OFFICIAL DOCUMENTS Supplemental Letter STATE OF UTTARAKHAND June 25, 2019 International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America INDIA: Loan No. 8928-IN (Uttarakhand Public Financial Management Strengthening Project) Performance Monitoring Indicators Dear Sirs and Mesdames: We refer to Section II of the Schedule to the Project Agreement between the International Bank for Reconstruction and Development ("Bank") and the State of Uttarakhand. Unless otherwise agreed with the Bank, we shall monitor and evaluate implementation of the Project in accordance with the Performance Monitoring Indicators attached to this letter. Very truly yours, STATE OF UTTARAKHAND By___ Authorized Representative Attachment - Performance Monitoring Indicators Results Framework COUNTRY: India Uttarakhand Public Financial Management Strengthening Project Project Development Objectives(s) The project development objective is to enhance accountability in public finances and increase effectiveness of revenue management systems in Uttarakhand Project Development Objective Indicators Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 Enhanced accountability in public finances (a) Stand- alone (a) Treasuries (a) Full state applications for have submitted accounts treasury and (a) Online monthly submitted to budgeting and Payment Bills Payments and accounts to the Accountant manual systems processed by accounts of all Accountant FD has provided General through in Works Drawing and Works Budget General, to the public IFMIS in paperless Complete and timely departments. Disbursing departments are preparation, including for online access to form, within ten State financial reports DLI 1 (b) Employee Officers (DDOs), processed allocation and Works Budget days from close of made available in service records other than of through IFMIS distribution have departments, execution the month public domain (Text) are manual and Works (b) Payroll been done through IFMIS, not linked with departments, processing and through IFMIS. within ten days reortst er bP rolc friendly format. employee service current payroll and Treasuries approvals have from close of the records are database and through IFMIS been done calendar month integrated and up there are delays through HRMIS (b) Service to date in processing of records have pension data been validated Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 for all employees, digitized and linked to Payroll module of HRMIS. Improved coverage of internal audit for high DLI 2 10.00 10.00 20.00 40.00 60.00 60.00 60.00 risk auditees (Percentage) (a) FD has disclosed (a) Budgetdicoe (a) Bdgetpublicly:(i) execution reports actkn( and procurement Budget contract awards report on FD has provided reports and are not (a) FD has budget public access to procurement published Online portal notified the proposals for information contract awards Enhanced estblished for SBDs in the last completed electronically on are published. transparency of key (b) Absence of citizens to Official year; (ii) at least 90% of (b) SBD notified budgetStandard Bidding provide Gazette(b) GRM Medium Term procurement and procurement Documents. comments for procurement Fiscal Plan contracts operationalized procuremendtitienopeiratidotn.(MTF)ed information (Text) Limited citizen during budget complaints (MTFP) in awarded over (c) GRM participation in preparation established and compliance with the e- estabs budgeting. process. functional. the FRBM Act; (d) GRM for and (iii) Citizen proreentd iizen procurement not Budget; (b) FD threshold provide inputs to established has published budget budget information bilingually in Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 open format Improved timeliness in prepartion and pplation od A DLI 4 0.00 0.00 0.00 10.00 50.00 70.00 70.00 publication of AFS of ULBs (Number) Increased effectiveness of revenue management systems Increased property tax collections of participating ULBs DLI 5 0.00 0.00 0.00 10.00 20.00 30.00 30.00 over baseline (Percentage) Intermediate Results Indicators by Components Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 Strengthening the Public Finance Management Functions (a) GO issued for (a) GO issued transition of works mandating budget (a Cremouls accounting to preparation,. Stand- alone of FMIS namely aFMin oks a ation Approval obtained New generation FMIS applications for budget, payments, module hav been disribtion from Accountant with enhanced controls treasury and e-DDO rolled out mpleented tr budg t General for New generation and processes budgeting and (b) GO issued includin thmoulo eMug submission of IFMIS implemented including project module of IFMVIS. implemented (Text) manual systems in mandating bill wise budget, (b)eBudget combined works departments. processing through accounts commitments and module IFIIIS expenditure (c) operationalized Cash credit limit and integrated Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 system with other discontinued modules of IFMIS (a) Computerized (a) Payroll module (a) GO issued (a) Initiation of ready for HRMIS to cover payroll system with mandating payroll emplo of manual deployment (User rocessing and Online HRMIS with interventions Acceptance approvals through 60% of service selected state own Payroll and records and payroll (b) service records Testing and HRMIS records digitized enterprises and employee service implemented (Text) are maintained training (b) 30% o and validated by parastatals records integrated impemete (Txt not completed)(b) of DDOs (b) 100% of service and are up to date manually and not recodditze Contract awarded ords digitized records digitized for service record and validated by ciiiainDDOs and validated by . DDOs digitization DDOs (a) Cash and Debt Debt records are Management Cell maintained established and (a) An Annual Cash (a) Training manually, Medium Cash and Debt and Borrowing (a) Training provided to staff Term Debt Strategy Management Plan has been (a) Training provided to staff (b) Debt (MTDS) and Public Committee prepared and toon software and management Improved cash and debt Debt Statistical constituted. updated monthly on software and debt management. software updateddeb managementemntsftar management practices DLI 7 Bulletin not (b) Debt recording (b) Complete debt debt management management prcics DLt (b) MTDS has been implemented. institutionalised (Text) prepared and Debt and management data is available on (b) Public Debt prepared and used (c) Debt statistical Sustainability Software an electronic Debt Statistical Bulletin for the annual bulletin, MTDS,DSA Analysis (DSA) not identified. Recording and published for last borrowing and Cash & conducted (c) GoUk has Management FY calendar. Borrowing Plan notified the Public system prepared. Debt Procedures Manual. Improved planning, (a) Weak alignment Training on (a) Guidelines (a) Preparation of Evaluation of Improved planning budgeting and evaluation in government goals outcome and developed and MTEF, outcome gender budget and and budgeting and Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 framework implemented and expenditures gender budget adopted by GoUk budget, and outcome budget evaluation (Text) (b) Limited provided for MTFP, Medium gender budget for for five key framework evaluations done Term Expenditure five major schemes institutionalised post budget Framework departments conducted by (MTEF), outcome (b) Training on evaluation and gender budget outcome, gender committee and evaluation.(b) budget and Preparation of evaluation process MTEF, outcome provided budget, and (c) Training on gender budget for MTEF and MTFP five major provided departments (a) Updated Guidelines for (a) Consultant appraisal of capital la)Constt projects approved (a) At least 30% of (a) At least 80% of (a) Appraisal appointed to an e ihvle (a) At least 60% of nwhg au guidelines exist but develop guidelines anewewhihighuenevaluevlu operationalized by projects appraised projects appraised need improvement and project oeainiedb prjcspriedprojects appraised Improved appraisal and GoUk(b) under the new under the new (b) Mnitoing onitringunder the new. monitoring of high value (b) Monitoring monitoring Rationalization of guidelines . guidelines capital projects (Text) system of high software (b) schemes (b) FD reviews guidelines (b) FD reviews all value projects Process of completed and progress of high (b) FD reviews all high value projects needs improvement schemes incorporated in value projects high value projects using PMD rationalization using PMD .i i .budget(c) Project using PMD initiated monitoring dashboard (PMD) developed Audit Directorate (a) Audit processes (a) Manuals for (a) Manuals on Training on (a) Quality (a) Manuals strengthened (Text) are manual Internal, Works Performance thematic audit Assurance operationalized, Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 (b) High risk and Revenue /Thematic and provided to staff conducted based staff trained and Thematic audit not Audit, and Procurement Audit on established two thematic audits conducted Financial Attest notified and guidelines (b) One completed audit notified and published on the thematic audit (b) Annual report on published on the website of GoUk completed audit of local bodies website of GoUk (b) Training placed in state (b) Training provided to audit legislature for the provided to audit staff on the above year ending March staff on the above audit manuals 31, 2022 audit manuals 40% of ALL Internal 60% of ALL Internal 60% of ALL Internal No automated audit Audit reports have Audit reports have Audit reports have Online Audit management Audit module of Compliance been issued been issued been issued through Management System system presently Ai modle of module of OAMS through OAMS, through OAMS, OAMS, within two Implemented (Text) used by the OAMS rolled out rolled out within two months within two months o thi two months from department from completion from completion of aditof aditcompletion of audit of audit of audit First response First response Improved auditee First response rate Auditees trained in entered in OAMS entered in OAMS FrterespnS prov auite Fist rspose ateentered in OAMS by response to Internal is currently not NA use of the by auditees for by auditees for auditees for 50% of Audit reports (Text) monitored Compliance 30% of audit 40% of reports reports issued audit module of OAMS reports issued issued audit through OAMS through OAMS Improved coverage of Financial Attest Audit of Local Bodies (Urban and DLI 6 0.00 0.00 40.00 60.00 80.00 80.00 Rural) (Percentage) Number of staff trained Training Needs (a) Structured Additional 1000 Additional 1000 Total 3000 staff 900.00 Training Neds (anStrucured i 100 aditi 100 tal 30 taf in targeted PFM areas Assessment training curriculum staff trained in the staff trained in the trained in the Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 (Text) completed and and courses targeted areas targeted areas targeted areas mid-term training developed. (b) plan developed. 1000 staff trained in the targeted PFM areas Number of Female staff 12 percent of total 15 percent of total 20 percent of total 25 percent of total 25 percent of total trained (Text) trainees trainees trainees trainees trainees Grievances responded by project level GRM 0.00 0.00 0.00 25.00 50.00 75.00 (Percentage) Strengthening Revenue Management Systems System (a) New online Integrator/Vendor excise BPR and Functional appointed and management New online excise e-Governance application Basic Excise e- Review System software rolled out Online excise management . ~ Requirement mngmn for excise function Governance Specification for . (b) IT enablement management software implemented (Text) application exists the new Excise Specifications of excise offices software rolled out implemented in system developed. (SRS) developed completed in all offices Excise Department for online excise management software GIS based Property tax system implemented in partic ipinU iB 0.00 0.00 2.00 8.00 14.00 14.00 participating ULBs (Number) House hold survey completed (umer) 0.00 0.00 2.00 8.00 14.00 14.00 completed (Number) ULBs have digitized their mLBana prope t r 0.00 4.00 14.00 14.00 14.00 14.00 manual property tax Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 registers (Number) (a) Consultants (a) GIS training appointed for provided to staff of (a) GIS training Dedicated GIS cell property tax provided to staff of CapactybildinDendiScn t red GISdcell GIS Cell and 4 ULBs Capacity building on GIS not formed and GIs digitization and GIS (b) Policy note GIS training GIS training 20 ULBs in UDD (Text) trainings not mapping prepared on provided to staff of provided to staff of (b) GIS cell fully provided (b) Dedicated GIS prae additional 8 ULBs additional 8 ULBs operational and Celloetupwith alternative Cell setup with pmanages GIS for adequate technical perax ULBs staffmechanisms staff IT applications for IT application for Roadma fo MauladStrategic Businessrenusytm Roatap or Manual and Plan including IT revenue systems IT application for revenue systems strengthened Revenue disaggregated PlandmeludingovT identified/Systems revenue systems has gone live and systems in GMVN (Text) revenue systems roadmakp approved Integrator has gone live strategic business appointed plan operationalised Strengthening PFM in Urban Local Bodies and State owned enterprises (a) Manual (a) Reform action accounting process plan for transition followed in the to Double entry (a) MAS deployed state and no state accrual based in 10 ULBs (b) GO wideuniorm ompteried andaingStaff of all ULBs wide uniform computerized mandating Staff of additional Staff of all ULBs have been trained ULBs institutionally accounting software accounting system accounting on 30 ULBs have been have been trained in revised UMAM strengthened (Text) implemented developed and MAS issued (c) trained in revised in revised UMAM and MAS and MAS (b) Staff not trained approved by GoUk Training on the tranednn rvise ninMeviedpUAMead eMS ian aMA on accrual double (b) Revised revised UMAM and UMAM and MAS and MAS implemented in all entry accounting Uttarakhand software provided system accounts Municipal to 20 ULBs Accounts Manual (UMAM) notified Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 by GoUk(c) Municipal Accounting Software (MAS) has been identified and contract signed with vendor Double Entry Accrual based computerised accounting system 0.00 0.00 10.00 50.00 70.00 92.00 implemented in ULBs (Number) ULBs opening balance UBse oprepare(ner 0.00 0.00 20.00 50.00 92.00 92.00 sheet prepared (Number) Monitoring & Evaluation Plan: PDO Indicators Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Cetion Coleon Collection Collection This indicator measures the implementation of new FMIS and HRMIS leading to enhanced internal controls, FMIS and online bill processing, faster HRMIS Review of systems and Directorate of Complete and timely State financial payments, online Annual maintained reports generated from Treasuries reports made available in public domain accounting and reporting. by Director system This indicator will measure of Treasuries the completeness and timeliness of accounts submission to Accountant General and disclosing financial reports in public domain. This indicator measures the increase in number of high risk auditees (Category A) actually audited as acmpadiote tal Audit directorate would Impovd oveag o ineralaudtmor ae.di wil theAtotal Reports from Improved coverage of internal audit for Annual provide this data from Directorate of Audit highriskaudieesauditees. Audit will be OAMSOAS high risk auditees OAMS. deemed as completed when the audit report is issued through OAMS within two months from completion of audit. Reports available on . . websites for each of the This indicator measures the agreed areas. Citizen Enhanced transparency of key budget and tasency and Annual FD portal and GRM portal PMU in CTRFA of key budget and procurement information available and procurement information to oeainlzdSD the ciizen.operationalized.SBD)s the citizen. notified in Official Gazette. This indicator measures the preparation of AFS by ULBs Data will be collected within six months from the year wise by UDD from Improved timeliness in prepartion and close of the FY. The Annual UDD the ULBs and AFS as UDD publication of AFS of ULBs accounts needs to be generated from the prepared as per revised MAS. UMAM and through the approved MAS. This indicator measures the ULB increase in the collection of electronic Data will be collected Increased property tax collections of .. AnnualUD participating ULBs over baseline Property Tax in participating Property by UDD from ULBs ULBs subsequent to Tax Registers digitization of property registers and GIS maps. The current baseline of property tax is INR 400 Million for 14 participating ULBs. Monitoring & Evaluation Plan: Intermediate Results Indicators . .Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Cetion Coleon Collection Collection This indicator tracks the User Acceptance implementation of the new Directorate Testing sign off, New generation FMIS with enhanced Annual Training Reports and Directorate of Treasuries generation software IFMIS of Treasuries controls and processes implemented and generation of complete Usage Reports from IFMIS reports on a timely basis. User Acceptance Directorate Testing sign off, Online HRMIS with integrated service This indicator tracks the Annual ' Directorate of Treasuries records and payroll implemented implementation of HRMIS of Treasuries Training Reports and Usage Reports from HRMIS . . Reports from software This indicator measures Cash and andot reor adoption of modern cash Debt adtingreos. Cash and Debt Improved cash and debt management ad de rnmcasht Annual D ebt MTDS, Debt Statistical Management Cell and FD practices institutionalised .ae ana gntMangemn Bulleting and DSA practices and institutional Cellpulse strengthening Training details would be collected from MIS. This indicator tracks the Planning The quality of training Improved planning, budgeting and implementation of new Annual department on budget PMU in CTRFA and FD evaluation framework implemented framework for planning, and FD interventions would be budgeting and evaluation. measured from quality of budget documents and GO. This indicator will review Expenditure EFC will provide development and Finance projects appraised Improved appraisal and monitoring of operationalization of Annual Committee while reports from PMU in CTRFA and FD high value capital projects appraisal guidelines and (EFC) MIS PMD will provide project monitoring and PMD MIS project monitoring dashboard This indicator tracks the development and Audit . . Audit Directorate and Audit Directorate strengthened implementation of Annual Directorate published and Training CTRFA modernized audit manuals Reports and training of staff User Acceptance Online Audit Management System This indicator tracks the Annual Audit Testing sign off, Audit Directorate Implemented implementation of the Directorate Training Reports and OAMS Usage Reports from OAMS This indicator tracks Improved auditee response to Internal measures the improvement Annual Directorate Reports from OAMS Audit Directorate Audit reports in response by auditees to audit reports OAMS of Ai of Reports would be This indicator measures the Adtcollated from OAMS Improved coverage of Financial Attest Tsdicatorate Annual Directorate collated fo Audit Directorate Audit of Local Bodies (Urban and Rural) audit completion rate for an I f and MIS maintained by available AFS of local bodies. and MIS of Audit Directorate UDD This indicator measures the Training records to Number of staff trained in targeted PFM capacity building of GoUk Annual CTRFA capture the required CTRFA areas staff, including female staff, data in targeted PFM areas This indicator measures the Number of Female staff trained capacity building of GoUk Annual CTRFA CTRFA training records CTRFA female staff, in targeted PFM areas GRM system would This indicator measures the Project GRM provide the details of Grievances responded by project level Grievances received and Annual grievance received and PMU in CTRFA GRM responded by project. responded by the project This indicator tracks the User Acceptance implementation of the Excise Testing sign off, e-Governance application for excise online excise management Annual Department Training Reports and Excise Department function implemented ft in Excise Usage Reports from new software Department MIS of UDD and This indicator measures the reSpci Ua number of participating certification on UDadGScl GIS based Property tax system ULBs who have Annual UDD cetionUDD and GIS cell implemented in participating ULBs implemented GIS property mi nan tax maps. This indicator will be measured cumulatively. maps This indicator measures the Certification by ULBs completion of house hold Annual ULBs and report submitted UDD House hold survey completed surveys for ULBs. This by consultants indicator will be measured on a cumulative basis. This indicator measures the digitization of existing ULBs have digitized their manual property property tax registers of Annual ULB Reports UDD tax databaseUD tax registers ULB. This indicator will be measured on a cumulative basis. This indicator measures Data will be collected building on GIS in UDD number of ULBs trained in Annual UDD year wise by the UDD GIS and operationalization Directorate. of GIS cell This indicator tracks the Reports approved by development of Strategic GoUk and User Acceptance Testing sign Roadmap for strengthened Revenue Pia fo the t e d Annual GMVN off, Training Reports GMVN verticals in GMVN and systems in GMVN subsequent implementation and Usage Reports of of the computerized the new computerized revenues system revenue systems . . Data will be collected This indicator measures Dt ilb olce Ths ndcao masre* Annual ULB year wise by the UDD ULBs institutionally strengthened number of ULBs trained in Die.rae from accounting and software traiin MIS training MIS This indicator measures the Data will be collected number of ULBs who have year wise by the transitioned to Double Entry Directorate. The Double Entry Accrual based computerised Accrual based computerized Annual UDD accounts would be UDD accounting system implemented in ULBs accounting system. This generated from the includes generating final system and maintained accounts in prescribed by UDD. format from the software. This indicator measures the Data will be collected balance sheet prepared number of ULBs who have Annual UDD year wise by the UDD created opening balance Directorate sheet