Document of The World Bank FOR OFFICIAL USE ONLY Report No: 72628-PE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT PROJECT APPRAISAL DOCUMENT ON A PROPOSED LOAN IN THE AMOUNT OF US$10 MILLION TO THE REPUBLIC OF PERU FOR A SOCIAL INCLUSION TECHNICAL ASSISTANCE PROJECT November 14, 2012 Human Development Sector Management Unit Bolivia, Chile, Ecuador, Peru and Venezuela Country Management Unit Latin America and the Caribbean Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS Exchange Rate Effective October 30, 2012 Currency Unit = Nuevo Sol S/. 1.00 = US$0.38 US$1.00 = S/.2.58 FISCAL YEAR January 1 – December 31 ABBREVIATIONS AND ACRONYMS CAE’s Comités de Alimentación Escolar (School Feeding Committees) CCT Conditional Cash Transfer CGR Contraloría General de la República (The Office of the Comptroller General of Peru) DA Designated Account DGGU General Directorate for the Management of Users DGSYE Dirección General de Seguimiento y Evaluación (General Directorate of Monitoring and Evaluation) DPL Development Policy Loan ENAHO Encuesta Nacional de Hogares (National Household Survey) ENDES Encuesta Demográfica y de Salud Familiar (Demographic and Family Health Survey) FM Financial Management FONCODES Fondo de Cooperación para el Desarrollo Social (Social Fund) GDP Gross Domestic Product GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit (German Agency for International Cooperation) GoP Government of Peru HGSF Home Growth School Feeding HOI Human Opportunities Index IADB Inter-American Development Bank IBRD International Bank for Reconstruction and Development ICT Information, Communications and Technology IDA International Development Association IDF Institutional Development Fund IFR Interim Financial Reports INEI Instituto Nacional de Estadística e Informática (National Statistics and Informatics Institute) IPSAS International Public Sector Accounting Standard ISA International Standards on Auditing ISP Implementation Support Plan KFW Kreditanstalt für Wiederaufbau (German Development Bank) LAC Latin America and the Caribbean Region MEF Ministry of Economy and Finance ii M&E Monitoring and Evaluation MIDIS Ministerio de Desarrollo e Inclusión Social (Ministry of Development and Social Inclusion) MIMDES Ministry of Women and Social Development MIS Management Information Systems MIMP Ministry of the Women and Vulnerable Populations NLTA Non-Lending Technical Assistance NGO Non-Governmental Organization ORAF Operational Risk Assessment Framework PCM Presidencia de Consejo de Ministros (Presidency of the Council of Ministers) PFM Public Financial Management PIN Program for Infant Nutrition PRONAA National Food Assistance Program PSIA Poverty and Social Impact Analysis RBB Results-Based Budgeting ROF Reglamento de Operación y Funciones (Operations and Roles Guidelines) SENASA Servicio Nacional de Sanidad Agraria (National Service of Agricultural Health) SEPA Procurement Plan Execution System SI Social Inclusion SIAF Country’s Integrated Financial Management System SIGA Sistema Integrado de Gestión Administrativa (Integrated System of Administrative Management) SINADIS National System for Development and Social Inclusion SIS Seguro Integral de Salud (Integral Health Insurance Program) SISFOH National Household Targeting System SNIP Sistema Nacional de Inversión Pública (National Public Investment System) TAL Technical Assistance Loan TOR Terms of Reference UCPS Unidad de Coordinación de Préstamos Sectoriales (Coordinating Unit for Sectoral Loans) ULF Unidades Locales de Focalización (Local Targeting Units) VMPES Vice-Ministerio de Políticas y Evaluación Social (Vice-Ministry of Policies and Social Monitoring) UN United Nations USAID The United States Agency for International Development WFP World Food Program Regional Vice President: Hasan A. Tuluy Country Director: Susan G. Goldmark Sector Director: Keith E. Hansen Sector Manager: Mansoora Rashid Task Team Leader: Alessandra Marini and Carine Clert iii PERU Social Inclusion Technical Assistance Project CONTENTS Page I. STRATEGIC CONTEXT .................................................................................................1 A. Country Context ............................................................................................................ 1 B. Sectoral and Institutional Context................................................................................. 3 C. Higher Level Objectives to which the Project Contributes .......................................... 7 II. PROJECT DEVELOPMENT OBJECTIVES ................................................................8 A. PDO............................................................................................................................... 8 Project Beneficiaries ........................................................................................................... 9 III. PROJECT DESCRIPTION ..............................................................................................9 A. Project Components ...................................................................................................... 9 B. Project Financing ........................................................................................................ 12 Lending Instrument ........................................................................................................... 12 Project Costs and Financing.............................................................................................. 12 C. Lessons Learned and Reflected in the Project Design ................................................ 12 IV. IMPLEMENTATION .....................................................................................................13 A. Institutional and Implementation Arrangements ........................................................ 13 B. Results Monitoring...................................................................................................... 15 C. Sustainability............................................................................................................... 15 V. KEY RISKS AND MITIGATION MEASURES ..........................................................16 A. Risk Ratings Summary Table ..................................................................................... 17 B. Overall Risk Rating Explanation ................................................................................ 17 VI. APPRAISAL SUMMARY ..............................................................................................17 A. Economic and Financial Analyses .............................................................................. 17 B. Technical ..................................................................................................................... 18 C. Financial Management ................................................................................................ 18 D. Procurement ................................................................................................................ 18 E. Social (including Safeguards) ..................................................................................... 19 F. Environment (including Safeguards) .......................................................................... 20 iv G. Other Safeguards Policies Triggered .......................................................................... 20 Annex 1: Results Framework and Monitoring .........................................................................21 Annex 2: Detailed Project Description.......................................................................................27 Annex 3: Implementation Arrangements ..................................................................................45 Annex 4: Operational Risk Assessment Framework (ORAF) .................................................59 Annex 5: Implementation Support Plan ....................................................................................62 Annex 6: Complementarities between the Social Inclusion DPLs and Social Inclusion TAL64 Annex 7: Lessons learned reflected in the project design ........................................................68 Annex 8: Project Poverty and Social Impact Analysis and Stakeholder Assessment ...........72 Annex 9: International Cooperation Agencies’ support to MIDIS .........................................76 v . PAD DATA SHEET PERU Social Inclusion Technical Assistance Project (P131029) PROJECT APPRAISAL DOCUMENT . LATIN AMERICA AND THE CARIBBEAN LCSHS-DPT Report No.: PAD323 . Basic Information Project ID Lending Instrument EA Category Team Leader P131029 Technical Assistance C - Not Required Alessandra Marini Loan Project Implementation Start Date Project Implementation End Date 31-Jan-2013 31-Jan-2017 Expected Effectiveness Date Expected Closing Date 31-Jan-2013 31-Jan-2017 Joint IFC No Sector Manager Sector Director Country Director Regional Vice President Mansoora Rashid Keith E. Hansen Susan G. Goldmark Hasan A. Tuluy . Borrower: REPUBLIC OF PERU Responsible Agency: Ministry of Economy and Finance Contact: Ms. Aida Amezaga Title: Chief of UCPS Telephone No.: 311-5958 Email: aamezaga@mef.gob.pe . Project Financing Data(US$M) [X] Loan [ ] Grant [ ] Other [ ] Credit [ ] Guarantee A variable-spread loan with a final maturity of 8 years, including a grace period of 5 years. For Loans/Credits/Others Total Project Cost (US$M): 14.30 Total Bank Financing (US$M): 10.00 . vi Financing Source Amount(US$M) Borrower 4.30 International Bank for Reconstruction and 10.00 Development Total 14.30 . Expected Disbursements (in USD Million) Fiscal 2013 2014 2015 2016 2017 0000 0000 0000 0000 Year Annual 1.00 2.00 2.50 2.00 2.50 0.00 0.00 0.00 0.00 Cumulati 1.00 3.00 5.50 7.50 10.00 0.00 0.00 0.00 0.00 ve . Project Development Objective(s) The project development objective is to strengthen MIDIS’s systems and capacity to improve the performance of MIDIS’s programs and to monitor social inclusion policy. . Components Component Name Cost (USD) Component 1: Quality improvement of MIDIS’s Programs 3,530,000.00 Component 2: Improving knowledge management, information 3,734,088.00 and communication Component 3: Strengthening of MIDIS’s capacity on results 3,493,000.00 orientation, monitoring and evaluation Component 4: Strengthening of human resource management 2,294,200.00 and capacity Component 5: Support to Project Administration 1,243,712.00 . Compliance Policy Does the project depart from the CAS in content or in other significant respects? Yes [ ] No [ X ] . Does the project require any waivers of Bank policies? Yes [ ] No [ X ] Have these been approved by Bank management? Yes [ ] No [ X ] Is approval for any policy waiver sought from the Board? Yes [ ] No [ X ] Does the project meet the Regional criteria for readiness for implementation? Yes [ X ] No [ ] . Safeguard Policies Triggered by the Project Yes No vii Environmental Assessment OP/BP 4.01 X Natural Habitats OP/BP 4.04 X Forests OP/BP 4.36 X Pest Management OP 4.09 X Physical Cultural Resources OP/BP 4.11 X Indigenous Peoples OP/BP 4.10 X Involuntary Resettlement OP/BP 4.12 X Safety of Dams OP/BP 4.37 X Projects on International Waterways OP/BP 7.50 X Projects in Disputed Areas OP/BP 7.60 X . Legal Covenants Name Recurrent Due Date Frequency Dated Covenant 31-Jan-2013 Description of Covenant (i) No later than 31 January 2013, MIDIS shall hire and thereafter maintain during the execution of the Project, a Project Coordinator, with functions, responsibilities, qualifications and experience acceptable to the Bank, as set forth in the Operational Manual; (ii) Operate and maintain, until the completion of the execution of the Project, a Project coordination unit (UCPS), with functions and responsibilities satisfactory to the Bank, as set forth in the Operational Manual; (iii) MIDIS and UCPS shall carry out the Project in accordance with the Indigenous Peoples’ Strategy. . Conditions Name Type Effectiveness condition Effectiveness Description of Condition (i) Signing of the Inter-institutional Agreement between UCPS and MIDIS. Team Composition Bank Staff Name Title Specialization Unit Alessandra Marini Senior Economist Team Lead LCSHS Ana Karina Rozas Operations Analyst Operations Analyst LCC6C viii Carine Clert Sector Leader Co-Task Team Leader LCSHD Catherinne Lily De La Consultant Consultant LCSHD Torre Salcedo Ekaterina Vostroknutova Senior Economist Senior Economist LCSPE Francesca Recanatini Senior Public Sector Senior Public Sector PRMPS Specialist Specialist Gabriela Grinsteins Temporary Temporary LEGLE German Nicolas Freire Social Development Social Development LCSSO Specialist Specialist Ignacio Raul Apella E T Consultant E T Consultant LCSHD Indu John-Abraham Operations Officer Operations Officer LCSPP Jimena Garrote Counsel Counsel LEGLE Kristyna Bishop Senior Social Senior Social LCSSO Development Specialist Development Specialist Lerick S. Kebeck Senior Program Assistant Senior Program LCSHS Assistant Lourdes Consuelo Sr Financial Management Sr Financial LCSFM Linares Specialist Management Specialist Lucy Violeta Castro Consultant Consultant LCSPT Marco Pariguana Junior Professional Social Protection LCSHS Associate Melissa Zumaeta Aurazo Consultant Consultant LCSHS Nelly Ikeda Financial Management Financial Management LCSFM Analyst Analyst Nelson Gutierrez Operations Officer Operations Officer LCSHS Pablo Facundo Cuevas Economist Economist LCSPP Patricia De la Fuente Senior Finance Officer Senior Finance Officer CTRLN Hoyes Patricia M. Bernedo Senior Program Assistant Senior Program LCSHS Assistant Patricia O. Orna Language Program Language Program LCSHS Assistant Assistant Rafael P. Rofman Lead Social Protection Lead Social Protection LCSHS Specialist Specialist Rory Narvaez E T Consultant E T Consultant LCSHH ix Sara Burga Team Assistant Team Assistant LCC6C Sarah Keener Senior Social Senior Social LCSSO Development Specialist Development Specialist Selene del Rocio La Procurement Specialist Procurement Specialist LCSPT Vera Sergi Perez Serrano Junior Professional Temporary LCC6C Associate William Reuben Consultant Consultant LCSHS Non-Bank Staff Name Title Office Phone City . Locations Country First Location Planned Actual Comments Administrative Division Peru Country wide . Institutional Data Sector Board Social Protection . Sectors / Climate Change Sector (Maximum 5 and total % must equal 100) Major Sector Sector % Adaptation Mitigation Co-benefits % Co-benefits % Health and other social services Other social services 100 Total 100 I certify that there is no Adaptation and Mitigation Climate Change Co-benefits information applicable to this project. . Themes Theme (Maximum 5 and total % must equal 100) Major theme Theme % Human development Nutrition and food security 20 x Social protection and risk management Social safety nets 50 Social protection and risk management Poverty strategy, analysis and 20 monitoring Human development Other human development 10 Total 100 xi I. STRATEGIC CONTEXT A. Country Context 1. The Government of Peru (GoP) is highly committed to tackling the country's major challenge of achieving more inclusive growth and reducing social gaps. After a stagnation that lasted about a quarter of a century, Peru became one of the fastest growing economies in Latin America during the past decade and weathered the recent crisis well. Between 2000 and 2011, GDP growth was strong averaging 5.7 percent over this period. Economic growth was particularly strong between 2004 and 2011 (Figure 1), when almost 31percent of the population was lifted out of poverty (Figure 2). Other social indicators improved significantly, e.g., chronic malnutrition, which dropped from 28.5 percent in 2007 to 23.2 percent in 2010. 1 Figure 1: Strong GDP Growth Figure 2: Fast Poverty Reduction (real GDP growth, percent) (percent of population below poverty line) 12 70 58.8 Percentage of Poor Individuals 55.9 10 60 52.0 8 50 42.4 37.3 40 33.5 6 30.8 27.8 30 4 16.7 16.2 16.0 20 11.2 10.9 2 9.5 7.6 6.3 10 0 2000 2002 2004 2006 2008 2010 0 2004 2005 2006 2007 2008 2009 2010 2011 Year Extreme Poverty Moderate Poverty Source: INEI and BCRP. Source: INEI. Note: Total poverty rate indicates the proportion of the population living in households whose monthly per capita expenditures is below the value of the basic consumption basket composed of food and non-food. Extreme poverty rate is similar but using only the food basket. 2. During the 2008-2009 global economic crises, the Government was able to utilize a successful set of monetary and fiscal measures that helped set conditions for a fast recovery. Countercyclical fiscal and monetary policies served to mitigate the effects of the global crisis and rapidly bring about an economy recovery. An Economic Stimulus Plan equivalent to 3.4 percent of GDP was launched in 2009, and kept GDP growth positive. On the monetary side, the Central Bank made significant reductions in its policy rate and provided additional liquidity through a set of policy tools equivalent to 9 percent of GDP. Growth recovered rapidly reaching 8.8 percent in 2010 and 6.9 percent in 2011 (see Figure 1), despite the continuing global slowdown. 1 INEI, Encuesta Demográfica y de Salud Familiar ENDES, 2005, 2007-2010. 1 3. The effects of strong growth on employment and incomes have yielded an important decline in poverty rates. Urban employment in formal firms has grown steadily between 2001 and 2008, and bounced back quickly after the crisis. Between 2004 and 2011, poverty declined by 31 percentage points, from nearly 60 percent of population to just nearly 28 percent. During the same period, extreme poverty was reduced by more than 60 percent, from 16.7 percent to 6.3 percent of the population (see Figure 2). Inequality also experienced a modest decrease during this period. Inequality fell slightly over the past decade, consistent with a proportional increase in consumption among the poor. Between 2004 and 2011, the expenditure-based Gini coefficient declined from 0.44 in 2004 to 0.38 in 2011 whereas the income-based Gini fell from 0.51 to 0.46. 4. Despite the impressive advances and significant decline in poverty rates, disparities persist across the country. Major challenges in reducing inequality remain: high poverty is still persistent in rural areas where 56 percent of the population lived below poverty line in 2011, compared to only 28 percent for the total population as a whole. Poverty reduction performance has also been uneven across the country’s regions. Despite poverty decreases in all regions the percentage of people living in poverty in the Sierra Norte (61 percent) is more than double the national total for 2011. By contrast, the central coast and Lima have the lowest poverty rates (around 10 percent). Thus, despite strong economic growth and improved employment conditions, Peru’s regions have uneven rates of job creation, earnings and labor productivity. 5. The indigenous population is more likely to be excluded from socio-economic development and is economically disadvantaged. Despite the reduction of more than 30 percentage points between 2004 and 2011, poverty is 32 percent among indigenous populations compared with 20 percent for non-indigenous populations. Furthermore, in 2011, the rate of extreme poverty among the indigenous population doubled that among the non-indigenous population. The life expectancy of indigenous peoples in the highlands is 30 years shorter than in Lima. This imbalance is mainly due to poor access to health services and other forms of social exclusion. The highest percentage of people without access to healthcare has an indigenous language as their mother tongue, such as Quechua (61 percent of exclusion) and Aymara (80 percent). 2 Only 41 percent of indigenous Amazonian communities have a community health center, 3 and about 90 percent of their childbirths occur without institutional assistance. Indigenous people have also less access to formal education: according to the last national census, 19 percent of indigenous Amazonians do not know how to read or write (28 percent of women), and only 51 percent of the population under 24 are receiving formal education (only 47 percent of the above-15s have completed primary education). Finally, a significant proportion of indigenous people have no identification documents (15 percent of Indigenous Amazonians): a further impediment to receiving social assistance. 6. Despite significant advances in recent years for Peruvian women’s social and economic inclusion – as in other countries of the region – gender gaps persist. In terms of endowments, women educational outcomes and health conditions have remarkably improved in 2 F. J. R.-B. &. A. L. Lavadenz, "Hacia un Perú mas saludable: desafíos y oportunidades del sistema de salud," in Perú en el umbral de una nueva era, edited by S. Goldmark, F. Jaramillo & C. Silva, Lima, Banco Mundial, 2012, pp. 434-465. 3 Instituto Nacional de Estadística e Informática, "Censos Nacionales 2007: II Censo de Comunidades Indígenas," INEI, Lima, 2009. 2 Peru in recent years. In education, gender gaps have closed in primary and secondary education and even reversed in tertiary education. Similarly, fertility rates have been on the decline. These advances were critical in the observed increases in the female labor force participation rates over the last decade. Nonetheless, this has not been fully translated in enhanced economic opportunities for women. In spite of higher levels of human capital, female workers have more difficulties to reach the top paid occupations and are more likely to be in low productive sectors than their male counterparts. Labor market segmentation and wage gaps still persist even if one accounts for educational attainment differences. Such differences are more acute in rural areas where teen pregnancy and violence against women remain obstacles to human capital formation for young women. 4 This lack of agency (the capacity to aspire and make own decisions) continues to affect women and potentially undermines the rate of poverty reduction and overall growth of the country. Taken together, dealing with market constraints, improving aspirations and empowering women can provide a necessary input to help women integrate better in the overall economy and allow them take advantage of their improved human capital by expanding their income generating opportunities in the labor force. 5 B. Sectoral and Institutional Context 7. Peru’s social protection programs historically comprised a contributory social security system that provides formal workers with income security in old age and a range of social assistance programs intended to provide income support to the poorest populations. It also included employment support programs, such as temporary employment programs and the social fund (FONCODES) to provide employment and productive earning opportunities for the poor. These programs have been characterized as covering a large portion of the population through very small benefits. Expenditure on social assistance continues to be among the lowest in Latin America, despite the sustained increase over the last decade, amounting to 0.77 percent of GDP in 2010. 8. Social protection programs lack a common framework to build a coherent social policy reform. The various actors engaged in social policy have worked largely in isolation, and efforts to reach target populations often run in parallel rather than being integrated. The programs’ objectives are typically defined by the responsible actors without taking a coordinated approach to achieving higher-level, national goals; as a consequence, policy designs are independent from each other and may not even be complementary. The large social protection programs in the country have maintained independent information systems, users’ registries and operations. Similarly, subnational governments, who bear significant responsibility for programs implementation, have had limited contribution on programs’ design and budgeting. 9. Most programs do not have a solid monitoring and evaluation (M&E) framework, nor have they benefitted from or planned rigorous evaluations to measure development outcomes. There are also difficulties in the information systems for program management – data collection from primary sources is often inconsistent and unreliable, access and availability of information is limited, and administrative records are not systematically processed and analyzed. Also, the country does not have a unique registry for the users of the social protection programs 4 Rosana Vargas Valente, Overseas Development Institute, Gendered risks, Poverty and Vulnerability in Peru, A Case Study of the JUNTOS Program, October, 2010. 5 Perova and Vakis, 2012. The Third Asset: Improving Development Outcomes through Empowerment. 3 and the National Household Targeting System (SISFOH) maintains significant inclusion and exclusion errors. 10. Peru’s social protection programs have been characterized by their heterogeneity in terms of goals, target populations, programs’ institutional cultures, criteria for targeting and eligibility rules, and coverage levels. These programs include: 6 (a) Food assistance programs constituted a large proportion of the social protection programs in Peru for many years. In 2006, there were 27 food assistance programs that represented 40 percent of total expenditure in social assistance (0.3 percent of GDP). In 2009, these programs were rationalized and reduced to five, maintaining a budget of 0.3 percent of GDP. In 2012, the GoP decided to close the main food assistance program (the National Food Assistance Program—PRONAA) due to significant deficiencies identified in previous evaluations that pointed to problems of low coverage and at the same time inclusion errors, sub-optimal delivery processes causing delays and incomplete rations. A new program, Qali Warma, was created when the closure of PRONAA was announced and will be effective by March 2013 when the new school year starts. Qali Warma is expected to gradually become universal by 2016, and its design relies on local capacities (changing radically from the centralized approach of PRONAA). Given these plans, the program faces two main challenges: (i) the timing of the launch of the new program gives little space for the development of a comprehensive design and validation in different contexts (i.e., rural vs. urban settings, areas with more food insecurity, etc); and (ii) managing the new program and monitoring its implementation will require different capacity especially at the local level. Until January 2012, the PRONAA food assistance programs were administered by the Ministry of Women and Social Development (MIMDES), now replaced by the Ministry of the Women and Vulnerable Populations (MIMP). Qali Warma will be managed by the new Ministry of Development and Social Inclusion (MIDIS). (b) The JUNTOS Conditional Cash Transfer (CCT) program targets the poorest districts in the rural highlands and aims at protecting consumption and human capital of households in extreme poverty. The program transfers S/.200 7 every two months to households with children, in exchange for the fulfillment of certain health and education conditions. The program was part of the Government's commitment to modernize and correct the exclusion of the vulnerable population from the social protection network. In recent years, the program has gained considerable importance and has established itself as a pillar of the social protection system. It is currently the second largest social program in the country, with a budget of 852 million soles in 2012 (approximately US$330 million or 0.16 percent of GDP 8), covering over 476,000 households in 638 districts in the poorest 14 regions of Peru. Five main challenges have been identified in the implementation of JUNTOS, specifically, the need to: (i) strengthen the information system for targeting and affiliation to inform the Program’s expansion; (ii) improve the mechanisms for evaluating the capacity of health and 6 Marini and Seguin (2011), p.5. 7 Approximately US$77.5. 8 Based on data included in the Marco Económico Multi-anual. 4 education sectors to prioritize expansion of coverage to those areas where supply is adequate; (iii) strengthen the mechanisms for verification of co-responsibilities; (iv) redesign the role of local promoters to include counseling and follow-up services for the most vulnerable families to stay in the program; and (v) revisit payment systems to ensure better technical and financial conditions to ensure better attention to users. Until January 2012, JUNTOS was administrated by the Cabinet (Presidencia de Consejo de Ministros, PCM), now it is under MIDIS. (c) FONCODES was created in 1991 to finance small scale public investment projects. The goal of this social fund was to increase employment, reduce poverty and improve access to social services. In general terms, this fund was created to benefit the most excluded rural communities identified through the poverty maps. However, over time, its relevance has diminished significantly as a result of declines in budget allocation and change in the local context. Until January 2012, FONCODES was administrated by the Ministry of Women and Social Development, now it is administrated by the new MIDIS. (d) The temporary employment programs constitute an important aspect of Peru’s social protection policies. Trabaja Perú (former Construyendo Perú/A Trabajar Urbano), is a temporary employment program that provides an alternative model of resource transfer to impoverished populations. This program provides the opportunity of temporary employment to unskilled labor hired in exchange for a salary below the minimum wage rate. In 2012, this program had a public budget allocation of 173 million soles (or US$ 67 million), which only represented 0.03 percent of GDP. 9 Temporary employment programs are administrated by the Ministry of Labor and Employment Promotion. (e) Peru’s old age income protection system has a long tradition of contributory programs, with benefits closely linked to previous work history offering protection to less than 20 percent of the labor force and 25 percent of the elderly. In August 2010, the Government launched the “pilot� program Gratitud to provide a basic monthly income (S/.100 or US$38) to elderly older than 75 and living in extreme poverty. In October 2011, Gratitud was replaced by a new non-contributory pension program, Pension 65, which provides a larger benefit (S/.125 or US$47 per month) to those older than 65 and living in extreme poverty. Until January 2012, non-contributory pension programs were administrated by the Cabinet, now Pension 65 is administrated by MIDIS. Framework for Policy Coordination and Administration 11. To address these challenges and promote socially inclusive growth the GoP created a new Ministry of Development and Social Inclusion in October 2011 (Ministerio de Desarrollo e Inclusión Social, MIDIS). The goal of MIDIS is to “improve the quality of life of the population through support to the exercise of rights, access to opportunities and capacity building, in coordination with different public, private and civil society entities.� 10 9 Marini and Seguin (2011), pp. 5-9. 10 Article 1 of the Law creating MIDIS. The Government has defined MIDIS’s sector as one that includes all government entities of the three levels of Government involved in the application of national policies to promote 5 12. MIDIS builds on important social reforms implemented in recent years that have improved the coherence of various social programs and contributed to the coordination of their goals. The national strategy, Crecer, led by Cabinet (PCM), and the implementation of the Results-Based Budgeting (RBB) initiative, by the Ministry of Economy and Finance (MEF), contributed to building a framework for more coordinated social protection interventions. (a) Crecer was a national strategy created in 2007 as an inter-institutional coordination platform of the main social programs that targeted, directly or indirectly, the reduction of infant malnutrition. In 2012, MIDIS has started the development of a new strategy, Crecer para Incluir, which replaced Crecer, and among other things, intends to harmonize the logic of intervention of public institutions focusing on the life cycle. The new strategy focuses on five strategic areas: infant malnutrition, early child development, competences for life, economic inclusion and elderly population protection. 11 (b) Results-Based Budgeting (RBB) is an instrument that enables budget programming in order to increase the efficiency and effectiveness in public expenditure, with an emphasis on social sector outcomes, such as child nutrition and maternal and infant health. This instrument broke the institutional budgetary inertia by assigning budgetary resources as a function of improved results in social indicators rather than on the basis of historical allocations. 12 It has, to some extent, improved the targeting and coordination of social programs and has contributed to a more coherent social policy framework. However, RBB has been led by MEF and conducted with little influence on the actual implementation of programs. It has placed great emphasis on national-level planning and budgeting mechanisms, with limited local experiences, and underestimating the institutional and management difficulties faced by subnational governments. The Government’s Social Inclusion Policy 13. Social inclusion is at the center of the new Government’s agenda. President Humala took office in July 28, 2011 with the goal of maintaining high growth rates and improving equity through an extended social inclusion agenda. 13 The Government is highly committed to achieving more inclusive growth, recognizing that an important proportion of the population does not have access to basic and adequate services, particularly in rural areas. 14 To close the main equity and inclusion gaps, the Government’s program announced a “growth with social inclusion� plan aimed at: (i) providing equal access to basic services, employment and social security, (ii) reducing extreme poverty with emphasis on rural poverty, (iii) preventing social conflicts by restoring the credibility of public institutions, and (iv) improving the surveillance of social development, inclusion and equality. The areas of responsibility of MIDIS are: (i) Social development, poverty reduction and promotion of social inclusion and equality; and (ii) Social protection of populations in situations of risk, vulnerability or abandonment. 11 The Crecer para Incluir strategy is in the process of being discussed with the different levels of government before its approval by the Cabinet. 12 Report No. 51149-PE, pp. 3. 13 Peru CPS (2012), ppi. 14 Peru CPS (2012), pp 1. 6 environmental risks. 15 The efforts of the new Government are oriented towards creating an institutional framework that fosters greater inclusion, improves efficiency of social programs and enhances mechanisms for better access to basic services. 16 These efforts are expected to enable a more coherent and effective social protection system. In order to implement the social inclusion reform, MIDIS was created on October 20, 2011. 17 14. MIDIS has the mandate to lead the Government's social inclusion strategy, exercise stewardship and coordination of social inclusion policies and implement specific targeted social protection programs. It serves steering and implementation functions. On the steering front, MIDIS aims to implement a National System for Development and Social Inclusion (SINADIS), and to promote closer coordination among the universal social sectors (health and education), productive opportunities, and subnational government actions in priority rural areas. Collaboration between national and subnational governments would be led by the MIDIS’s General Office of Decentralization and Coordination of Social Programs, and facilitated by integrated systems and policies promoted broadly within MIDIS (e.g., integrated information platform including data at different levels of implementation, strengthening SISFOH’s local units of targeting, etc.). The Monitoring and Evaluation function of MIDIS aims at increasing the effectiveness of implementation of programs and overall social inclusion strategy by generating a more informed design and implementation of programs based on the realities on the ground and promoting greater supervision of the programs in terms of their broader policy goals. On the implementation front, it has also assumed the responsibility for coordinating five targeted social programs: (i) the National Food Assistance Program, PRONAA, and now the new program Qali Warma, (ii) the Social Fund, FONCODES, (iii) the early childhood development program, Wawa Wasi, now Cuna Mas; (iv) the Conditional Cash Transfer Program JUNTOS, and (v) the non- contributory pension, Pension 65. 18 C. Higher Level Objectives to which the Project Contributes 15. The proposed project aims at improving the effectiveness of the social inclusion policy in Peru and at supporting the reforms proposed under the second phase of the Social Inclusion DPL Program. The Social Inclusion DPL1 (being presented to the Board together with this operation) focuses on the framework for an establishment of MIDIS’s reforms. The second phase of the MIDIS’s reform program, which focuses on the consolidation of the reforms, will be supported by DPL2, which is expected to be submitted to the Board during the first half of calendar year 2014. A Social inclusion Non-Lending Technical Assistance (NLTA) Program to support both this proposed operation and the proposed DPL 1 is under implementation (see complementarities outlined in Annex 6). 15 Peru CPS (2012), pp.9. 16 In July 2012, through his yearly national speech, President Humala confirmed GoP’s commitment to social inclusion. This commitment translated the 2013 Budget Law (presented to the Congress on September 4, 2012) into bigger allocations to increase coverage of two of the programs supported by this loan: Pension 65 and JUNTOS. These allocations represent a 23 percent increase for JUNTOS and 72 percent for Pension 65. 17 Law No. 29792/2012. The organizational and functional framework (Reglamento de Operación y Funciones – ROF) was approved by Supreme Decree No. 001-2011-MIDIS, published in December 27, 2011. 18 The first three programs were initially implemented under MIMDES, and the last two programs were formerly overseen by the PCM. The creation of MIDIS and the transfer of the five key social programs have set the foundations for the institutional framework that will allow the implementation of a new and more coordinated social protection strategy. 7 16. The preparation of the proposed operation and the overall Bank’s support to MIDIS are being closely coordinated with other relevant international cooperation agencies such as the Inter-American Development Bank (IADB), the German Agency for International Cooperation (GIZ), and the World Food Program (WFP). GIZ has collaborated with MIDIS during the whole reform process and focused, among others, on technical assistance to the Commission in charge of the reorganization of MIDIS, the Cuna Mas program, and Qali Warma (elaboration of the logical framework). The German Development Bank (KFW) is supporting the social fund program FONCODES (which is now part of MIDIS) through the Program on Municipal Strengthening. The IADB has a strong involvement in the following programs and instruments: (i) JUNTOS (verification process for co-responsibilities of health care and education of users and linking compliance to the payment system; differentiated payment methods; impact evaluation; exit strategy, among other areas); (ii) the new Early Childhood Development program, Cuna Mas; and (iii) the National Household Targeting System SISFOH (Strengthening of the central targeting unit of SISFOH). See Annex 9. 17. This proposed operation is fully consistent with the Bank’s Country Partnership Strategy (CPS) Peru for FY12-FY16 that was discussed by the Executive Directors in March 2012. 19 The CPS calls for supporting the Government’s plan of “growth with social inclusion to overcome social gaps and boost productivity.� In particular, the technical assistance supported by this operation aligns with the First Strategic Objective of Increased “Access and Quality of Social Services for the Poor,� and specifically with the first Result Area of “a more inclusive and effective social protection system.� This operation also contributes to the fourth strategic objective of the CPS, “Improved Public Sector Performance for Greater Inclusion,� since it supports the set-up of key quality control and monitoring systems in the area of social policy. A key example is the design of an effective national monitoring and evaluation system for social policy. The operation also supports integration between social programs, central and regional actors, hence strengthening “sub-national management capacity,� which is a major result area of this fourth Strategic Objective. II. PROJECT DEVELOPMENT OBJECTIVES A. PDO 18. The project development objective is to strengthen MIDIS’s systems and capacity to improve the performance of MIDIS’s programs and to monitor social inclusion policy. The achievements of the project will be measured by two outcome and eight intermediate indicators that are detailed in Annex 1. 19. The two outcome indicators are: (a) Percentage of user families of MIDIS’s programs of total families eligible for at least one MIDIS’s program; 20 (b) Year 1, 2 and 3: Programs’ “Improvement agreements� 21 based on the Technical Reports from the monitoring dashboard and evaluations are signed between the General 19 Report No. 66187-PE. 20 Families eligible for targeted MIDIS programs; that is: JUNTOS, Pension 65 and Cuna Mas. 8 Directorate of Monitoring and Evaluation (DGSYE) and the programs; 22 Year 4: two new Programs’ “Improvement agreements� are signed; and one “Improvement Agreement� signed in previous years is evaluated and shows, at least, partial fulfillment. Project Beneficiaries 20. Direct beneficiaries of the project include an estimated 4,744,580 current users of MIDIS’s key programs 23 and additional users are expected to benefit from the process of inclusion 24 over the four years as a result of improved performance, expansion and better monitoring of key programs. At least 55 percent 25 of these beneficiaries are expected to be women. Other direct beneficiaries are MIDIS itself and local governments whose staff and institutional capacity will be strengthened through activities funded by this operation. III. PROJECT DESCRIPTION A. Project Components Description 21. The project will support four key components with a specific focus on JUNTOS, Pension 65 and Qali Warma. 26 Given that MIDIS is a new Ministry (created on October 2011 and that started managing social programs only as of January 2012) in charge of a new sector, some of the specific proposed project activities are expected to be refined and detailed further during the implementation of this operation. In particular, it is expected that in a number of cases, the recommendations and outcomes of the initial technical assistance will inform the redefinition of content and scope of activities included in this TAL. 22. Component 1: Quality improvement of MIDIS’s Programs (US$3,530,000 of which IBRD finances US$2,647,500). Provision of support to design and pilot activities aimed at improving the quality control of MIDIS's Programs by: (i) Developing user's participation and accountability mechanisms for the MIDIS's Programs, through, inter alia: (a) the development of culturally adequate norms, standards, protocols, didactic materials and communication tools to 21 Improvement agreements are to be established between the programs that are monitored and evaluated and the General Directorate of Monitoring and Evaluation (Dirección General de Seguimiento y Evaluación, DGSYE). These agreements will be based on the recommendations identified in technical reports prepared by the DGSYE from the monitoring dashboards and/or the respective evaluations conducted. By law, the programs are obligated to respond to the technical reports of the DGSYE, and the agreements serve as a more concrete mechanism for the practical use/application of the recommendations from the Monitoring and Evaluation system. 22 We expect the “Improvement agreements� to be initially signed with MIDIS’s programs, but at a later stage to include also social programs outside of MIDIS. 23 Estimated by MIDIS in August 2012. Current users’ databases don’t allow for the identification of users of two or more programs; the figure presented above constitutes the maximum number of users as it aggregates the estimated number of users per program: Cuna Mas (56,780), PRONAA (3,832,183), JUNTOS (450,658), FONCODES (231,068) and Pension 65 (173,891). See http://www.midis.gob.pe/mapas/. 24 I.e., those with at least three out of the four characteristics associated to exclusion: (i) live in rural settings; (ii) are considered part of indigenous groups (Quechua, Aymara or other indigenous languages); (iii) the mother or head of the house has only elementary school or less; and (iv) first (poorest) quintile of household consumption. 25 MIDIS’s calculations by August 2012, for users of Cuna Mas, Pension 65, JUNTOS and PRONAA. 26 See Annex 2 for more details on Project Description. 9 promote transparency and accountability at the school and district level for Qali Warma; (b) the development, testing and piloting of a users' participation and accountability mechanism to collect feedback from users of MIDIS's Programs; and (c) the improvement of MIDIS's grievance mechanisms; (ii) Designing and piloting local coordination methodologies and tools for MIDIS's Programs; (iii) Improving SISFOH's internal and external communication and coordination mechanisms; (iv) Strengthening administrative processes of MIDIS's Programs, through, inter alia: (a) the design and piloting of alternative money transfer systems for Pension 65 and Qali Warma; (b) the design and piloting of alternative management models and nutritional quality control mechanisms for Qali Warma; and (c) the development of information tools to detect and address deficiencies in the provision of health, nutrition and education services in areas of intervention of JUNTOS. 23. Component 1 contributes to the PDO by supporting activities that improve the performance of MIDIS’s programs through accountability mechanisms that institutionalize channels for user’s feedback (intermediate result one, see Annex 1); and the development of planning, information, monitoring and evaluation tools for MIDIS’s decentralized offices that coordinate the provision of social programs in the territory (intermediate result two). By supporting this, in addition to activities aimed at strengthening processes of specific MIDIS’s programs and SISFOH, the component is aligned with reforms promoted by the Policy Area 2 of the Second Social Inclusion DPL program on Improving the Inclusiveness and Effectiveness Capacity of Social Programs of MIDIS. 24. Component 2: Improving knowledge management, information and communication (US$3,734,088 of which IBRD finances US$2,800,566). Provision of support to strengthen MIDIS's information system to collect, process and produce data to enhance the decision-making processes within SINADIS by: (i) Designing an integrated multi-sectoral information platform for social policy decision making, including the development of data models; (ii) Strengthening the management information systems of Qali Warma and Pension 65; (iii) Improving MIDIS's administrative and communication systems, through, inter alia: (a) the carrying out of a capacity building program for MIDIS's staff; (b) the development of a communication strategy for the MIDIS's social inclusion plan (Crecer para Incluir); (c) the design of an annual dissemination and communications plan; and (d) the development of an internal communication plan for MIDIS's staff. 25. Component 2 contributes to the PDO by supporting activities that improve the performance of MIDIS’s programs and strengthen MIDIS’s capacity to monitor social inclusion policy through the implementation of an integrated information platform that includes data from different programs (intermediate result three, see Annex 1); the interconnectivity of local targeting units that are strengthened with trained staff on information management, monitoring and customer service (intermediate result four); and the development of a national communication strategy that includes different approaches for different population groups (intermediate result five). By supporting this, in addition to activities aimed at strengthening the MIS of specific MIDIS’s programs and overall MIDIS’s administration, the component is aligned with reforms promoted by all Policy Areas of the Second Social Inclusion DPL program with emphasis on Policy Area 1 on the Consolidation of the institutional framework for the 10 stewardship of the social inclusion agenda and Policy Area 3 on Reforming Social Policy Approaches and Systems. 26. Component 3: Strengthening of MIDIS’s capacity on results orientation, monitoring and evaluation (US$3,493,000 of which IBRD finances US$2,619,750). Provision of support to develop and implement a social policy monitoring and evaluation system by: (i) Developing tools to collect data and analyze indicators of social policies within SINADIS, including MIDIS's Programs, through, inter alia: (a) the development of a monitoring dashboard for chronic infant malnutrition and the mechanisms to analyze and use the information produced by said dashboard; (b) the creation of an elderly observatory to support the development of an integrated strategy for the elderly; (c) the systematization of pilot experiences of application of social policy; and (d) carrying out evaluations of the Borrower's social policy and programs. 27. Component 3 contributes to the PDO by supporting activities that strengthen MIDIS’s capacity to monitor social inclusion policy 27 through the development of information dashboards to oversee infant malnutrition and development plans (intermediate result six, see Annex 1); and technical assistance to improve the evaluation of programs processes, potential effects and impacts (intermediate result seven). By supporting this, in addition to the design of strategic policies and tools to coordinate social inclusion policy, the component is aligned with reforms promoted by all Policy Areas of the Second Social Inclusion DPL program with emphasis on Policy Area 3 on Reforming Social Policy Approaches and Systems (i.e., establishment of a National System of Monitoring and Evaluation for Social Policy). 28. Component 4: Strengthening of human resource management and capacity (US$2,294,200 of which IBRD finances US$1,720,650). Provision of support to design and implement a continuous capacity building and training program for public officials implementing social policy by: (i) Designing and carrying out capacity-building activities for public officials involved in policy planning, budgeting and implementation of social inclusion programs; (ii) Creating a guidance and counseling program for local JUNTOS promoters, through, inter alia: (a) the development of capacity building activities and educational materials; and (iii) Developing a capacity-building and certification program for qualified local and regional coaching professionals to create a network of MIDIS-certified local professionals. 29. Component 4 contributes to the PDO by supporting activities that strengthen MIDIS’s systems and capacity to improve the performance of MIDIS’s programs through the introduction of result-oriented human resources management practices (intermediate result eight, see Annex 1). By supporting this, in addition to the design of the new role for JUNTOS’s promoters, the component is aligned with reforms promoted by all Policy Areas of the Second Social Inclusion DPL program with emphasis on Policy Area 1 on the Consolidation of the institutional framework for the stewardship of the social inclusion agenda, and Policy Area 2 on Improving the Inclusiveness and Effectiveness Capacity of Social Programs of MIDIS. 30. Component 5: Support to Project Administration (US$1,243,712 of which IBRD finances US$211,534). This component will finance the activities related to management and 27 While Component 2 focuses more on developing the information platform, this Component supports the use of the information for monitoring and evaluation. 11 implementation of the project, including the strengthening of the UCPS’s team to be able to facilitate, coordinate and monitor implementation. B. Project Financing Lending Instrument 31. The lending instrument for the project is a Technical Assistance Loan (TAL) for a period of four years from January 31, 2013 to January 31, 2017. Project Costs and Financing 32. Total project financing requirements are estimated at US$14.3 million, of which Bank financing would be US$10 million, including contingencies. The costs by component are detailed in Table 1 below. Table 1: Project Costs Project Components Project cost IBRD % Financing 1. Component 1: Quality improvement of MIDIS’s Programs. 3,530,000 2,647,500 75% 2. Component 2: Improving knowledge management, information and communication. 3,734,088 2,800,566 75% 3. Component 3: Strengthening of MIDIS’s capacity on result orientation, monitoring and 3,493,000 2,619,750 75% evaluation. 4. Component 4: Strengthening of human 2,294,200 1,720,650 75% resource management and capacity. 5. Component 5: Support to Project 1,243,712 211,534 17% Administration. Total Project Costs 14,295,000 10,000,000 70% Total Financing Required 10,000,000 C. Lessons Learned and Reflected in the Project Design 33. The operation would leverage lessons learned from other World Bank interventions in many areas, including experience on conditional cash transfers, social pensions, feeding programs, targeting and social accountability. On conditional cash transfers, the proposed operation builds on international experience that demonstrated the need for combined demand and supply-side interventions to reach the expected impact on final outcomes and the role of local promoters in counseling service activities. On non-contributory social pension programs, activities under this loan reflect lessons learned in the implementation of efficient targeting and payment mechanisms and on the development of rigorous monitoring and evaluation activities. Activities supporting Qali Warma reflect best practices and lessons learned in school feeding programs around the world and particularly on the design of decentralized models by including activities to mitigate risks from corrupt practices in procurement and contracting and quality control of the food being purchased at local levels. The operation’s support to the national 12 targeting system also reflects best practices in the development of effective targeting systems by maximizing gains of targeting systems used by different programs and by supporting the development of clear national guidelines for processes and quality control mechanisms. Finally, the definition of activities on social accountability builds on lessons that point to the need for a holistic approach that integrates transparency with opportunities for users’ feedback and the assimilation of the value of that feedback by the service delivery agency (i.e., in staff evaluations, in recognition of good feedback). See a detailed description of lessons learned in Annex 7. IV. IMPLEMENTATION A. Institutional and Implementation Arrangements 34. The General Secretariat in MIDIS would be responsible for the technical leadership of the implementation. The complexity inherent in the implementation of an operation involving several Social Programs and units in MIDIS justifies the need for a strong coordinating unit with the political and legal mandate to achieve the objectives of the operation. The General Secretariat carries sufficient weight to oversee implementation in the different Programs and Offices. The main responsibilities of the General Secretariat as the technical coordinator of the operation include the following: (i) ensure general coordination with the Bank, and other Government stakeholders; (ii) ensure timely implementation of all Project activities; (iii) monitor the achievement of project development objectives as evidenced by progress against main project components, and monitor project outcome and intermediate outcome indicators; (iv) maintain the dialogue and coordination among MIDIS’s units and whenever possible remove implementation bottlenecks; (v) jointly with UCPS (see below), prepare and monitor the annual implementation plan, and adjust it as necessary; (vi) prepare and /or assist MIDIS’s units in the preparation of TORs; (vii) ensure quality and timely updates to the Operational Manual; (viii) monitor progress in the implementation of safeguards recommendations; and (ix) coordinate with implementation MIDIS’s units to ensure timely execution of activities. The participating units within MIDIS are: Qali Warma, JUNTOS, Pension 65, General Directorate of Monitoring and Evaluation, General Office of User Management, General Office of Decentralization and Coordination of Social Programs, General Office of Quality of Social Benefits, General Office of Policies and Strategies, and the General Secretariat itself. 35. All fiduciary responsibilities (procurement and financial management) will be carried out through MEF’s existing Coordinating Unit for Sectoral Loans (UCPS). The UCPS has extensive experience with Bank-financed projects. Given the scope of the project and the significant number of activities to be carried out under it, the UCPS will be strengthened to provide support under the project, in particular in project procurement and financial management. The UCPS will be responsible for the preparation of the procurement audit of the Operation and for having the financial statements audited, as defined in the Operational Manual. UCPS has well established processes and procedures, as well as required tools and mechanisms, which are considered acceptable to the Bank; however, it continues to be a supporting Implementing Agency formed by external consultants financed out of different projects. Therefore, there is a need to ensure staff continuity and also to assess the need for further 13 strengthening in terms of staff number to ensure adequate support to timely address the needs of the project. 36. An inter-institutional agreement will be signed between MIDIS and UCPS, detailing the responsibilities of the two entities. While recognizing UCPS’s expertise, the decision of having a separate administrative unit within MEF to support project implementation in the short term may be helpful. However, in the medium-long term, this may undermine the explicit objectives of capacity development, institutionalization and sustainability of actions within MIDIS itself. Therefore, the inter-institutional agreement is critical in providing clarity regarding specific responsibility areas while also improving coordination between MIDIS and UCPS and to ensure that over time, the fiduciary capacity is built in MIDIS. Project Poverty and Social Impact Analysis (PSIA) and Stakeholder Assessment 37. The World Bank team is designing and implementing a Poverty and Social Impact Analysis (PSIA) with MIDIS’s staff. The PSIA is being used as an iterative process and overall approach to identify and monitor the social benefits and potential risks of the reforms supported by the Social inclusion DPL Program and this project. By the end of the DPL Program series in 2015, it is expected that the PSIA will have provided a roadmap for participatory monitoring by a multi-stakeholder group of reforms in order to adjust them as they progress to achieve positive poverty outcomes. One of the PSIA’s objectives is to help identify measures and policy adjustments to enhance positive impacts on indigenous peoples, women, the elderly and Afro descendants through culturally and gender sensitive design 28 in MIDIS’s programs. 38. The PSIA is divided into two phases. Phase 1, which accompanied the preparation of this operation and of the Social Inclusion DPL, focused on examining the poverty dimensions of the baseline reform programs and identifying key opportunities and risks to the reforms achieving their poverty and social inclusion objective. This phase was completed on October 2012. Because MIDIS is a new Ministry, data constraints have been acute and reforms are evolving. Phase 2 PSIA would take place as part of the preparation of DPL2 and as the specifics of the reforms become clearer, especially with regard to the following key elements of the DPL Program: the design of the new School feeding Program Qali Warma, the expansion of the strategy for the extremely-poor elderly under Pension 65, the development of an enhanced role for JUNTOS local promoters; the consolidation of the institutional framework targeting system SISFOH; and the overall establishment of MIDIS’s local offices and the users’ information and accountability mechanisms. 39. Preliminary findings of the PSIA’s first phase include: (i) the DPL series and the TAL have a high potential to yield positive social impacts on marginalized groups given MIDIS’s explicit commitment to populations in the process of inclusion and its planned improvements in targeting, expansion, and quality of programs; (ii) given the nature of the expanded target, the expected positive social benefits of these programs for excluded groups are linked to the capacity of MIDIS to facilitate better access, better grievance redress, and adaptation of approaches to 28 With regard to Pension 65, the PSIA is also expecting to support the development of an age-sensitive lens given the specific access barriers for the poor rural elderly. 14 rural and indigenous areas; (iii) the reforms for Pension 65 and JUNTOS are largely focused on expansion of programs and increases in benefits, and therefore are likely to have a positive impact on poverty reduction; (iv) the ability of Pension 65 to maintain its progressive nature will depend on implementation mechanisms that can ensure proper targeting; (v) the expansion of coverage of JUNTOS and the recruitment of more social promoters is expected to enhance the information that women and families receive; (vi) the creation of a new universal school feeding program, Qali Warma, will expand program benefits to areas with higher levels of poverty and a greater percentage of excluded groups; and (vii) one of the challenges looking forward will be on how to enhance the voice of groups that may benefit from the feeding programs’ reform. 40. A stakeholder assessment, prepared as a first input for the PSIA, focused on the decision of the GoP to close PRONAA and create Qali Warma, and was prepared as part of the first phase of the PSIA. Its main conclusions were: (i) there is a need to increase the number of individuals benefitting from a better targeted school feeding program; (ii) potential losers and opponents of the reform include former PRONAA staff and food providers affected by changes in the focus of the food programs and the redefinition of procurement rules and control mechanisms; and (iii) if the program succeeds in improving its targeting, indigenous communities and local producers are likely to benefit from more culturally adapted and fresher food. Annex 8 includes a detailed description of the PSIA and the stakeholder assessment. B. Results Monitoring 41. Monitoring of outcomes and results during implementation will be carried out as follows. MIDIS will collect, analyze and present data and reports as part of annual reviews which will be carried out during project implementation, jointly with the World Bank team. Regular project progress reports are expected to be prepared on a yearly basis and will be published and accessible to managers and decision makers. 42. The development and strengthening of the mechanisms and tools for information, monitoring and evaluation will also directly support the monitoring of the project itself. The integrated data platform will ease the compilation and analysis of necessary information for the TAL by ensuring the availability of up-to-date information in a digestible format. Likewise, the project is likely to inform the development of the platform to produce information necessary and useful for the supervision of activities. Also, many of the results indicators defined in the Results Framework (Annex 1), particularly those related to the MIDIS’s programs, will be incorporated into the monitoring dashboards. This will facilitate the supervision of the project, as progress could be monitored remotely through the online dashboards. C. Sustainability 43. The sustainability of the Project will ultimately be linked to the sustainability of the country’s social inclusion reforms as a whole. The high-level prioritization of these reforms and the considerable ownership of the project design by the counterparts suggest that the project’s sustainability rests on a strong foundation. Also, the flexibility built into the design of this operation will also enhance the overall sustainability of outcomes as these will be continuously reviewed and corrective measures taken to continue to improve program performance and effectiveness. 15 V. KEY RISKS AND MITIGATION MEASURES 44. Based on the ORAF (Annex 4) and the financial and procurement assessments, the following specific capacity, governance and stakeholder risks and mitigation strategies have been identified as critical: (a) A capacity risk is posed by the challenges related to the establishment of a new Ministry. Two risks have been identified. The first one is related to possible coordination problems between UCPS and MIDIS. To overcome this risk the Operational Manual outlines the coordination mechanisms to ensure effective information flow among MIDIS’s programs and units and the specific arrangements, as well as roles and responsibilities for UCPS and MIDIS. The second risk is related to MIDIS General Secretariat’s capacity to manage Project activities. While the UCPS is expected to play a critical role in day-to-day management of administrative and procurement tasks, there is a risk that the General Secretariat’s technical and managerial capacity will be weak at the beginning of Project implementation. During Project implementation, the General Secretariat will have to consolidate requirements from the three social programs (i.e., Qali Warma, Pension 65, and JUNTOS) and ministerial units. This will increase its workload especially in the first stages of project implementation. To mitigate this risk, the Bank and MIDIS have identified key areas where capacity building within MIDIS is needed. These areas include: creating knowledge and capacity to implement social policy with a result’s orientation; tailored capacity building programs for Qali Warma’s and Local Targeting Units’ staff; and the redefinition and training of JUNTOS’s local promoters to include a new “Information, Guidance and Counseling Service.� Also, the activities under Component 2 are expected to enhance management capacity of MIDIS and the General Secretariat itself. In addition MIDIS will hire a project coordinator, and as mentioned above, the Operational Manual identifies the coordination mechanisms to ensure effective information flow among MIDIS’s programs and units. Finally, the implementation plan for the first year of the program sets relatively conservative targets to enable the process to start as smoothly as possible and to be able to adjust to unforeseen circumstances. (b) Governance and stakeholder risks. Two risks have been identified. The first one is related to the leadership in MIDIS that could be disrupted due to possible changes in the political leadership in the Ministry which could undermine Project ownership during implementation. To mitigate this risk, the project framework is aligned with the national priorities of the Government policy agenda, which goes beyond the institutional structure of MIDIS. The Bank team is also maintaining a close coordination with MIDIS’s technical team (maintaining for example frequent video- conferences) to ensure adequate implementation of project activities. In addition, MIDIS’s technical staff, typically less likely to change as a result of political reshuffling, has been involved in project design from the initial stages. The second stakeholder risk is related to the new census implemented by SISFOH between 2012 and 2013 which would identify new potential users of social programs. As a consequence of this process, JUNTOS and Pension 65 are likely to “un-affiliate� a 16 number of current users that won’t be eligible anymore. As a mitigation measure, activities under the Social Inclusion NLTA and this operation will support the response capacity of grievance mechanisms of MIDIS and its key programs. In addition, the proposed project will support the design of a communication strategy to improve information on the new targeting rules and changes in eligibility for social programs and its application. Finally, staff and management of social programs that were recently absorbed under the authority of MIDIS are likely to resist changes, especially at the sub-national level. To mitigate this risk, the TAL is supporting some activities aimed at reducing resistance to change, based on communication strategy and users’ feedback and grievance mechanisms. A. Risk Ratings Summary Table Stakeholder Risk High Implementing Agency Risk - Capacity Substantial - Governance Substantial Project Risk - Design Moderate - Social and Environmental Low - Program and Donor Low - Delivery Monitoring and Sustainability Moderate Overall Implementation Risk Substantial B. Overall Risk Rating Explanation 45. The overall risk is considered to be Substantial for implementation. Most notably, the potential for turnover in key authorities, challenging implementation arrangements against institutional and administrative capacity constraints given that MIDIS only started to operate in January 2012, could affect project implementation. During preparation, the Bank worked closely with MIDIS to provide technical support and ensure sound project preparation as well as a smooth coordination with the UCPS. Project implementation will require continued close relationship among MIDIS, UCPS and the Bank. VI. APPRAISAL SUMMARY A. Economic and Financial Analyses 46. The design of the project, which adds US$14.3 million for technical assistance to a Ministry administrating US$1 billion in 2012, 29 is based on the principle of cost- effectiveness through: (i) the emphasis on activities that maximize benefits on users, as measured by the development of accountability mechanisms in social programs; (ii) the focus on 29 Source Country’s Integrated Financial Management System (SIAF). The Institutional Modified Budget (Presupuesto Institucional Modificado – PIM) for MIDIS by November 15, 2012 is S/2,893,302,682 or US$1,121,435,148. 17 the implementation of cost-effective social inclusion reforms (such as the support for the implementation of a decentralized school feeding program and alternative modalities for payment of the social pension transfers); (iii) supporting reforms that allow for integrated activities in the field, informational systems, communications and monitoring and evaluation, thereby gaining from scale economies; (iv) supporting improvements in targeting systems that will allow for reduced errors of inclusion; (v) strengthening a monitoring and evaluation system that will provide practical recommendations to programs on how to become more cost-effective; and (vi) supporting local capacity programs that are low cost and focus on results to ensure training leads to effective interventions. B. Technical 47. The operation’s technical design is sound and leverages lessons learned from previous and current Bank supported interventions. These lessons are also based on international best practices including experience on conditional cash transfers, social pensions, feeding programs, targeting and social accountability (see Annex 7 and section on lessons learned). C. Financial Management 48. In accordance with the implementation arrangements defined for the project, the UCPS will be responsible for the fiduciary aspects of the Project; while MIDIS’s General Secretariat would be responsible for technical leadership of the Project. Project activities are straightforward, and they do not require decentralized arrangements from the FM perspective. On its side, UCPS has developed expertise in implementing Bank-financed projects and project implementation will fully benefit from those existing arrangements (i.e. as part of the preparation process, a financial management capacity assessment has been carried out to determine the adequacy of UCPS’s existing financial management arrangements to properly support project implementation). However, the proposed implementation arrangements pose some additional challenges to ensure timely coordination and smooth project implementation. Therefore, based on UCPS’s expertise and current arrangements, roles and responsibilities for MIDIS and UCPS, and specific coordination mechanisms between the two have been defined and are being formalized in an Inter-institutional Agreement and have been further detailed in the Operational Manual. Additionally, MIDIS and UCPS will maintain adequate number of experienced staff to facilitate coordination and to ensure efficiency in the operation of fiduciary function. As of the date of this document, the FM risk is considered as moderate, mainly based on the following considerations: (i) a straightforward project design and clearly defined activities which do not require complex arrangements; (ii) the need for adequate coordination arrangements among several units within MIDIS and coordination between MIDIS and UCPS, which if not in place may affect project implementation; and (iii) UCPS’s expertise and adequacy of existing financial management arrangements. D. Procurement 49. Procurement for the proposed Project would be carried out in accordance with the World Bank’s "Guidelines: Procurement under IBRD Loans and IDA Credits" dated January 2011; "Guidelines: Selection and Employment of Consultants by World Bank Borrowers" dated 18 January 2011, and the provisions stipulated in the Loan Agreement. The Borrower, through the UCPS prepared a Procurement Plan dated November 6, 2012 which will be made available through the Procurement Plan Execution System (SEPA). As part of Project preparation, the UCPS prepared an Operational Manual dated November 6, 2012 which provides detailed procurement information for Project implementation, which include: (i) the particular methods for the procurement of goods, non-consulting services and consultants, (ii) a clear definition of responsibilities that will apply to each kind of procurement, (iii) filing procedures, and (iv) management of the Procurement Plan. E. Social (including Safeguards) 50. The overall social impact of the Project is expected to be positive as the objective is to improve social inclusion policy in Peru. Improving social inclusion will benefit some of the poorest and most marginalized communities, including indigenous peoples and African descendants. While many of the activities are focused on improving the institutional capacity of the MIDIS to administer its various programs, many of these improvements will greatly promote access to and quality of basic services such as education and health for these poor and marginalized communities. The expected improvements to programs, such as JUNTOS, have pointed to their positive impact on female empowerment and agency, and the planned impact well as the user feedback mechanisms would examine the degree to which different programs are effectively reaching women, indigenous communities, people of African descent and the very poor. In order to ensure that the project includes adequate measures to address existing barriers to access, a comprehensive social assessment was undertaken during preparation to provide key project design inputs and to ensure proper targeting and coverage of project investments. 51. OP 4.10 on Indigenous Peoples is triggered as this is a nation-wide project in a country with a significant indigenous population. While it is unlikely that the project will have a negative impact on indigenous households, there is a risk that indigenous households – among the poorest in the country – may not benefit from the investments made under the project or under the accompanying Social Inclusion DPL Program unless specific measures to take their particular needs and concerns into consideration are part of the project design and during implementation. To mitigate this risk, MIDIS has prepared an Indigenous Peoples Strategy that will provide guidelines for how to include an intercultural dimension to existing programs such as JUNTOS, Pension 65 and the new school feeding program Qali Warma. The focus will be on ensuring that information regarding the project is available in appropriate languages and formats and that delivery of services are culturally appropriate and adequate for the circumstances of indigenous users. 52. Indigenous Peoples’ strategy prepared by MIDIS to comply with OP 4.10, including: (i) the results of a social assessment undertaken in a representative sample of indigenous communities in the Andes and the Amazon; (ii) a review and analysis of existing literature, relevant analytical work, and evaluations from the current social protection programs as they relate to impacts, benefits and barriers to access of these programs for Indigenous peoples; (iii) an institutional assessment of the new Ministry's proposed organizational chart in order to assess the existing capacity for effective engagement with Indigenous peoples; (iv) a review of Peru's relevant legal and institutional framework; and (v) a participatory process with Indigenous leaders, users, and organizations to receive feedback and develop recommendations for program 19 design. As agreed between MIDIS and the Bank, the Strategy was disseminated and discussed during a validation meeting on October 29, 2012 with a representative group of Indigenous peoples’ organizations. Feedback, comments and inputs received during the validation meeting were incorporated into the final version of the Strategy, which was disclosed on the MIDIS website on October 30, 2012 30 and the Bank’s external website on October 31, 2012. F. Environment (including Safeguards) 53. This operation does not trigger the Bank’s environmental safeguard policies. G. Other Safeguards Policies Triggered 54. This operation does not trigger any other safeguards policies. 30 http://www.midis.gob.pe/index.php?option=com_content&view=article&id=330&lang=es. 20 Annex 1: Results Framework and Monitoring . PERU Social Inclusion Technical Assistance Project Project Development Objective (PDO): The project development objective is to strengthen MIDIS’s systems and capacity to improve the performance of MIDIS’s programs and to monitor social inclusion policy. Data Responsibilit Description Cumulative Target Values** Frequency Source/ y for Data (indicator Core PDO Level Results Unit of Measure Baseline Methodology Collection definition etc.) Indicators* End YR 1 YR 2 YR3 Target Indicator One: Percentage N/A +2% +2% +2% +2% Annual Reports prepared General Improve the Coverage of by the General Directorate of performance of MIDIS’s programs Directorate of Monitoring five MIDIS’s is improved Monitoring and and programs. (percentage increase Evaluation. Evaluation. in families users of X MIDIS’s programs with respect to total families eligible for at least one MIDIS’s program. 31) Indicator Two: Number 0 2 2 3 3 Annual Reports from the General Management Key monitoring and General Directorate of capacity to evaluation, and Directorate of Monitoring oversee the coordination Monitoring and and policy of social mechanisms are Evaluation. Evaluation. inclusion. established (number Unit of of “Improvement Measure: Year agreements� signed/ 1, 2 and 3:’ evaluated between “Improvement programs and agreements� MIDIS). based on the Technical Reports from the monitoring dashboard and 31 Families eligible for targeted MIDIS’s programs; that is: JUNTOS, Pension 65 and Cuna Mas. 21 evaluations signed between the General Directorate of Monitoring and Evaluation (DGSYE) and the programs. Year 4: Two new “Improvement agreements� signed; and one “Improvement Agreement� signed in previous years is evaluated and showing, at least, partial fulfillment. INTERMEDIATE RESULTS Intermediate Result (Component One): Quality improvement of MIDIS’s Programs. Intermediate Result Number 0 1 2 3 4 Annual Reports on replies General User indicator One: to grievances Office of accountability Improvement in directed to each Quality of mechanisms quality of MIDIS’s program Social are defined as programs as shown including gender Benefits. grievances by the and ethnic mechanisms implementation of specific with timely users accountability indicators. reply to mechanisms complaints. (number of MIDIS’s programs with user accountability mechanisms). Intermediate Result Number 0 1 1 1 1 Annual Internal General De- indicator Two: documents Office of concentration MIDIS operates in a reporting the use Decentralizati of MIDIS at de-concentrated of planning, on and the sub way along the information, Coordination national level. 22 country’s territory monitoring and of Social Unit of (activities evaluation tools Programs. Measure: completed towards for the operation Activities the set up of of MIDIS’s one- completed in MIDIS’s one-stop stop shops. each year. Year shops or 1: MIDIS’s decentralized one-stop shops offices for territorial (or coordination). decentralized offices) operating in the territory are using planning tools designed to facilitate territorial coordination; Year 2: MIDIS’s one- stop shops are using a common information system; Year 3 and 4: MIDIS’s one-stop shops are using monitoring and evaluation tools designed to facilitate territorial coordination. Intermediate Result (Component Two): Improving knowledge management, information and communication. Intermediate Result Number 0 1 2 3 4 Annual Information General Programs’ indicator Three: platform Office of information MIDIS is operating with User systems feed an implementing an indicators that Management. integrated integrated can disaggregate information information system by gender. platform. for its programs (number of MIDIS’s programs 23 that share a common information platform). Intermediate Result Percentage 0 50% 70% 90% 100% Annual Reports on ULF General indicator Four: Office of Unit of Improved User measure: performance of Management. “Number of SISFOH by ULFs interconnecting interconnected Local Targeting and with their Units (Unidades staff trained on Locales de standardized Focalización – practices on ULF) (percentage of information ULFs management, interconnected and monitoring and with their staff customer trained on service.� standardized practices). Intermediate Result Number 0 1 1 1 1 Annual Communications General Unit of indicator Five: strategy, pilots Secretariat. Measure: Step A national design and 1: Design of communications summary of the strategy for MIDIS results and communication is in place and official document strategy; Step includes different formalizing the 2: Pilots of approaches for national strategy; Step 3 different population communications and 4: A groups (i.e., strategy. national indigenous strategy is in peoples). (Steps place and completed). includes different approaches for different population groups. Intermediate Result (Component Three): Strengthening MIDIS’s capacity on result orientation, monitoring and evaluation. Intermediate Result Number 0 3 5 7 10 Annual Information General Unit of indicator Six: dashboard Directorate of Measure: MIDIS monitors operating, Monitoring Number of 24 infant malnutrition including and regions with an and development indicators to Evaluation. operating plans indicators at monitor chronic information the regional level malnutrition and dashboard on (number of regions). development infant plans. malnutrition and development plans indicators. Intermediate Result Number 0 3 4 5 6 Annual Technical General indicator Seven: evaluations of Directorate of MIDIS’s programs programs. Monitoring and policies are and being evaluated Evaluation (number of programs and policies that are being evaluated). Intermediate Result Number 0 0 1 0 1 Annual Technical studies General indicator eight: to create and Office of MIDIS designs and implement the Policies and implements a policy tool. Strategies tool to coordinate interventions to reduce chronic malnutrition (number of operations rules designed to coordinate interventions to reduce chronic malnutrition). Intermediate Result (Component Four): Strengthening of human resource management and capacity. Intermediate Result Number 0 1 1 1 1 Annual Methodology, General Office Unit of indicator Nine: pilots design of Policies and Measure: Step MIDIS introduces and summary Strategies. 1: Design of results-oriented of results and the human resource official methodology management document to introduce practices (number of formalizing the results-oriented steps completed). incorporation human 25 of performance resources evaluations in management MIDIS’s practices; human Step 2: Pilots resources of management methodology; practices. Step 3: Official document formalizing the incorporation of performance evaluations in MIDIS’s human resources management practices. Step 4: Performance- based human resources policy is in operation. . 26 Annex 2: Detailed Project Description PERU Social Inclusion Technical Assistance Project Project Concept 1. This operation will support both the steering and implementation functions of MIDIS, specifically accompanying the reform of three of its social programs: JUNTOS, Qali Warma and Pension 65. The Steering Role of MIDIS 2. The establishment of MIDIS presents a new opportunity to advance the results- based management agenda to the benefit of individual citizens, by supporting the quality of information, as well as monitoring and evaluation (M&E) from the frontline of the programs to the overarching goals of policy. The impetus towards the creation of MIDIS stemmed from a purposeful agenda to provide vulnerable citizens with improved, comprehensive services to address critical gaps in their welfare. This implies an understanding of who the poor are – where and how they live, how their individual and family needs are met, and how their lives are changed through the services they receive. This, in turn, has required a new approach to information, monitoring and evaluation of social programs and policies, focused on performance and results. 3. Under MIDIS’s leadership, a component for Monitoring and Evaluation (M&E) for Social Policy under SINADIS, known as Evidencia, seeks to improve the performance of social programs and policies by providing the information, capacity building and transparency to promote effective public management and decision-making. Firstly, the M&E system is being developed as a source of reliable and continuous information on the state of social programs and policies, to the benefit of both civil servants and citizens. The information produced from the monitoring system will serve as a key input for adjustments/corrections in the process of implementation. It will offer guidance as to what is working or not, and why. Secondly, Evidencia will provide capacity building to strengthen the technical capacity for M&E and for the use of the information it produces. The latter is of particular importance, as it ensures the feedback loop towards evidence-based planning and decision-making. Finally, the system of M&E will increase the transparency of public management, taking the information produced and sharing it within government and with the public at large in user-friendly formats. In doing so, it is expected that program officials will be held more accountable for the expected results, and thereby encourage good performance. 4. The General Directorate for Monitoring and Evaluation (DGSYE) of MIDIS is principally charged with the responsibility to manage Evidencia. This implies the definition of M&E strategies, their implementation and/or supervision, and the constructive application of their recommendations. MIDIS has placed a strong emphasis on this third area, recognizing that many efforts in M&E have failed to influence program and policy decisions, whether due to the lack of adequate dissemination, the poor technical quality of evaluations, or the limited policy relevance of recommendations. The DGSYE seeks to purposefully address this missing link in the policy cycle by tailoring recommendations around concrete management and planning 27 actions, elevating the legal significance of its recommendations, and strengthening the capacity for M&E within MIDIS and its counterparts. 5. The National Household Targeting System, SISFOH, began in 2004 as an initiative of MEF with the purpose of providing information to social programs to be used for the selection of users and therefore improving their equity and effectiveness. The system includes information on the socioeconomic characteristics of households, the General Household Registry, operated by a Central Targeting Unit. Since January 2012, the system’s administration has been transferred to the General Directorate for the Management of Users (DGGU) in MIDIS. Since its establishment and operation, it has been providing information to various social programs, from the local food programs (Vaso de Leche, or Glass of Milk) to JUNTOS, health insurance (SIS) and the recently created Pension 65. 32 6. The current administration identified a few challenges in the implementation of SISFOH: (i) reform of the database for urban and rural households through standardized and auditable processes on information gathering, and qualifying criteria that are clear and transparent both for programs and users, and (ii) strengthening the function of Local Targeting Units as the unique “window� for the enrollment of new households. With respect to the reform of the database, the Government of Peru began implementing a re-certification process of households in 12 of the 24 regions in 2012 and expects to initiate an auditing process to develop quality standards. MIDIS requested immediate technical assistance to the World Bank to analyze the robustness of the welfare index currently used and its relevance for users of the different programs. A second process of re-certification for the remaining 12 regions will be implemented in 2013 and expects to be supported by this operation, both with respect to the data collection process and to the monitoring and auditing quality standards of the information collected. The Implementation Role of MIDIS 7. JUNTOS has quickly become the centerpiece of the social inclusion agenda of the recently created MIDIS which decided to consolidate the reforms undertaken and strengthen the opportunities for intersectoral coordination provided by the Program. 33 With this objective in mind, MIDIS management identified challenges in each of the operational processes of JUNTOS: 32 The registry initially included information on urban areas only, and only recently has been complemented with information collected in rural areas by the health insurance program SIS and by the JUNTOS CCT programs. The database is not yet complete, as it still requires several verification processes and the creation of Local Targeting Units with the objective of purifying the data, adjusting to the needs of social programs and reducing the burden of complaints. In addition, through the Municipal Incentive program the GoP initiated a budgetary tool that promoted, among other things, the creation of the General Household Registry in 642 districts, of which 236 have been created to date, and promoting the registration of all the users of the largest social programs, like the Glass of Milk in the 642 districts. 33 Three sets of key challenges were identified in the implementation of the JUNTOS programs as part of a technical assistance project initiated and promoted by the World Bank in 2008: (i) possible inefficiency of the transfer scheme (i.e., current amount is fixed –S/.200 every two months – regardless of demographic characteristics of families), (ii) inadequate mechanisms for verification of compliance with co-responsibilities, and (iii) the recognition of the limited capacity of supply of the health and education sectors intervening in the areas of the program. Additionally, the program faced challenges related to its institutional arrangements, technical capacity and inter-sectoral coordination. 28 (a) Information system – Targeting and Affiliation: JUNTOS plans to expand coverage to cover the 800,000 households in extreme poverty, its target population, by the end of 2013. To achieve this goal, the program requires improving its IT platform to be able to exchange data with SISFOH, which plans to update socio-economic status information of all JUNTOS households over the next two years. (b) Evaluating Health and Education sectors capacity for service provision: JUNTOS will require strengthening mechanisms for evaluating the capacity of health and education sectors to provide services associated with the co-responsibilities and to prioritize expansion of coverage to those areas where supply is adequate, which require strengthening the institutional coordination with those sectors at national and subnational levels. (c) The mechanism for Verification of Conditionalities in health and education is currently being revisited and will require to be enhanced. (d) Redesigned role for JUNTOS local promoters (Gestores Locales): One of the elements that are currently being reviewed by the program is the role played by local promoters, both in their relationship with users families and to the actions carried out with other institutional actors, mainly health and education. 34 The program will implement an “Information, Guidance and Counseling Service� (a family-oriented service) that includes information and orientation services for families in JUNTOS and a counseling and follow-up services to ensure that the most vulnerable families stay in the program and that those who have difficulty in complying with the co-responsibilities receive more support. (e) Payment System: Despite the fact that JUNTOS changed the periodicity of payment from monthly to bi-monthly, the administrative cost of payment has not been reduced and service standards have not improved. MIDIS will support the development of a contract model with payment providers to ensure better technical and financial conditions. Additionally, the program is currently experimenting differentiated payment by demographic composition to better align incentives with challenges related to different age groups. 8. Informed by significant deficiencies identified in previous PRONAA’s evaluations, 35 MIDIS decided to close the program through Supreme Decree D.S. N°007-2012-MIDIS. On 34 To date, the program has about 976 social promoters, distributed in 16 regional headquarters of the program. 60 percent of social promoters joined the program in 2010 and 2011 and the remaining 40 percent in 2008 and 2009, so most of them have had short careers. Just over half (49 percent) are women and the average age of social promoters is 38 years; however, there are large variations between the youngest (23 years) and oldest (68 years). By end of 2012 a new recruitment process took place for more than 1000 promoters with the new profile. Some of the old promoters applied. 226 new social promoters will be incorporated. The main areas of expertise are education (40 percent), health (15 percent), social sciences (16 percent) and agronomy and other careers related to rural activities (16 percent). The functions currently performed by social promoters are mainly related to the delivery of information to the user families and the process of verification of compliance with co-responsibilities. 35 MIDIS identified two main challenges to improve PRONAA’s efficiency and impact in service delivery: (i) deficiencies in the information system to deliver timely, reliable and transparent reports; and (ii) the lack of participation and user feedback in the management of human resources and the quality control cycle across the food 29 the same day, Supreme Decree D.S. N°008-2012-MIDIS created a new program, Qali Warma, focused on school feeding. Qali Warma is expected to begin its functions by March 2013 when the school year starts. Initially it will operate in the PRONAA’s schools and the expansion to new schools will be gradual (i.e., prioritizing districts with high food insecurity). Qali Warma introduces new elements such as the implementation through CAE’s (Comités de Alimentación Escolar – School Feeding Committees), a decentralized procurement system at school level and alternative modalities of services provision depending on school size, cultural or geographical characteristics, local food availability, and a clear M&E system, among others. 9. The design and the implementation of Qali Warma face major challenges. The most important ones, as identified by MIDIS, are: (a) The tight time frame proposed by the Government, which is expecting to have the Program running by the beginning of the next school year (March 2013), is clearly the most critical challenge. The limited timeframe reduces the possibility for any piloting before the launch of the program. 36 (b) The program needs to define and develop alternative management and costing models based on the very diverse schools characteristics (there are around 50,000 educational units nationwide), local food production, procurement conditions, parents participation and ethnicity. Qali Warma is planning to pilot alternative modalities of implementation through local governments and NGOs. This operation will support the piloting and evaluation of alternative modalities in order to incorporate them as management models. (c) Quality control of food delivery is a crucial process of any feeding program. By proposing a highly decentralized implementation, Qali Warma needs to work closely with other sectors related to the food supply chain (Ministry of Agriculture, Ministry of Health, SENASA, among others) and at the same time take advantage of opportunities to include culturally appropriate diets. (d) A well-designed and comprehensive management information system for the program is needed. This information system should allow the registration, monitoring, control, supervision, evaluation and accountability of the program, so as to be fully compatible with the social information system that MIDIS must manage. (e) The program requires the development and implementation of mechanisms to increase users’ participation (see Sub-component 1.1). Accountability is going to be especially challenging at the local level given the decentralized nature of the program and the short procurement-delivery chain. One of the subcomponents of PRONAA has been evaluated by the Ministry of Economy and Finance (MEF) in the context of Results-Based Budget (RBB). The conclusions of this evaluation point to a problem of low coverage and high filtration, problems with the delivery process causing delays and incomplete rations, and a big difference between the amount of food delivered and the amount effectively consumed by the users (related to a non-optimal allocation household resources and filtration problems in schools). 36 The team has advised Qali Warma colleagues of the need to use the last few months of the current school year to pilot some of the mechanisms that Qali Warma plans to introduce. This would allow the Qali Warma team to gather very important information on the design of the program and to make some adjustment before the launch of the program itself in 2013. 30 timeframe for its initial implementation. Districts and localities with limited access to information are especially vulnerable to abuse and mis-use of resources. In addition, the fact that expansion may include proportionally more rural areas (where indigenous populations tend to be concentrated) will require adaptation of operating procedures and accountability mechanisms to ensure that they function in the rural context. (f) Human resource management will be a critical area, as the evaluation of PRONAA highlighted. Given the broad coverage of the program and its decentralized implementation, the program requires suitable and sufficient personnel for its operation across the country. Such personnel should be adequately hired and subsequently trained to successfully face the tasks of monitoring, control and technical support to School Feeding Committees. (g) Finally, given the low credibility and reputation of the previous program PRONAA, the new program faces the challenge of improving the image of the government in this area. For this purpose, it will be important for the Qali Warma team to focus on the development of a comprehensive and effective communication strategy of the new Program and the new mechanisms for transparency and accountability that MIDIS is proposing to introduce. Such campaign could help on two fronts: (i) to promote users’ feedback and increase impact of the program, and (ii) to change the image of feeding programs in the country and increase the quality of staff involved in this work. 37 10. MIDIS developed a strategy to consolidate the Pension 65 program in the medium and long term. 38 The authorities plan to continue expanding coverage by progressively incorporating new regions to the program until reaching the whole country. This involves improvements in the targeting strategy, the inclusion of a more efficient and accessible payment system for the elderly, and the promotion of complementary services that are relevant for this age group, such as health and long term care. 11. Strengthening the implementing and steering functions of MIDIS requires the design and operation of a set of key instruments such as: a common local institutional arrangements between programs, the development of integrated action plans for social inclusion, the design and implementation of a new system for information and complaints for local users of MIDIS’s programs and an integrated register of users for MIDIS’s programs (registro integrado de usuarios). 37 This has been done successfully in other LAC countries, such as Ecuador. The Bank team has already connected the Qali Warma team with the Ecuador colleagues to share their experience and lessons learned in promoting greater trust in government institutions. 38 Through the NLTA. 31 Project Description Project Components Description 12. The project will support four key components with a specific focus on JUNTOS, Pension 65 and Qali Warma. Given that MIDIS is a new Ministry (created on October 2011 and that started managing social programs only as of January 2012) in charge of a new sector, some of the specific proposed project activities are expected to be refined and detailed further during the implementation of this operation. In particular, it is expected that in a number of cases, the recommendations and outcomes of the initial technical assistance will inform the redefinition of content and scope of activities included in this TAL. 13. Component 1: Quality improvement of MIDIS’s Programs (US$3,530,000). This component will finance technical assistance to design and pilot a series of activities aimed at improving the quality control of programs. It will continue supporting Policy Area 2 of the Second Social Inclusion DPL Program on Improving the Inclusiveness and Effectiveness Capacity of Key Social Programs of MIDIS. Specifically, this component will include: 14. Sub-component 1.1: Development of Users’ Participation and Accountability Mechanisms (US$500,000). The reforms promoted by MIDIS include a greater emphasis on accountability to users as an element to improve service quality. The decentralization of school feeding via Qali Warma will require a shift in monitoring towards greater use of preventive mechanisms, and increased monitoring by end-users (i.e., students, and parents), including monitoring the performance of any local committees tasked with implementation of the program. The expansion of JUNTOS and Pension 65, and the introduction of a new targeting rules and changes in eligibility for social programs by SISFOH will need to be accompanied by stronger transparency and accountability mechanisms. Technical assistance will be provided to MIDIS on how new technologies (i.e., cell phone, mapping software) can play a role in facilitating practical use of data generated by feedback and grievance mechanisms to promote transparency and incentives for performance at the facility level. This sub-component would finance technical assistance around three related areas that are important for accountability, transparency and risk mitigation: (a) Transparency and Anti-Corruption Mechanisms for Qali Warma. Technical assistance will help development of culturally adequate norms, standards, protocols, didactic materials and communication tools to promote transparency and accountability at the school and district level for Qali Warma. This will be carried out by: (i) developing simple rules and templates for publishing unit cost, user and procurement data at the facility (in this case, school) and subnational level; (ii) developing norms and guidelines on the accountability of the committees to the broader community including the use of local mechanisms such as traditional governance structures in order to discourage capture of resources; and (iii) integration of the new norms and requirements into a culturally appropriate communications campaign, and the development of sensitization campaigns for students and schools. 32 (b) Social Monitoring This activity will finance technical assistance for the development, testing and piloting of a users’ participation and accountability mechanism to collect feedback from users of MIDIS’s Programs (with a special focus on women) starting with Qali Warma. These mechanisms will support the dissemination of service quality standards to users and then collect their informed-feedback. Pilots will be conducted in a sub-set of regions with an analysis of lessons learned for broader replication. At least one indigenous community will participate in order to determine whether the methodology needs to be adapted for their use. (c) Grievance Mechanisms Because of the pace of scaling up and the overall reorganization of this new Ministry, it is critical to improve and scale up its Grievance and user feedback mechanisms. Support to grievance mechanism (call centers or in rural areas more traditional means of feedback) should include: (a) the design and introduction of the system architecture (ICT) responsible for automatically organizing feedback in a manner which is disaggregated, promotes accountability and facilitates monitoring not only by Qali Warma but also by decentralized groups of stakeholders (i.e., grouping data by facility, region and province and by type of issue) which also protects whistle blowers from retribution; (b) developing institutional pathways for who will react to different types of complaints; (c) monitoring mechanisms for response to complaints, with better systems publishing performance data on complaints received and responses, as well as internal quality control and strong staff training mechanisms; and (d) communications on the new system to end users to explain how it will function and what their rights are. 15. Sub-component 1.2: Strengthening local coordination of MIDIS’s programs (US$380,000). This sub-component would support the design and piloting of local coordination methodologies and tools for MIDIS’s Programs. The TAL will support MIDIS in piloting local coordination of programs/services through four sets of activities: (i) territorial coordination – different services provided at the same locality, (ii) integrated delivery of services – different services targeted to the same families, (iii) intersectoral management – different programs/services working in the same social intervention, and (iv) network management – different programs/institutions stop-shop for the same users. This sub-component would include technical assistance for monitoring and systematization of the piloting process in order to scale up those models that had performed better. 16. Sub-component 1.3: Improving the client orientation of SISFOH (US$440,000). This sub- component would support activities aimed at improving SISFOH’s internal and external communication and coordination mechanisms. In support of the information quality and credibility improvements of SISFOH this sub-component will facilitate technical assistance to ensure that ULFs and the central unit are well coordinated and communicated, and that information flows effectively between SISFOH and its users for relevant processes. This includes module of grievance redress mechanisms, information quality protocols, quality audits and checks, and working towards a Unique User Registry that includes all MIDIS’s programs. 33 17. Sub-component 1.4: Strengthening Administrative Processes in MIDIS’s Program (US$2,210,000). (a) Strengthening money transfer systems of Pension 65 and Qali Warma. This sub- component would support the design and implementation of pilots of alternative money transfer systems for Pension 65 and Qali Warma. These money transfer systems would promote the use of financial instruments in areas where they are available and the identification of innovative solutions in other areas where there may not be conventional access to financial institutions. For Pension 65, this sub-component would support the design and implementation of pilot tests for three methods of payment including: (a) accreditation in bank accounts in urban areas; (b) payment through the use of mobile phones in rural areas with access to this kind of technology; and (c) payment through mass consumption firms (such as soft drink distributors) in rural areas with very difficult access. This sub-component would also support activities aimed at piloting different systems of transferring resources to the Local School Committees of Qali Warma, which in Peru is a starting point for a decentralized management model where local school committees will be responsible for purchasing the food and directly manage the program transferred budget. (b) Alternative management models and nutritional quality control of Qali Warma. This sub component aims at developing alternative management models by piloting modalities in which local governments and NGOs are in charge of the food service delivery (i.e., instead of CAE). The operation will support the design of pilots, the evaluations of their results and, based on those results, the definition of alternative management models that address potential differences in geographic, social and cultural aspects of the areas in which the schools are located. This sub component will also include activities aimed at improving the legal and institutional framework at the national and subnational level on nutritional quality control systems. These activities will identify and analyze nutrition quality control problems in the first months of implementation of Qali Warma and propose solutions. As part of the Indigenous Peoples Strategy, efforts will also be made to identify opportunities to improve the adaptation of school feeding programs in terms of dietary guidelines, delivery mechanisms and community involvement to indigenous customs and practices. (c) JUNTOS information tools to detect deficiencies in health, nutrition and education services. JUNTOS initiated several initiatives to enhance the access of its users to services associated with the health and education co-responsibilities. The lack of timely information about deficiencies in the availability of inputs (i.e., human resources, equipment and infrastructure) negatively affected implementation and planning. The program lacks a consolidated information system that can create warnings when services provision is interrupted or can’t serve all users of the program. The TAL will support the development of information tools to detect and address deficiencies in the provision of health, nutrition and education services in areas of intervention of JUNTOS. The tools would aim to improve the coordination of the program with the health and service providers at subnational and national level. 34 18. Component 1 contributes to the PDO by supporting activities that improve the performance of MIDIS’s programs through accountability mechanisms that institutionalize channels for user’s feedback (intermediate result one, see Annex 1); and, the development of planning, information and monitoring and evaluation tools for MIDIS’s decentralized offices that coordinate the provision of social programs in the territory (intermediate result two). By supporting this, in addition to activities aimed at strengthening processes of specific MIDIS’s programs and SISFOH, the component is aligned with reforms promoted by the Policy Area 2 of the Second Social Inclusion DPL program on Improving the Inclusiveness and Effectiveness Capacity of Social Programs of MIDIS. 19. Component 2: Improving knowledge management, information and communication (US$3,734,088). This component will finance technical assistance to strengthen MIDIS’s information system to collect, process, and produce data to enhance the decision-making processes within SINADIS. This component will continue supporting the three Policy Areas of the second Social Inclusion DPL Program with special emphasis on Policy Area 3 (Reforming Social Policy Approaches and Systems). The component will include: 20. Subcomponent 2.1: Integrated Information Platform for Social Policy (US$2,324,000): This sub-component would finance the design of an integrated multi-sectoral information platform for decision-making of social policy, including the overall system architecture, data models and data standards to guide its strategic development (see Box 2.1 for details on the steps needed for the development of this platform). The platform would require the development of information technology to collect (in real-time), align and analyze information on planning, budgeting and implementation of social inclusion policies operating under SINADIS. The platform initially would be developed to support the interoperability of the various MIS systems of the five MIDIS’s programs in order to facilitate the analysis of aggregated information. While each program will maintain and strengthen their existing MIS, the platform will allow for the communication among them to inform coordinated management strategies, particularly from a territorial perspective. The system would then be scaled up to integrate specific interfaces of the main planning and budgeting administrative systems in the Peruvian state (such as SIAF, SIGA, and SNIP) as well as other relevant information systems (such as the MIDIS’s M&E system, Unique User Registry, cadastral systems, INEI Open data initiative 39 and other social programs’ systems). The design of the platform would be preceded by a rapid assessment of the functioning and main bottlenecks of the existing planning, budgeting and implementation systems (SIAF and SIGA). The analyzed information would then be made public through a portal with geo referenced information to allow the public to see the active programs and results mapped by region. In addition, the system will include a focus on the gathering of disaggregated data regarding ethnicity which is one of the critical deficiencies in the information systems for all the social inclusion programs. 39 There is strong demand in harmonizing INEI's existing data/documentation systems to better streamline databases and information collected by the GoP. This technology, similar to the one the WB uses under its Open Data Access initiative, allows full flexibility by the user on how data and information are accessed and visualized. More importantly, the feasibility to do so using an easy, unique, interactive system in real time could introduce large efficiency gains on how information is processed and flows from INEI to the rest of the GoP and external users. 35 21. Subcomponent 2.2: Strengthening the Management Information Systems (MIS) of Qali Warma, and Pension 65 (US$810,000): (a) Qali Warma’s MIS. After the first phase of implementation, this sub-component would assess and redesign Qali Warma’s information system with the objective of optimizing the generation of data that effectively feed decision-making processes at different management levels of the program and operates in coordination with the MIDIS’s systems. To this end, the assessment will identify obstacles in the delivery of timely, relevant and reliable reports to inform quality control and decision-making processes. It will also identify and propose mechanisms to improve transparency and the credibility of the program, using information and feedback from both users and staff. This component of the assessment would include information about the procurement process and the management of human resources of the Qali Warma and the development of new indicators of performance. The indicators of performance of Qali Warma would be made publicly available on a regular basis. (b) Pension 65’s MIS. This sub-component would finance the development of an information system for Pension 65 to operate in coordination with the MIDIS’s systems. 22. Subcomponent 2.3: Improvements in MIDIS’s Administrative and Communication Systems (US$600,088): (a) Administrative System. The project will support the design and/or implementation of a number of tools to strengthen the internal management capacity of MIDIS. Those tools will include: (i) the Institutional Strategic Policy with its implementation plan and the institutional manuals for internal organization, functions and administrative procedures, (ii) Human Resources Management Institutional Policy that includes a Human Resources Development Plan, a competency-based training plan, guidelines for the implementation of training activities, the design of a methodology to annually evaluate the performance of MIDIS’s staff and tools to use in this evaluation process, and (iii) the Strategic Plan of Information Technologies and its implementation plan, that allows monitoring, control and registry processes of activities under the administrative system. It is envisaged that these tools would be available online to allow for the monitoring and control of the process in real time. (b) Communication System. This component will support the development of a communication strategy for the MIDIS’s social inclusion plan (Crecer para Incluir), the design of an annual dissemination and communications plan, and the development of an internal communication plan for MIDIS’s staff through three key actions. First, the design of the MIDIS’s Communication Policy and Strategy to position the Ministry as the technical leader of the Social Inclusion Sector. Second, the design of a strategic communication process for the inter-institutional coordination platform Crecer para Incluir. Finally, the design of “Annual Dissemination and Communications Plans" on the services and projects under MIDIS. These Plans will integrate the dissemination plans of MIDIS’s programs and other institutions attached to the Ministry to ensure effective and efficient communication practices. The Plan will include culturally appropriate messages. 36 Box 2.1: Development of an integrated information platform for MIDIS The development of an integrated information platform for MIDIS is expected to follow these key steps: • From the programmatic point of view, with MIDIS creation five social protection programs were incorporated to the same institution and each one was previously managed by different institutions. Each of the programs incorporated into MIDIS has developed its own Management Information System (MIS). They are at different stages of development and with different functionalities. • Of the five programs incorporated into MIDIS, one was recently created (QaliWarma) and another was in a very initial stage (Pension 65). These two programs need to create their own MIS based on the new programmatic design. • The law creating MIDIS stipulates that one of Ministry’s functions is to “design and operate the registries and databases of the social programs, the identification, selection and registry of users and other registries created in the future.� This means that MIDIS needs to start ensuring that the existing MIS are functioning in accordance with the basic programmatic requirements. • MIDIS is planning the design and implementation of an Integrated Information System for program incorporated to the Ministry and other social inclusion programs. The envisioned phases for this task are: (a) analysis of the functioning of each existing MIS, to support its update, optimization, and ensure that they can be integrated with other systems; (b) development of new MIS for “new� programs (Qali Warma and Pension 65); (c) development of an online platform that allows for the integration of different programs’ MIS, with mechanisms to ensure smooth and efficient exchange of information; (d) integration of MIDIS programs’ MIS in one platform, with inter- connections of key data and focused on the users of the programs; (e) incorporation of the national targeting system (SISFOH) to the integrated platform, which allows for information on actual and potential users; and (f) gradual incorporation of other (outside of MIDIS) social protection programs’ MIS in the integrated platform that is part the social inclusion strategy lead by MIDIS. This TAL is expected to directly fund phases b, c and d. 23. Component 2 contributes to the PDO by supporting activities that improve the performance of MIDIS’s programs and strengthen MIDIS’s capacity to monitor social inclusion policy through the implementation of an integrated information platform that includes data from different programs (intermediate result three, see Annex 1); the interconnectivity of local targeting units that are strengthened with trained staff on information management, monitoring and customer service (intermediate result four); and the development of a national communication strategy that includes different approaches for different population groups (intermediate result five). By supporting this, in addition to activities aimed at strengthening the MIS of specific MIDIS’s programs and overall MIDIS’s administration, the component is aligned with reforms promoted by all Policy Areas of the Second Social Inclusion DPL program with emphasis on Policy Area 1 on the Consolidation of the institutional framework for the 37 stewardship of the social inclusion agenda and Policy Area 3 on Reforming Social Policy Approaches and Systems. 24. Component 3: Strengthening of MIDIS’s capacity on result orientation, monitoring and evaluation (US$3,493,000). This component would provide support for the development and implementation of a social monitoring and evaluation system. The planned National System of Monitoring and Evaluation for Social Policy, known as Evidencia, is expected to be a key component of the Integrated Information Platform. The system would seek to improve the performance of social programs and policies by providing opportune information and rigorous evidence, capacity building on M&E among key stakeholders, and greater transparency to promote effective public management and decision-making. This component will continue supporting the three Policy Areas of the second Social Inclusion DPL Program with special emphasis on Policy Area 3 (Reforming Social Policy Approaches and Systems). The project will support: 25. Sub-component 3.1: Developing tools to collect data and analyze indicators of social policies within SINADIS, including MIDIS’s programs (US$2,120,000): This sub-component will finance the conceptual and operational development of tools and instruments to collect data and analyze indicators of MIDIS’s programs and social policies operating within SINADIS, and facilitate decision-making and transparency and the coordination of social inclusion policy with a results orientation. Historically vulnerable groups such those included in MIDIS definition of “households in process of inclusion� 40 will be regularly monitored giving that they constitute MIDIS’s targeted groups. Specifically, it would support: (a) Monitoring dashboard for chronic infant malnutrition and development plan for “households in process of inclusion� will be developed as a user-friendly instrument to allow for the collection and manipulation of data related to the National Strategy for Social Development and Inclusion, Crecer para Incluir, to address chronic malnutrition and development plan for “households in process of inclusion� (including development of productive capacities and access to basic infrastructure). This will involve both the conceptual and technological development of the tool, which builds on and scales up the dashboard established for MIDIS’s programs developed under the NLTA/IDF. Likewise, the policy monitoring dashboard will be made available to the public to support the social monitoring and oversight of the activities and advances made under the strategy. The dashboard will be complemented by technical reports to the program and policy makers/operators to analyze the information gathered (and disaggregated by gender) and provide recommendations to address lagging areas. In addition to the instrument itself, the technical assistance will support the mechanisms for analysis and use of the information produced. MIDIS intends to develop similar dashboards for all of the key policy areas defined under its Crecer para Incluir strategy. (b) Creation of an “Elderly Observatory� to promote a better understanding of needs and characteristics of the elderly in Peru. The observatory will develop a database integrating 40 I.e., those with at least three characteristics associated to exclusion: (i) live in rural settings; (ii) are considered part of indigenous groups (Quechua, Aymara or other indigenous languages); (iii) the mother or head of the house has only elementary school or less; and (iv) first (poorest) quintile of household consumption. 38 relevant information to characterize the elderly and their needs; and, prepare analytical studies on most significant topics. As part of this activity the operation will also support the adoption of an integrated strategy to provide income protection to the elderly. Support will focus in two activities: (i) the preparation of an analytical report characterizing and discussing the profile of the elderly (i.e., including those who are users of Pension 65, those in contributory pensions and those who are not currently being covered by a social protection program); and (ii) the preparation of a “White Book� to propose a long term strategy for the sector. (c) The systematization of pilot experiences of application of social policy. The operation will support: (i) the design of incentives for the coordination of social inclusion policies (including the systematization of pilot experiences of the application of social policy); and (ii) the design of the results framework of the strategic axis of Crecer para Incluir including an incentive system to support the operation of SINADIS. 26. Sub-component 3.2: Evaluation of Social Policy and Programs (US$1,373,000): MIDIS seeks to institutionalize a range of evaluation methodologies and guidelines, taking into account the call to respond to different performance information needs of a variety of stakeholders, as well as the need to generate useful and feasible evidence-based recommendations. In addition, in order to ensure the implementation of the recommendations, adequate incentives and mechanisms will be developed to facilitate the application of evidence produced through M&E. 41 Technical assistance will support the following activities: (a) Evaluation of Social Policy Coordination. In order to assess the effects of the coordinating and convening role of MIDIS, a results evaluation will be conducted to determine the results on users of multiple interventions for social development in a single territory. MIDIS is currently conducting territorial pilots in strategic areas of the country. The experience from the pilots will inform the design and preparation of the evaluation. (b) Support to the Evaluation of Pension 65. These activities will complement the ongoing evaluation co-financed by MIDIS. It will include consultancies needed to analyze the data collected by INEI as part of regular surveys to look at effects of the program on users’ welfare, and access to other complementary services, such as health, and of the effectiveness of the targeting mechanism, to assess inclusion and exclusion errors. 27. Evaluation of Qali Warma. Given the importance of Qali Warma as a flagship program of MIDIS, an evaluation will be conducted to demonstrate and inform on the progress made in promoting school attendance and dietary diversity. The design of Qali Warma is being prepared with an eye towards this planned evaluation. A baseline is expected to be conducted in the coming months. As the program will be phased in over time, the expansion plans would facilitate the randomization for the evaluation design, for example, allowing communities that are not initially selected to serve as the control group. Component 3 contributes to the PDO by 41 The IADB will be financing an evaluation to analyze alternative payment schemes in JUNTOS. 39 supporting activities that strengthen MIDIS’s capacity to monitor social inclusion policy 42 through the development of information dashboards to oversee infant malnutrition and development plans (intermediate result six, see Annex 1); and, technical assistance to improve the evaluation of programs processes, potential effects and impacts (intermediate result seven). By supporting this, in addition to the design of strategic policies and tools to coordinate social inclusion policy, the component is aligned with reforms promoted by all Policy Areas of the Second Social Inclusion DPL program with emphasis on Policy Area 3 on Reforming Social Policy Approaches and Systems (i.e., Establishment of a National System of Monitoring and Evaluation for Social Policy). 28. Component 4: Strengthening of human resource management and capacity (US$2,294,200). This component will finance the development and implementation of a plan of continuous capacity building and training for public officials implementing social policy. The component would also support the reorganization and organization of human resources in JUNTOS and Qali Warma respectively, promoting coordination between different programs at local level. This component will continue supporting the three Policy Areas of the second Social Inclusion DPL Program with special emphasis on Policy Area 3 (Reforming Social Policy Approaches and Systems). Specifically, it will include three sub-components: 29. Sub-component 4.1: Development of Targeted Continuous Training (US$505,000).This subcomponent would finance the design and carry out capacity-building activities for public officials involved in policy planning, budgeting and implementation of social inclusion programs. Technical assistance will support: (a) Strengthening capacity of Qali Warma’s staff. Given the specificities of Qali Warma, its staff would require an ad-hoc training program. This operation will support the preparation of an assessment of specific capacities required by staff of Qali Warma, the design a modular curriculum to cater the training needs of different actors and the development of a platform for education and training available and accessible to staff (through distance, classroom, and on-line learning). (b) Capacity building of local information/registry units. The loan will support a first assessment of capacities of staff at the Local Targeting Units (Unidades de Focalización Local– ULF) and the design of a tailored capacity building program. The objective of this program is to improve, harmonize and standardize practices across regions in terms of information, monitoring and providing services to users. 30. Sub-component 4.2: New Role for the JUNTOS’s Promoters (US$550,000). This subcomponent would finance technical assistance needed for the development of a guidance and counseling program for local JUNTOS’s promoters (“Information, Guidance and Counseling Service�). The program includes redefining the role of the local JUNTOS’s promoter (gestor local) who would play a key role in connecting families with local opportunities of benefits and services. The program plans to refine and specialize the role of local promoters to ensure that families: (i) achieve the results expected by the program, (ii) have the information needed for 42 While Component 2 focuses more on developing the information platform, this Component supports the use of the information for monitoring and evaluation. 40 their optimal performance in the program, and (iii) have the quality guidance they need to access services and benefits available in their localities. The “Information, Guidance and Counseling Service� will include information and orientation services for JUNTOS’s families as well as counseling and follow-up services to ensure that the most vulnerable families stay in the program and that those who experience difficulties in complying with the co-responsibilities receive more support. In addition, it will be crucial to provide personalized support to those families who are moving toward conditions that allow them to exit and/or graduate from the program. 43 The WB, through the Social Inclusion NLTA, is currently advising JUNTOS to define the nature and sequence of the counseling service, and testing some tools that the program has developed. To implement this service the TAL will finance the design of the educational materials needed for local promoters in charge of the counseling as well as their training in order to improve abilities to manage and advice vulnerable families, especially those families that have not fulfilled the conditionalities expected by the program. 31. Sub-component 4.3: Capacity-building for the implementation of the strategic axis of Crecer para Incluir (US$1,239,200). These activities include the development of a capacity- building and certification program for qualified local and regional coaching professionals to create a network of MIDIS-certified local professional. The program would be designed under the framework of the Crecer para Incluir strategy. They would be focused in creating knowledge and capacity to implement social policy with a results’ orientation and constitute an integral part of the implementation of SINADIS and its objective of strengthening the management capacity of MIDIS’s technical teams, and subnational governments. 32. Component 4 contributes to the PDO by supporting activities that strengthen MIDIS's systems and capacity to improve the performance of MIDIS’s programs through the introduction of result-oriented human resources management practices (intermediate result eight, see Annex 1). By supporting this, in addition to the design of the new role for JUNTOS's promoters, the component is aligned with reforms promoted by all Policy Areas of the Second Social Inclusion DPL program with emphasis on Policy Area 1 on the Consolidation of the institutional framework for the stewardship of the social inclusion agenda, and Policy Area 2 on Improving the Inclusiveness and Effectiveness Capacity of Social Programs of MIDIS. 33. Component 5: Support to Project Administration (US$1,243,712). This component will finance the activities related to management and implementation of the project, including the strengthening of the UCPS’s team to be able to facilitate, coordinate and monitor implementation. 34. Table 2.1 summarizes how the project will support the implementation of JUNTOS, Qali Warma and Pension 65 and overall MIDIS’s capacities in the four areas backed by this TAL. 43 Technical assistance would include support to the: i) Definition of modalities of information, guidance and family counseling appropriate to the program needs and to the problems that families are facing to better perform in the program; ii) Design of the methodology for family counseling intervention, including the frequency, number and content of each session, the expected results, registry tools and the educational materials required to support the intervention; iii) Design and development of a training plan and capacity building activities for social promoters; and iv) Definition of the criteria and tools for the performance evaluation of local promoters. 41 Table 2.1: Summary of TAL components by Program and Unit of MIDIS JUNTOS Qali Warma P65 Overall MIDIS C1: Quality Development of an Development and Design and Technical assistance to improvement of information system on the evaluation of pilots of development of pilots support geographical MIDIS’s Programs. supply of health and alternative of alternative payment coordination of education services. management systems. MIDIS’s programs. modalities. Strategy to update maps Scaling up and design on health and education Design and of components and services’ deficiencies. development of pilots additional channels for of alternative users’ accountability mechanisms of money mechanisms. transfers. Improvement of the Technical assistance national and sub for the implementation national institutional of social verification and legal framework processes of for nutrition standards information. quality control. Interconnection of Improvement of SISFOH’s local transparency and anti- focalization units. corruption mechanisms. C2: Improving Strengthening of Development of a MIS Support the design of knowledge information system of for Pension 65, that an Integrated management, Qali Warma and the operates in Information Platform. coordination with the information and communication of MIDIS’s systems. Communications communication. information among strategy for MIDIS. MIDIS’s programs. Improvement of MIDIS’s management systems. C3: Strengthening Evaluation of Qali Creation of an “Elderly Development of a of the result Warma. Observatory� that monitoring dashboard orientation and includes the for infant malnutrition monitoring and development of a and development plans evaluation capacity strategic plan on the indicators. of MIDIS. role of non- contributory pensions Results evaluation of within other economic social coordination. protection programs targeted to elderly in the country. Design of incentives for the coordination of Support to the social inclusion policy evaluation of P65 on the access to complementary services. Support to the evaluation of the effectiveness of the targeting system. 42 JUNTOS Qali Warma P65 Overall MIDIS C4: Strengthening Design and development Development and Development of of human resource of a training plan for the implementation of a targeted continuous management and local JUNTOS’s training plan for staff. training for MIDIS’s capacity. promoters in the context staff: of the implementation of -Strengthening the new Family Support subnational Program (“Information, government capacity. Guidance and Counseling Service�). -Capacity-building for the implementation of the strategic axis of Crecer para Incluir. -Capacity building for local information/registry units. The costs by sub-component are detailed in the table below: Project Components Project cost IBRD % Financing 1. Component 1: Quality improvement of MIDIS’s Programs. 3,530,000 2,647,500 75% Sub-component 1.1. Development of Users’ Participation and Accountability Mechanisms. 500,000 375,000 75% Sub-component 1.2. Strengthening local coordination of MIDIS’s programs. 380,000 285,000 75% Sub-component 1.3. Improving client orientation of SISFOH. 440,000 330,000 75% Sub-component 1.4. Strengthening Processes in Key MIDIS’s Program. 2,210,000 1,657,500 75% 2. Component 2: Improving knowledge management, information and communication. 3,734,088 2,800,566 75% Subcomponent 2.1. Integrated Information Platform for Social Policy. 75% 2,324,000 1,743,000 Subcomponent 2.2. Strengthening the Management Information Systems (MIS) of 75% Qali Warma, and Pension 65. 810,000 607,500 Subcomponent 2.3. Improvements in MIDIS’s Administrative and Communication Systems. 600,088 450,066 75% 3. Component 3: Strengthening of MIDIS’s capacity on result orientation, monitoring and evaluation. 3,493,000 2,619,750 75% Sub-component 3.1. Developing tools to collect data and analyze indicators of social 2,120,000 1,590,000 75% policies within SINADIS, including MIDIS’s programs. 1,373,000 1,029,750 75% Sub-component 3.2. Evaluation of Social Policy and Programs. 43 Project Components Project cost IBRD % Financing 4. Component 4: Strengthening of human 2,294,200 1,720,650 75% resource management and capacity. Sub-component 4.1. Development of Targeted 505,000 378,750 75% Continuous Training. Sub-component 4.2. New Role for the 550,000 412,500 75% JUNTOS’s Promoters. Sub-component 4.3. Capacity-building for the implementation of the strategic axis of Crecer 1,239,200 929,400 75% para Incluir. 5. Component 5: Support to Project 1,243,712 211,534 17% Administration. Total Project Costs 14,295,000 10,000,000 Total Financing Required 10,000,000 44 Annex 3: Implementation Arrangements PERU Social Inclusion Technical Assistance Project Project Institutional and Implementation Arrangements 1. The following implementation arrangements are proposed for this Project: overall coordination of Project preparation and implementation will be under the responsibility of the General Secretariat in MIDIS. All fiduciary responsibilities (procurement and financial management) will be carried out through MEF’s existing Coordination Unit for Sectoral Projects (UCPS). The UCPS has extensive experience with Bank-financed activities. Given the significant increase in the size of the activities to be carried under the proposed Project, the UCPS will be strengthened to provide support under the proposed Project, in particular in Project Procurement and Financial Management. Project administration mechanisms 2. The General Secretariat in MIDIS would be responsible for the technical coordination of the implementation of this operation. The complexity inherent in the implementation of an operation involving several Social Programs and units in MIDIS justifies the need for a strong coordinating unit with the political and legal mandate to achieve the objectives of the operation. The General Secretariat carries sufficient weight to oversee implementation in the different Programs and Offices. The participating units within MIDIS are: Qali Warma, JUNTOS, Pension 65, General Directorate of Monitoring and Evaluation (DGSYE), SISFOH, and the General Secretariat itself (Figure 3.1 shows MIDIS’s organizational chart).The following table summarizes the project components and responsible units: Project Components Responsible Units 1. Quality improvement of MIDIS’s Programs 1.1. Development of User’s Participation and Accountability General Office of Quality of Mechanisms. Social Benefits and General Office of Users Management. 1.2. Strengthening local coordination of MIDIS’s programs. General Office of Decentralization and Coordination of Social Programs. 1.3. Improving client orientation of SISFOH. General Office of Quality of Social Benefits and General Office of Users Management. 1.4. Strengthening Processes in Key MIDIS’s Program. Pension 65, Qali Warma and JUNTOS. 2. Improving knowledge management, information and communication 2.1. Integrated Information Platform for Social Policy. General Directorate of Monitoring and Evaluation. 2.2. Strengthening the Management Information Systems (MIS) of Qali Pension 65 and Qali Warma. Warma and Pension 65. 2.3. Improvements in Administrative and Communication Systems. General Secretariat. 3. Strengthening MIDIS’s capacity on result orientation, monitoring and evaluation. 45 Project Components Responsible Units 3.1. Coordination and monitoring of Social Inclusion Strategic Policies. General Directorate of Monitoring and Evaluation, Pension 65, and General Office of Policies and Strategies. 3.2. Evaluation of Social Policy and Programs. General Directorate of Monitoring and Evaluation. 4. Strengthening of human resource management and capacity. 4.1. Development of Targeted Continuous Training. General Office of Policies and Strategies. 4.2. New Role for the JUNTOS’s Promoters. JUNTOS. 4.3. Capacity-building and Certification Program of Professionals for General Office of Policies and Local Government Management Strengthening. Strategies. Figure 3.1: MIDIS’s Organizational Chart Source: MIDIS (2012), “MIDIS First Hundred Days: Accountability and Guidelines for Development and Social Inclusion Policy.� 3. In this context, the main responsibilities of the General Secretariat as the technical coordinator of the operation include the following: (a) Ensure general coordination with the Bank, and other Government stakeholders. (b) Ensure timely implementation of all Project activities, and monitoring such activities and Project related indicators. To this end, the UEP would organize and hold regular supervision meetings with all participating units. 46 (c) Monitor progress in the operation development objectives by the main Programs and units. (d) Maintain the dialogue and coordination among MIDIS’s units and whenever possible remove implementation bottlenecks. (e) Jointly with UCPS, prepare and monitor the annual operations plan and adjust it as necessary. (f) Prepare and /or assist partners in the preparation of TOR. (g) Ensure quality and timely updates to the Operational Manual. (h) Monitor progress in implementation. (i) Coordinate with implementation partners to ensure timely execution of activities. 4. The General Secretariat within MIDIS will have a full time professional appointed to carry out the overall technical coordination of the project. 5. For each subcomponent, the unit in charge would be responsible for: (a) Implementing project activities and complementary ones in a timely and efficient manner in order to ensure compliance with agreed Project indicators, including the disbursement-linked ones. (b) Developing TORs for specific studies, managing their contracting, and overseeing study implementation, as well as follow-up to ensure appropriate implementation and dissemination of results and recommendations. (c) Putting in place sound monitoring and evaluation mechanisms to allow proper and reliable collection/generation of Project indicator data. (d) Maintain technical and political dialogue with other national and subnational stakeholders required for successful Project implementation. (e) Disseminating results in such a manner as to strengthen reform constituencies and ensure the carrying out of reforms derived from the Program’s activities, studies and recommendations. Monitoring 6. Monitoring of outcomes and results during implementation will follow standard Bank practice. MIDIS will collect and present data and reports for annual review in conjunction with World Bank supervision missions. Discussions during supervision missions will provide effective means of monitoring progress. Progress reports will be published and will be accessible to managers and decision makers. 47 7. The development and strengthening of the mechanisms and tools for information, monitoring and evaluation also will directly support the monitoring of the project itself. The integrated data platform will ease the compilation and analysis of necessary information for the TAL by ensuring the availability of up-to-date information in a digestible format. Likewise, the project is likely to inform the development of the platform to produce information necessary and useful for the supervision of activities. Also, many of the results indicators defined under the results matrix (Annex 1), particularly those related to the MIDIS’s programs, will be incorporated into the monitoring dashboards. This will facilitate the supervision of the project, as many of the advances can be monitored remotely through the online dashboards. Fiduciary Coordination 8. The UCPS would be in charge of the fiduciary coordination of the operation. The UCPS will be responsible for the preparation of the procurement audit of the Operation and for having the financial statements audited as defined in the Operational Manual. They will manage all the fiduciary processes, including procurement and financial management required for the implementation of each activity. The UCPS will carry out the following activities: (a) Day-to-day oversight of overall operations, control of financial management, compliance with procedures, and relations and coordination with the Bank. (b) Jointly with MIDIS, host and facilitate Bank supervision missions and working with the Bank to optimize the Project’s results and impact. (c) Prepare progress and financial reports (and other Project-related documents as the case may be), as agreed in the Loan Agreement in coordination with MIDIS. Such reports shall be in the format and content acceptable to the Bank. (d) Ensure that procurement is carried out following Bank rules and procedures. 9. An Inter-Institutional Agreement covering the roles and responsibilities of each agency would be signed between the MIDIS and UCPS. The specific roles and responsibilities are detailed in the Operational Manual. 10. The Operational Manual includes details on the institutional arrangements, the management, and the follow up of the Project. The Manual details the following items: (i) institutional arrangements, including organizational structure and profile of required staff; (ii) the activity flow, people responsible for each item, and mechanisms for internal control; (iii) procedures for financial management, accountancy, disbursements, internal control, and audit; (iv) procedures to be followed for each institution depending on their legal nature; (v) templates for the files to be used for each time of acquisition and contract; and (vi) filing procedures. 48 Financial Management, Disbursements and Procurement Financial Management A. Executive Summary of Financial Management Assessment 11. In accordance with the implementation arrangements defined for the project, the UCPS will be responsible for the fiduciary aspects of the project; while MIDIS’s General Secretariat would be responsible for technical coordination. As part of the preparation process, a financial management capacity assessment has been carried out to determine the adequacy of UCPS’s existing financial management arrangements to properly support project implementation. This assessment is based on the Bank’s knowledge of the proposed implementing entity and its financial management performance under existing Bank-financed projects (loan and grants), which overall has been considered acceptable. 12. Even though project design includes several components and subcomponents under different areas and programs within MIDIS, project activities are straight forward, and they do not require decentralized arrangements from the FM perspective. On its side, UCPS has developed expertise in implementing Bank-financed projects and project implementation will fully benefit from those existing arrangements. However, the proposed implementation arrangements with UCPS as the administrative coordinator and MIDIS as the implementing/technical coordinator, pose some additional challenges to ensure timely coordination and smooth project implementation. Therefore, based on UCPS’s expertise and current arrangements, roles and responsibilities for MIDIS and UCPS and specific coordination mechanisms between the two have been defined and are being formalized in an Inter-institutional Agreement, and are further detailed in the Operational Manual. Additionally, MIDIS will hire a project coordinator to facilitate the technical implementation. 13. As of the date of this document, the FM risk is considered Moderate, based on the following considerations: (i) a straightforward project design and clearly defined activities which do not require complex arrangements; (ii) the need for adequate coordination arrangements among several units within MIDIS and coordination between MIDIS and UCPS, which if not in place may affect project implementation; and (iii) UCPS’s expertise and adequacy of existing financial management arrangements. 14. The UCPS meets the minimum FM fiduciary requirements to implement the project and the proposed financial management arrangements –as designed– can be considered acceptable to the Bank. The UCPS has been able to complete the following actions: (i) draft inter-institutional agreement between MIDIS and UCPS reflecting the roles and responsibilities of each entity, and basic coordination arrangements; (ii) an Operational Manual to reflect the processes and procedures to be followed by MIDIS and UCPS with respect to annual programming and budget preparation, payment processing and approval, and (iii) draft terms of reference for the project coordinator for MIDIS. Thus, the proposed financial management arrangements –as designed– can be considered acceptable to the Bank. 49 15. Subject to the successful implementation of those actions, which progress has been assessed at appraisal and negotiations, the proposed financial management arrangements -as designed- are considered acceptable to the Bank. B. Summary of financial Management Assessment 16. As per the implementation arrangements defined for the project, UCPS will be responsible for the financial management tasks. UCPS is a well-established project coordinating unit within MEF which has in place adequate financial management arrangements. UCPS supported by an experienced administrative-finance team which covers budgeting, accounting, treasury and procurement functions. Each of these areas is managed by qualified and experienced professionals financed through different sources of financing. Considering that implementation of the proposed project will increase the demand on UCPS, it has been agreed that the UCPS will maintain financial management qualified and experienced staff in adequate number all with terms of reference satisfactory to the Bank. 17. The MIDIS through its General Secretariat Unit will be responsible for the technical aspects of the project. To facilitate project implementation, an Inter-Institutional Agreement between UCPS and MIDIS will be signed to define the roles and responsibilities of each entity. In addition, MIDIS will hire a Project Coordinator, who will be responsible of the project coordination of activities between MIDIS and UCPS. C. Use of country systems. 18. The 2009 Public Expenditure and Financial Accountability (PEFA) assessment concluded that Public Financial Management (PFM) in Peru is functioning well overall and in several aspects is in line with international good practices. The central government’s budget in Peru is a reliable and credible financial tool, despite the discrepancies between the executed and the initial budget. Overall, the budget formulation follows international good practice, and is an orderly, transparent and institutionalized process. Budget execution is well documented and Consolidated Government Financial Statements (Cuenta General de la República) are prepared annually within six months from the end of the year. Annual financial statements are audited within the legally established time periods by the Supreme Audit Institution (Contraloría General de la República, CGR). 19. Similar to other operations in the portfolio, this project will significantly benefit from those well-functioning PFM elements mainly in relation budget formulation and execution. Project transactions will be fully integrated into the national budget execution. 20. Programming and budgeting. The preparation of the project program and budget will follow general government procedures regulated by the Annual Budget Law and other instructions issued by the Ministry of Finance. In addition, specific arrangements to ensure timely and adequate coordination between MIDIS and UCPS are being defined. Under those arrangements, MIDIS through its General Secretariat would take the lead for the preparation of the annual program, with the participation and support of UCPS in order to ensure consistency among annual program, budget and procurement plan in accordance with project needs. 50 21. Budget funds of the project will be assigned to the UCPS as the responsible entity of the fiduciary aspects of the project. The funds execution of the project will have to comply with local regulations in terms of budgeting, accounting and reporting. D. Accounting 22. UCPS has to comply with Peru’s laws governing budget and financial management, including the use of the Country’s Integrated Financial Management System (SIAF) and the General Chart of Accounts established in there. Budget execution of this project, will be fully integrated into UCPS/MEF’s and national budget execution and accounting records. Therefore, project transactions will be recorded and processed through SIAF-PS and from there, they will be uploaded into the SIAF’s Project Execution Module (Modulo de Ejecución de Proyectos-SIAF-MEP) that allows the recording of project transactions by project components/subcomponent. The information provided by SIAF-MEP will be used for the preparation of financial reports following the Cash basis of accounting. E. Processes and procedures (including internal controls) 23. UCPS has adequate and well established processes and procedures, which provide for an adequate segregation of functions and adequate controls and clear roles for authorization and approval of payments. The UCPS has an Operational Manual that reflects the internal processes and procedures that works for other projects and it is satisfactory for the Bank. The UCPS and MIDIS have also prepared an Operational Manual for the Project and the UCPS’s Operational Manual is annexed to the project’s Operational Manual to reflect UPCS’s and MIDIS’s responsibilities and the coordination mechanisms agreed with both of them. 24. Financial Reports. The financial reports will be prepared based on the information provided by SIAF-MEP. On a semester basis, the UCPS will prepare unaudited interim financial reports (IFR) containing at least: (i) a statement of sources and uses of funds and cash balances (with expenditures classified by component/subcomponent); and (ii) a statement of budget execution per components and all sources of financing. The core content of the unaudited interim reports will be similar to the ones that are currently in use for other projects. The UCPS will be responsible for submitting the interim reports to the Bank not later than 30 days after the end of each semester. On an annual basis, the UCPS will prepare the project financial statements including cumulative figures, for the year and as of the end of that year, and explanatory notes in accordance with the Cash Basis International Public Sector Accounting Standard (IPSAS). 25. Audit. Annual audit reports on project financial statements, including management letter, should be submitted to the Bank within six months of the end of the borrower’s fiscal year (December 31). The audit should follow International Standards on Auditing (ISA), and should be conducted by a private independent firm and in accordance with terms of reference (TORs), both acceptable to the Bank. The audit cost could be financed out of loan proceeds, and appointment would follow regulations established by the CGR. The scope of the audit would be defined by the UCPS in agreement with the Bank. Audit requirements would include the following: 51 Audit Report Due Date 1) Project specific financial statements June 30 2) Auditor’s Management Letter Disbursements Flow of funds and Disbursement Arrangements 26. Considering the results of the assessment, the following disbursement methods may be used to withdraw funds from the Loan: (a) reimbursement, (b) advance based on a quarterly forecast, and (c) direct payment. 27. Under the forecast advance method and to facilitate project implementation, the UCPS will prepare a forecast of expenses for the next three months. The UCPS will have access to a segregated Designated Account (DA) in US Dollars which will be opened and maintained in the Banco de la Nación del Perú in the name of the project. Funds deposited into the DA as advances, would follow Bank’s disbursement policies and procedures, as described in the Disbursement Letter and Disbursement Guidelines, with which UCPS is fully familiar. 28. The advances to be made into the DA would be based on a quarterly forecast of expenditures of the project. All other Disbursement Arrangements are specified in the Disbursement Letter for the Project. Table of Loan Proceeds Category Amount of the Loan Percentage of Expenditures to be Allocated financed (expressed in USD) (inclusive of Taxes) (1) Goods, non-consulting 10,000,000 100% services, consultants’ services, Operating Costs and Training under the Project TOTAL AMOUNT 10,000,000 Supervision 29. On a preliminary basis, the FM team plans to perform at least two supervision missions per year, while also reviewing the annual audit report and the IFRs. Procurement 30. Procurement for the proposed Project would be carried out in accordance with the World Bank’s “Guidelines Procurement of Goods, Works and Non-Consulting Services under IBRD Loans and IDA Credits & Grants by World Bank Borrowers,� dated January 2011; the World Bank’s “Guidelines Selection and Employment of Consultants under IBRD Loans and IDA Credits & Grants by World Bank Borrowers,� dated January 2011; and the provisions stipulated in the Loan Agreement. For each contract to be financed by the Loan, the 52 different procurement methods or consultant selection methods, the need for pre-qualification, estimated costs, prior review requirements, and time frame are agreed between the Borrower and the Bank in the Procurement Plan. Goods and non-consulting services (including contracts under subprojects) shall be procured under contracts awarded on the basis of International Competitive Bidding, National Competitive Bidding, Shopping and Direct Contracting. Consultants’ services (including contracts under subprojects) shall be procured under contracts awarded on the basis of Quality and Cost-based Selection, Quality-Based Selection, Selection under a Fixed Budget, Least Cost Selection, Selection Based on the Consultants’ Qualifications, Single Source Selection and, Procedures set forth in Section V of the Consultant Guidelines for the Selection of Individual Consultants, including single-source Selection for Individual Consultants. F. Assessment of the agency’s capacity to implement procurement 31. Country. The national procurement system of Peru has made significant progress in the last few years, particularly with regard to access to information and adoption of standard bidding documents. Areas of improvement are recognized in the National Procurement Strategy of Peru prepared by Organismo Supervisor de las Contrataciones del Estado (OSCE) (available at http://www.osce.gob.pe/noticia.asp?idn=35). 32. Agency. Following the implementation arrangements established in Annex 3, all fiduciary responsibilities (procurement and financial management) will be carried out by the Coordinating Unit for Sectoral Loans (UCPS). The capacity assessment report is part of the project files. The assessment looked into UCPS Program: (a) organizational structure, (b) facilities and support capacity, (c) qualifications and experience of the staff that will work in procurement, (d) record-keeping and filing systems, (e) procurement planning and monitoring/control systems used, and (f) capacity to meet the Bank’s procurement contract reporting requirements. It also reviewed the procurement arrangements proposed in the Procurement Plan. 33. Since the UCPS has extensive experience with Bank-financed activities, the overall project risk for procurement is MODERATE. The level of risk for this project will be reassessed and revised once there is evidence that mitigating measures such as: (i) the development of Bidding Documents for project implementation, (ii) procurement reviews conducted by independent auditors and/or Bank staff, (iii) the UCPS will be strengthened to provide support under the proposed Project, in particular in Procurement, and (iv) the inclusion of the Procurement Plan in the Bank’s publicly accessible Procurement Plan Execution System (SEPA). G. Procurement Special Provisions. 34. In addition and without limitation or restriction to any other provisions set forth in this Section or the Procurement Guidelines, the following provisions shall govern the procurement of goods, and works with National Competitive Bidding procedures: (a) Foreign Bidders shall not be required to be locally registered as a condition of participation in the selection process. 53 (b) No reference value shall be required for publication in the bidding documents or used for the purpose of evaluation. (c) Award of contracts shall be based exclusively on price and, whenever appropriate, shall take into account factors that can be quantified objectively, and the procedure for such quantification shall be disclosed in the invitation to bid. (d) Foreign Bidders shall be allowed to participate in without restrictions and shall not be subject to any unjustified requirement which will affect their ability to bid such as, but not limited to, the requirement to authenticate their bidding documents or any documentation related to such bidding documents with either Peruvian Consulates, the Ministry of Foreign Affairs, or any Peruvian authorities as a prerequisite of bidding. (e) The Borrower, through the UCPS, shall use standard bidding documents and standard evaluation formats, all satisfactory to the Bank. 35. In addition and without limitation or restriction to any provision set forth in this Section or the Consultant Guidelines, the following provisions shall govern all employment of consultants: (a) Foreign Consultants shall not be required to be locally registered as a condition of participation in the selection process. (b) Foreign Consultants shall not be required to authenticate any documentation related to their participation in the selection process with either the Peruvian Consulates, the Ministry of Foreign Affairs, or any other Peruvian authorities as a condition of participation in said selection process. (c) The Borrower shall use standard requests for proposals and standard evaluation formats, all satisfactory to the Bank. (d) Foreign Consultants, either individuals or firms, shall not be required to pay fees to the Peruvian Consultants’ Association that are different from those required for Peruvian consultants. (e) No consultant hired for the Project, at the time he or she is carrying out his or her contractual obligations as a consultant, may hold civil service office or any other position in any agency of the Borrower, nor shall such consultant have any right to re-entry into any such office or position upon the conclusion of his or her consulting services. 36. Annual Procurement External Reviews. The Borrower, through the UCPS, shall: i) have all the procurement records and documentation for each fiscal year of the Project reviewed, in accordance with appropriate procurement review principles, by independent reviewers, contracted following the procedures of the Bank’s Consultants Guidelines, acceptable to the Bank; ii) furnish to the Bank as soon as available, but in any case not later than six months after 54 the end of each such fiscal year, the procurement external review report of such review by said reviewers of such scope and in such detail as the Bank shall reasonably request; and iii) furnish to the Bank such other information concerning said procurement records and documentation and the procurement review thereof as the Bank shall from time to time reasonably request. 37. Seven percent of all contracts will by post-reviewed by the Bank. Based on the finding of the Post Procurement Reviews and the proposed ratings, the Bank may determine the revision of the prior review requirements. H. Procurement Plan 38. The Borrower, through the UCPS, has prepared a simplified Preliminary Procurement Plan based on an indicative list of eligible activities to be implemented. The Procurement Plan will be updated annually or as required to reflect the actual project implementation needs and improvements in institutional capacity. The Procurement Plan will be available at the Procurement Plan Execution System (SEPA). Bank’s approval Date of the procurement Plan – November 6, 2012. Date of General Procurement Notice: Q4 2012 Period covered by this procurement plan: 1.5 years Goods and non-consulting services 39. Prior Review Threshold: Procurement Decisions subject to Prior Review by the Bank as stated in Appendix 1 to the Guidelines for Procurement: Thresholds for procurement methods and prior review (thousands of USD) Contract Value Contracts Expenditure (Thresholds) US$ Procurement Method Subject to Category thousands Prior Review 1. Goods >250 ICB All 50 - 250 NCB First <50 Shopping First <100 DC All Note: ICB = International Competitive Bidding NCB = National Competitive Bidding DC = Direct Contracting Reference to Project Operational/Procurement Manual: 40. The Borrower has updated the Operational Manual which provides detailed procurement information for project’s implementation. 55 Summary of the Procurement Packages for Works and Goods (based on Procurement Plan of November 2012) 1 2 3 4 5 6 7 Ref. Description Estimated Packages Domestic Review by Comments No. Cost US$ Preference Bank million (yes/no) (Prior/Post) 1 Summary of 1.174 2 No Prior NA ICB (Goods) 2 Summary of 0,315 2 No First NA NCB (Goods) 3 Summary of 0.15 2 No First NA NCB (Non- consultant services) 3 Summary of 0.33 Several No First NA Shopping (Non- consultant services) 4 Summary of 0.580 1 No Prior NA Direct Contracting I. Selection of Consultants 41. Prior Review Threshold: Selection decisions subject to Prior Review by Bank as stated in Appendix 1 to the Guidelines Selection and Employment of Consultants: Thresholds for methods and prior review (thousands of USD) Contract Value Consulting Procurement Contracts Subject (Thresholds) US$ Services Method to Prior Review thousands >200; QCBS, QBS, <200 Terms 3.a Firms >100 FBS, LCS of Reference QCBS, QBS, FBS, LCS, Terms of <100 CQS Reference <100 SSS All Comparison of 3 CVs in >100; 3.b accordance <100 Terms Individuals with Chapter of Reference 56 V of the Guidelines Note: QCBS = Quality- and Cost-Based Selection QBS = Quality-Based Selection FBS = Fixed Budget Selection LCS = Least-Cost Selection CQS = Selection Based on Consultants' Qualifications SSS: Single Source Selection 42. Short list comprising entirely of national consultants: Short list of consultants for services, estimated to cost less than US$350,000 equivalent per contract, may comprise entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines. 43. The short lists should normally be composed of firms of similar experience or of not for profit organizations (NGOs, Universities, UN Agencies, etc.) acting in the same field of expertise. If mixing is used, the selection should be made using Quality Based Selection. The short lists shall not include individual consultants. List of Consulting Assignments with Short-list of International Firms (based on Procurement Plan dated November, 2012) 1 2 3 4 Number Estimated Ref. Description of Assignment Cost US$ No. million 1 Summary of number of 5 1.674 contracts that will be let under QCBS 44. The capacity assessment of the Implementing Agency recommended Moderate Risk. In addition to the prior review supervision to be carried out from Bank offices, the capacity assessment of the Implementing Agency has recommended annual supervision missions to visit the field to carry out post review of procurement actions. The size of the sample for post review will be not less than 1 in 10 contracts. Environmental and Social (including safeguards) 45. The overall social impact of the Project is expected to be positive as the objective is to improve social inclusion policy in Peru. Improving social inclusion will benefit some of the poorest and most marginalized communities, including indigenous peoples and African descendants. While many of the activities are focused on improving the institutional capacity of the Ministry of Development and Social Inclusion (MIDIS) to administer its various programs, many of these improvements will greatly promote access to and quality of basic services such as education and health for these poor and marginalized communities. In order to ensure that the Project includes adequate measures to address existing barriers to access, a comprehensive social 57 assessment was undertaken during preparation to provide key project design inputs and to ensure proper targeting and coverage of Project investments. 46. OP 4.10 on Indigenous Peoples has been triggered as this is a nation-wide project in a country with a significant indigenous population. While it is unlikely that the Project will have a negative impact on indigenous households, there is a risk that indigenous households – among the poorest in the country – may not benefit from the investments made under the Project or under the accompanying Social Inclusion DPL Program unless specific measures to take their particular needs and concerns into consideration are part of the Project design. To mitigate this risk, MIDIS has prepared an Indigenous Peoples Strategy that will provide guidelines for how to include an intercultural dimension to existing programs such as JUNTOS, Pension 65 and the new school feeding program Qali Warma. The focus will be on ensuring that information regarding the project is available in appropriate languages and formats and that delivery of services are culturally appropriate and adequate for the circumstances of indigenous users. 47. In order to comply with OP 4.10, MIDIS has prepared an Indigenous Peoples Strategy. The Strategy includes: (i) the results of a social assessment undertaken in a representative sample of indigenous communities in the Andes and the Amazon; (ii) a review and analysis of existing literature, relevant analytical work, and evaluations from the current social protection programs as they relate to impacts, benefits and barriers to access of these programs for Indigenous peoples; (iii) an institutional assessment of the new Ministry's proposed organizational chart in order to assess the existing capacity for effective engagement with Indigenous peoples; (iv) a review of Peru's relevant legal and institutional framework; and (v) a participatory process with Indigenous leaders, users, and organizations to receive feedback and develop recommendations for program design. As agreed between MIDIS and the Bank, the Strategy was disseminated and discussed during a validation meeting on October 29, 2012 with a representative group of Indigenous peoples’ organizations and national level technical experts. The meeting was chaired by MIDIS. Feedback, comments and inputs received during the validation meeting were incorporated into the final version of the Strategy, which was disclosed on the MIDIS’s website on October 30, 2012 44 and the Bank’s external website on October 31, 2012. 44 http://www.midis.gob.pe/index.php?option=com_content&view=article&id=330&lang=es. 58 Annex 4: Operational Risk Assessment Framework (ORAF) PERU Social Inclusion Technical Assistance Project Stage: Board Project Stakeholder Risks Rating: High Description: Risk Management: A Poverty and Social Impact Analysis (PSIA) and stakeholder Staff and management of JUNTOS, Qali Warma and Pension 65 recently assessment helped define a strategy to reduce resistance to change and to identify “moved� under the authority of MIDIS are likely to resist changes. incentives and set the stage for a dialogue between users and programs. The Ultimate users of programs may also create some opposition as some of assessment also identified the potential losers of the reforms and guided the them may experience losses with revised targeting system and improved definition of a communication strategy and mitigation measures. Dialogue will transparency. This situation may create internal tensions. continue during project execution. Resp: Client | Stage: Appraisal| Due Date: October 30th 2012| Status: Completed Implementing Agency Risks (including fiduciary) Rating: Capacity Substantial Description: Due to its recent creation and lack of fiduciary experience, Risk Management: Specific arrangements, as well as, roles and responsibilities MIDIS has preferred not to take the fiduciary responsibility of the for UCPS and MIDIS have been discussed and agreed to facilitate the coordination project. Instead an arrangement with the UPCS within MEF has been between them. These arrangements are included in the Operational Manual. taken to expedite project execution. The UCPS is a well-established Resp: Bank | Stage: Implementation| Due Date: January 31st 2017| Status: Not yet administrative coordinating unit within MEF, which has developed due expertise in the administration of external-financed resources in Risk Management: A financial management and procurement capacity assessment coordination with other several sectors. UCPS has well established has been prepared to identify bottlenecks in the UCPS (including staffing) to processes and procedures, as well as required tools and mechanisms, adequately respond to MIDIS's needs under the project. which overall are considered acceptable; however, it continues to be and Resp: Bank | Stage: Appraisal | Due Date: October 30th 2012| Status: Completed Implementing Entity formed by external consultants financed out of Risk Management: The Bank has identified key areas where capacity building different projects. within MIDIS is needed. Activities under Component 2 are expected to enhance management capacity of MIDIS and the General Secretariat, technical coordinator While recognizing UCPS’s expertise, the decision of having an for the Project. The Operational Manual will identify the coordination mechanisms administrative unit within MEF as the Implementing Agency in the short to ensure effective information flow among MIDIS’s programs and units. term may undermine the objective of capacity development, Resp: Bank, Client | Stage: Implementation| Due Date: January 31st 2017| Status: institutionalization and sustainability of actions within MIDIS. At the Not yet due same time it may generate possible delays in implementation in absence of smooth coordination between UCPS and MIDIS. 59 Rating: Governance Substantial Description: There is a risk that political leadership in MIDIS will be Risk Management: The project framework is aligned with the national priorities disrupted due to change of political authorities undermining Project of the new administration, which goes beyond the institutional structure. The Bank ownership during implementation. is keeping close coordination with MIDIS’s team (maintaining for example frequent VCs) to ensure adequate implementation of project activities. The Social Inclusion DPL series supports the institutionalization of the social inclusion policy priorities that are supported by this TAL. Resp: Bank| Stage: Preparation and Implementation| Due Date: January 31st 2017| Status: In Progress. Risk Management: Technical staff, typically less likely to change due to a political crisis, has been involved in project design from the initial stages and will continue to be involved during implementation. Resp: Bank| Stage: Preparation and Implementation | Due Date: January 31st 2017| Status: In Progress. Description: The census implemented by SISFOH between 2012 and Risk Management: The Social Inclusion NLTA and activities included in the TAL 2013 will identify the new potential users of the social programs. As a will support the response capacity of grievance mechanisms of MIDIS and of its consequence of this process, JUNTOS and Pension 65 are likely to be key programs. In addition, MIDIS, the programs and SISFOH are designing a exposed to operational pressures to include new users and to “un- preventive communication strategy. The Bank is working with MIDIS and Qali affiliate� an important number of the current users due to changes in their Warma specifically to strengthen quality controls and users’ participation to social and economic condition associated with the poverty reduction that enhance program’s transparency. Peru experienced in the last four years. Resp: Bank, Client | Stage: Preparation | Due Date: December 18th 2012| Status: In Progress. Description: Qali Warma‘s implementation requires close coordination Risk Management: Qali Warma has established informal discussions with the with the Ministry of Education and no formal mechanisms have been Ministry of Education and is finalizing a strategy for collaboration. established. Resp: Client | Stage: Preparation and Implementation | Due Date: January 31st 2017 | Status: Not yet Due Project Risks Rating: Design Moderate Risk Management: The Bank has identified key areas where capacity building Description: Even though project design includes several components within MIDIS is needed. Activities under Component 2 are expected to enhance and subcomponents under different areas and programs within MIDIS, management capacity of MIDIS and the General Secretariat, technical coordinator project activities are straightforward, and they do not require for the Project. The Operational Manual identifies the coordination mechanisms to decentralized arrangements from the Financial Management perspective. ensure effective information flow among MIDIS’s programs and units. Nevertheless, given that MIDIS constitutes a new Ministry in charge of a Resp: Bank, Client | Stage: Implementation | Due Date: January 31st 2017| new sector; the reforms supported by this operation are not yet Status: Not yet Due 60 completely defined and the scope of the activities to be funded need to be Risk Management: Make implementation goals for first year of program as flexible. conservative as possible, and program a first year review as well as an early midterm review to adjust the deliverables to account for unforeseen circumstances. Resp: Bank, Client | Stage: Preparation and Implementation | Due Date: January 31st 2017 | Status: Not yet Due Social & Environmental Rating: Low Description: There is a potential risk that some of the policy reforms to Risk Management: A stakeholder assessment has been prepared and defined a be implemented with this project may exacerbate social conflicts strategy to identify incentives and set the stage for a well-organized and sustained especially at the subnational level. The transfer of key social programs dialogue to avoid social conflicts. The project also supports the strengthening of has set the initial institutional framework that will allow the MIDIS’s grievance mechanisms, which would channel potential claims from implementation of a new and coherent social protection strategy. Staff, programs’ users or population excluded from social programs. management and users of these programs are likely to offer some Resp: Client, Bank| Stage: Preparation | Due Date: October 30th, 2012 | Status: resistance to change, unless MIDIS’s management identifies and designs Completed proper incentives and sets the stage for a well-organized and sustained dialogue. Program & Donor Rating: Low Description: Some international agencies (i.e., GIZ, KFW, USAID and Risk Management: The Bank is constantly coordinating with international IADB) are working on targeted interventions related to the strengthening agencies to avoid overlapping of activities and promote externalities and of the executing role of MIDIS and to the improvement of delivery of coordination. services at the national and subnational level. The proposed project has Resp: Bank | Stage: Preparation and Implementation | Due Date: January 31st taken these initiatives into account and does not expect major risks by 2017| Status: In Progress dependencies on other development partners. Rating: Delivery Monitoring & Sustainability Moderate Description: There is a potential risk that MIDIS would not report Risk Management: The project includes a component that will strengthen the information related to progress on project activities. There is a lack of a monitoring and evaluation capacity of MIDIS through the implementation of national monitoring and evaluation system to produce reliable data on Evidencia, the new National System of M&E. This system will allow monitoring progress of social programs under MIDIS. project activities to assess the progress of the key social programs. Resp: Bank, Client | Stage: Implementation | Due Date: January 31st 2017| Status: Not due yet Implementation Risk Rating: Substantial Substantial risks are foreseen for the implementation stage, given the ambitiousness of the program design, the potential for turnover in key authorities, and challenging implementation arrangements against institutional and administrative capacity constraints given that MIDIS only started to operate in January 2012. 61 Annex 5: Implementation Support Plan PERU Social Inclusion Technical Assistance Project Strategy and Approach for Implementation Support 1. The strategy for Implementation Support Plan (ISP) by the Bank team reflects the nature of the Project, its risk profile, and MIDIS’s institutional needed to ensure the timely implementation of the Project. The strategy aims to provide an adequate amount of support to the implementing technical and administrative line units, while remaining focused on implementation of the risk mitigations measures described in the ORAF assessment. 2. The ISP for the Social Inclusion Technical Assistance Project is based on the following facts: (i) a financial management assessment and a procurement assessment was carried out and identified the risks, expected bottlenecks for Project implementation, mitigation measures and levels of reviews and supervision; and (ii) the team is dialoguing with the MIDIS and other involved units on the reforms needed. The strategy is indicative and flexible, and will be revisited during Project implementation based on the progress made on the ground. 3. Overall Project Implementation. During the first 12-month post effectiveness, critical implementation areas will be: (i) implementation of capacity building activities; (ii) preparation and implementation of procurement processes; (iii) financial management; and (iv) monitoring and evaluation of implementation. 4. Procurement. The Bank supervision team will: (i) provide support to the procurement specialist in the UCPS; (ii) review procurement documents and provide timely feedback to the UPCS; and (iii) monitor procurement progress against the Procurement Plan. 5. Financial management. In accordance with the FM Action Plan agreed with the Client, the Bank supervision team will: (i) provide training to the UCPS; (ii) closely supervise financial management of the Project; and (iii) encourage the UCPS to launch the first audit of the Project in a timely manner, with support for the preparation of the terms of reference and the selection process. 6. Monitoring and evaluation. The implementation of the M&E framework from the start of Project implementation is essential to enable the Project to assess implementation progress and take appropriate actions to address potential issues. In addition to the hiring of a consultant to help set up and launch the M&E framework implementation, the Project team will provide support as needed to the UEP and the technical line units within MIDIS. Implementation Support Plan 7. The ISP would focus on the following areas and activities: (a) Technical inputs needed: (i) technical professionals and experts to support the elaboration of Terms of Reference in the involved MIDIS’s units; (ii) field visits to 62 other experiences abroad in the areas of education and public sector management to learn innovative and successful practices; and (iii) fiduciary staff to support Project implementation in the UCPS and provide cross support to participating units. (b) Fiduciary requirements and inputs: (i) ensure that the operational and fiduciary staff within the UCPS, with qualifications acceptable to the Bank, will be put in place; and (ii) provide training on issues related to procurement and project management to UCPS’s staff. 8. The project will include the following elements of implementation support for the first two years: Time Focus Skills needed Resource Estimate First twelve months Maintain UCPS’s Maintain the UCPS To be defined staff staffed with qualified and experienced staff in adequate numbers, including with procurement and financial management qualifications. Fiduciary Training US$ 10,000 Acquisition of To be defined equipment and training 12 – 48 months Keep UCPS’s staff Same as above, as well as other skills as identified Field visits US$ 30,000 9. In addition to the supplementary needs above, the Project will require the following supervision in the first two years: Skills need Number of staff weeks Number of trips Comments Senior Operations Officer 12 4 Senior Operations Officer will oversee the whole operation. Operations Analyst 10 - Operations Analyst will support the supervision of the operation on-site. Procurement Specialist 12 4 Procurement specialist will support MEF on related issues. Financial Management 10 4 FM specialist will support MEF on Specialist related issues. 63 Annex 6: Complementarities between the Social Inclusion DPLs and Social Inclusion TAL PERU Social Inclusion Technical Assistance Project DPL I DPL II TAL (Prior Actions) (Programmed triggers) (Components and Subcomponents) Policy Area I. Consolidation of the institutional Policy Area I. Consolidation of the institutional Component 1. Quality improvement of MIDIS’s framework for the stewardship of the social inclusion framework for the stewardship of the social inclusion Programs. agenda underMIDIS. agenda under MIDIS. • Subcomponent 1.2: Strengthening local coordination of MIDIS’s programs. • The GoP has approved the legal and institutional • MIDIS has evaluated and adopted integrated operating framework for the stewardship of the social inclusion models in all regions. Component 2.Improving knowledge management, agenda under MIDIS. information and communication. • Subcomponent 2.1: Integrated information platform for social policy. • Subcomponent 2.3: Improvements in MIDIS’s Administrative and Communication Systems. Component 4. Strengthening of human resource management and capacity. • Subcomponent 4.3: Capacity-building for the implementation of the strategic axis of Crecer para Incluir. Policy Area II. Improving the inclusiveness and Policy Area II. Improving the inclusiveness and Component 1. Quality improvement of MIDIS’s effectiveness of key MIDIS’s social programs. effectiveness of key MIDIS’s social programs Programs. • Subcomponent 1.1: Development of Users’ II.1 JUNTOS: Enhanced coverage and support to II.1 JUNTOS: Enhanced coverage and support to Participation and Accountability Mechanisms. users by local promoters. users by local promoters. • Subcomponent 1.4: Strengthening Processes in • The GoP has adopted the necessary measures to ensure MIDIS’s Programs. • The GoP has approved the expansion of coverage of the continued expansion of the coverage of JUNTOS. JUNTOS to districts where SISFOH has carried out a Component 4. Strengthening of human resource socio-economic evaluation and where the poverty • MIDIS has completed the training of JUNTOS’s local management and capacity. levels are between 40-50% of the population. promoters in order to provide them the necessary tools • Subcomponent 4.2: New Role for the JUNTOS’s for family support to households. Promoters. • MIDIS has enhanced the terms of reference to be used • Subcomponent 4.3: Capacity-building for the for the recruitment of 1000 new local promoters for implementation of the strategic axis of Crecer para JUNTOS in order to improve family support to Incluir. 64 DPL I DPL II TAL (Prior Actions) (Programmed triggers) (Components and Subcomponents) households. II. 2. Pension 65: Enhanced Coverage and Broad-based II. 2. Pension 65: Enhanced Coverage and Broad-based Component 1. Quality improvement of MIDIS’s Strategy for the Elderly living in Extreme Poverty. Strategy for the Elderly living in Extreme Poverty. Programs. • Subcomponent 1.1: Development of Users’ • The GoP has approved the expansion of coverage of • MIDIS has implemented a strategy to strengthen the Participation and Accountability Mechanisms. Pension 65 nationwide. provision of complementary services for the elderly • Subcomponent 1.4: Strengthening Processes in living in extreme poverty (health). MIDIS’s Programs. • MIDIS has introduced improvements in the affiliation Component 2. Improving knowledge process and payment systems of Pension 65, based on management, information and communication. the recommendations of specific studies and pilots. • Subcomponent 2.2. Strengthening the Management Information Systems (MIS) of Qali Warma, and Pension 65. Component 3: Strengthening of MIDIS’s capacity on result orientation, monitoring and evaluation. • Subcomponent 3.1: Developing tools to collect data and analyze indicators of social policies within SINADIS, including MIDIS’s programs. • Subcomponent 3.2: Evaluation of Social Policy and Programs (support to the evaluation of Pension 65). II.3 Qali Warma: Establishment of a new school II.3 Qali Warma: Establishment of a new school Component 1. Quality improvement of MIDIS’s feeding program in public schools. feeding program in public schools. Programs • Qali Warma has developed mechanisms for • Subcomponent 1.1: Development of Users’ • The GoP has created the National School Feeding transparency and civil society oversight. Participation and Accountability Mechanisms. Program, Qali Warma, to ensure food service delivery • Subcomponent 1.4: Strengthening Processes in to children enrolled in public pre-schools (ages 3 and MIDIS’s Programs. over) and primary schools. Component 2. Improving knowledge management, information and communication. • Subcomponent 2.2. Strengthening the Management Information Systems (MIS) of Qali Warma, and Pension 65. 65 DPL I DPL II TAL (Prior Actions) (Programmed triggers) (Components and Subcomponents) Component 3: Strengthening of MIDIS’s capacity on result orientation, monitoring and evaluation. • Subcomponent 3.2: Evaluation of Social Policy and Programs (evaluation of Qali Warma). Component 4. Strengthening of human resource management and capacities. • Subcomponent 4.1: Development of Targeted Continuous Training. • Subcomponent 4.3: Capacity-building for the implementation of the strategic axis of Crecer para Incluir. Policy Area III. Reforming social policy approaches Policy Area III. Reforming social policy approaches Component 1. Quality improvement of MIDIS’s and systems. and systems. Programs. • Subcomponent 1.3. Improving client orientation of III.1 Overhaul of the GoP’s National Household III.1 Overhaul of the GoP’s National Household SISFOH. Targeting System (SISFOH) for Social Programs and Targeting System (SISFOH) for Social Programs and Component 4. Strengthening of human resource Policies. Policies. management and capacity. • Subcomponent 4.1: Development of Targeted • The GoP has started to develop the new institutional • The GoP has completed the approval of the legal and Continuous Training (capacity building of local framework for SISFOH under MIDIS. institutional framework to improve the management of information/registry units). • The GoP has taken measures to update the General the targeting system. Household Registry. • The GoP has completed the General Household Census in the 24 regions and MIDIS (through SISFOH) has designed and implemented quality standards and protocols on the confidentiality and security of information. III.2 Foundations for a Monitoring and Evaluation III.2 Foundations for a Monitoring and Evaluation Component 2. Improving knowledge System for Social Inclusion Policy and Programs System for Social Inclusion Policy and Programs management, information and communication. (Evidencia). (Evidencia). • Subcomponent 2.1. Integrated Information Platform for Social Policy. • MIDIS has approved the guidelines (Lineamientos) for • MIDIS has approved the M&E operational guidelines • Subcomponent 2.2. Strengthening the the development of a monitoring and evaluation system establishing the process for evidence-based Management Information Systems (MIS) of Qali for results-based policy formulation and management performance agreements of its social programs. Warma, and Pension 65. in the social inclusion sector. • Subcomponent 2.3. Improvements in MIDIS’s Administrative and Communication Systems. 66 DPL I DPL II TAL (Prior Actions) (Programmed triggers) (Components and Subcomponents) Component 3: Strengthening of MIDIS’s capacity on result orientation, monitoring and evaluation. • Subcomponent 3.1: Developing tools to collect data and analyze indicators of social policies within SINADIS, including MIDIS’s programs. • Subcomponent 3.2: Evaluation of Social Policy and Programs. III.3 Development of systems and strategies to III.3 Development of systems and strategies to Component 2. Improving knowledge enhance overall coordination of social inclusion enhance overall coordination of social inclusion management, information and communication. policies and programs. policies and programs. • Subcomponent 2.1: Developing an information strategy for social policy. • MIDIS has approved the guidelines (Lineamientos) for • MIDIS and all relevant agencies have completed joint inter-sectoral and inter-governmental coordination to planning and budgeting in two pilot regions. Component 3: Strengthening of MIDIS’s capacity reduce chronic malnutrition identifying priority on result orientation, monitoring and evaluation. districts where effective interventions will be • Subcomponent 3.1: Developing tools to collect implemented. data and analyze indicators of social policies within SINADIS, including MIDIS’s programs. • Subcomponent 3.2: Evaluation of Social Policy and Programs. Component 4. Strengthening of human resource management and capacity. • Subcomponent 4.3: Capacity-building for the implementation of the strategic axis of Crecer para Incluir. 67 Annex 7: Lessons learned reflected in the project design PERU Social Inclusion Technical Assistance Project 1. The operation would leverage lessons learned from other World Bank interventions in many areas, including experience on conditional cash transfers, social pensions, feeding programs, targeting, social accountability and transparency. Conditional Cash Transfer Programs 2. The Bank has been working with the Government of Peru to strengthen the design of the CCT program over the last few years. The country is currently in the process of improving the effectiveness of the JUNTOS program, an example of well-targeted social program in Peru (Perova and Vakis, 2009) and one of the key interventions of the Government’s poverty reduction strategy. The basic design follows best practices from regional and international experiences, especially in the areas of targeting, definition of co-responsibilities, transparency, local level participation and with respect to efforts in strengthening nutritional outcomes. JUNTOS also has piloted some adaptations in terms of implementation in order to better benefit indigenous families. 3. International experience demonstrated the need for combined demand and supply- side interventions to reach the expected impact on final outcomes. Lack of economic resources, combined with limitations in access and quality of health services, prevents poor families in Peru from receiving basic health and nutrition services. Following these lessons, the proposed operation plans to strengthen the program’s capacity to identify deficiencies in supply of health and education services in order to best target its expansion. Counseling Services by promoters 4. The experience of similar programs in Chile (Chile Solidario) and Colombia (Unidos) shows that the training of local promoters that assume counseling service activities must be systematized in a curriculum that can be replicated to scale up services and to ensure adequate quality. The capacity-building component of the proposed project includes resources to develop such a curriculum and to support the training of JUNTOS’s promoters and regular supervision. Social Pension 5. The Bank has been cooperating with the Government to strengthen the coverage and effectiveness of non-contributory pension through Pension 65 over the last year. In 2010, contributory coverage of the elderly (25.9 percent) was one of the lowest in the region (Rofman y Oliveri, 2012). The basic design of Pension 65 follows lessons from regional and international experiences, especially in the areas of targeting, payment mechanism and transparency with the objective of improving coverage of the non-contributory system. The program has adopted two mechanisms to select users based on geographical targeting (especially 68 in rural areas where there is a greater poverty concentration) and proxy-means testing (particularly in urban areas). 6. International experience demonstrated the need to use efficient targeting and payment mechanisms. The Bank team organized two international workshops in Lima as part of the Social Inclusion NLTA to discuss international experiences in targeting and payment mechanisms including Argentina, Brazil, Ecuador, Mexico and Uruguay. The design of the proposed operation and support to Pension 65 is taking into account the results of the workshops. It will focus on ensuring that the targeting mechanisms are adequate to capture the most vulnerable among the elderly and on piloting new payment mechanisms to reach people in the most remote areas. School feeding 7. The activities supporting Qali Warma reflect best practices and lessons learned in school feeding programs around the world. The joint WB-WFP book "Rethinking School Feeding" (Bundy et al, 2009) provides guidance on how to develop and implement effective school feeding programs in the context of productive safety nets and long terms effort to provide social protection for the poor. The review highlights how the design of decentralized models, as proposed by Qali Warma and increasingly common around the world, should address a series of challenges including the potential opportunities for corrupt practices in procurement and contracting and quality control of the food being purchased at local levels. Local procurement, which is also emerging as a common approach overall, has the advantage of promoting the sustainability of programs and being a stimulus for the local agricultural economy. Similarly, a series of case studies prepared by the World Bank team as part of the non-lending technical assistance program to PRONAA and Qali Warma (Narvaez, 2012) highlight the importance of community participation in decentralized models (Bolivia), and the need to develop social accountability mechanisms at the community level (Bolivia, Costa Rica). 8. International experience shows a successful transition towards locally-sourced school feeding programs, the so-called “Home Growth School Feeding� (HGSF) (Burbano, 2012). There is emerging consensus that HGSF provide an integrated framework with potentially multiple impacts across agriculture, health, nutrition and education. In addition to regular school feeding programs’ impacts (i.e., school attendance, cognition and educational achievement), HGSFs have the potential to improve food security for small holders’ farmers and community- based groups delivering support service to school feeding. However, in order for this to happen the program needs to include a component to support agriculture and community development which should include sensitization campaigns around improved production practices, income- generation activities in support to school feeding and on improved nutrition practices (Burbano, 2012). The activities supporting Qali Warma funded by this operation will take into account these lessons learned in the design of pilots of alternative managing models for the program. Targeting 9. The Operation’s support to SISFOH reflects best practices in the development of effective targeting systems. A recent review of 122 targeting systems (Groh, et al. 2012) 69 concludes that it can take several years of pro-active management and fine-tuning for a targeting system to reach its optimal definition. The same study highlights the gains of using the same system for different programs, such as SISFOH. These gains include savings in administration costs, low barriers and better services to clients and, synergies in service use, integration and benefits for clients. This operation’s support to SISFOH would try to maximize these gains by funding the development of an interconnected information platform to ensure smooth exchange of data between the central SISFOH office, local targeting units and the system’s clients; and, staff capacity building programs to ensure these improvements are used effectively. 10. International experience also shows that when data collection is decentralized, as in SISFOH, clear national guidelines for processes should be communicated and quality control mechanisms should be put in place (Groh, et al. 2012). Activities under this operation would also take into account these lessons in the definition of grievance redress mechanisms, information quality protocols, quality audits and checks, and in the development of a Unique Users Registry for MIDIS. Social Accountability and Transparency 11. Systems promoting social accountability and transparency mechanisms are key for the effective delivery of basic services and the reduction of inequality. Empirical research has shown that lack of transparency and corruption reduce the quality of publicly provided services and investment in the public sector (Gupta, Davoodi, Alonso-Terme, 1998; Davis, 2004). Overall, service delivery is strengthened by transparency and accountability, since these increase the ability and incentives of policy makers and users to monitor providers (World Development Report, 2004). These basic principles have been used for the design and implementation of several programs supporting strengthening of public service delivery in Africa and Asia. The key lessons that have emerged suggest that open access to information about the program and its management, clear accountability system for the actors responsible for its implementation and strong participation mechanisms by citizens can increase the effectiveness of the program implemented. 12. Various types of social or community monitoring techniques have been used in many countries, with large scale application most prevalently in countries within the South and East Asia Region. The lessons that emerge from such experiences point to the need for a holistic approach that integrates transparency in the allocation and delivery process with opportunities for users’ feedback and the assimilation of the value of that feedback by the service delivery agency (i.e., in staff evaluations, in recognition of good feedback). A second important lesson points to the importance of ensuring that, where committees are involved in feedback, there exist clear guidelines on how committee members are selected, to whom they are accountable, how they report back to constituencies, what data they should publish and what redress mechanisms are available should the committee malfunction or, worse, become involved in corruption. 13. Information and participation have shown to be key factors in the success of the implementation of public service programs. Generally, social monitoring is most effective when the local context has been adequately analyzed, when it involves publication of results of 70 the monitoring at the local level (allowing for anonymous feedback should there be fear of repercussions, particularly in rural areas), when it allows for well-established and clear mechanisms for feedback from actual users, and is preceded by adequate sensitization of the feedback process. In addition, the fact that knowledge aggregating local results will be public, and will be repeated, is often an important incentive for good performance. Programs similar to Qali Warma have an unique opportunity to use these new social monitoring mechanisms as an educational tool in the discussion of good governance among students, by devising exercises where they can participate in some aspects of tracking resources, users and calculating unit costs (much as participatory budgeting has done in schools in Recife Brazil). Where appropriate, the use of new technologies which allow users to provide feedback and receive information via cell phone (or internet or Twitter), and then “map� the data automatically to websites can be powerful tools in promoting downwards accountability by service providers. Indigenous Peoples 14. Experience from across the region has underscored the need to include indigenous peoples in all the phases of the development process, from design and implementation to monitoring to ensure inclusive growth and reduce inequality. 45 Good projects in indigenous areas can only be achieved if accompanied by good policy work and support, which entails awareness campaigns and clear knowledge sharing & learning strategies. Research-based approaches work better, especially if based on locally relevant and culturally adapted strategies. 46 For Indigenous Peoples communities, the lesson learned is that local institutions and traditional leadership need to be involved. 45 Gillette Hall and Harry Anthony Patrinos (Editor), Indigenous Peoples, Poverty, and Development, Cambridge University Press, 2012. A. Gray, Indigenous Rights and Development: Self-determination in an Amazonian Community, Oxford: Berghahn Books, 1997. 46 J. U. &. M. E. Davis S, "Lessons of Indigenous Development in Latin America," in Sustainable Development Working Paper No. 20: Indigenous Peoples Development Series, The World Bank, 2004. 71 Annex 8: Project Poverty and Social Impact Analysis and Stakeholder Assessment PERU Social Inclusion Technical Assistance Project 1. The World Bank team is designing and implementing a Poverty and Social Impact Analysis (PSIA) with MIDIS’s staff. The PSIA is being used as an iterative process and overall approach to identify and monitor the social benefits and potential risks of the reforms supported by the Social inclusion DPL Program and TAL. By the end of the Program series in 2014-2015, it is expected that the PSIA will have provided a roadmap for participatory monitoring of reforms by a multi-stakeholder group in order to adjust them as they progress to achieve positive poverty outcomes and will have built MIDIS’s capacity in ex-ante policy analysis. For example, under the new School Feeding program a key aspect of the reform’s potential added value relates to its ability to expand to poorer rural areas, thereby improving targeting relative to PRONAA. A potential indicator of progress that could be closely monitored by key stakeholders would be the number of users reached, both by food insecure area and poverty quintile relative to the pre-reform baseline. 2. This PSIA is divided into two phases. Phase 1 focused on examining the poverty dimensions of the baseline reform programs and identifying key opportunities and risks to the reforms achieving their poverty and social inclusion objective. This phase was completed on October 2012. Because MIDIS is a new Ministry, data constraints have been acute and reforms are evolving. Phase 2 PSIA would take place during DPL1 and as part of the preparation of DPL2 and as the specifics of the reforms become clearer, especially with regard to the following key elements of the DPL Program: the design of the new School feeding Program Qali Warma (Policy Area II.3), the expansion of the strategy for the extremely-poor elderly under Pension 65 (II.2), the development of an enhanced role for JUNTOS’s local promoters (II.2); the consolidation of the institutional framework targeting system SISFOH (Policy Area III.1); and the overall establishment of MIDIS’s local offices and the users’ information and accountability mechanisms (Policy Area I). 3. Approach to Cross-cutting issues: Ethnicity and Gender. One of the PSIA and project social assessment objectives is to help identify measures and policy adjustments to enhance positive impacts on indigenous, women, the elderly and Afro-descendants through culturally and gender sensitive design 47 in MIDIS’s programs. The proposed approach (currently under discussion with MIDIS’s management) would be to: (i) build on the results of the social analysis of these issues and consultations that will have been conducted as part of the Social Inclusion TAL (as per Social Safeguards requirement) and as part of the PSIA; and (ii) contribute to the development and implementation of the Guidelines on mainstreaming “Interculturality� in MIDIS’s interventions, which MIDIS has committed to develop in recent official documents. Synergies with the TAL could include the development of further social analysis and consultations as an integral part of the monitoring and evaluation agenda of MIDIS, especially for the flagship programs that this DPL is supporting. The methodology used for the PSIA included both qualitative field work in indigenous communities (the social assessment), stakeholder analysis of the former feeding program (PRONAA) and quantitative analysis using 47 With regard to Pension 65, the PSIA is also expecting to support the development of an age-sensitive lens given the specific access barriers for the poor rural elderly. 72 both publicly available MIDIS’s program data and data from national level household surveys (ENAHO 2010 and 2011). Main conclusions: 4. This Phase I of the PSIA confirms that the DPL program, accompanied by this TAL, has a high potential to yield positive social impacts on marginalized groups. MIDIS’s explicit commitment to populations in the process of inclusion (rural, belonging to Quechua, Aymara and native ethnic groups, low level of maternal education, and lowest 20 percent of households in terms expenditures), and its planned improvements in targeting, expansion of programs, and decentralization can potentially mitigate challenges to past programs. At the same time, specific challenges and hurdles in implementation of this ambitious agenda have been identified and risk mitigation measures have been proposed. 5. The expected positive social benefits of these programs for excluded groups is linked to the capacity of MIDIS to facilitate better access to its services, better grievance redress, and adaptation of approaches to increasingly rural and indigenous areas. MIDIS will invest in improvements and scaling up of its grievance redress and user feedback systems (call centers, pilot community scorecard processes, and mobile teams seeking feedback) and in the establishment of more decentralized service windows. These initiatives, should, in principle improve accessibility to information on MIDIS’s programs. The techniques used for grievance redress will need to be both adapted and low-tech and high-tech (mobile phones, etc.) for areas where cell phone coverage is sufficient. 48Adaptation of approaches will require strong feedback from the new groups under inclusion (indigenous, Afro-descendents, women, rural communities). A key risk is lack of sufficient investment in accountability and user orientation given the scale of the reforms. 6. Pension 65: The reforms for Pension 65 and JUNTOS are largely focused on expansion of programs and increases in benefits, and therefore are likely to have a positive impact on poverty reduction among the elderly. Analysis of coverage of the existing pension program from MIDIS’s data as of August, 2012, shows that it currently is progressive in terms of targeting the poor. 7. The ability of Pension 65 to maintain its progressive nature will depend on implementation mechanisms that can ensure proper targeting and accessibility of benefits, and monitoring those who are receiving benefits relative to poverty criteria. Two potential issues with the implementation of the program is the exclusion of the population over 65 without an identity document (a program requirement). This lack of ID is particularly acute among the poor, and particularly among poor older women and older indigenous populations; about 22 percent of poor women were not able to vote because they did have not an ID compared to 13 percent of poor men (ENAHO 2011). 8. Older more rural populations also face logistic challenges in terms of their mobility to reach banks or health care facilities within the mandated period. Older women and 48 Note that in one of the poorest areas – Sierra Norte – the HOI for cell phones is only 40 percent relative to 86 percent for Lima. 73 indigenous populations also are less likely to be literate and therefore may have more difficulty in understanding program benefits. Women are also less likely to have been covered by formal pension schemes, and thus the expansion of Pension 65 should help to address this source of gender inequity. Nonetheless, women live five years longer than men which enable them to profit more from pensions. 9. JUNTOS Expansion: The expansion of coverage of JUNTOS and the recruitment of more social promoters is expected to enhance the amount of counseling women and families receive. Further, enhanced coverage will favor access of poor rural women to health services. Potential adverse impacts include the time burden on women to attend meetings, given other competing responsibilities within and outside the household (and tensions this can create). In terms of mitigating measures, MIDIS is currently preparing some guidelines to ensure gender- sensitivity in MIDIS’s operations and policies, which would entail enhanced training and awareness-raising of JUNTOS’s staff and promoters on these issues. The social assessment conducted for this TAL has raised additional obstacles that extend beyond MIDIS’s room for maneuver: the persistent poor quality in health services, and discriminatory treatment of JUNTOS’s users by the health personnel. MIDIS will work with the Ministry of Health and Regional Health Services to redress these issues. In addition, major investments will be made to foster enhanced empowerment of MIDIS’s users, both men and women, on their rights and responsibilities. 10. Establishment of Qali Warma: The creation of a new universal school feeding program, Qali Warma, will expand program benefits to areas with higher levels of poverty and a greater percentage of excluded groups relative to the previous program. At the same time, the reform also carries substantial implementation risks linked to the scale and the speed of implementation. The stakeholder analysis pointed to the risk of capture of resources or corruption at the subnational level, which could affect both perception of the program and effectiveness. The logistical challenges in setting up a new program are also considerable. Eventual changes in the focus of the food programs and the enforcement or redefinition of procurement rules and control mechanisms could affect the business of certain large scale food providers. Former PRONAA’s staff could potentially be negatively affected and MIDIS is currently addressing this issue carefully as part of the closing of PRONAA. 11. Indigenous and rural producers have the potential to benefit from the establishment of Qali Warma if the program takes an adaptive approach to nutritional guidance, adapts procedures for smaller scale rural producers, and coordinates closely with the Ministry of Agriculture and others supporting small scale producers. It is well documented that indigenous traditional agro-ecological and food knowledge is in rapid decline, and schooling plays a major role in this decline. Qali Warma has an opportunity to shift from nationally defined dietary guidelines that are the same for all regions, to culturally adapted guidelines that are locally relevant or culturally pertinent to indigenous territories. 12. One of the challenges looking forward will be on how to enhance the voice of groups that may benefit from the reform. The focus on user feedback mechanisms, as well as on a participatory dialogue on the reform itself and a strong communications campaign are all key elements in this direction. Were MIDIS to adopt a participatory monitoring of the reform 74 process, by associating stakeholders (NGOs, indigenous groups, representatives of rural communities, decentralized small scale food producers, parents committees), it may enhance the voice of poorer groups likely to benefit most from the proposed reform. Finally, given risks of capture at the local level, mechanisms both for transparency and accountability, as well as for user feedback on the quality of the program, on its expenditures, and on its unit cost relative to regional averages, will need to be integrated into the program. 13. The stakeholder analysis focused on the GoP’s decision to close PRONAA and creation of Qali Warma. It points to the need for increasing the number of individuals benefitting from a better targeted school feeding program. The analysis also points to potential losers and opponents of the reform including former PRONAA’s staff. Further, eventual changes in the focus of the food programs and the enforcement or redefinition of procurement rules and control mechanisms could affect the business of certain large scale food providers. 75 Annex 9: International Cooperation Agencies’ support to MIDIS PERU Social Inclusion Technical Assistance Project Duration Cooperation Vice Ministry Name of Project US$ Program Objective / Expected Results Agency Start date End date / MIDIS's unit Increasing institutional capabilities of countries in the Innovative Policies formulation and implementation of public policies for for the Development January, 300,000 per Territorial Rural Development (TRD). AECID of Rural Areas in July, 2014 2011 year Articulate TRD policies and territorial policies in the Latin America, institutional chain of the overall socio-economic PIDERAL – IICA. development of the countries. JUNTOS: (1) Development of an information system on the supply of services; and (2) Defining and Vice Ministry implementing a plan for ongoing training to local of Social JUNTOS managers and a new family support plan. Benefits Pension 65: (1) Developing a baseline for evaluating the program's impact on access to health services and annual evaluation; (2) Design and implementation of pilots to Social Inclusion Non- evaluate alternative payment mechanisms; (3) *Cost (to World Bank Lending Technical 2011 2012 Evaluation of the effectiveness of the targeting system; be defined) Assistance (NLTA). (4) Development of a program of complementary services to the user population, as part of a strategy to Vice Ministry promote the improvement of the quality of life of users; of Social Pension 65 (5) Developing an information system for Pension 65 Benefits and its integration with the MIDIS’s system; (6) Characterization of the program users; (7) Developing a strategic vision about the role of non-contributory pensions under the various programs of economic protection of the elderly; and (8) Creation of an observatory of the elderly and mechanisms of sensitization. 76 Duration Cooperation Vice Ministry Name of Project US$ Program Objective / Expected Results Agency Start date End date / MIDIS's unit PRONAA: (1) Development of an information system; (2) Development and implementation of a staff training Vice Ministry plan; and (3) Development of a user information and of Social PRONAA accountability mechanisms system. Benefits Vice Ministry Targeting: (1) Protocol development of quality of Social standards, security and confidentiality of SISFOH; (2) Benefits / Funding the updating of "padrón general de hogares" Vice Ministry MIDIS and its quality audit; and (3) Evaluation of institutional of Policies and strengthening strategy of the local focalization units. Social Assessment Monitoring and Evaluation: (1) Development of the process for generating evidence; (2) Training program on impact evaluation; (3) Strengthening DGSYE impact evaluation capacities, PSIA, systematic reviews; (4) Vice Ministry Design and implementation of mechanisms for the use of of Social evidence and evaluation results; (5) Strengthening Benefits/ DGSYE capacities in the management of evidences and Vice Ministry MIDIS evaluation results; (6) Development of performance of Policies and evaluations of social management strategies for results; Social (7) Strengthening DGSYE capacities in social policy Assessment monitoring systems; (8) Strengthen information systems of social programs; (9) Training Program on monitoring and evaluation of social programs; and (10) Strengthening the implementation of a national system for monitoring and evaluation of social policy. 77 Duration Cooperation Vice Ministry Name of Project US$ Program Objective / Expected Results Agency Start date End date / MIDIS's unit Improved articulation: (1) Support in the development of capacity building methodologies (Developing an e- Vice Ministry learning system); (2) Support the strengthening of of Social management tools for articulating social inclusion Benefits/ policy; (3) Support in the systematization of learning Vice Ministry MIDIS from the experiences of the articulation pilots in 20 of Policies and provinces; and (4) Design and implementation of Social articulation strategies between MIDIS’s social programs. Assessment Improved management: (1) Recruit of a company Vice Ministry specialized in "change management" for the of Social reorganization of MIDIS; (2) Continuous training Benefits/ program for HR for MIDIS including subnational Vice Ministry MIDIS government; and (4) Support MIDIS’s communications of Policies and office, design of the communications plan for the sector. Social Assessment Transparency: (1) Technical Assistance to the DGSYE Vice Ministry for the replication of the pilot for establishment of of Social transparency standards; and (2) Dissemination and Benefits/ awareness of information to users. Vice Ministry MIDIS of Policies and Social Assessment Vice Ministry Component 1: Quality Improvement in MIDIS’s of Social Programs. This component will finance technical Social Inclusion Benefits/ JUNTOS assistance to design and pilot a series of activities aimed Technical Assistance 2013 2016 10 million Vice Ministry Pension 65 at improving the quality control of programs. Loan (TAL) of Policies and PRONAA Social Assessment 78 Duration Cooperation Vice Ministry Name of Project US$ Program Objective / Expected Results Agency Start date End date / MIDIS's unit Vice Ministry Component 2: Improving knowledge management, of Social information and communication. This component will Benefits/ finance technical assistance to strengthen MIDIS’s Vice Ministry information system to collect, process, and produce data of Policies and to enhance the decision-making processes within Social SINADIS. Assessment Vice Ministry Component 3: Strengthening of MIDIS’s capacity on of Social result orientation, monitoring and evaluation. This Benefits/ component would provide support to the development Vice Ministry and implementation of a social monitoring and of Policies and evaluation system. Social Assessment Component 4: Strengthening of human resource Vice Ministry management and capacity. This component will finance of Social the development and implementation of a plan of Benefits/ Vice continuous capacity building and training for public Ministry of officials implementing social policy. The component Policies and would also support the reorganization and organization Social of human resources in the JUNTOS and Qali Warma Assessment programs respectively, promoting coordination between different programs at local level. (i) Improving the inclusiveness and effectiveness of key social programs that MIDIS is mandated to execute, with Vice Ministry a specific focus on the rural Conditional Cash Transfers of Social JUNTOS (CCT) Program JUNTOS; the newly created non- Social Inclusion Benefits/ PENSION contributory pension program Pension 65, and Qali Development Policy 2013 45 million Vice Ministry 65 Warma; and, more broadly, and (ii) Developing the new Loan (DPL) of Policies and PRONAA social policy approach and institutional framework that Social MIDIS MIDIS is mandated to formulate, through the Assessment enhancement and/or establishment of proper systems for targeting; monitoring and evaluation; overall coordination; and basic quality standards. 79 Duration Cooperation Vice Ministry Name of Project US$ Program Objective / Expected Results Agency Start date End date / MIDIS's unit SISFOH: Strengthening the Central Targeting Unit to have the mandate and the capacity to develop, update PE-L1105 Third and standardize targeting instruments and maintain the UCPS/MEF phase of the list of users. Vice Ministry programmatic loan to JUNTOS:(i) exit; (ii) general application of Reglamento of Social support Social de Operaciones (RO), emphasizing the issues of Benefits/ Reforms (includes 2012 2012 30 million verification of co-responsibilities and targeting; (iii) Vice Ministry components for labor implementation of differentiated payment model based of Policies and markets, SIS, on temporal clauses for gradual expansion; (iv) Social SISFOH and implementation of communication activities based on Assessment JUNTOS) the strategy adopted; and (v) adopting recommendations from the implementation and operational impact assessments. PE-L1100 Refundable technical cooperation to Inter- JUNTOS: activities for co-responsibilities verification, support American differentiated payment scheme, communication and programmatic series 2010 2014 6 million UCPS/MEF Development information strategy. (includes components Bank (IADB) SISFOH: household registration (empadronamiento). for labor markets, SIS, SISFOH and JUNTOS) Evaluation: Cuna Mas Impact Evaluation; consolidation of critical processes and impact assessment activities; articulation mechanism of social policy evaluations and their link with the budgeting PE-L1129 UCPS/MEF process; Quality; improving quality of care; 2013 30 million Programmatic loan MIDIS Management: JUNTOS's exit and coordination strategy with support programs for autonomous income generation; design of the payment strategy and reduction of transaction costs of the cash transfers; redefinition of JUNTOS’s local management process. Various Vice Ministry Support the program design; impact evaluation; users 2012 2014 1 million Cuna Mas nonrefundable of Social perception – Wawa Wasi. 80 Duration Cooperation Vice Ministry Name of Project US$ Program Objective / Expected Results Agency Start date End date / MIDIS's unit technical cooperation Benefits/ Design exit strategy, productive lines and Vice Ministry communication; definition of local management process; of Policies and JUNTOS evaluation of management agreements; formulation of Social results based budgeting; review of operational manual. Assessment Pension 65 Elaboration of the operational manual. Evaluation of management agreements commitments, PRONAA User perception survey, Evaluation of ration supply chain. Evaluation of SISFOH's functions, processes and SISFOH regulations. Vice Design of a financial inclusion strategy; Support Ministry of proposals to redesign social programs; Support P20 Social pilots. Benefits International conference on gender MIDIS/Internat To be and social inclusion 2012 2012 ional Organization and financing of the conference. determined (tittle: to be Cooperation confirmed) Regional study of Quantitative and qualitative analysis of the JUNTOS indigenous Vice Ministry program that seeks to understand the factors of exclusion populations in 2011 2013 180,000 of Social JUNTOS that limit the effectiveness of CCT programs on conditional cash Benefits indigenous communities. transfer programs 81 Duration Cooperation Vice Ministry Name of Project US$ Program Objective / Expected Results Agency Start date End date / MIDIS's unit New Horizons: "Community surveillance� its main objective is to Vice Ministry Towards greater improve JUNTOS’s program services through a process 2011 2013 400,000 of Social JUNTOS participation of of empowerment of mothers leaders based on Benefits women in politics community participation and supervision. Municipal German Vice Ministry Strengthening December December Development of municipal management and provision of Development 30 million of Social FONCODES Program - 2008 2012 basic social infrastructure. Bank - KFW Benefits FONCODES Reforms of social programs for: (i) define a users’ German PBL Reform of social migration strategy of existing non-targeted programs; (ii) 20 million JUNTOS Development services - joint with 2010 2012 MEF / MIDIS extend and strengthen the JUNTOS CCT program; and Euro SISFOH Bank - KFW IADB (iii) extend the adoption of the targeting instrument SISFOH. 12 million Euro (corres- - Overall objective of the Program: Public institutions of ponds to Vice Ministry different levels of government (national and subnational) QALI improve their services oriented criteria of citizenship and German the of Social WARMA, good governance. Agency for Program for good program Benefits/ 12/12/2014 - Planning with MIDIS period 2012-2014: in process (to International governance and state 12/12/2011 total, Vice Ministry (first stage) CUNA MAS, be concluded in October 2012). Cooperation focuses on Cooperation- reform coopera- of Policies and GIZ tion to Social strengthening the monitoring and evaluation system, the FONCODES articulation of social programs and targeting. MIDIS Assessment amounts to 1.5 million euro approx.) 82 Duration Cooperation Vice Ministry Name of Project US$ Program Objective / Expected Results Agency Start date End date / MIDIS's unit - Technical support for the Commission to reorganize MIDIS. Commission - Formulation of guidelines and the instructive basis for for the redesign the development of the operational manuals of the social of social programs attached to MIDIS and proposal for programs organizational redesign of social programs (approved guidelines by RM 108-2012-MIDIS July 2, 2012). Commission for the redesign Support the organization and functions of the of social Commission. programs - Presentation of lessons learned from GIZ technical advice for the design of a National Social Monitoring and Evaluation period 2008-2011 (advice to the ex ST- CIAS). DGSYE - Consultancy to evaluate the articulation processes of CUNA MAS with other services in the territory (in process). - Introductory workshop for the Poverty and Social Impact Analysis methodology. General Direction of Decentralizatio n and Coordination Technical assistance to MIDIS in the construction and of Social initiation of its intergovernmental and intersectorial Programs/ strategies for territorial articulation in rural areas. General Direction of Policies and Strategies Support the redesign of PRONAA with a focus on PRONAA results. Support the design of Qali Warma with a focus on QaliWarma results (diagnosis and design of its logic matrix in the framework of Result Based-Budgeting). 83 Duration Cooperation Vice Ministry Name of Project US$ Program Objective / Expected Results Agency Start date End date / MIDIS's unit - Support the design of the service “Acompañamiento a Familias� and the redesign of the service “Cuidado Diurno� with a focus on results (diagnosis and design of CUNA MAS its logic framework for results based budgeting). - Gender analysis and formulation of recommendations for the incorporation of a gender approach in the national program Cuna Mas. - Support the redesign of FONCODES with a focus on results (co-financed by KFW). FONCODES - An expert to accompany the implementation of the redesign (specific topic to be defined). 84