Document of The World Bank Report No: ICR00003569 IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-49070 IDA-H3850 TF-99092) ON A LOAN/CREDIT IN THE AMOUNT OF SDR 11.2 MILLION (US$ 18 MILLION EQUIVALENT) TO THE REPUBLIC OF LIBERIA FOR A ECONOMIC GOVERNANCE AND INSTITUTIONAL REFORM PROJECT December 23, 2015 Global Governance Practice Country Department AFCW 1 Africa Region i CURRENCY EQUIVALENTS (Exchange Rate Effective December 24, 2015) Currency Unit = Liberian Dollar (LRB) 88.5 LRB = US$ 0.01 US$ 1.00 = 88.50 LRD FISCAL YEAR Abbreviations and Acronyms AF Additional Financing AfT Agenda for Transformation AWPB Annual Work Plan Budget BOC Bureau of Concessions BIR Bureau of Internal Revenue CBL Central Bank of Liberia CDC Common Data Center CENTAL Center for Transparency and Accountability in Liberia CPS Country Partnership Strategy CSA Civil Service Agency CS-DRMS Commonwealth Secretariat - Debt Reporting Management System DA Designated Account EBIRS Employee Biometric Identification Registration System EGIRP Economic Governance and Institutional Reform Project EITI Extractive Industries Transparency Initiative EI-TAF Extractive Industries Technical Advisory Facility FMTS Financial Management Training School GAC General Auditing Commission GDP Gross Domestic Product GEMAP Governance and Economic Management Assistance Program GiZ Die Deutsche Gesellschaft für Internationale Zusammenarbeit GOL Government of Liberia GSA General Service Agency HIPC Highly-Indebted Poor Countries HRMIS Human Resource Management Information System IBRD International Bank for Reconstruction and Development IDA International Development Association IFMIS Integrated Financial Management Information System IFR Interim Financial Report IMCC Inter-Ministerial Committee on Concessions IMF International Monetary Fund IPFMRP Integrated Public Finance Management Project IPTP Intensive Procurement Training Program I-PRSP Interim Poverty Reduction Strategy Paper ISDS Integrated Safeguard Data Sheet IT Information Technology ITAS Integrated Tax Administration System ii LACE Liberia Agency for Community Empowerment LAN Local Area Network LEITI Liberia Extractive Industries Transparency Initiative LIBTELCO Liberia Telecommunications Corporation LIPA Liberia Institute of Public Administration LRA Liberia Revenue Authority LTC Telecommunication Corporation MDAs Ministries, Departments and Agencies MFDP Ministry of Finance and Development Planning M-I Medium driven by Impacts M-L Medium Likely MLME Ministry of Land, Mines, and Energy MOA Ministry of Agriculture MOE Ministry of Education MOF Ministry of Finance MOH Ministry of Health MPEA Ministry of Planning and Economic Affairs MPW Ministry of Public Works MS-CCF Multi-stakeholder Community Forum NSC National Steering Committee ORAF Operational Risk Assessment Framework PDO Project Development Objective PFM Public Financial Management PFMU Project Financial Management Unit PID Project Information Data PIM Project Implementation Manual PMU Project Management Unit PPCA Public Procurement and Concessions Act PPCC Public Procurement and Concession Commission PPR Post Procurement Review PRSP Poverty Reduction Strategy Paper PSMP Public Sector Modernization Program PTC Project Technical Committee QALP-2 Quality Assurance of Lending Portfolio RMU Resource Management Unit SES Senior Executive Services SIGTAS Integrated Tax Administration System UL University of Liberia UNDP United Nations Development Program USAID United States Agency for International Development WAN Wide Area Network Acting Senior Practice Director: Jim Brumby Practice Manager: George Addo Larbi Project Team Leader: Smile Kwawukume ICR Team Leader: Catherine Anderson iii LIBERIA ECONOMIC GOVERNANCE AND INSTITUTIONAL REFORM PROJECT Contents Abbreviations and Acronyms ......................................................................................... ii Data Sheet ....................................................................................................................... v ICR Abstract ................................................................................................................ xiv 1. Project Context, Development Objectives and Design ............................................... 1 2. Key Factors Affecting Implementation and Outcomes .............................................. 7 3. Assessment of Outcomes .......................................................................................... 14 4. Assessment of Risk to Development Outcome......................................................... 24 5. Assessment of Bank and Borrower Performance ..................................................... 25 6. Lessons Learned ....................................................................................................... 28 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners .......... 30 Annex 1. Project Costs and Financing .......................................................................... 31 Annex 2. Revisions of the Results Matrix .................................................................... 33 Annex 3: Outputs by Component ................................................................................. 38 Annex 4. Economic and Financial Analysis ................................................................. 43 Annex 5. Bank Lending and Implementation Support/Supervision Processes ............ 47 Annex 6. Beneficiary Survey Results ........................................................................... 48 Annex 7. Stakeholder Workshop Report and Results................................................... 48 Annex 8. Summary of Borrower's ICR ......................................................................... 49 Annex 9: Government Results Matrix .......................................................................... 53 Annex 10. Comments of Cofinanciers and Other Partners/Stakeholders ..................... 55 Annex 10. List of Supporting Documents .................................................................... 55 iv Data Sheet A. Basic Information Economic Governance Country: Liberia Project Name: & Institutional Reform IDA-49070,IDA- Project ID: P107248 L/C/TF Number(s): H3850,TF-99092 ICR Date: 11/24/2015 ICR Type: Core ICR REPUBLIC OF Lending Instrument: ERL Borrower: LIBERIA Original Total USD 11.00M Disbursed Amount: USD 17.24M Commitment: Revised Amount: USD 17.94M Environmental Category: C Implementing Agencies: Civil Service Agency Public Procurement and Concession Commission Liberia Institute for Public Administration Cofinanciers and Other External Partners: B. Key Dates Revised / Actual Process Date Process Original Date Date(s) Concept Review: 04/03/2008 Effectiveness: 06/23/2008 06/23/2008 04/07/2011 Appraisal: 03/28/2008 Restructuring(s): 06/14/2013 12/11/2014 Approval: 05/13/2008 Mid-term Review: 12/12/2012 Closing: 08/31/2011 06/30/2015 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Moderately Unsatisfactory Risk to Development Outcome: Low or Negligible Bank Performance: Moderately Unsatisfactory Borrower Performance: Moderately Satisfactory v C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Moderately Quality at Entry: Government: Moderately Satisfactory Unsatisfactory Moderately Implementing Quality of Supervision: Moderately Satisfactory Unsatisfactory Agency/Agencies: Overall Bank Moderately Overall Borrower Moderately Satisfactory Performance: Unsatisfactory Performance: C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments Indicators Rating Performance (if any) Potential Problem Quality at Entry Project at any time Yes None (QEA): (Yes/No): Problem Project at any Quality of No None time (Yes/No): Supervision (QSA): DO rating before Moderately Closing/Inactive status: Satisfactory D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) Central government administration 100 100 Theme Code (as % of total Bank financing) Administrative and civil service reform 33 33 Other public sector governance 17 17 Public expenditure, financial management and 33 33 procurement Tax policy and administration 17 17 E. Bank Staff Positions At ICR At Approval Vice President: Makhtar Diop Obiageli Katryn Ezekwesili Country Director: Henry G. R. Kerali Ishac Diwan Practice George Addo Larbi Antonella Bassani Manager/Manager: Project Team Leader: Smile Kwawukume Emmanuel Doe Fiadzo ICR Team Leader: Catherine M. Anderson ICR Primary Author: Catherine M. Anderson vi F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) The project development objective is to improve the efficiency and transparency in managing public financial and human resources, focusing on revenue administration, public procurement, budget execution and payroll management. Revised Project Development Objectives (as approved by original approving authority) PDO remained the same. (a) PDO Indicator(s) Original Target Formally Actual Value Values (from Revised Achieved at Indicator Baseline Value approval Target Completion or documents) Values Target Years Original: Average difference between budget outturn and legislated budget allocation for each ministry. Indicator 1 : Revised: Aggregate expenditure outturns compared to the original approved budget and disaggregated for five key ministries. Value quantitative or 21% 8% -10% -2% Qualitative) Date achieved 06/23/2008 08/31/2011 04/07/2011 06/30/2015 Achieved. Revised to reflect more realistic project interventions and to use exact Comments wording of PEFA indicator - PI-3. Note, GoL continues to make payments for (incl. % commitments 90 days after the close of the fiscal year, and these are not always achievement) captured in GoL reports, which can produce discrepancies. Original: Revenue administration cost as a percentage of revenue. Indicator 2 : Revised: Business procedures for commercial registration of tax payers in the Bureau of Internal Revenue. Value 11 manual quantitative or Baseline not established. Less than 5% 13 automated steps. steps. Qualitative) Date achieved 06/23/2008 08/31/2011 04/07/2011 06/30/2015 Achieved. 100% completed. A 13 step automated system was created. Comments Note, the revised target differs from the actual target achieved – one is manual (incl. % and one is automated. The MTR 2012 explains, 'the manual system (11 achievement) procedures) excludes post-registration procedures to validate registered taxpayers, automated system includes these’, and thus is more effective. Original: Percentage of public procurement that used direct contract and or other Indicator 3 : less competitive methods without prior justification. vii Revised: Qualified procurement specialists graduated from intensive procurement training working in the MDAs. Value quantitative or No baseline established. Less than 30% 100 36 Qualitative) Date achieved 06/23/2008 08/31/2011 04/07/2011 06/30/2015 Partly Achieved. Original indicator dropped under first restructure (7 April Comments 2011) due to the lack of reliable data on public procurements that use direct (incl. % contracting. New indicator established to align directly with project achievement) interventions. Partly achieved with 36 of 100 expected graduates. Original: Decrease in discrepancy between nominal roll and payroll. Indicator 4 : Revised: Ministries, Departments, and Agencies (MDAs) registered in HRMIS. Value quantitative or 25% 5% 29 30 Qualitative) Date achieved 04/29/2008 08/31/2011 04/07/2011 06/30/2015 Comments Achieved. Rationale for the change: to align the indicator directly with project (incl. % interventions on biometric identification. Target 100% accomplished. achievement) Indicator 5 : New Indicator added 7 April 2011: IFMIS Report published monthly. Value quantitative or No Yes Yes Yes Qualitative) Date achieved 04/07/2011 12/31/2013 04/07/2011 04/30/2015 Comments Achieved. New indicator added to reflect expanded activities related to data (incl. % centre and WAN to integrate various information systems. Target 100% achievement) achieved. (b) Intermediate Outcome Indicator(s) Original Target Actual Value Formally Values (from Achieved at Indicator Baseline Value Revised approval Completion or Target Values documents) Target Years Indicator 1 : Percentage of vouchers that MoF can approve and pay. Value (quantitative 60% (Estimated in 2006) 85% or Qualitative) Date achieved 06/23/2008 08/31/2011 Comments Dropped. This indicator was dropped on 7 April 2011 as it was not directly (incl. % related to project interventions, which only provided equipment, and those achievement) activities had been completed. Improve transparency by reducing delays in posting of quarterly expenditure Indicator 2 : reports. Value 3 months after end of (quantitative Within 4 weeks 48 days 72 days quarter. or Qualitative) viii Date achieved 06/23/2008 08/31/2011 04/07/2011 06/30/2015 Comments Partly Achieved. Reports consistently posted after each quarter, but with (incl. % significant delays. Note, these figure reflects 3rd quarter FY14/15 report posted achievement) on MoF website. ISR inconsistent. Original: Prepare legislative report on annual statement of Government account. Indicator 3 : Revised: Issue legislative report on annual financial statement of public sector accounts. Value 9 months after end (quantitative No baseline established. 6 months. 12 months. of FY. or Qualitative) Date achieved 06/23/2008 08/31/2011 04/07/2011 06/30/2015 This indicator was revised for clarity. Comments (incl. % Partly Achieved. Target partly achieved due to long delays in the issuance of achievement) the legislative report. Note target in AF Project Paper (AFPP) vs ISR inconsistent - AFPP target 6 months, ISRs target 8 months. ICR adopts AFPP. Percentage of collected revenue captured in Integrated Tax Administration Indicator 4 : System. Value (quantitative 0% 50% 100% 64% or Qualitative) Date achieved 06/23/2008 08/31/2011 04/07/2011 06/30/2015 Comments Partly Achieved. Target 64% accomplished. Note, final ISR inconsistent with (incl. % final data submitted by GoL. achievement) At least two reports of payments to and revenues received by the government for Indicator 5 : extractive industries (mining and minerals) are published within the project period. Value At least two report Not (quantitative No reports published. Achieved. published applicable or Qualitative) Date achieved 06/23/2008 08/31/2011 04/07/2011 Comments (incl. % Achieved. Target 100% achieved prior to target date. achievement) Percentage of contracts valued over USD 250,000 that have undergone annual Indicator 6 : external audits by GAC submitted to national authorities and donors. Value (quantitative None 20% 30% 0% or Qualitative) Date achieved 06/23/2008 08/31/2011 04/07/2011 06/30/2015 Comments Not Achieved. No progress towards this. The GAC has focused principally on (incl. % audits of institutions (particularly SoEs), and fiscal transfer mechanisms of achievement) Government. Percentage of procurement for which less than 120 days elapsed between bid Indicator 7 : opening and the contract signature. ix Revised: Procurement monitoring system developed and operational in PPCC for MDAs. Value 10 M&E (quantitative No baseline established. 60% reports from Not achieved. or Qualitative) MDAs. Date achieved 06/23/2008 08/31/2011 04/07/2011 06/30/2015 Comments Not Achieved. PFMU informs that the system for tracking MDAs is operational (incl. % in PPCC but it is unclear if and how many MDAs are reporting. achievement) New indicator added: Quarterly inspections of industrial scale mining operations Indicator 8 : performed by MLME. Value (quantitative No Yes Yes No or Qualitative) Date achieved 04/07/2011 12/31/2013 04/07/2011 06/30/2015 Comments Not Achieved. Implementation delayed on account of Ebola. Post Ebola, (incl. % International TA established inspection arrangements, and conducted first visit achievement) but quarterly inspections not yet achieved. Annual technical audits of large-scale mining operations conducted by MLME Indicator 9 : and BoC. Value (quantitative No Yes Yes No or Qualitative) Date achieved 04/07/2011 12/31/2013 04/07/2011 06/30/2015 Comments (incl. % Not Achieved. achievement) Adherence to the Extractive Industries Transparency Initiative, particularly in Indicator 10 : carrying out audit of revenues received from mining companies for FY07/08 Value Publication of first audit Achieve EITI Full EITI (quantitative report of Mines and Compliance. Compliance. or Qualitative) Minerals Sector. Date achieved 06/23/2008 08/30/2011 10/14/2009 Comments Achieved. Liberia became first African country to achieve EITI compliance on (incl. % 14 October 2009. This indicator was subsequently dropped. achievement) Original: Percentage of civil servants registered in the HRMIS. Indicator 11 : Revised: Civil servants registered using biometrics. 30,000 Civil Value servants 31,801 civil (quantitative 0 75% registered servants registered. or Qualitative) using biometrics Date achieved 06/23/2008 08/31/2011 04/07/2011 06/30/2015 Comments Target revised to directly reflect project interventions. (incl. % achievement) Achieved. x New Indicator Added: A new career stream for procurement is established by Indicator 12 : CSA and endorsed by GoL. Value (quantitative No Yes Yes Yes or Qualitative) Date achieved 04/07/2011 12/31/2013 04/07/2011 06/30/2015 Comments (incl. % Achieved. Procurement and FM career stream established. achievement) Original: Number of procurement officers trained in basic procurement and have acquired proficiency in basic computer skills. Indicator 13 : Revised: Public Procurement Specialists working in MDAs having completed in- service procurement training provided by LIPA. Value (quantitative 50% 0% 75 241 or Qualitative) Date achieved 06/23/2008 08/31/2011 04/07/2011 06/30/2015 Comments (incl. % Achieved. Target revised, and then far exceeded (300% + achievement). achievement) New Indicator Added: LIPA annual training calendar created with course Indicator 14 : offerings targeted civil servants and communicated to MDAs. Value (quantitative No Yes Yes Yes or Qualitative) Date achieved 04/07/2011 12/31/2013 04/07/2011 06/30/2015 Comments (incl. % Achieved. achievement) Indicator 15 : LIPA Board of Governors established with representation from key ministries. Value (quantitative No Yes Yes Partially. or Qualitative) Date achieved 04/07/2011 06/30/2015 04/07/2011 09/15/2015 Comments Partly Achieved. LIPA Board of Governors established shortly after the closing (incl. % date for the project. Representation is broad, but there is no MDA participation. achievement) G. Ratings of Project Performance in ISRs Actual Date ISR No. DO IP Disbursements Archived (USD millions) 1 12/30/2008 Satisfactory Satisfactory 2.00 2 06/22/2009 Satisfactory Satisfactory 3.07 3 12/10/2009 Satisfactory Satisfactory 3.90 4 06/29/2010 Satisfactory Satisfactory 4.76 xi 5 01/18/2011 Satisfactory Satisfactory 7.36 6 08/01/2011 Moderately Satisfactory Moderately Satisfactory 7.84 7 01/03/2012 Moderately Satisfactory Moderately Satisfactory 9.33 8 07/27/2012 Moderately Satisfactory Moderately Satisfactory 11.82 9 02/20/2013 Satisfactory Satisfactory 13.21 10 11/10/2013 Satisfactory Satisfactory 15.27 11 07/08/2014 Satisfactory Satisfactory 16.54 12 12/11/2014 Satisfactory Satisfactory 16.95 13 06/26/2015 Moderately Satisfactory Moderately Satisfactory 17.24 H. Restructuring (if any) ISR Ratings at Amount Board Restructuring Disbursed at Restructuring Reason for Restructuring & Approved Restructuring Date(s) Key Changes Made PDO Change DO IP in USD millions The project was restructured to provide additional financing, to reallocate proceeds between project components; to 04/07/2011 Y S S 7.36 introduce a new component for project management; and to improve the monitoring of core and intermediate indicators. The closing date for the project was extended from Dec 31 2013 to Dec 31 2014 to ensure completion of outstanding activities in the MLME, and 06/14/2013 N S S 14.34 continued oversight by MoF, and monitoring and evaluation by the project coordinator. Funds were also reallocated between categories. Extension of Closing Date from December 31, 2014 to June 30, 2015. Project implementation was on track to meet development objectives and the last ISR had rated overall 12/11/2014 N S S 16.95 implementation as 'satisfactory' at the time of project restructuring. However, the outbreak of Ebola in Liberia in mid 2014 impeded project delivery, and necessitated an xii ISR Ratings at Amount Board Restructuring Disbursed at Restructuring Reason for Restructuring & Approved Restructuring Date(s) Key Changes Made PDO Change DO IP in USD millions extension of project closing date. If PDO and/or Key Outcome Targets were formally revised (approved by the original approving body) enter ratings below: Outcome Ratings Against Original PDO/Targets Moderately Unsatisfactory Against Formally Revised PDO/Targets Moderately Unsatisfactory Overall (weighted) rating Moderately Unsatisfactory I. Disbursement Profile xiii ICR Abstract The Liberian Economic Governance and Institutional reform Project (EGIRP) was constituted to bridge early efforts in economic stability and institutional reform, and to lay the foundations upon which a future sector could build. At project closing, half of the project’s 20 results indicators had been achieved, five were partially achieved, four were not achieved and one was dropped. The most notable results are seen in enhanced budget credibility and fiscal discipline, tax systems improvements, which has improved revenue predictability and yielded tangible financial savings; improved payroll management; and in the inception of a cadre of capable financial management and procurement specialists. Yet, the project has also encountered some challenges, particularly in project design and quality at entry, in monitoring and evaluation, and Bank performance and supervision. The combination of Public Financial Management (PFM) and Human Resource Management (HRM) reforms into a single operation created implementation challenges from the outset, and the project tended more towards a conventional PFM or HRM operation than it did an emergency project. The project was not implementation ready at approval, with limited technical analysis and neither a dedicated PMU nor an operations manual; and the results framework was weak in design, implementation and utilization, rendering project outcomes difficult to track. Indeed, in many respects, project design and implementation did not reflect the lessons learnt from other operations in fragile states contexts; and the project would see three restructures to scale back and consolidate ambitions and build in more capability on the part of the borrower. These restructuring efforts would produce material gains, most notably in its consolidation of systems reforms (SIGTAS and HRMIS), but they also changed the tone of many of the project’s results from an outcome orientation to output or process-based results. Set against this backdrop, the Government is to be applauded for its achievement of results. Among the several important lessons learned, this project has highlighted that emergency projects should be modest and incremental to begin, designed to build on the achievements of prior investments, and amenable to change or evolution. xiv 1. Project Context, Development Objectives and Design 1.1 Context at Appraisal 1. Liberia suffered a brutal civil war from 1989 to 2003, with a relatively brief interlude in the late 1990s. Peace was restored in 2003, with the signing of the Accra Comprehensive Peace Agreement (ACPA) and was being maintained at the time this project was formulated, with the assistance of 15,000 UN peacekeepers. The civil war had a devastating impact on the economy and social welfare. The economy had contracted by more than two thirds in real terms since 1980. GDP per capita was estimated at US$195 in 2007, and much of the country’s physical and productive infrastructure (e.g. electricity generation and transmission, large parts of the water supply facilities, most of the capital stock of the mining industry) had been destroyed. A Core Welfare Indicator Questionnaire completed in 2007 estimated that 64 percent of the population was living below the national poverty line, with 48% of the population living in extreme poverty. The economy began to recover with the restoration of peace and security and was boosted by demand driven by donor activities in the country. In 2007, economic growth was estimated at 9.4 percent1. 2. The capacity of the public sector to deliver basic public services had deteriorated markedly as a result of a collapse in government revenues, loss of human resources from the public service and a breakdown of systems of government. Many experienced and qualified staff had left the public service as salaries and benefits shrunk to extremely low levels. Equipment and documents were destroyed or stolen and basic systems and procedures for public administration had essentially broken down, including systems for financial management and procurement, providing ample opportunities for corruption. Liberia is rich in natural resources (agricultural land, forests and mineral deposits) but the Government’s capacity to protect and ensure optimal and transparent use of the revenue streams from these natural resources was weak. Public services delivery was very limited and much of what was provided was being provided by NGOs and other civil society organizations. For example, the Government spent US$3.5 per capita on the provision of health services in FY2006/07, while donor expenditure on health was estimated at about US$20 per capita in 2007. With the emergency relief being provided by NGOs due to phase out, the Government needed to fill the gap. 3. The Economic Governance and Institutional Reform Project (EGIRP) responded to a request made by the Government of Liberia for emergency funding to support the strengthening of economic governance and public administration. The project aimed to build on and deepen reforms that were already being undertaken in public financial management, including in the areas of public procurement, cash management and domestic tax administration. The project further aimed to provide technical and financial support to 1 World Bank, ‘Emergency Project Paper for an IDA Grant in the Amount of SDR 6.7 million to the Republic of Liberia for an Economic Governance and Institutional Reform Project’, April 29, 2008. 1 address the critical recommendations of the Public Expenditure Management and Accountability Review (PEMFAR); to further the government’s efforts to meet HIPC triggers; and to assist Liberia to graduate from the temporary remedial measures implemented under an economic governance stabilization initiative - the Governance, Economic Management and Administration Project (GEMAP)2. 4. The rationale for the project was three-fold: First, to address severe institutional weaknesses in the public sector, which constituted critical constraints to development, poverty reduction and sustainable peace in Liberia. Second, to reduce opportunities for corruption by strengthening fiduciary systems in public sector administration, thereby tackling what was seen to be a leading driver of civil conflict. Third, the project sought to consolidate gains in governance and institutional reforms made under GEMAP and to support accelerated implementation of the I-PRSP and the full PRSP. 1.2 Original Project Development Objectives (PDO) and Key Indicators (as approved) 5. The project development objective is to improve the efficiency and transparency in managing public financial and human resources, focusing on revenue administration, public procurement, budget execution and payroll management. 6. Original Project Outcome Indicators:  Average difference between budget outturn and legislative budget allocation for each Ministry, as measured by PEFA indicator PI-2.  Revenue administration cost as a percentage of revenue.  Percentage of public procurement that used direct contracting and/or other less competitive methods without prior justification.  Discrepancy between nominal roll and payroll. 7. Original Intermediate Outcome Indicators:  Percentage of vouchers that MOF can approve and pay on receipt.  Improve transparency by reducing delays in posting of quarterly expenditure reports.  Prepare legislative report on annual statement of Government account.  Percentage of collected revenue captured in the Integrated Tax Administration System. 2Established in late 2005, the GEMAP was a direct response to the concerns of the Government and partners about the mismanagement of public resources in the post-conflict transition and the threat it represented to the peace process. GEMAP implementation was overseen by an Economic Governance Steering Committee (EGSC) chaired by the President and comprised the administration, the Central Bank of Liberia (CBL), international partners and civil society. The Program had six components: (i) securing Liberia’s revenue base; (ii)improving budgeting and expenditure management; (iii) improving procurement practices and granting of concessions; (iv) establishing processes to control corruption; (v) supporting institutions of government that are key to promoting and sustaining accountable government and good financial management; and (vi) capacity building. 2  At least two reports of payments to and revenues received by the government for extractive industries (mining and minerals) are published within the project period.  Percentage of contracts valued at over USD 250,000 that have undergone external audits by GAC submitted to national authorities and donors.  Percentage of procurements for which less than 120 days elapsed between bid opening and the contract signature  Adherence to the Extractive Industries Transparency Initiative, particularly carry out audit of revenues received from mining companies for FY07/08.  Percentage of civil servants registered in HRMIS.  Number of procurement officers trained in basic procurement and have acquired proficiency in basic computer skills (Word, Excel, accounting and budgeting). 1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and reasons/justification. 8. The PDO remained the same, but the outcome indicators and intermediate results indicators were revised on 14 April 2011, in the context of Additional Financing. The revised indicators are set out below. 9. Revised Project Outcome Indicators: i. Aggregate expenditure outturns compared to the original approved budget and disaggregated for five key ministries. (disaggregated by ministry – MoA, MoE, MoH, MLME, MoPW) ii. Business procedures for commercial registration of tax payers in the Bureau of Internal Revenue. iii. Qualified procurement specialists graduated from intensive procurement training working in Ministries, Departments and Agencies (MDAs) iv. Ministries, Departments and Agencies (MDAs) registered in HRMIS. v. IFMIS Report published monthly. 10. Revised Intermediate Outcome Indicators. Component 1. 1.1 Posting of quarterly expenditure reports on MoF website after end of reporting period. 1.2 Issuance of legislative report on annual financial statement of public sector accounts after end of reporting period. 1.3 Tax revenue captured in ITAS. 1.4 Quarterly inspections of industrial scale mining operations performed by MLME. 3 Annual technical audits of large-scale mining operations conducted by MLME 1.5 and BOC. 1.6 Percentage of contracts valued at over USD 250,000 that have undergone annual external audits by GAC submitted to national authorities. 1.7 Procurement monitoring system developed and operational in PPCC for MDAs Component 2. 2.1 Civil servants registered using biometrics 2.2 A new career stream for procurement is established by CSA and endorsed by GoL. 2.3 Procurement specialists working in MDAs completed in-service procurement training provided by LIPA. 2.4 LIPA annual training calendar created with course offerings targeting civil servants and communicated to MDAs. 2.5 LIPA Board of Governors established with representation from key government ministries. 1.4 Main Beneficiaries 11. The project covers seven inter-related agencies as primary beneficiaries of the project: the Ministry of Finance (MoF, and later MFDP), the Public Procurement and Concessions Commission (PPCC); the Civil Service Agency (CSA); the General Auditing Commission (GAC); the Ministry of Lands, Mines and Energy (MLME); the Liberia Institute of Public Administration (LIPA); and the University of Liberia (UL). 1.5 Original Components (as approved) 12. Component 1: Strengthening Public Financial Management. Building on the gains of the Governance and Economic Management Project (GEMAP) and a previous grant to the Resource Management Unit, this component sought to: (a) build functional PFM systems through continued assistance to the MoF’s resource Management Unit; (b) strengthen the joint MoF/UL/LIPA/CSA Financial Management Training Program; (c) fill institutional gaps to implement public procurement reforms and support the Liberia Agency for Community Empowerment (LACE) to implement investment programs in a range of sectors (education, health, public works etc.); (d) Consolidate and strengthen tax administration reform efforts by implementing a new computerized Integrated Tax Administration System (ITAS); (e) support mining sector financial governance; and (f) train, support and equip a new team of auditors in the General Auditing Commission and strengthen the capacity of the Ways and Means Committee in the House of Representatives. 13. Component 2: Supporting the Civil Service Reform Program. This Component sought to support the design and implementation of the Government’s civil service reform program by reducing fraud in the payroll and pensions systems, and controlling 4 personnel hiring; and by rebuilding skills in the civil service through training. It sought to do this through (i) better control of the payroll through the purchase, installation and customization of a computerized Human Resource Management Information System linked to the payroll system of MoF; and (ii) by rehabilitating training capacity by strengthening LIPA. 1.6 Revised Components 14. Component 1: Strengthening Public Financial Management. The Project will: (a) facilitate an exchange of public financial information to improve the comprehensiveness and timeliness of fiscal reports by creating a data center and a wide area network in the Ministry of Finance that provides a common platform for an Integrated Financial Management Information System (IFMIS): (b) build technical capacity in financial management and procurement by scaling up training activities and adding an Intensive Procurement Training Program to the MOF Financial Management Training School; (d) improve revenue administration by covering the cost overrun of the installation of an integrated tax administration system; (c) strengthen financial management and governance in the mining sector; and (e) strengthen financial management and governance in the mining sector by scaling up technical assistance activities. 15. Component 2: Support Civil Service Reform to strengthen human resource management and human capacity. The project will: (a) strengthen a civil service employee database through the development of a “ One Employee, One File, One Salary, One Job” using biometric identification and the development of a comprehensive Human Resource Information Repository; (b) maintain existing capacity within the civil service by supporting the Senior Executive Service Program; and (c) rehabilitate and strengthen LIPA’s institutional capacity, both its organizational and governance structure and its training capacity. (d) In-service procurement training to develop very low procurement skill base in the civil service, supported by the establishment of a career path for trained procurement professionals. 16. Component 3: Program Management. This component is designed to reduce procurement risk and to increase effectiveness in coordinating activities and in monitoring results indicators. 1.7 Other significant changes 17. The project was restructured three times. 18. The first and most significant restructuring occurred in April 2011, in the context of additional financing (AF). The restructure sought to consolidate existing project 5 activities, and to revise the results matrix. New activities were added, particularly IT, to accommodate data sharing – for example, to cover the costs of establishing a Common Data Centre (CDC), a Local Area Network (LAN) and Wide Area Network (WAN) – but also to cover cost overruns in software, installation, training and technical assistance for ITAS under sub-component 1.5. The AF further: assisted to scale-up training activities at the Financial Management Training School, through the creation of an Intensive Professional Training Program (IPTP) (sub-component 1.2); continued support for high performing staff contracted under the Senior Executive Service (SES) Program, with additional resources for their subsequent integration into the civil service; and scaled-up mining sector governance, which had proven results. A dedicated Project Management Unit (PMU) was also created to strengthen operational management of the project. The new PMU provided for a Project Coordinator, a Procurement Specialist and a Team Assistant. Reallocation of proceeds both within and across categories also occurred under this AF. Within Component 1, proceeds remaining from funds ear-marked for key policy advisers (1.1(a)), support for internal audit functions, and Magnetic Ink Charter Recognition (MICR) were reallocated to cover the cost of SIGTAS overruns (Component 1.4). Proceeds from the installation of HRMIS were reallocated from Component 2 to Component 1 to finance ongoing activities, including the continuation of the Financial Management Training School and services of a Project Coordinator, and to reconcile SIGTAS cost overruns. Table 1: Revised Project Cost by Component Original After AF Total Project Reallocation Costs Component I: Strengthening Public Financial Management $8.478 $9.500 $4.950 $14.200 1.1 Support for the Resource Management Unit (RMU) in the MOF $1.958 $1.865 $2.003 $3.618 1.2 Support for MOF’s Financial Management Training School $0.394 $0.844 $1.200 $2.044 1.3 Strengthening Public Procurement $2.480 $2.480 $2.480 1.4 Support to MoF Revenue Department $2.000 $2.665 $0.147 $2.812 1.5 Support for Mining Sector Financial Management and Gov. $0.496 $0.496 $1.600 $2.096 1.6 Strengthening the External Oversight Function $1.150 $1.150 $1.150 Component II: Supporting Civil Service Reform $2.200 $1.500 $1.700 $3.200 2.1 (a) Support to an Employee Biometric Registration $1.200 $0.500 $0.500 2.1 (b) Support to SES $1.700 $1.700 2.3 Rehabilitation and Strengthening of LIPA $1.000 $1.000 $1.000 Component III: Project Management $0.350 $0.600 Unallocated $0.322 TOTAL $11.0 $11.0 $7.0 $18.0 1/ Total cost for project management includes reallocation of proceeds from component 2 and additional financing. 19. A second restructure occurred on 14 June 2013 both to ensure continued oversight by MOF and monitoring and evaluation of the results framework by the Project Coordinator during the one-year extension of the project; and to ensure completion of outstanding activities in the Ministry of Lands, Mines and Energy (MLME). This again resulted in a reallocation of funds (USD Equiv. of XDR $161,000) between Components 1 and 3 of the project. The results framework also changed at this juncture – one project level indicator was revised and three intermediate indicators were dropped – but these changes were not formally communicated to Government. At project closing, the client had continued to report against the prior intermediate results framework, and achieved 6 results that the World Bank was no longer monitoring at project close (see Section 5.1 on Bank Performance below)3. Given the communication gaps between the Bank and Client, this ICR adopts the results framework followed by the Client in order to recognize the results achieved. 20. A third and final restructuring was approved on 11 December 2014 to extend the closing date from 31 December 2014 to 30 June 2015; and to reallocate proceeds (USD equiv. XDR 196,484.21) from Component 1 to Component 3 to ensure continued project oversight and monitoring or results throughout the extension of the project. The Project Development Objective (PDO) and results indicators remained relevant, none were revised or dropped. 2. Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design and Quality at Entry 21. Soundness of background analysis: Reviewing the project material, it is clear that careful thought was given both to the rationale for the Bank’s intervention. The PAD remarks that the operation was designed to build on the initial gains of the Governance and Economic Management Assistance Project (GEMAP), and to help accelerate implementation of the interim and final Poverty Reduction Strategy Projects (I-PRSP and PRSP). The project also enjoyed widespread Government and donor support throughout preparation. 22. Through GEMAP, ‘the Government had improved the budget preparation process and successfully implemented an interim commitment control system to prevent the accumulation of domestic arrears, introduced regular fiscal reporting, enacted and implemented a new procurement law, and introduced better financial controls in key state- owned enterprises’. Despite these initial improvements, the PEMFAR conducted in 2008 found that the PFM system remained outdated and was in need of significant reform and capacity development. The PEMFAR established a roadmap for comprehensive PFM reform, and the EGIRP adopted this roadmap as the basis for the design of the project. The roadmap included: (a) creation of a new overarching PFM law and regulations; strengthening the human resources and information systems capacity for planning and budgeting; (iii) strengthening procurement capacity in the PPCC as well as ministries, departments, private sector and LACE; (iv) strengthening overall systems and procedures in ministries and departments; (v) continued strengthening of tax administration; and (vi) general enhancement of internal and external oversight capacity. It was further decided that the project would also seek to ‘improve mining sector management and its contribution to 3 Existing project documentation suggests that these changes were discussed with the Government in the context of a Mid Term Review (MTR – 12 December 2012), and yet they were not referenced in the Memo to the Country Director requesting formal project restructure, nor were they communicated to the client in the Bank’s formal notification of the restructure. 7 economic development by developing a more transparent framework for the sector to increase the revenue base and ensure adequate benefit-sharing for Liberians’. 23. Complementing the project’s proposed efforts in PFM reform, and as a second component, the EGIRP further sought to support the design and implementation of the Government’s Civil Service Program, which was seen as critical to rebuilding state institutions and improving public services provision. This component built on the I-PRSP and World Bank LICUS Trust Fund Grant, which had assisted the Government to articulate a comprehensive strategy for civil service reform; and it created a Financial Management Training Program to strengthen capacities for planning and budget in the ministries, departments and agencies (MDAs). The civil service component sought to address a chronic leadership gap through continued support for the ‘Senior Executive Service’ (SES) – a program which had previously benefited from strong donor support – and to advance efforts to prepare and implement the development of a pay and employment strategy, and review of institutional mandates. The objective of these efforts was to: eliminate functions that are no longer relevant; reduce the number of MDAs; eliminate ‘ghost workers’; shed surplus staff and rebuild skills through training; and improve over time, pay and working conditions. In adopting these reforms the project took note of some the lessons of the GEMAP and the LICUS Trust Fund – including, for example, that capacity substitution is a short term solution and that in-line capacity enhancement, combined with systems reform, is needed for sustainable and effective institutional reforms. Absent in the project documentation, however, is a more granular analysis of specific lessons in PFM and civil service reform – and experiences of implementing such efforts in a fragile states context such as Liberia – such that it is unclear the extent to which these factors informed EGIRP design. 24. In terms of design and quality at entry: A Quality Assurance of Lending Portfolio (QALP-2) review conducted in late 2009 observed, ‘given post-civil war conditions in Liberia, efforts to strengthen financial management and implement civil service reform were strategically relevant’. Yet, the QALP-2 also expressed reservations about the scope and feasibility of project activities, given the emergency nature of the project. Specifically it was said: The project was prepared under OP 8.00 as an emergency operation. As such it was exempted from certain preparation activities involving safeguards, procurement and disbursement and economic analysis. The panel acknowledges the extended description of the project’s strategic relevance and context in the PAD, but notes the limited...technical analysis done to prepare what were complex components related to capacity building, revenue generation and management, procurement and civil service reform. The project raises an important question of whether an emergency operation is the proper lending instrument for tackling these types of issues…… civil service reform is a long-term commitment not well suited to a three-year project that lacked a strategic plan for this reform…[further] the complexity of the project, in terms of scope and technical requirements for the successful implementation and maintenance, overwhelms the weak institutional capacity of counterpart agencies. Intense project supervision and high level project 8 oversight by the counterpart cannot, in the panel’s view, overcome these fundamental challenges. 25. The ICR Team endorses the observations of the QALP-2, and notes that the challenges in project implementation and uneven impact and results have borne out the risks of the project’s broad scope. ‘Christmas Tree’ projects in fragile and conflict affected contexts are inherently difficult to implement, given the weak and often fragmented institutional dynamics that tend characterize these contexts. These are risks that even the most robust Bank supervision and client commitment cannot always serve to address. 26. EGIRP promised considerable benefits for Government, including HIPC completion, and the Government’s commitment to the project during preparation was clear. Project records on the early meetings of the Steering Committee and the very senior representation of Government in project management reflect this commitment. 27. Assessment of risks. The Project’s overall risk rating at inception was deemed ‘Substantial’. At a country level, risks were seen in the fragile security environment; the President’s lack of support in the legislature, which was needed to pursue legal/regulatory PFM reforms; insufficient implementation capacity, which had previously been met in the GEMAP through a program of capacity substitution (import of external advisors); and weak fiduciary controls. Risk mitigation measures adopted by the project included frequent supervision missions (three times each year); recruitment of a dedicated procurement firm to bolster capacities for project execution, and for the preparation and delivery of high priority investment projects on behalf of Government; engagement of the Public Financial Management Unit (PFMU) at the Ministry of Finance (MoF) to manage financial risks, and by introducing a robust capacity development component in PFM. 28. Based on the above, the overall risk rating at design and mitigating measures adopted are deemed adequate by this ICR. 2.2 Implementation 29. Project changes/restructuring: The quality of EGIRP implementation fluctuated over the life of the project, and several factors affected implementation. The EGIRP was implemented over a period of seven years, one month and seven days (23 May 2008 to 30 June 2015) with a total project cost of $17,551,835.00. The QALP-2 had observed that ‘project risks were high both in terms of project implementation and sustainability, due to the complexity of the operation in light of serious institutional capacity weaknesses and potential for the priorities and commitment of the current presidential administration to shift’. The lack of plans for follow on Bank assistance was also thought to add considerably to the risk of longer-term sustainability. The QALP-2 went on to find that the likelihood of achieving the PDO was moderately unlikely due to the ambitious nature of the project, and this precipitated a restructure by the project team. 30. Following the recommendations of the QALP-2, the project was formally restructured with additional financing on April 7, 2011. This was the most salient 9 restructure over the life of the project. As detailed at paras 18-20 above, the rationale for project restructure was to expand activities under Components 1 and 2, to account for cost overruns and to create a new Component 3 for project management. The closing date for the project was also extended as part of successive restructures: first, from 31 December 2011 to December 2013; then again from December 2013 to December 2014; and finally from December 2014-30 June 2015, and funds were reallocated on each occasion (per section 1.7 above). 31. Project at Risk Status and Action Taken: The findings of the QALP-2 and the persistent challenge of ensuring robust capacity for project management signaled that the project was at risk early on; and indeed, weak government capacities required that the World Bank Task Team dedicate much of the first three years to building implementation capacity on the part of the Borrower as project implementation stalled. The Bank took two important actions at this juncture: first, it appointed Procurement Specialists from other Bank projects (IFMIS and the Fast-Track Initiative - Basic Education) to act as Interim Procurement Specialists for the project; and then in 2011, the team added a dedicated Project Management Unit (complete with a dedicated Project Coordinator and Procurement Specialist) as part of the restructure. These efforts paid immediate dividends - project procurement improved – although building project management capacity took some time longer, and was setback by difficulties with recruitment. Ultimately, however, the formation of a fully equipped and capable PMU in 2012 substantially enhanced the Borrower’s capacity to deliver results in the remaining life of the project. 2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization Overall M&E Rating: Moderately Unsatisfactory 32. M&E Design. Many elements of the original M&E framework were essentially well constructed - indicators were outcome oriented and well aligned to project goals. But there were also gaps, for example, two PDO indicators and one Intermediate Results Indicator (IRI) lacked baseline data for up to three years. Monitoring some of the project’s targeted objectives would also prove difficult due to the lack of data and weak capacity on the part of the borrower, and this suggests that the M&E framework was too sophisticated in its design. At project restructure in 2011, changes were made, and yet several process- oriented indicators substituted outcome oriented indicators, weakening the results orientation of the project. 33. In some respects the project sought to compensate for shortcomings in the M&E framework through efforts to enhance Liberia’s country systems for M&E in PFM and HRM. In this regard, the establishment of a compliance monitoring system in the PPCC, tax payment and administrative monitoring systems in the Liberian Revenue Authority (LRA), and the development of a Civil Service Management System (including Biometrics), have proven helpful. Many of these systems are not yet functioning at optimal capacity, but the foundations are laid and good progress has been made. 10 34. M&E Implementation. The lack of baseline data for the two PDO indicators and one IRI at the outset was an immediate constraint for M&E implementation. It is also the case that successive ISRs were highly congratulatory of Government progress and ranked several indicators ‘satisfactory’ despite the challenges that were being faced. The QALP-2 was particularly critical; ‘key performance indicators for the DO lacked reliable data for formulating baselines and targets’, and ‘ISRs lacked candor in their reports and ratings….most performance indicators are not tracked, ratings have been satisfactory without exception for all components…...[despite] that ISRs highlight a number of implementation issues including weak agency capacity, low education levels affecting training of procurement officers, and delays in IT procurement’. Indeed, early ISRs are scant and inconsistent in their data and analysis. The concluding recommendation of the QALP-2 was that, during restructure, the team should, ‘revisit the PDOs and results framework so as to ensure a match with what can be achieved..to ensure consistent measurement and reporting in the ISRs…and to improve the candor and evidence provided in ISRs to enhance management oversight through the ISR process’. 35. Based on the recommendations of the QALP-2, the 2011 restructure resulted in substantive revisions of the results matrix: eight indicators were revised; four indicators were dropped; and seven new indicators were added, and yet this did not appear to improve the quality of project monitoring. Indeed, despite the restructuring, the revised M&E framework proved consistently difficult to track due to the lack of reliable data, and again, in some cases, what were previously outcome indicators, were substituted with input or process-based measures, which are a poor proxy for results. For example, efficiency and transparency in the administration of the payroll was initially measured according to an intermediate indicator that assessed the ‘decrease in the discrepancy between the nominal roll and the payroll’. This indicator was later revised to ‘Ministries, Departments and Agencies (MDAs) registered in HRMIS’, under the 2011 project restructure and, while this created an opportunity for MDAs to transition from manual to automated personnel management, more targeted efficiencies in management of the payroll were lost. As a result, between 2008 and 2012, there was no change in PEFA indicator PI-18 on the ‘effectiveness of payroll controls’, and Liberia’s grade for this has remained at D+.4 36. Another example, though perhaps more understandable, was the IRI that measured the percentage of procurement for which less than 120 days had elapsed between bid opening and contract signing. Again in 2011, this indicator was revised, and the following measure was adopted - ‘procurement monitoring system developed and operational in PPCC for MDAs’. The reason for the change was because there was no methodology in place to enable monitoring of procurement in MDAs, which is a legitimate concern, but again, the resulting process indicator has made it very difficult to gauge what, if any, material impact this initiative has had in terms of reducing delays in procurement. 37. A second project restructure on 14 June 2013 yielded more problems again. The closing date for the project was extended one year to December 2014, funds were reallocated between projects, one PDO indicator was revised, and three IRIs were dropped 4 Public Financial and Accountability Assessment (PEFA), July 2012. 11 under Component 2 (Civil Service Reform), on the basis that they had either been adopted by other Bank projects (specifically IFMIS and IPFMRP) or were not related to project interventions. Existing project documentation suggests that these changes were not referenced in the Memo to the Country Director requesting the project’s restructure, nor were they mentioned in the Bank’s formal communication to the client, notifying them of the basis of the restructure. These omissions produced a discrepancy in the results frameworks adopted by the World Bank and Borrower as the client continued to report and make progress as against prior IRIs. At project closing, the borrower had reached or exceeded several of targets that the Bank had dropped. Although the client seems unaffected by discrepancies in their results frameworks vis a vis the World Bank, it does raise questions about the quality of M&E implementation and Bank Performance – a matter which is addressed in more detail at Section 5.1 below. 38. M&E Utilization. Based on the very limited data accessible in the project portal, it is not clear the extent to which data collected and analyzed under the auspices of the EGIRP M&E framework was used to inform the process of decision-making and resource allocation. M&E data submitted by Government for the purposes of this ICR was often times inconsistent with other Government Reports, including for example, their PEFA Self- Assessment 2015 and Government Expenditure Reports; and at the same time, there was a discrepancy between Government data and the World Bank’s final ISR. Indeed, for the purposes of this ICR, primary research, data collection and validation was necessary to track performance as against a large number of targets or variables. In effect, the broad range of indicators, lack of baseline data and successive changes to the M&E framework, some of which were not communicated to the client, undermined M&E utilization. A more significant contribution of the project was in the development of the country’s own M&E arrangements, for example, the HRMIS and Biometric Register, SIGTAS, and the WAN LAN Network. 2.4 Safeguard and Fiduciary Compliance Overall rating for safeguard and fiduciary compliance: Moderately Satisfactory 39. The project did not give rise to any environmental and social safeguards, and was rated category C. It provided technical assistance and policy advice, paid for goods (office equipment, computers etc.) and invested in technology systems to assist the GoL to develop its institutions. 40. Fiduciary capacity within the MoF was very weak to begin; and financial management and procurement were deemed high for inherent risks and substantial for control risks. The project sought to mitigate these risks by assigning responsibility for financial management to a ‘centralized’ FM unit of the MoF; and by adopting a suite of mechanisms and procedures – including FM procedures established by former Bank projects – and appointing an internal auditor and a procurement firm to buttress fiduciary capacity. The Bank team also proposed frequent Bank oversight and external reviews, but these did not always happen. The QALP-2 observed that there is no evidence that a ‘Financial Management Specialist was a member of the Task Team during the critical 12 initial stages of the project’5. Nevertheless, important FM procedures and guidelines (e.g. the FM Procedures Manual, separate quarterly FMRs etc.) were developed and/or updated and followed by the PFMU; and the PFMU proved well-equipped to manage and meet financial compliance responsibilities by consistently submitting satisfactory quarterly Interim Financial Reports (IFRs) on time. 41. In contrast to FM, procurement proved to be the Achilles heel of the project, and ‘weak procurement capacity in the PFMU’ was a particular concern. An international procurement firm (IPA) was initially appointed to manage project procurement and this smoothed procurement to begin and assisted the GoL to reduce procurement backlogs in six large spending ministries, which facilitated public spending in FY2009/2010. But the procurement firm was overburdened and did not accomplish all of its work, and the project experienced long delays in recruiting a procurement specialist with adequate experience to replace the firm once it had concluded its contract, on or about March 2010. With weakened procurement capacities under the project, in July 2010, a World Bank Supervision Mission recommended that all procurements be subject to prior review until risk mitigation measures were put in place.6 Procurement officers for the IFMIS and the ‘the Fast-Track Initiative - Basic Education’ - were called upon to manage procurement for the project on an interim basis, and this assisted to alleviate procurement bottlenecks until a Procurement Specialist was recruited in April 2012. The World Bank reinstated the ‘post review’ procurement threshold in December 2012 following this enhanced procurement capacity. 5 FM supervision was provided by an FM Specialist based out of Accra who would supervise several Bank projects in one mission at a time, and with less frequency than suggested at the outset of the project. 6 Mitigation measures included (a) completion of a Post Procurement review (PPR) by the World Bank; (b) hiring of at least one full-time, qualified Procurement Specialist; and (c) submittal and agreement on an update Procurement Plan. 13 2.5 Post-completion Operation/Next Phase 42. Efforts to ensure that the achievements of the project are carried forward can be seen in the various financial contributions of the Government including, for example, (a) an annual contribution to LEITI, which has been increasing year on year (except in 2015 – potentially as a result of Ebola); in the GoL’s commitment to finance the recurrent costs of the newly integrated cadre of FM specialists; in the integration of 42 SES consultants into the civil service of Liberia; and in the GoL’s part payment for the installation of SIGTAS. 43. In addition to direct contributions by Government, the World Bank and Donors partners have further committed to assist the Government to advance, deepen and expand project activities in the area of PFM reform and public sector management performance. For example, when EGIRP financing ended, the World Bank’s Intergrated Public Financial Management Reform Project (IPFMRP) continued to sponsor FM and procurement training at the FMTS and IPTP, and has now proposed to transition the program to the University of Liberia in 2017. The IPFMRP has also adopted several elements of Component 1 of the EGIRP, including support for the Liberian Revenue Authority, strengthening of public procurement and support for the Ways and Means Committee in the Legislature. Biometric registration and the continued development of a personnel data file for integration /population of the HRMIS has also continued under a new World Bank Public Sector Management Project (PSMP), which became effective in February 20157. The one field in which future support or maintenance and follow-up remains uncertain is in mining sector governance, although the GiZ have a technical project in this area. 3. Assessment of Outcomes 3.1 Relevance of Objectives, Design and Implementation Overall Relevance Rating: Moderately Unsatisfactory 44. Relevance of Objectives: Substantial. Project objectives were and remain highly relevant, as inefficiencies in PFM and human resources management continue to restrain Liberia’s development.8 This explains why the PDO has remained largely unchanged despite three restructures and revisions in indicators. The Government’s Poverty Reduction Strategy 2012 -2017, ‘the Agenda for Transformation’ (AfT), put public sector modernization at the heart of its priorities. Under the Governance Pillar of the AfT, priority interventions include: ‘raising the bar for performance standards and building a robust 7 Three key areas are emphasized under the PSMP: i) strengthening institutional capacity for public sector management ii) human resource management and pay reform and iii) in-service training and -building across the civil service. Improving payroll management, strengthening of payroll records and issuance of biometric ID cards is an integral part of this, as is complete cleaning and updating of personnel files. 8 The AfT (2012-2017) is a 5-year development plan grounded on the goal of Liberia Rising 2030 to transform Liberia into a more prosperous and inclusive society as well as to achieve middle income country status by 2030. The AfT follows capacity the Lift Liberia Poverty Reduction Strategy (PRS), which guided Liberia through the initial phases of post- conflict recovery and emergency reconstruction. The goals of the first strategy were only partially met due to the enormous financial, institutional and human capacity constraints, with limited progress in delivering visible results for ordinary Liberians. 14 system for managing performance and improving integrity in the public sector’9. And, although it is true that the political conditions and the policy environment have sufficiently improved to enable deeper engagement in second generation PFM and civil service reforms (for example, expansion of IFMIS and the HRMIS), it is also the case that many constraints persist in these sectors. The CPS 2012-2017 affirms that strengthened financial management, measured by improved scores in future Public Expenditure and Financial Accountability (PEFA) assessments, will continue be an important area of Bank support during the CPS period. Priority attention will be given to areas with the weakest performance under the PEFA, such as budgetary planning and budget credibility, budget execution, procurement and accounting systems, and financial reporting as well as external audit and legislative scrutiny. 45. Relevance of Design: Modest. Although project objectives – both PFM strengthening and civil service reforms – remain highly relevant, the project’s design did not reflect that of an emergency project, but rather a conventional PFM or HRM operation. The project was broadly conceived to begin and in many respects scaled back during subsequent restructures in recognition of the fact that it had been too ambitious from the outset. The project’s design also did not account for prior lessons learned, which include the risks of pursing form over function (for example, establishment of an HRMIS system when its application is not always visible), and the merits of adopting an incremental, problem-driven approach in an FCS context. A better approach would have been to begin with modest ambitions, and to incrementally scale up the project’s goals in later years to deepen results. 46. Relevance of Implementation: Modest. Initially project implementation was coordinated by the PFMU in the Ministry, but it soon became clear that a dedicated Project Management Unit (PMU) was needed to reduce procurement risks, increase effectiveness in coordinating activities and to better monitor results. Indeed, an important lesson learned is that a dedicated PMU is a necessary precondition for effective project implementation in a fragile state. The new PMU included a Project Coordinator, Procurement Specialist and a Project Assistant. Project reports submitted following the creation of the new PMU demonstrate that the unit made a substantial contribution towards improving project management and coordination. Revised implementing arrangements, which include the new PMU, are reflected at Figure 1. below. 9In January 2013, in the her Annual Message to the 53rd legislature, the President identified ‘ghost workers’ and a compromised payroll as the reason for not increasing civil service salaries, and promised to increase salaries with savings from ongoing work to clean the payroll. 15 47. An important element of the project’s implementing architecture was the National Steering Committee (NSC), which was chaired by the Ministry of Finance and included each of the beneficiary agencies as members. The NSC was tasked to provide conceptual and strategic guidance to the implementing agencies on project design, implementation and in the coordination of project activities – and this proved to be central to effective project implementation given the high number of implementing agencies involved. Outside of the NSC, implementing agencies benefited from considerable autonomy implementing the project and, by PMU accounts, designated agency focal points interacted and coordinated effectively with the PMU in MoF. But this autonomy proved a double-edged sword: in some cases it served the implementing agencies well and they achieved clear results (e.g. CSA, PPCC); in other cases, such autonomy hindered project implementation (e.g. MLME). 3.2 Achievement of Project Development Objectives Overall Achievement of Project Objectives: Moderately Unsatisfactory. 48. Out of twenty results indicators adopted overall, ten were 100% achieved, five were partly accomplished, four were not achieved and one was dropped. But real results are best understood in relation to the project’s primary objectives: improving efficiency and transparency in PFM and HRM focusing on budget execution, tax administration, public procurement, and payroll management. This ICR addresses each of these objectives in turn. 16 Improving Efficiency and Transparency in Public Finance Management10 49. Significant progress has been made towards building sound fiscal institutions in Liberia, focusing on improved revenue administration, public procurement and budget execution (IMF 2014). Recent achievements include closer monitoring of State-Owned Enterprises’ performance, the establishment of a Single Treasury Account (although this is still in its final stages), and payroll cleanup, which is expected to yield medium-term savings amounting to approximately 0.5 percent of GDP on the wage bill. The EGIRP has contributed to many of these outcomes, but there are also persisting challenges. Achievement of Budget Execution Objective: Modest 50. Improving fiscal discipline and bringing credibility to the budget proved a particularly tough assignment – and the results have been uneven. Aggregate outturn compared to the annual approved budget exceeded the target of 10% in four of the last seven years, and yet the GoL did achieve a -2% variation at project closing (Annex 4, Table 2 refers)11. Comprehensiveness and transparency of the budget has also improved, and the public has greater access to quarterly expenditure reports, budget documents, and end of year financial statements – although these are not presented on a timely basis. Similarly, although the five accounts for Central Government (CG) at the Central Bank of Liberia (CBL) are reconciled, consolidated and sent to the Ministry of Finance on a daily basis, these are not yet linked to the Treasury Account rendering the availability of funds unpredictable. According to the GoL’s most recent Annual Report, a Cash Management Framework was approved by Ministry Management in June 2015, and this has set the basis for the MFDP to move from cash rationing to a system of cash/treasury planning. 51. 132 Financial Management Specialists have graduated under the Financial Management Training School (FMTS), 92 of which have been integrated into various MDAs. It is difficult to quantify their performance, but each is responsible for important in-line technical functions (including, for example, on IFMIS, budget and expenditure, and internal audit). IFMIS is now also operational in 36 ministries, with an agreement to expand this to a further 14 agencies and to enhance systems functionality in 2016 by enabling its budget, debt management and bank reconciliation capabilities. Support for internal audit, financed by both the EGIRP and IPFMRP, has also enabled the creation of risk based audit capacity in the Internal Audit Agency (IAA) and produced targeted audits of the MoH payroll, resulting a savings of approximately USD $90,000 per month, and of fixed assets in select SoEs (e.g. NOCAL). 1021 of these students were jointly financed by the IPFMRP. 11Note, there are some important factors behind these deviations. In FY 2008/2009, the Government took a deliberate decision to reduce spending in light of the lower than expected revenue flows. By contrast, in FY2010/2011, central government’s primary expenditure exceeded the originally approved budget by 8.4 percent in 2010/2011. The external shock triggered by the EVD outbreak in 2013/2014 and FY2014/2015 has again impacted budget credibility, but this was well beyond the control of either the Government or the project. 17 Achievement of Revenue Administration Objective: Modest 52. Automation of the tax administration system (TAS) has enhanced tax administration and potentially broadened the tax base, although the data is inconclusive. According to MoF and LRA, 24,912 business taxpayers and 21,568 individuals are now registered, and SIGTAS is capturing 64% of total government revenues.12 Evidently the SIGTAS accumulated $4.14 million in penalties and interest in 2013/2014, as compared with the Tax Administration System in existence during 2011-2012.13 For the first time in four years, tax revenue collection also exceeded the budget by US$52.9 million, or 13% of the approved tax budget for FY 2014/2015, and although this is in large part due to the high performance in international trade,14 installation of SIGTAS (and its interface with ASYCUDA), and TIN cleaning and updates enabled under the EGIRP have also contributed to these results. 53. Despite these achievements, the Government is mindful that tax shortfalls and compliance challenges persist. In its recent draft PEFA self-assessment 2015, the GoL downgraded its ‘control in taxpayer registration’ on account of SIGTAS still being incomplete.15 Among the difficulties that have impeded progress are: limited capacity and funding, a change in MOF senior management in early 2012, and the additional work required to meet requested changes to the SIGTAS contract (such as interest and penalty calculation, dual currency, business process reengineering, and data interfaces with IFMIS and Central Bank). The IMF have further observed that the administrative measures implemented earlier in the year to tackle tax evasion and smuggling have helped improve collection, but did not suffice to compensate for the revenue loss. Weak tax compliance by foreign concession companies and state entities has led to further underperformance, and signal persisting challenges for the LRA. 54. An important achievement of transparency in revenue administration is the Liberian Extractive Industries Transparency Initiative (LEITI). LEITI has produced five validation reports – three of those with support of the EGIRP – and these have highlighted .24 % and 2 % discrepancies in company payments and government receipts, in FY2010/2011 and FY2011/2012, respectively and these require follow-up (Annex 4, Table 4 refers). In December 2009, Liberia became the first country on the African continent to achieve EITI compliance. LEITI has also led global innovations in full contracts disclosure; the application of EITI beyond mining to forestry and agriculture; and post award audit of concession contracts for procurement compliance. Next steps for LEITI would be to go beyond a strict reconciliation of payments to follow up on any discrepancies or non- payment. 12 Borrower’s ICR October 2015. The gap in revenues collected by the system represents taxes and revenues collected through ASYCUDA and outside of Monrovia, as SIGTAS is currently only functional at four sites in Monrovia (MFDP, LRA, LBR, MLME). 13 Borrower’s ICR October 2015 14 MFDP Annual Report 2015, p.11 and Table 8, Annex 4 refer (note figures cites in the Annual Report and Budget data are inconsistent and the correct figure is in fact $52 mil in FY14-15. 15 Since its launch in October 2010, the deployment of SIGTAS is only about 50 percent complete, a consequence of considerable challenges in its implementation. 18 55. Less successful in revenue administration, and broadly linked to this project objective, were EGIRP’s efforts to improve mining governance. Project outputs included nationwide consultations on revisions to the draft Mining Code; establishment of a mining cadastre, and pilot efforts to establish mines inspection capabilities under the tutelage of an international firm. Regrettably, in this field, it is difficult to discern tangible outcomes and several activities have stalled – for example, the Mining Code is not yet law, and it is unclear if the mining cadastre is in use as GiZ and USAID have since financed an alternative. A functional and capacity review conducted by Fitchner Consultants suggests that the MLME continues to significantly underperform. Efforts to institute quarterly mines inspection have also not yet yielded fruit despite that a consultant firm established the methodology and trained staff to do this. Achievement of Public Procurement Objective: Modest 56. Progress on public procurement reforms has been mixed, and monitoring of the original PDO outcome indicator – the percentage of public procurement that used direct contracting and/or less competitive methods without proper justification – proved difficult to measure, and was dropped in 2011. The indicator was later substituted with a new target measuring the number of graduates from intensive procurement training at the IPTP, a subsidiary of the FMTS. 54 Procurement specialists have now graduated under the program, 36 of which are now working in the MDAs and are responsible for public procurement. Rehabilitating and strengthening the Liberian Institute for Public Administration (LIPA) has further enabled the development and delivery of an in-service training program, which has equipped 241 civil servants, working across a wide range of MDAs, with basic procurement capacities. 57. Revision of the Public Procurement and Concessions Act (PPCA) and extensive institutional reform of the Public Procurement Concessions Commission (PPCC) have also yielded modest improvements in public procurement. Public procurement plans and tenders are now published - 95% of competitive bidding procurements are advertised in newspapers and published on the PPCC website.16 But not all agencies adhere to existing compliance and monitoring arrangements and the Government is not yet able to demonstrate direct economic and financial results from these procurement inputs. Indeed, according to the Government’s PEFA self-assessment 2015, a survey of large spending ministries and agencies revealed that about 83% of the value of the Governments procurement was conducted using less competitive procurement methods, although 95% of these instances are said to be justified under the PPCA17. 16According to a recent Government Survey funded by the EGIRP Project. 17Although, of this figure, about 95% is reportedly accounted for by the Ministry of Public Works, which justified its use of alternative methods adopted, citing delays in the passage of the budget, the need to accelerate priority projects, and the significant alternations of weather patterns as among the reasons for the delay. Such justifications are covered by Section 55(1)(9d) of the PPCA. 19 Efficiency and Transparency in Human Resources Management Achievement of Payroll Objective: Modest 58. To achieve efficiency and transparency in human resources management, the project focused on two priorities (a) better control of the payroll through the purchase and installation of a computerized Human Resource Information Management System (HRMIS); and (b) support for the rehabilitation of training capacity and strengthening of LIPA. The principal impacts of this component are seen in improved control of the payroll through biometric registration and installation of the Civil Service Management System (CSMS) module of IFMIS, part of which constitutes the HRMIS; and in the development of strategy and policy capacity within the GoL due to the integration of 42 SES professionals into senior governmental posts including, in one instance, as deputy minister. 59. According to recent CSA data, the Government has registered 31,801 civil servants in its biometric system, and this in turn reduced the number of individuals formerly on the government payroll from 45,000 to 36,000 – resulting in a wage bill savings of $2,660,148 in FY2013/2013.18 This achievement proved short-lived, as the external shock triggered by the EVD outbreak exerted pressure on the Government to introduce 5,984 health-workers onto the government payroll, and as at October 2015/2016, the number of individuals on the public service payroll stands at 44,324.19 These figures also exclude the distorting effects of the supplementary payroll in the Ministries of Education (6,031) and Internal Affairs (1,585), which add an additional 7,616 employees to the government wage bill. Eliminating the supplementary payroll is a current focus of the IPFMRP. The recent Government PEFA Self-Assessment (2015) is particularly sanguine about results, ‘Even with [recent] progress, there are still a number of leakages in the payroll associated with incorrect employee identification’, and yet this is an area in which the Government has continued to make steady and significant progress. 58. Currently, the HRMIS and Biometric System captures basic personnel data from 30 ministries of Government, but the records are incomplete. The CSMS/HRMIS is housed in the Civil Service Agency, and linked to the payroll (Diagram 1 below refers), but most MDAs continue to rely on manual personnel records. Several MDAs have commenced a process of completing and updating these records – to produce a set of ‘One Employee, One File, One Salary and One Job’ – but these are yet to be integrated into the HRMIS. Once complete, and in order for the Government to optimize the benefits of automated human resource and payroll management systems, these personnel records will need to be reconciled with data in the HRMIS to ensure that they are consistent, and to identify and remove duplicates, ghosts or misrepresentations. 18Borrower’s ICR October 2015. 19CSA-HRMIS Directorate, ‘Annual Report 2015: Report on the Activities of the Directorate from January 1 2015 – 31 October 2015. Note: the Biometric Register has yet to account for staff on the supplementary payroll and for those health workers added as a consequence of Ebola. 20 Diagram 1: Liberia’s Civil Service Management System (CSMS) Source: CSA-HRMIS Directorate, ‘Annual Report 2015: Report on the Activities of the Directorate from January 1, 2015- 31 October 2015 Annex 3 details specific inputs/outputs financed by the project. 3.3 Efficiency 60. The NPV/ERR was not calculated at the outset of the project, and the Project Paper did not include an economic analysis. It was said, ‘it is always difficult to measure the economic impact of capacity building and technical assistance project…..Ultimately the economic justification of the proposed project is its contribution to a better functioning government through improved PFM and the implementation of a well-designed civil service reform program’. And indeed, the economic benefits for capacity building and civil service reform can be difficult to measure. With that said, the project did deliver some economic benefits and these are elaborated both here, and in Annex 4 below. First, the installation and capture of 64% of tax revenues in SIGTAS has reported contributed to $4.14 million in accumulated penalties and interest in 2013/2014, and to tax revenue collection exceeding the budget by US$52.9 million or 13% of the approved tax budget in FY2014/2015. Given the allocation of $3.387 million in total funding for the Revenue Department under the project, this suggests a degree of efficiency and value for money. It is perhaps also useful to note that with progress made on LEITI implementation, and in public audit, the Government is also now well placed to track public revenues and spending, and to reduce any future discrepancies. 61. The principal efficiency in HRM is in payroll cleaning in which the Government estimates it has produced USD $2,660,148 in savings on the public sector wage bill in 2013/2014.20 To some extent these direct financial gains have slipped in the context of Ebola (EVD), as the Government has recently introduced a further 5,984 health workers onto the government payroll, and yet these constitute important financial gains derived from $2.98 million in project financing. Please refer to Annex 4, for a further and more detailed account of the economic and financial context to which this project has contributed. 20 Borrower’s ICR October 2015. This needs to be verified as the ‘PEFA Self-Assessment’, Borrower’s ICR and more recent figures directly from the payroll in MFDP conflict. 21 3.4 Justification of Overall Outcome Rating 62. Again out of twenty overall results indicators, ten were 100% accomplished, five were partly accomplished, four were not achieved and one was dropped. The Objective of the project was and remains highly relevant is rated Substantial, while the Efficiency of the Project is rated Modest. 63. Achievement of PDOs. Disaggregating the two principal components of the project by four objectives: budget execution (or credibility and fiscal discipline), tax administration, public procurement and payroll, it is possible to see discrete project achievements as well as shortcomings. Efforts to strengthen budget credibility and fiscal discipline warrant a Modest rating, because although the results have proven uneven, these efforts ultimately reduced variation in aggregate outturn compared to the annual approved budget to -2% at project closing. They have also enabled the adoption of an integrated financial management approach across Government, through the CDC, LAN and WAN. Tax administration, also warrants a Modest rating, due to 64% of tax revenues now captured in SIGTAS, accumulated penalties and interest and the 13% increment on the approved tax budget in FY2013/2014. This rating is further reinforced by the increased transparency enabled in natural resource revenue management as a result of Liberia’s commitment to LEITI. It is more difficult to measure enhanced efficiency in public procurement, although enhanced human and institutional capacities could soon yield results, and there is increased transparency in the publication of procurement plans and tenders. And, finally, the Government has taken important steps to stabilize the payroll and to reduce fraud through biometric registration, resulting in $2,660,148 savings in FY2013/2014; and yet the persisting disconnect between the HRMIS, Biometric Register and ‘One Employee, One File, One Salary and One Job’ records, and the leakages in the payroll associated with incorrect employee identification would need to be corrected to optimize and galvanize payroll efficiencies overall. Given these persisting challenges, the ratings for both public procurement and payroll management are also deemed Modest. 64. Taking into account the relevance of the project, the efficiency gains or savings yielded by the project, and its uneven impacts, the overall outcome rating is classified as: Moderately Unsatisfactory. Relevance Efficacy Efficiency Overall Objectives Design Object. Object. Object. Object. Outcome 1. 2. 3. 4. Substantial Modest Modest Modest Modest Modest Modest Moderately Unsatisfactory 22 3.5 Overarching Themes, Other Outcomes and Impacts (a) Poverty Impacts, Gender Aspects, and Social Development. 65. The project was not designed to have a direct impact on poverty, gender or social development and yet it is consistent with a period of steady growth and poverty reduction in the country, which saw poverty rates reduce from 63.8 percent in 2007 to 56.7 percent, based on the analysis of data from the 2010 Core Welfare Indicator Questionnaire (CWIQ) Survey. Nevertheless, at the time of approval of the CPS in 2012, Liberia was experiencing high levels of child malnutrition and maternal mortality, and very low levels of access to public electricity services (1.7percent). Access to potable piped water, (1 percent) also ranked amongst the lowest in the world, and many of these measures persist. Ninety five percent of the nation’s primary, secondary and feeder roads remain unpaved, suffer from poor maintenance and are affected by heavy rainfall. In the period since approval of that CPS, Liberia has further been hit by the devastating effects of the Ebola outbreak. The outbreak triggered a national emergency, heightened the country’s fragile security and fueled unemployment, abandonment of farms and temporary cessation of agricultural activities. By 2015, GDP growth for Liberia was projected at 3% --a welcome increase compared to the 1% GDP growth of 2014, but still well below the pre-Ebola growth estimates of 6.8%,21 and although an incipient economic recovery has taken root and employment is improving, it has set the Government back significantly. Despite Liberia’s continued susceptibility to external shocks and fragility, it is anticipated that the many and varied capacity impacts generated from the project will ultimately assist the Government to enable efficiency gains, better prepare and manage the budget and spending and – ultimately – improve service delivery outcomes for Liberians. (b) Institutional Change/Strengthening. 66. EGIRP has had a considerable impact on institutional change in several areas. First and foremost, project implementation arrangements were designed in such a way as to ensure that skills would be built back into Government, and that there was progress towards the use of country systems in the medium term. The PFMU established in the Ministry of Finance was aligned with the functions of the Comptroller and Accountant General’s Office in order to integrate the PFMU into the office in the long run, and plans are currently underway to begin to make that transition. The International Procurement Firm recruited to assist with project procurement was also tasked to work with the big spending ministries, the Ministry of Education (MoE) and the Ministry of Public Works (MPW), among others, to prepare and prioritize their pipeline of seasonal procurements. 67. From a systems strengthening perspective, the installation of basic IT infrastructure (connectivity networks) and equipment (hardware and software), and staff training to manage and operate these systems has also had an important impact. IT infrastructure, connectivity and maintenance has focused principally on the automation of tax administration – through the installation of SIGTAs and the WAN/LAN – and in human 21 World Bank Group MFM, ‘Update on the Economic Impact of the 2014-2015 Ebola Epidemic on Liberia Sierra Leone, and Guinea’, April 15, 2015. 23 resources management, through the installation and deployment of the HRMIS component of IFMIS. Yet perhaps the most significant achievement is the human resource and professional development that has been facilitated by the project. On the one hand the project directly financed a team of SES professionals who are now working at all levels of Government, including in prominent roles of decisions making. On the other, the Financial Management Training School and Intensive Public Procurement Training Program have proven invaluable assets, and plans are now underway to ensure these programs are integrated into the curriculum of the University of Liberia. Initially established under a LICUS Trust Fund, but maintained and expanded under EGIRP, the FMTS has graduated 83 students with masterate level financial management capacities, and 54 students with post-graduate diplomas in procurement. These efforts are further complemented by the basic in-house training in procurement, which was delivered by LIPA to 241 staff across government and some private sector institutions.22 The preparation of a civil service career path in financial management and public procurement promises to augment and capitalize on these considerable institutional development gains. (c) Other Unintended Outcomes and Impacts (positive or negative). 68. Not applicable. 3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops 69. Not applicable 4. Assessment of Risk to Development Outcome Rating: Low 70. The key risk to the project’s development outcome is sustainability, and although implementation has proven difficult and slow, this risk is considered low, given the Government’s demonstrated political and financial commitment to project goals. Again, the Government’s commitment is evident in its agreement to finance recurrent staff costs for FMTS and IPTP graduates trained under the project and to absorb SES Consultants (including ministerial, and deputy ministerial levels). The forthcoming integration of the PFMU into the Comptroller and Accountant General’s Office is a further assurance of the long-term sustainability of the project’s inputs. 22Basic Foundation Training in the Enhancement and Professionalization of Public Procurement Management in Civil & Public Services of Liberia. According to the PMU, to date LIPA has conducted and completed training of 8 batches, with 241 participants from 96 Institutions comprising of Ministries, Agencies, Commissions and some private institutions. 24 5. Assessment of Bank and Borrower Performance 5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry Rating: Moderately Unsatisfactory. 71. The EGIRP Project was constituted in response to considerable Government and donor demand. It was collaboratively prepared, and it was required to bridge the gap between responding to emergency needs and priorities and providing the foundations for more targeted PFM and HRM reforms. As remarked in the Decision Note for the project, ‘the proposed activities were urgently needed, as they represent next steps in an ongoing program of PFM and civil service reforms. It is also the case, however, that the quality of this project at entry was compromised by several factors: the lack of an operations manual and dedicated PMU, a weak results monitoring framework, the project’s limited analytical underpinnings, and project design and implementation arrangements that did not reflect lessons learned from other operations in FCS contexts. Such lessons encourage an incremental, problem-oriented approach in FCS contexts and caution against an emphasis on the pursuit of institutional form over function. The QALP-2 (2009) was particularly concerned about the potential overreach of the project, and an attempt was made to consolidate activities around a more limited set of priorities through a process of restructure – although, to some extent, these efforts were thwarted by the advances already made. An attempt was also made to improve the utility of the results matrix, but this did not yield improvements. In the end, although the project rationale is not questioned, its design was complex and its development objectives were overambitious for the 3 year timeframe in which they were to be met. A better approach would have been to adopt modest ambitions to begin and to scale up and deepen results following the project’s early achievements. (b) Quality of Supervision Rating: Moderately Unsatisfactory 72. The quality of Bank supervision fluctuated over the life of the project and varied according to the unique approach and operational experience of respective Task Team Leaders. This ICR particularly notes that the implementing environment was tough. Liberia was emerging from conflict, its institutions were weak, and the demands on the project were high. WB supervision teams were focused on achieving development impacts, and yet poor and inconsistent ISR reporting, a high turnover of Task Team Leaders (TTLs) and poor project monitoring punctuated project results. In seeking to bridge the gains made under GEMAP, EGIRP produced a ‘Christmas Tree’ of activities and support, which was difficult to supervise, particularly in the absence of a dedicated PMU. Project supervision intensified from mid-2010, and following the first restructure, with active problem solving by the Bank to establish and inaugurate a newly dedicated PMU and to generate momentum on project implementation. These efforts signal the importance of intensive and proactive supervision for emergency operations in a fragile states context. 25 73. At other times throughout the life of the project, however, project files suggest that the quality of Bank supervision waned, with poor documentation and record-keeping, i.e. the absence of a PIM, lack of documentation on the first MTR, and limited candor in ISR reporting. Inconsistencies in Bank ISRs and Government data and reporting, and the evident disconnect between the Government and subsequent WB Supervision Teams on changes to the results framework (per Section 2.3 above) suggests that communication between the Bank and the client was not strong, particularly following the second restructure. Again, the second restructure formally enabled the extension of project closing from December 2013 to December 2014 and the reallocation of project proceeds within project components, but it was also the case that several PDO and IRIs were revised and dropped - and these revisions were not formally communicated to the Client or Borrower.23 This has rendered project monitoring difficult and made it particularly hard to gauge the impact of project activities. Given these challenges, and for the purposes of monitoring and reporting, this ICR has adopted the PDO Indicators, IRIs, and target values both agreed and approved by World Bank senior management, and communicated to the Client. 74. For the reasons outlined above: poor documentation and record-keeping; the lack of consistency in project monitoring; changes to the results matrix and poor communication with the client, this ICR has rated the Quality of Bank Supervision as Moderately Unsatisfactory. Justification of Rating for Overall Bank Performance 74. With a Moderately Unsatisfactory for Quality at Entry, and a Moderately Unsatisfactory rating for Quality in Supervision, overall Bank Performance is rated Moderately Unsatisfactory in accordance with the Bank’s harmonization criteria. 23 It was also the case, as reflected in several ISRs, that the target value for a particular PDO indicator – aggregate expenditure outturns compared to the original approved budget – was changed during successive World Bank supervision missions in the later stages of the project, with the effect that neither the Bank nor the client seem to be clear as to the target on which the project was ultimately be measured. 26 5.2 Borrower Performance (a) Government Performance Rating: Moderately Satisfactory 75. The Project benefitted from high level political support from Government, although it was also subject to the idiosyncrasies of an FCS in the high turn-over of senior government officials. An administrative transition following national elections in late 2011 delayed project implementation as many senior government focal points changed (particularly in MoF and MLME), and the new cadre of responsible ministers and deputy ministers needed time to familiarize themselves with the project. Despite these transitional challenges, the Government was a strong proponent of the project from the outset, and demonstrated its continued commitment to project goals through modest financial commitments towards installation of SIGTAS and LEITI, and through the absorption of the project’s human resources investments into the civil service (for example, SES Consultants, and FMTS and IPTP graduates). (b) Implementing Agency or Agencies Performance Rating: Moderately Satisfactory 76. The Ministry of Finance was lead implementing partner for the project and it managed its responsibilities as best it could, given the FCS context in which it worked. It also grew in capacity and confidence as the project matured. Initial implementation was fraught, particularly in the MoF. One ISR observed: ‘project management has suffered from the absence of a clearly designated government counterpart for the project for three months, delays in signing contracts and payments, and weak coordination’. From March to May 2011, the project had three MoF senior officials24 responsible for the project because the appointment of a designated counterpart remained pending. These arrangements delayed the signing of contracts and approval of payments and led to complaints by suppliers and consultants. Project management was also weakened by the initial lack of regular meetings of the National Steering Committee (NSC) and the Project Technical Committee (PTC), and this meant that the project ran for several months without an approved annual budget and work plan. 77. From the outset, implementing agency performance was poor. Nevertheless, it is also the case that many of these challenges, such as high staff turnover and delays within internal decision making, tend to characterize a fragile state, and the project benefited from a significant upswing in performance in implementing agency performance midway through project implementation until the project closed. Following the first project restructure, and with the benefit of a new and dedicated component for project management, the borrower’s performance improved, due to the increase in project 24 The Minister of Finance who was signing contracts and payments above $3,000, a Deputy Minister of Financing for Administration who was responsible to sign contracts and make payments below $3,000, and the Director of the Aid Management Unit, who was responsible for day-to-day activities. 27 management personnel and resources, and more intensive project supervision support by the World Bank. From that point forward, the NSC and PTC regularly met, and were pro- active in the preparation of project tasks and activities, in ensuring monitoring and supervision, and in follow-up. The PMU continued to galvanize its role as effective implementing partner and coordinating unit for the project year on year until project close. 78. Despite weak borrower performance and project delays to begin, this ICR has rated the Quality of the Implementing Agency’s Performance Moderately Satisfactory on account of the very practical challenges of an FCS, and the substantial upswing in borrower performance in the later years of the project. (c) Justification of Rating for Overall Borrower Performance Rating: Moderately Satisfactory 79. With a Moderately Satisfactory rating for Government Performance, and a Moderately Satisfactory rating for Implementing Agency or Borrower Performance, overall Borrower Performance is rated Moderately Satisfactory in accordance with the Bank’s harmonization criteria. 6. Lessons Learned 80. The project has yielded a number of general and project specific lessons that are relevant both to Bank engagement in fragile states, and to the nature and scope of emergency projects. 81. In an FCS, projects should be incremental, designed to build on the achievements of prior investments, and amenable to change or evolution. The WDR 2011 informs that ‘creating legitimate institutions, which can prevent repeat violence, takes a generation, and even the fastest transforming countries have taken between 15 and 30 years to raise their institutional performance from that of a fragile state – Haiti, say – to that of a functioning institutionalized state, such as Ghana’. As evidenced in this ICR, Liberia is no exception. A central contribution of the EGIRP project was in recognizing that, in fragile states, institutional and systems reforms are long-term endeavors that are rarely delivered by a single project. That in mind, and in order to be effective, the EGIRP sought to be incremental: to build on the achievements of prior investments, notably GEMAP and the SES; and at the same time to lay the foundations for deeper, sector specific reforms – in this instance, under the IPFMRP and the PSMP. As a result of these efforts, and despite variable setbacks, Liberia has seen modest yet incremental progress towards more efficient and transparent PFM and HRM, and these achievements are set to advance well beyond the life of the EGIRP project. 82. Emergency Projects are not well suited to the delivery of complex multi- sectoral objectives, and require dedicated PMUs and intensive in-country supervision. With 20 PDOIs and IRIs across two divergent sectors, PFM and HRM - the EGIRP was a complex ‘Emergency Project’. Implementation was particularly slow to 28 begin and until restructuring in 2011, in large part, because it was not implementation ready at project approval. The project needed further technical work and additional resources for the project’s IT components, as well as a dedicated PMU and operations manual. Indeed, implementation performance significantly improved following the appointment of a dedicated PMU (in 2012), and during periods of intensive in-country supervision, in which the TTL worked hand in glove to solve problems with Government. The lessons of these experiences are that complex multi-sectoral operations require adequate technical preparation, dedicated project management, and intensive in-country monitoring and supervision to achieve results. These lessons are well known to the World Bank and its operational staff, and yet existing pressures on TTLs are immense, particularly in a fragile states context, such that TTLs are rendered ill-equipped to dedicate the level of time and supervision needed for effective project management. 83. OP/BP.8.0 is a useful tool to process new investment lending in response to urgent FCS needs but it can prove inadequate unless its design, duration and level of commitment can be readily adjusted to fit the country context. With three formal restructures, and a design that tended more towards a conventional PFM or HRM operation than an Emergency Project, EGIRP was not tailored to fit Liberia’s fragile states context, and produced substantial transaction costs. A tension exists between the need for OP.8.0 and emergency responses, particularly in FCS contexts, and the need for good analytical work and assessments to inform project design. The lesson of EGIRP is that this tension is best met through more flexible project design, and an incremental and adaptive approach to implementation that enables the project to begin with modest ambitious, and to readily scale-up or adjust to fit the country context over time. This is arguably also an area in which the more systematic use of contingency funds could play an important role. 84. Complex multi-sector operations, designed for FCS contexts should ensure adequate support to build the monitoring and evaluation systems of Government. As a complex emergency operation, the project’s M&E architecture raised particular challenges due to the lack of robust and consistent data to measure results and a disconnect between World Bank and Government reporting. Yet, while the project’s M&E system was not robust, a particular value added introduced by the project was in strengthening a select few country systems for PFM and HRM M&E systems improvements. This is not to suggest that an Emergency Project could or should be responsible to improve country M&E systems overall, but a targeted approach that enables the development of a select few specific monitoring capabilities would be an important value added. 85. Training that is tailored to specialized professional services and accompanied by opportunities for career development can deliver productive professional capacity in Government. An important legacy of the EGIRP was its contribution to the development of a cadre of professional financial management and procurement specialists. With EGIRP financing, the FMTS and the IPTP produced 132 qualified financial management specialists and 54 procurement specialists, the majority of which now work 29 in Government.25 The project also took steps to complement these efforts by establishing a career path, accompanied by the appropriate rewards and incentives, for FM and Procurement Specialists in Government. As with all capacity building initiatives, it is difficult to quantify the direct economic or performance impact of this specific pool of graduates, although many of these individuals are in frontline policy, systems administration and fiduciary functions, demonstrating impressive performance. Indeed, the EGIRP has shown that, to be successful, specialized professional development programs should be tailored-to-fit particular skills and qualifications, and must be accompanied by on the job training and career development. In taking this approach, the Government has successfully secured the long term human resource opportunities offered by the project, and provided the basis to continue to build FM and procurement performance going forward. 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies See Borrower’s ICR at Annex 7. (b) Cofinanciers (c) Other partners and stakeholders 25 Data provided by the FMTS Coordinator, Sylvia Squires, 19 November 2015. 30 Annex 1. Project Costs and Financing (a) Project Cost by Component (in US$ Million equivalent) Appraisal Actual/Latest Estimate Percentage of Components Estimate (US$ millions Appraisal (US$ millions) ) I 8.478 14.45 70.44% II 2.200 3.200 0.45% III 0.350 100% Unallocated 0.322 - - Total Baseline Cost 11.00 18.00 64% Physical Contingencies - - - Price Contingencies - - - Total Project Costs Front-end fee PPF - - - Total Financing 11.00 18.00 64% Required (b) Financing Appraisal Actual/Latest Type of Co- Percentage of Source of Funds Estimate Estimate financing Appraisal (US$ mil) (US$ mil) Borrower - - - - Special 11.00 18.00 64% Financing Disbursement Loan Number Funding Type Disbursed (US$ millions) H3850 Grant 10.39 49070 Loan 6.85 Total 17.24 31 Annex 2. Revisions of the Results Matrix Revisions of the Results Framework PDO Original PAD Revision through Rationale for Change Informal Revision Rational for Change Additional Financing of Targets following (2011) MTR (2013) Improve the efficiency No Change No Change and transparency in managing public financial and human resources, focusing on revenue administration, public procurement, budget execution and payroll management. PDO Indicators Original PAD Revision through AF Rationale for Change Informal Revision Rational for Change to Targets following MTR Average difference Aggregate expenditure Revised - to reflect more No Change between budget outturn outturns compared realistic interventions of the and legislated budget to the original approved project and to use exact allocation for each budget and disaggregate wording for PEFA ministry for five key ministries indicators (disaggregated by ministry) 33 Tax Revenue Business procedures in Revised - to align the Continued but Target value changed to administration cost as a commercial registration of indicator with interventions baseline and target reflect the effect of percentage of revenue taxpayer in the Bureau of in tax automation. values revised automation on qualitative Internal Revenue. (manual versus automation) and quantitative changes (business procedures) Baseline: Manual with 11 steps Target: Automation with 13 steps Percentage of public Dropped - due to unreliable procurement that used data on public procurements direct contracting and that use direct contracting other less competitive and not aligned directly methods without with project interventions proper justification Decrease in discrepancy Ministries, Departments, Revised - to align the Continued between nominal roll and and Agencies (MDAs) indicator with direct project payroll registered in HRMIS interventions on biometric identification Procurement specialists New – to align directly with Continued graduated from intensive project interventions in procurement training at FM intensive procurement Training School working in training provided by MDAs FM Training School IFMIS published monthly New - to reflect expanded Continued activities related to the data center and WAN to integrate various information systems 34 Intermediate Outcome Indicators Improve transparency by Posting of quarterly Revised – to clarify the Continued reducing delays in posting expenditure reports on indicator of quarterly expenditure. MOF website after end of reporting period. Increased percentage of Dropped - not directly vouchers approved and related to major project voucher receipts by MOF interventions (only provision of equipment) and these activities completed Prepare legislative report Issuance of legislative Revised Continued on annual financial report on annual financial statement of public sector statement of public sector accounts accounts after end of reporting period. Increase percentage of tax Tax revenue captured in Continued revenue captured in the the Integrated Tax Integrated Tax Administration System Administration (ITAS) System (ITAS) At least two reports of Dropped - target had been payments to and revenue achieved received by the government for extractive industries (mining and minerals) are published within the project period Quarterly inspections of New - to reflect additional Continued industrial scale mining activities 35 operations performed by MLME. Annual technical audits of New - to reflect additional Continued large-scale mining activities operations conducted by MLME and BOC. Percentage of contracts Continued Continued valued more than USD$250,000 that have undergone annual external audits by GAC Percentage of procurement Procurement monitoring Revised - no methodology Revised – ‘MDAs Revision to better reflect for which less than 120 system developed and and mechanism in place to with interventions days operational in PPCC for enable monitoring of procurement tracking under the project and elapsed between bid MDAs. procurement in ministries methodology piloted realistic targets. opening and agencies by PPCC’ and the contract signature Adherence to the Dropped - target achieved Extractive Industries Transparency Initiative, particularly carry out audit of revenues received from mining companies for FY07/08 Percentage of civil Civil servants registered Revised - to directly reflect Dropped The project no longer servants using biometrics project supports this activity due registered in the HRMIS interventions to limited funding. A new career stream for New – to reflect a revision Continued procurement is established of 36 by CSA and endorsed by LIPA activities on in- GoL service training Number of procurement Procurement specialists Revised – to directly reflect Continued officers trained in basic working in MDAs project interventions procurement and have graduated from in-service acquired proficiency in procurement training at basic computer skills LIPA (Word, Excel, accounting, and budgeting) LIPA annual training New – to reflect a revision Dropped The indicator is not calendar created with of linked to project’s course offerings targeting LIPA activities intervention, i.e. delivery civil servants and of in-service communicated to MDAs procurement training program. LIPA Board of Governors New – to reflect a revision Dropped Establishment of Board established with of of Governors for LIPA representation from key LIPA activities seen as a political matter government that does ministries not reflect project’s interventions. 37 Annex 3: Outputs by Component Stage 1: 2008 – 2011 Stage 2: 2011- 2015 Outputs Components prior to Components post restructure restructure COMPONENT 1: STRENGTHENED PUBLIC FINANCIAL MANAGEMENT (a) Build functional PFM (a) Facilitate public financial info.  SIGTAS (Tax Roll and TIN); HRMIS Component of IFMIS; systems through support to exchange to improve quality of Data Centre26 and WAN/LAN delivered, installed and RMU. fiscal reports by creating a data tested27. center and a wide area network in  Recruitment of international policy advisers to support policy (b) Strengthen the joint MoF that provides a common reforms and improved procedures in rev. Admin, planning, MoF/UoL/LIPA/CSA Financial platform for an IFMIS: budget execution, procurement, monitoring.28 Management Training Program. (b) Build technical capacity in FM  Logistical support to Revenue Administration to ensure (c) Institutional support for and procurement through training County Payments. public procurement reforms and and intensive training program at  TA to develop internal control and internal audit framework support to LACE to implement the MOF Financial Management and capacities in five high risk ministries and agencies (MoH, investment programs in a range Training School. MoE, MoPW, MoF, MLME). of sectors (education, health, public works etc.). 26 The Data Centre was installed to support the functioning of IFMIS, which links ITAS and ASYCUDA in the Ministry of Finance. A mini data centre was also established at the GAC Office and will be connected to IFMIS at MoF. 27 Tax roll and Tax Identification Number (TIN), Core Module (Assessment, Payments, and Document Management), and Peripheral Modules (Appeal, Audit, Enforcement, Property Tax, Non-tax Revenue, and Value-Added Taxes). These modules will be deployed first at the Large Taxpayers Department (LTD), followed by Medium Taxpayers Department (MTD) and then Small Taxpayers Department (STD). 28 Inputs include: Aid Mgt Adviser to assist in creation of Aid Mgt Unit; Policy Advisors for budget prep, execution and review and for design of Chart of Accounts; logistical support to rev. payment which improved county payments systems 38 (c) Strengthen financial  Complete documentation of internal control procedures and (d) Consolidate and strengthen management and governance in the train staff in five ‘high risk’ ministries. tax administration by mining sector; implementing ITAS  TA for the re-establishment of an Internal Audit Board and Secretariat. (d) Improve revenue administration (e) Support mining sector by covering the cost overrun for  Chart of accounts established to rationalize GoL accounting financial governance. ITAS. (EF Response to QALP-2).  Procurement firm recruited to support project procurement (f) Train, support and equip team (e) Strengthen FM and governance and procurement in large procuring entities. (Budget of auditors in GAC; and in the mining sector through TA. execution in FY2009 reportedly zero?) strengthen the capacity of the Ways and Means Committee in  Trained 30+ students in PFMU. legislature  Performance evaluation of FMTS trainees.  Review of the FMTS training curriculum/program.  Purchase of equipment, library textbooks, training materials), and payment of staff salaries, student fees, stipends and medical insurance for FMTS.  Jointly with LIPA, trained select members of procurement committees in large spending ministries (50 Pax).  Design of an Intensive Procurement Training Program (IPTP), in FMTS.  Human resource management firm contracted to recruit procurement students on a competitive basis.  Institutional Assessment and preparation of an Action Plan to strengthen the PPCC. 39  Revised PPCA and provided logistical support for M&E of communication network for PFM.  Technical Advisor for Compliance and Monitoring Division of the PPCC.  PPCC Compliance Division holds procurement hearings with all MACs, to receive and review MDA procurement plans.  PPCC conducted public procurement training working with private sector companies (May 2012).  Installation of LAN Network at PPCC.  Stakeholder consultations on the draft PPCC regs.  LETIT compliance (first in Africa), publication of several audit reports, and establishment of LEITI Secretariat29.  Diagnostic review of LEITI and preparation of three-year post-validation work-plan. (check)  Capacity and functional assessment of MLME.  Joint EGIRP/GiZ recruitment of an EI Coordinator.  Joint WB/GiZ TA support to review and revise Mineral Policy, Mining Code and Mining Regs. 29 Expanding the scope of reporting to include fees paid to entities not yet included in EITI reporting requirements (Environmental Protection Agency, Bureau of Maritime Affairs, and others); (b) Develop an action plan to ensure reports are based on accounts audited to international standards; (c) Develop a Policy Manual to guide the internal workings of the MSG and LEITI Secretariat; (d) Establish local focal points to decentralize the LEITI process. (e) Integrate LEITI template into the regular government reporting, including linkages to IFMIS and IT AS that may facilitate reconciliation between LEITI figures and state accounts; (f) Undertake post-contract award process audits; (g) Track the government's use of extractive industries revenues. 40  Local Consultant recruited to manage pre-consultation process for a revised Mining Code.  TA review of reconnaissance, exploration and artisanal license administration and procedure.  Purchase and installation of mining cadastre equipment.  Procurement of mining inspection equipment (including GPS’, Non-Magnetic Tripods, Sat Phones).  Installation of Data Centre connecting GAC to IFMIS at MoF  Trained (#) GAC auditors on IT audit, including use of Computer Assisted Auditing Techniques (CAATs) and International Public Sector Accounting Standards (IPSAS)  GAC audit of GoL accounts for first time in 25 yrs.  Installation of Conference equipment in Senate and House of Representatives.  Study tour (for leaders of Senate and Congress, and officials of MoF and Presidency) to Ghana to experience legislative procedures, resulting in ratification of LESEP and WARCIP. COMPONENT 2: IMPLEMENTATION OF THE CIVIL SERVICE REFORM PROGRAM 41 Reducing fraud in the payroll (a) Strengthen a civil service  Approximately 31,801 civil servants biometrically identified. and pensions systems, employee database through the controlling personnel hiring; and development of a “ One Employee,  Financed 42 SES Professionals, who were later integrated by GoL into the civil service. rebuilding skills in the civil One File, One Salary, One Job” service through: using biometric identification and  Digitisation of data collection instruments, and networking of the development of a Biometric Centre at Civil Service Agency. (i) Better control of the payroll comprehensive Human Resource  TA to assist LIPA prepare an actionable, time bound plan of through the purchase, Information Repository; actions, and to revise business processes. installation and customization of a (b) Maintain existing capacity  LIPA: TA (Curriculum Consultant) preparation and computerized Human within the civil service by implementation of a pilot procurement training program. Resource Management supporting the Senior Executive  LIPA: Review of procurement training curriculum and Information System linked to Service Program. training of trainers. the payroll system of MoF; (c) Rehabilitate and strengthen  Delivery of in-service training pilot in five highest spending (ii) Rehabilitating training LIPA’s institutional capacity, both ministries (late 2011). capacity by strengthening its organizational and governance  TA to prepare a plan for internship of IPTP students, LIPA. structure and its training capacity. placement of IPTP graduates and the recruitment of second batch IPTP students.  Preparation of FM and Procurement Career Track.  Preparation of a transition plan to mainstream the FMTS into the University of Liberia. 42 Annex 4. Economic and Financial Analysis As earlier noted, there was neither an NPV/ERR nor an economic analysis undertaken during the preparation of this project, and it is difficult to gauge the direct economic and financial benefits of this project as many its subcomponents involved systems reform and capacity development. Nevertheless, in this section the project examines some of the wider economic gains achieved in the Liberia context during the life of the project, some of which can be linked to the project itself. Liberia has made good economic progress since 2008, but this has been setback by the outbreak of EVD and decline in commodity prices… Table 1: Liberia’s Basic Macroeconomic Indicators 2008 2009 2010 2011 2012 2013 2014 2015 Real GDP Growth 6.0 5.1 6.1 7.4 8.2 8.7 0.7 3.8 Real GDP per capita 6.2 -0.6 1.4 CPI Inflation 17.5 7.4 7.3 8.5 6.8 7.6 9.9 7.9 Total Government Revenue 19.1 23.0 26.8 26.0 28.5 28.1 28.8 28.8 (% of GDP) Total Government 29.5 33.1 32.5 29.1 30.1 32.1 32.3 40.1 Expenditure (% of GDP) Budget balance (% GDP) -9.4 -9.3 -5.1 -2.7 -1.6 -4.1 -3.2 -9.7 Current account balance (% -46.6 -23.2 -32.0 -27.5 -21.4 -28.2 -28.7 -41.6 GDP) Source: African Economic Outlook, http://www.africaneconomicoutlook.org/en/country-notes/west-africa/liberia/, accessed 24 November, 2015; and data from the IMF Mission, October 2015. On Component 1 GoL has reduced variance in expenditure outturns compared to the original approved budget, but consistent fiscal discipline remains a challenge. Table 2: Composition of Expenditure Outturn Compared to Original Budget Primary FY08/09 FY09/10 FY10/11 FY11/12 FY12/13 FY13/14 FY14/15 Expenditure Budget (original) 298.1 371.9 369.4 516.4 672.1 586.0 635.2 Actual 258.3 296.6 389.1 488.2 568.0 517.2 621.7 expenditure Difference (USD) -39.8 -75.6 19.6 -28.2 -104.3 68.8 -13.5 Percentage -13.4 - 20.3 5.3 -5.5 -15.5 -11.7 -2.1 difference Source: GoL Budget Office October 2015, based on Annual Budget as approved by the legislature and unaudited financial statements, FYs 2008-2014. Actual expenditure is presented on a cash basis. 43 Revenue collection has increased with the introduction of SIGTAS, but Government continues to experience a high level of fluctuation in its revenue projections..… Table 3: Domestic and Total Revenue, FYs 2010/2011‐2012/2013   (in millions of USD)  FY2010/2011 FY2011/2012 FY2012/2013 FY2013/2014 FY2014/2015 Approv Approv. Approv. Description Actual Actual Actual Approv. Actual Approv. Actual Budget Budget Budget Budget Budget Income and Profit Tax 60.5 110.6 84 126.8 127.2 154.5 173.3 161.4 149.4 155.7 Property Tax 1.9 2.2 1.8 2.5 3.1 3.8 5.2 4.1 5.1 3.3 Goods and Services Tax 57.5 54.4 72.6 57 62.2 61.6 72.2 63.9 45.4 53.8 Taxes on int’l trade 95.6 111.2 108.1 159.4 170.3 148.7 170.2 133.2 126.6 176.1 Other taxes 15.7 10 17 19.3 19.5 11.5 13.1 11.2 12.7 13.1 Property income 67.1 42.3 47.4 16.2 54.1 42.3 60.9 55.9 53.8 42.0 Administrative Fees 7.9 9.9 7.9 22.4 19.4 21.5 15.9 7.1 10.7 Fines, Penalties, and 5.4 2.7 1.7 4 Forfeits 3 2 2.6 2.1 3.4 Domestic Borrowings 0 10 5 10 5 0 0 Carry Forward 10.7 8.3 8.7 8.8 3 0 0 0 Contingent Revenue 39 111.8 40.8 83.4 63.2 0 0 15.5 Total Domestic 348 349.9 463.3 441.3 557.3 513.4 583.0 517.2 638.5 691.4 Revenue Source: Approved Annual Budget and unaudited financial statements, FYs 2010-2013. FY10/11 variance 55%; FY2011/2012 -4 75%; FY2012/13 -7 88%; FY2013/2014 -11 3%; FY2014/2015 8 3% LEITI has enabled the reconciliation of company payments with Government receipts, with just .24% and 2% discrepancy in FY10/11 and FY11/12 respectively. FY2010/2011 FY 2011/201230 Sectors Company GoL Receipt Company GoL Receipt Payment (USD) (USD) Payment (USD) (USD) Agriculture 18,330,499.66 18,281,719.70 27,217,903 28,003,258 Forestry 5,408,592.18 5,616,076.23 6,072,631 11,110,035 Mining 43,798,764.75 44,223,697.12 53,429,371 56,961,468 Oil 49,911.073.86 49,681,073.86 14, 089,915 14,071,895 Total 117,448,930.45 117,802,566.90 100,809,819 110,146,657 On Component 2 30 Note: In FY2011/2012, a net difference of US$9,336,838 (8%) remained unreconciled. This amount includes US$825,129 unreconciled payments made by small scale miners and pit sawyers; US$87,113 payments for companies below the threshold and US$6,741,606 unreconciled difference for companies not in LEITI database or registered extractive businesses, which are yet to engage in direct extractive activities. Overall, a net difference of US$1,925,394 (2%) of the total receipts from companies within the threshold remained unreconciled. 44 The GoL has successfully introduced payroll controls…. Source: CSA-HRMIS Directorate, ‘Biometric Status Update: Reporting on Activities of CSA-HRMIS Covering the Period FY 2013/14-2014/2015’. Note, the figures cited are in Liberia Dollars (LD). ..which translated into USD 2,660,148.00 in savings in FY13/14 alone. Source: CSA-HRMIS Directorate, ‘Biometric Status Update: Reporting on Activities of CSA-HRMIS Covering the Period FY 2013/14-2014/2015’. 45 Liberia has also produced a cadre of FM and Procurement Specialists, many of whom are working in the MDAs to consolidate further PFM gains.. List of FMTP/IPTP Students 2007-2015 Recruitment/Graduations, Placement and Absorption & Sponsors Batch Name of Candidates Placement into Absorbed into Ministries & Ministries & Program Recruited Graduated Sponsor Batches/year Agencies Agencies Male Female Male Female Payroll Payroll 1st Batch/2007 27 3 26 3 Yes 29 EGIRP 2nd 29 1 25 1 Yes 24 EGIRP Batch/2008 3rd 23 7 21 7 Yes 28 EGIRP Batch/2009 MBA 4th 21 9 19 9 Yes 11 EGIRP Batch/2011 5th EGIRP and 23 7 17 4 Yes 0 Batch/2013 IPFMRP 1st Batch/2012 20 5 19 5 Yes 24 EGIRP 2nd 24 6 24 6 Yes 12 EGIRP Batch/2013 Procurement 3rd 24 6 23 5 No 0 IPFMRP Batch/2014 4th 16 14 0 0 No 0 IPFMRP Batch/2015 46 Annex 5. Bank Lending and Implementation Support/Supervision Processes (a) Task Team members Responsibility/ Names Title Unit Specialty AFTME - Modupe A. Adebowale Sr Financial Management Specialist HIS Paola Agostini Lead Environment Specialist GENDR Lisa Bhansali Adviser GGODR Parminder P. S. Brar Lead Financial Management Spec GGODR LEGAF- Eduardo Brito Senior Counsel HIS Martin Brownbridge HQ Consultant ST AFRDE AFTDE - Samuel Bruce-Smith Consultant HIS Emmanuel Doe Fiadzo Senior Economist GMFDR Errol George Graham Senior Economist GMFDR SEGOM Graeme Eric Hancock Senior Energy Specialist, Mini - HIS Christopher Paul Jackson Lead Rural Development Special GFADR Barbry R. Keller Senior Operations Officer GSURR Ekaterina Mikhaylova Lead Strategy Officer GEEDR Nyaneba E. Nkrumah Sr Natural Resources Mgmt. Spe GENDR SASDA - Michael A. Stevens Consultant HIS Amadou Tidiane Toure Consultant EACMM AFTP4 - Bi Gouri Simplice Zouhon E T Consultant HIS Supervision/ICR Esther Bryant Program Assistant AFMLR Ismaila B. Ceesay Lead Financial Management Spec GGODR Winston Percy Onipede Cole Sr Financial Management Specia GGODR Maxwell Bruku Dapaah Sr Financial Management Specia GGODR AFTP1 - Giulio De Tommaso Sr Public Sector Mgmt. Spec. HIS Emmanuel Doe Fiadzo Senior Economist GMFDR Errol George Graham Senior Economist GMFDR AFTP4 - Anna Kristiina Karjanlahti Jr Professional Officer HIS Smile Kwawukume Senior Public Sector Specialis GGODR AFTPE - Anthony Mensa-Bonsu E T Consultant HIS 47 Ekaterina Mikhaylova Lead Strategy Officer GEEDR Allan Rotman Lead Procurement Specialist GGODR AFTP2 - Rebecca Simson E T Consultant HIS AFTPR- Harjit Singh Consultant HIS SEGOM Dorian Vasse Jr Professional Officer - HIS (b) Staff Time and Cost Staff Time and Cost (Bank Budget Only) Stage of Project Cycle USD Thousands (including No. of staff weeks travel and consultant costs) Lending FY08 59.35 203.34 Subtotal: 59.35 203.34 Supervision/ICR FY09 33.17 116.16 FY10 50.25 187.25 FY11 34.59 141.94 FY12 26.36 107.77 FY13 24.96 106.80 FY14 12.03 39.16 Subtotal: 181.36 699.08 Annex 6. Beneficiary Survey Results Not applicable Annex 7. Stakeholder Workshop Report and Results Not Applicable. 48 Annex 8. Summary of Borrower's ICR Assessment of the operation's objectives, design, and implementation. The objectives, design and implementation of this project were highly relevant and appropriate to address the immediate post conflict circumstances with which Liberia was confronted. Liberia’s government institutions were in a chaotic situation; revenue generation, financial management, transparency, budgeting and human resource management had become critical issues, and the Government needed support to enhance its manpower, to develop processes and infrastructure for proper accountability and effective management of public funds, and to reduce the wage bill, which was overburdened by a bloated civil service. The justification for the intervention was multidimensional: Firstly, it identified weaknesses in public sector financial management which were serious constraints on the country’s development; second, it identified weakness in fiduciary management which provided an opportunity for corruption; and third, it rightly focused on governance and institutional reform through a combination of information technology, capacity development programs and public policy efforts. Taken together, these activities were expected to reduce corruption, and to provide efficiency, transparency and accountability; thereby, sustaining the gains made in governance and institutional reform through prior interventions. The project’s success rested on several factors including, the experience of the World Bank in post conflict countries in developing the project’s content; the relevance and timeliness of the operation; and the strong commitment of Government and donors to drive implementation. Project preparation, design and quality at entry were major factors that positively influenced implementation. The project management structure and effective oversight and coordination by the Project Management Unit was another strength of the project. Assessment of the operation against agreed objectives The World Bank ICR refers. Evaluation of the Borrower's own Performance during implementation Borrower Performance - The Government performance is rated Satisfactory. As per the Financing Agreement (FA) the Government major responsibility under Section I. Project Execution - Institutional and Implementation Arrangements includes the following:  Institutional Arrangements  Implementation Arrangements (1)Established a National Steering Committee (1)Project Implementation Manual (2)Project Technical Committee (2)Annual Work Plan and Budget (3)Project Financial Management Unit (3)Anti-Corruption Guidance (PFMU (4)Project Monitoring and Evaluation 49 (5)Financial Management, Financial Report and Audits (6)Follow established procurement guidelines set by World Bank and PPCC It is noted that the Government of Liberia demonstrated strong political will to ensure execution of all provisions of the Financing Agreement (FA), Aide Memoires and Project Paper for both the original grant U$11 million and Additional Financing (AF) U$7 million. Yet the Government also faced considerable challenges as a result of the many changes in leadership and staff turnover in the implementing agencies, the MOF and beneficiary entities, which caused delays in fiduciary management and project execution. For example whenever there was a change in the management team of the MOF, banking transactions were delayed due to signing issues at the bank. Secondly, most beneficiary entities struggled to implement the project in a timely manner due to a lack of capacity, institutional politics and political issues arising in terms of who would have signing authority at the designated bank. Implementation Agency Performance: The success of the project implementation can be mostly attributed to effective and efficient project management, active fiduciary as verified by the Government’s Impact Evaluation Assessment. The assessment noted the following:  99% disbursement rate;  Consistent satisfactory rating by World Bank supervision missions;  Approval of procurement plan by TTL delivered as per agreements of FA and PA;  Approval of Work Plan and budget by TTL delivered as per agreements of FA and PA;  Periodic project quarterly and annual reports delivered as per agreements of FA and PA;  Periodic external audits reports delivered as per agreements of FA and PA;  Project Management Unit (PMU) regularly coordinated the Technical and Steering Committee as agreed;  PMU support for Supervision Missions as agreed;  PMU trained procurement staff as agreed; PMU coordinated and completed all project activities 100%. PMU coordinated and ensured impact assessment done;  PMU ensured information sharing of project activities to stakeholders and the larger community through radio, social and print media. Given the above, and due to the satisfactory achievement of the majority of result indicators and completion of all components and sub-components, together with sound project management, particularly in the later years of the project implementation – Implementing Agency Performance is rated Satisfactory by the Borrower. This can be verified by the various supervision missions conducted by the Bank communicated through by Aide Memoires. Overall Borrower Performance: Overall Borrower Performance is also rated Satisfactory. In spite of the many challenges faced in project implementation, including the EVD-EBOLA outbreak and changes in personnel and staff turnover; the government demonstrated commitment and political will to ensure that the project was successfully implemented. Sustainability is a potential challenge especially for the Financial Management Training School and Intensive Procurement Training Program due to competing priorities of the Government. The management of the program is expected to be transfer to the University of Liberia in the not too distance future. 50 Finally, the Government (MFDP) did not do a good job at the close of the EGIRP project to allow the PMU to complete other administrative activities and assist the PFMU in its final audit of the project. Additionally, the GoL and the Bank did not have adequate exit strategy to assimilate staff of the PMU into the MFDP to retain institutional knowledge and lessons learned. Bank Performance Bank Performance Lending - The IDA performance classification, preparation and appraisal of the project is rated Satisfactory even though the design was very ambitious with many parts. It is also important to recognize that there were no new fiduciary risks identified during implementation that had not been foreseen in the original project, that overall financial management arrangements satisfied the Bank's minimum requirements under OP/BP 10.02 with a Minimum-Likelihood rating; and that a US Dollar Credit Designated Account (IDA) was opened at a commercial ECO Bank, under terms and conditions rated satisfactory to IDA. Supervision - The Bank's Supervision Performance is rated Satisfactory, and indeed, the Bank’s supervision support contributed to the overall success of the project. The Bank’s technical specialists in financial management, procurement, public administration, mining and capacity building provided adequate support during project implementation, despite that there were gaps in supervision. Most of the technical staff have adequate experience working in developing countries and provided excellent advisory and technical support to the PMU. Due to the ambitious nature of the project, implementation was a challenge, particularly when the TTL was out of the country. The project also had four different TTLs, and several coordinators and procurement officers which cause implementation delays. In some cases, supervision meetings were not vigorous enough to address or resolve implementation issues. Timely Bank responses to requests for non-objection also posed a problem when the TTL or technical specialists were out of the country on mission or stationed elsewhere. Indeed, the processing of non-objections was often too slow and resulted in a lot of time spent waiting for approval to proceed with implementation. Despite these constraints, the Bank provided sustained and ongoing supervision in the midst of these challenges. As per the PAD "the Task Team Leader coordinated regular supervision meetings with the technical specialists and members of the CMU review project progress and resolve bottlenecks" The Government would however note that most implementing agencies are also of the opinion that it is expedient for the World Bank to involve beneficiary and stakeholders in making decisions on project activities instead of prioritizing activities for agencies on their behalf. The process of determining fund allocations should also involve the implementing agencies themselves. Agencies understand the country context and social and political environment. And finally, the life span of the intervention was too short in some agencies - for example, LACE. Overall Bank Performance - The Bank's overall performance is rated Satisfactory. The Bank was very dynamic in managing all aspects of preparation, and produced the required documentation for appraisal and supervisory missions in a timely and orderly manner. Description of the proposed arrangements for the sustainability of the project 51 The design and implementation of the EGIRP has several inbuilt features that have enhanced its sustainability.  Human capacity: Central to the sustainability of this project is the quality of human resources now available to Government. This project has built a high level of human resources capacity in the public service of Liberia. On the one hand, the involvement of senior civil servants at different stages of the project: for example, in project meetings, supervision meetings, process development and adjustment, and implementation has enabled on- the-job training and develop human capital to manage administrative processes and procedures down the line. Direct capacity was also built in terms of basic skills and competencies; public servants were trained at home, abroad and in-situ and have acquired a variety of skills that can be sustained beyond the life of the project as a result. The integration of these SES professionals into the civil service further demonstrates the government’s commitment to ensure the sustainability of the project.  Institutional capacity has been built through the installation of IT infrastructure, and development of administrative processes and procedures. Some existing institutions have used these opportunities to further develop. For example, LIPA has used her new image to design an enterprise project, generating revenues for the institution. Lessons Learned Higher efficiency in Governance is achievable in post conflict countries with well-targeted interventions. In post war countries, the immediate pressure for reconstruction and stability can be overwhelming, and it is strategically prudent to identify and target sectors that can quickly help to achieve stability. To that end, EGIRP appropriately targeted financial management and capacity building, aiding the faster recovery and stability of the Liberian economy. The development of local human capacities should be at the center of capacity development efforts for countries coming out of crises. There are many options available to development partners to development the human capacities of a nation coming out of conflict. Rather than importing skills as the first option, more rewarding is to build local capacity as seen in the SES program. Stakeholders’ involvement and participation is critical. To strengthen ownership and motivation on the part of project stakeholders, they should be engaged in the design, and participate deeply in its implementation. The involvement of the Steering and Technical Committees under the EGIRP and results achieved, highlight the value of these efforts. An Exit Strategy is important to ensure sustainability. As donors support for project goals will ultimately cease or dwindle after project implementation, the Government should define a clear exit strategy with the support of the donors and partners. The SES designed an exit strategy, involving the absorption of SES and other human capacity resources, which has helped to sustain the benefits of the program. 52 Annex 9: Borrower’s Results Matrix Borrower’s Results Framework and Monitoring Indicators As at November 2015 2007/08 09/10 2010/2011 2011/2012 2012/2013 2013/2014 2014/2015 Unit Baseline Actual Actual Target Actual Target Actual Target Actual Target Actual Target PDO RESULTS INDICATORS 1. Aggregate expenditure outturns compared to the original approved budget (and % 21.0 -19.8 8.4 -15 -5 -5 -12 -1 -32 -21 -3 24 disaggregated by five ministry) Ministry of Agriculture -41.0 -46.5 -18.9 -30 -30.0 -13.0 -45.0 -2.4 -44.8 -44.2 -2.5 3.8 Ministry of Education 2.0 -4.5 5.9 2 11.7 -5.7 6.9 0.0 -25.5 -25.8 -1.7 0.8 Ministry of Health -5.0 -25.4 2.6 -3 -12.3 -8.0 -11.7 0.0 -43.9 -31.0 -3.6 10.7 Ministry of Land, Mines, and Energy -10.0 -20.9 -59.9 -8 -32.4 -16.9 -48.2 -3.5 -71.1 -37.6 -1.0 5.9 Ministry of Public Works -48.0 -49.6 -15.9 -40 -8.0 -8.4 -60.8 -1.6 -48.7 -33.4 -1.2 2.9 2. Business procedures for commercial Function Functio Function registration of tax payers in the Bureau of 11 steps Functional al nal al Internal Revenue 3. Qualified procurement specialists graduated from intensive procurement 0 0 0 25 24 20 24 20 43 20 30 20 training working in Ministries, Departments and Agencies (MDAs) 4. MDAs registered in HRMIS 0 11 16 24 29 24 29 24 29 30 29 5. IFMIS Report published monthly 0 0 0 Posted Posted 45 days 45 days INTERMEDIATE INDICATORS Component I: Strengthened Public Financial Management 1. Posting of quarterly expenditure reports 42 on MOF website after end of reporting No data 83 days 45 days 45 days 45 days days period 53 2. Issuance of legislative report on annual Not Not financial statement of public sector accounts Not yet Not yet Not yet Not yet Not yet Not yet yet yet at end of reporting period 3. Tax revenue captured in the ITAS 64% 100% 4.Quarterly inspections of industrial scale mining operations performed by MLME No No No No No No Yes 0 5. Annual technical audits of large-scale mining operations conducted by MLME and No No No No No No No No BOC 6. Percentage of contracts valued over USD 250,000 that have undergone annual Unclea Unclea Unclear Unclear Unclear Unclear Unclear Unclear external audits by GAC r r 7. Procurement monitoring system Procurem P/hearin P/ P/ developed and operational in PPCC for ent Yes Yes g hearing hearing MDAs hearing Component II: Initiating Civil Service Reform 1. Civil servants registered using biometrics 21,080 30,000 21,080 30,000 25,000 30,000 36,000 30,000 2. A new career stream for procurement is DRAF No No No No yes Yes Yes established by CSA and endorsed by GoL T REP. 3. Procurement specialists working in MDAs completed in-service procurement 75 75 103 75 103 75 241 75 training provided by LIPA 5. LIPA annual training calendar created with course offerings targeting civil servants Yes Yes Yes Yes Yes Yes Yes Yes and communicated to MDAs 6. LIPA Board of Governors established with representation from key government No No No No No No Yes Yes ministries 54 Annex 10. Comments of Cofinanciers and Other Partners/Stakeholders Not Applicable. Annex 10. List of Supporting Documents  Borrower’s ICR October 2015.  CSA-HRMIS Directorate, ‘Annual Report 2015: Report on the Activities of the Directorate from January 1 2015- 31 October 2015’.  CSA-HRMIS Directorate, ‘Biometric Status Update: Reporting on Activities of CSA- HRMIS Covering the Period FY 2013/14-2014/2015’.  Public Financial and Accountability Assessment (PEFA), July 2012.  Government of Liberia, Annual Budgets FY2008-2014.  Government of Liberia Public Financial and Accountability Assessment (PEFA) Self- Assessment 2015.  World Bank, ‘Integrated Public Financial Management Reform Project’, Project Appraisal Document, November 18, 2011.  World Bank, ‘Public Sector Modernisation Project’, Project Appraisal Document, January 15, 2014.  World Bank Group MFM, ‘Update on the Economic Impact of the 2014-2015 Ebola Epidemic on Liberia, Sierra Leone, and Guinea’, April 15, 2015. 55 MAP OF LIBERIA 56