 2001) envisages support for the development of children from socially disadvantaged families and the creation of satisfactory living conditions for children whose support is provided by the state. This strategic direction of the Government involves the development of improved childcare and child-protection forms for the - 3 - children living in institutions and in families at risk. 2. Objectives The project development objective is to improve child welfare and protect childrens' rights in Bulgaria through promoting community-based child welfare approaches such as de-institutionalization, abandonment prevention and street children services, as cost-effective alternatives to institutionalized child care. Thereby, the project will facilitate meeting some of the human rights elements of European Union (EU) accession and the fulfillment of its commitment to the United Nations (UN) Convention on the Rights of the Child (CRC). 3. Rationale for Bank's Involvement This project is an opportunity for the Bank to lend support in collaboration with other donors to ensure the government's reform program is community-based and implemented with a fully comprehensive approach for achieving significant and sustainable child welfare reform. The Bank project would provide assistance to complement other development partners to bolster a comprehensive program that does not overlap or leave out targeted areas of the reform. The Bank can use its wider development experience and influence to catalyze more effective collaborative networks in support of the governments integrative strategy for reforming child welfare services and protection. 4. Description The project will support the Bulgarian Government in reforming the child protection system, through developing services at municipal level, reducing the flow of children into institutions, improving the quality of care for institutionalized children, developing alternative care systems and assisting older institutionalized children adapt to the community as productive citizens. It will also focus on street children and Roma who are population groups particularly at-risk of poverty and social deprivation. The project would build upon existing smaller-scale initiatives of other donors and NGOs. 1. Capacity Building 2. De-institutionalization 3. Abandonment Prevention 4. Street Children Services 5. Financing Total ( US$m) GOVERNMENT 5.29 IBRD 11.5 IDA EC-PHARE -- EC PROGRAM FOR CENTRAL EUROPE 3.05 GOVERNMENT OF UNITED KINGDOM 2.31 GOV. OF JAPAN (EXCLUDING MINISTRY OF FINANCE - PHRD GRANTS) 1.06 Total Project Cost 23.2 -4- 6. Implementation 4.1. Implementation periodThe project will be implemented over 3 years commencing January 2001. 4.2. Executive AgenciesThe MOLSP has overall responsibility for the project which it will execute through the PMU. A Project Steering Committee (PSC) comprising of the Deputy Ministers of MOLSP, MES, MOH, MOI, MOJ and the Minister responsible for the National Council on Ethnic and Demographic Issues (NCEDI) has been set up to ensure a coherent multi-sectoral approach to the overall project.At municipal level, the CPDs, with technical assistance and coordination provided by the PMU, would implement small-scale project activities (e.g. contracting services from NGOs/private service providers) and would manage and supervise the newly created child welfare services, while also playing a key gate-keeping role which would contribute to the reduction of the numbers of institutionalized children. The selected municipalities would contribute to the project implementation by providing buildings and terrain for the development of agreed project interventions.Non-governmental organizations (NGOs) would participate in the project development and the provision of services for children, ensuring the quality of the provided childcare. NGO services for specific project interventions will be contracted by the PMU or by the CPDs.4.3. Project coordinationThe PMU will oversee the implementation of the project, under the guidance of the PSC, in achieving the performance indicators specified in Annex 1. It will coordinate and assess sub-projects targeting the development of services for children and families, including procurement and financial management, M&E. The PMU will coordinate and support the development of the CWR MIS, and the management training for project implementation at the MSAS level. The PMU will be responsible for ensuring transparency and free flow of information to the participants and beneficiaries of the CWR, and for the implementation of the public awareness campaign. In carrying out the above the PMU will liase and work closely with the PSC, the National Police Department (NPD), representatives of the five line Ministries, the GACP, donor organizations and NGOs. A Project Coordinator (PC) has been appointed within the MOI to oversee implementation of those sub-components under Component III to be implemented by the NPD. An agreement on project cooperation between the MOLSP and the NPD, satisfactory to the Bank is a Condition of Effectiveness.Adequate systems for information management, for M&E of the project implementation will be established in order to ensure compatibility of all the activities with Bulgarian legislation, Bank and EU integration requirements. The PMU will directly coordinate with other donors. Greater project implementation effectiveness will be achieved through the regular submission of progress reports (according to the agreed format in the Project Implementation Manual - PIM) as well as through direct donor involvement in the supervision missions. Preparation of the PIM, satisfactory to the Bank, is a Condition of Negotiations. The Bank together with MOF and PSC will review the progress and project impact, and prepare annual agreement on budgetary allocations. All changes to the PIM should be approved by the Bank. The Bank must approve all sub-project feasibility studies for Components II, III and IV. 4.4. Procurement and disbursement.All procurement and disbursement procedures will be in accordance with the relevant Bank guidelines and will be documented in the PIM. Procurement packages have been identified and are listed in Annex 6. Fixed price contracts will be used for NGO service provision.The Government will establish and maintain a project financial management system (FMS) in a format acceptable to the Bank (LACI - 5 - requirements). The project annual financial statements will be audited each fiscal year in accordance with Bank guidelines, by independent auditors acceptable to the Bank. Conclusion of a contract with selected auditors, satisfactory to the Bank, is a Condition of Effectiveness. Detailed accounts will be kept for each project component and its sub-components. The accounts will also reflect the status of payment against each contract; utilization of the Special Account (SA) and replenishments made by the Bank; and sources of funding used. Board Presentation conditions include: (i) appointment of the Accountant and Financial Manager, with TOR and CVs satisfactory to the Bank; and (ii) installation and customization of the accounting software system and provision of appropriate training. Copies of the audit reports will be submitted to the Bank within six months of the close of the country's fiscal year. The audit report will cover both the compiled account of expenditure incurred during the fiscal year as well as the Statement of Expenses (SOEs) used for withdrawals from the SA. Special attention will be taken to confirm the transparency and accountability of the use of funds from the beneficiaries.4.6. Monitoring and evaluation arrangements.The M&E system will be based on the MIS developed within the PMU. Information on project progress will be collected through progress reports and supervision missions, and will be distributed to all participants. An underlying principle of the M&E system will be the external evaluation of the services offered, financed under Component I of the Project.Two Project Impact Surveys (one at mid-term, the other on project completion), will be supplemented by a series of beneficiary assessments (undertaken every six months) targeted to the pilot municipalities. These will strengthen the M&E feedback mechanisms during the life of the project. A project-specific MIS is being designed by a specialist (financed under the Japanese PHRD Grant) to serve as the key project monitoring tool. The PMU would be responsible for monitoring progress against specific performance and impact monitoring indicators as summarized in Annex 1 and developed further in the PIM. PMU must submit Project Management Report (PMR) to the Bank from March 31, 2001 and quarterly thereafter. 7. Sustainability The financial sustainability of the project is directly related to the establishment of appropriate schemes for funding of the various activities and services for children and families. Of great importance is the establishment of local level mechanisms, allowing funding of the local programs with municipal sources, mechanisms for redistribution and reallocation of the funds from one type of child care to another, as well as supporting "back-up" mechanisms in case of financial and economic crises at local level. 8. Lessons learned from past operations in the country/sector The following experiences and lessons have been reviewed and addressed in project design. The sources of the lessons are given in parentheses: G = Global Development Experience; B = Bulgarian Development Experience; and C = Child Welfare Reform Experience.Project Complexity: Complex projects are more prone to failure (G). Unfortunately CWR in Bulgaria is inherently complex stemming from the division of responsibilities for child welfare between the five line Ministries, the municipalities and the many inter-related dimensions of child welfare. CWR projects are potentially risky as they require complex coordination and place an - 6 - additional emphasis on project monitoring. The project addresses this issue by simplifying the implementation arrangements through the establishment of a single PMU, under the MOLSP, with an operational linkage to CPDs at the municipal level, and giving special attention to the development of a national MIS and M&E system.Integrated Approach: The issue of improving child welfare has many inter-related aspects, including issues of health and nutrition, living conditions, education and training (C). Therefore, to achieve a sustainable impact, it is necessary to address the problem on many fronts simultaneously. To make a difference there must be a critical mass of inter-related interventions at the local level, rather than scattered uncoordinated interventions spread across a larger area. The project will promote integrated activities in a relatively small number of municipalities (7 initially) in order to demonstrate the positive effects of an integrated approach. Partnership and Donors: In a complex field such as CWR, different donors and NGOs can bring complementary skills together to make a larger impact than a single financing agent alone (G, C). The project design and development reflects a continuing consultation process with the a number of donors, ranging from UNDP and UNICEF during design, EU on policy issues and the creation of the GACP, UK DFID on community policing, CWR and social exclusion issues. There has been regular information sharing between the CWR participants and joint work in preparing the relevant studies. The project design is the result of the cooperation and motivated involvement of all stakeholders. This practice will be sustained and expanded during project implementation.NGO Involvement: NGOs are frequently leaders in innovation and pioneering new approaches in CWR and their approaches need to be studied, and where cost-effective, replicated (C). A number of NGOs are currently developing services to address prevention of abandonment and institutionalization, de-institutionalization and alternative care. Unfortunately most of these approaches are relatively small scale, albeit important pilot interventions scattered in different parts of the country. At the same time, in most of the cases, municipalities were not involved enough in the project design and implementation. However, a number of foreign NGOs active throughout the country have brought to Bulgaria valuable TA from around the world and are developing projects based on best foreign practice. The project will support the development of community-based services, based on previous NGO experience by including best practice projects and encouraging the development of municipality - NGO partnership in the process of project design and implementation.Beneficiary Involvement: Global experience demonstrates the need for communities to be fully involved in the project cycle from identification, through preparation, implementation and evaluation especially in sensitive sectors such as CWR where behavioral change is important (G,C). A recurrent weakness in Bulgaria, demonstrated mainly in extensive nation-wide projects, is that the connection with the community is lost, which results in minimal positive impact. The project addresses this issue through: (i) direct beneficiary involvement at all stages under Component III; (ii) ongoing beneficiary assessments under Component I; and (iii) extensive public awareness program to ensure the involvement and the support of the local communities under Component I. Ethnic Diversity and Social Inclusion: Addressing hard-core poverty in Bulgaria requires the social inclusion of disadvantaged ethnic groups (B). The lack of knowledge and understanding of the Roma population culture have resulted in ineffective initiatives to address their needs at the central and local level. The project will directly address the needs -7 - of the Roma and other disadvantaged ethnic groups through school preparation programs, more attentive community policing, and community development activities involving representatives from the community in providing services to children and families.Sustainability: The lack of a coherent approach to child welfare issues in the previous years has resulted in isolated interventions on the part of the government, donors and NGOs, and has raised sustainability as important issue (G, B, C). Experience has shown that investment in institutions may strengthen them without improving the quality of care for the children. Often, good practice and human capital, acquired in the course of a project, is lost after project completion. The Government's recognition of the need for a coherent approach to child welfare issues led to the adoption of the CPA and the establishment of a PSC. The project reflects these changes by supporting policy development, enhancement of the information flows throughout the CWR system and capacity building at all levels.M&E: Establishing a unified M&E system, adequate to the needs of the reformed CWR system, is a prerequisite for successful implementation (G). The M&E system will address the issue of horizontal and vertical information flows and will ensure a feedback mechanism to and reduce costs and is considered a critically important project component.Project Readiness: Projects need to have prepared up-front the sub-projects selection and design (feasibility studies), straightforward procurement and disbursement arrangements, clear flow of funds and implementation responsibilities, PIM, MIS (including M&E arrangements and FMS) to make an effective start (G,B). Intensive efforts are being made to complete all of these actions prior to loan effectiveness. Comprehensive workshops will be held with the selected municipalities to prepare for project implementation over the period October - December 2000.Redundancies from Structural Reform: The main stakeholders to lose out from CWR are the staff working in institutions being closed down who become redundant - the opposition of these staff can be the largest single brake on continued reform. Recognizing this, Component II provides explicitly for retraining and other support for workers being made redundant. Moreover, such workers would be given some preference in foster-care training and the selection by NGOs for alternative services. Public awareness campaigns will be targeted to these workers to make them aware of alternative employment opportunities and to explain the rationale of the reforms. 9. Program of Targeted Intervention (PTI) Y 10. Environment Aspects (including any public consultation) Issues : There are no significant environmental issues. Scattered civil works, both new constructional refurbishment, for the sub-projects under Components II, III and IV will be small. However, all necessary precautions will be taken to ensure that potentially toxic substances such as asbestos or lead from paint will be handled in a safe and environmentally sound manner, based upon experience already gained through the RIF executed under the MOLSP. The RIF PMU will pass on this experience to the CWR PMU through regular working contacts. Furthermore, the construction plan will take steps to minimize waste, dust, and debris from construction and to safely dispose of construction wastes. Only licensed contractors will undertake such contracts. 11. Contact Point: -8- Task Manager John A. Innes The World Bank 1818 H Street, NW Washington D.C. 20433 Telephone: 202-473-58-26 Fax: 202 477 33 87 12. For information on other project related documents contact: The InfoShop The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 458-5454 Fax: (202) 522-1500 Web: http:// www.worldbank.org/infoshop Note: This is information on an evolving project. Certain components may not be necessarily included in the final project. This PID was processed by the InfoShop during the week ending October 27, 2000. 9