The World Bank Implementation Status & Results Report Project to Strengthen budget execution and financial reporting systems (P163131) Project to Strengthen budget execution and financial reporting systems (P163131) EAST ASIA AND PACIFIC | Marshall Islands | Governance Global Practice | IBRD/IDA | Investment Project Financing | FY 2018 | Seq No: 3 | ARCHIVED on 03-Mar-2020 | ISR40642 | Implementing Agencies: Ministry of Finance, The Republic of the Marshall Islands Key Dates Key Project Dates Bank Approval Date: 30-May-2018 Effectiveness Date: 01-Oct-2018 Planned Mid Term Review Date: 29-Jan-2021 Actual Mid-Term Review Date: Original Closing Date: 25-Sep-2023 Revised Closing Date: 25-Sep-2023 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The objective of the project is to improve the completeness, reliability and timeliness of Government’s annual financial statements, and the availability of reliable socioeconomic statistics. Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Strengthening the Public Financial Management Environment:(Cost $0.50 M) Financial Management Information System (FMIS):(Cost $4.48 M) Change Management and Human Resource Development:(Cost $0.97 M) Household Income and Expenditure Survey (HIES) Implementation:(Cost $0.65 M) Project Management:(Cost $2.40 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Moderately Satisfactory Moderately Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Satisfactory Overall Risk Rating Substantial Substantial Implementation Status and Key Decisions The current disbursement rate is only 6% ($0.5m), with expenditures mainly relating to Project Management (Component 5) and the Household Income and Expenditure Survey (HIES) (Component 4). Project implementation has recently accelerated due to the Project Manager coming onboard , and the rate of disbursement is expected to pick-up as a result. The bulk of the disbursement under the Project will occur under Component 2 when the new Financial Management Information System (FMIS) is contracted and installed. It is therefore imperative that the tender be issued for the new FMIS by March 31, 2020. . The status of each project components is as follows:- 3/3/2020 Page 1 of 8 The World Bank Implementation Status & Results Report Project to Strengthen budget execution and financial reporting systems (P163131) Aligning the legal, regulatory and operating environment – Activities under this component are planned to commence in the second (calendar) quarter of 2020 when an expert will be brought on board to review the PFM legal and regulatory environment together with a Procurement Reform expert to review the existing procurement legal framework Financial Management Information System (FMIS) – Preparations for the design of a cloud-based FMIS is ongoing. The mission discussed and confirmed with the authorities that the FMIS will be hosted on a fully managed private cloud with dedicated servers that will give RMI exclusive access and control over the business processes and data that will be backed up in-country for additional security.The Systems Requirement Study (SRS) consultants have completed their Inception Report and Accounting and Reporting Framework Compliance report which have been approved by the PFM Working Group. The draft reports for the Business Process Design and Chart of Accounts (CoA), and Functional Requirements specification for a new FMIS have been prepared by the SRS consulting firm and are being reviewed by the Project Implementation Unit (PIU) and the PFM Working Group. It is critical for the new CoA structure to be approved by the Steering Committee and included as part of the FMIS bidding document. MoF is considering the possibility of using ‘Limited International Bidding’ (LIB) procurement method for the new FMIS, which allows for the tender to be distributed to a pre-defined short-list of suitable suppliers. A justification for LIB will need to be submitted to the WB for no objection. Change Management Change management measures have commenced with the Project Manager coming on board to facilitate the meetings of the PFM Working Group and sessions with Ministry of Finance staff to raise awareness of the project. These sessions are planned to continue and be expanded to other line ministries and stakeholders. A Terms of Reference for a full-time Change Management Specialist was approved during this mission and it is planned for the position to be filled in the second (calendar) quarter this year. It is also planned to recruit in second (calendar) quarter 2020, a part-time Communication Specialist located in the PIU, who will be tasked with finalizing and facilitating the Communications Strategy for the project. Human Resource Development (HRD) - The full-time HRD Specialist is onboard and has commenced work on the activities for this sub- component, including the key task of developing a PFM Competency Framework , ultimately for endorsement by the Public Services Commission. Household Income and Expenditure Survey (HIES) Implementation - this component is implemented by the Economic Policy, Planning and Statistics Office (EPPSO). The field work is continuing with surveys completed in 51 out of 74 enumeration areas by the end of January 2020. Operations had recommenced in January 2020, aided by the lifting of travel restrictions in the outer islands. The fieldwork and data collection is on- track for completion by end May 2020. Project Management The Project Manager has been onboard from July 2019. The Project Implementation Manual (PIM) first version has been finalized and approved by the Bank during the current mission. An approved project annual budget was submitted and cleared by the Bank in December 2019. The annual work plan with updated milestones needs to be finalized as soon as possible, and a Project Progress report including updated disbursement forecasts, submitted prior to the next mission. The Central Implementing Unit in the Division of International Development Assistance (DIDA) provides shared services to support the PIU, including financial management, procurement, and safeguards. The procurement process is about to be commenced for a portfolio Monitoring and Evaluation expert to be located in DIDA. The Project will also need support from a specialist in FMIS procurement throughout the various stages from review and issue of the bidding documents, to evaluation and contract signing. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance Moderate Moderate Moderate Macroeconomic Moderate Moderate Moderate Sector Strategies and Policies Moderate Moderate Moderate Technical Design of Project or Program Moderate Moderate Moderate Institutional Capacity for Implementation and Substantial Substantial Substantial Sustainability Fiduciary Substantial Substantial Substantial Environment and Social Low Low Low Stakeholders Moderate Moderate Moderate Other -- -- -- 3/3/2020 Page 2 of 8 The World Bank Implementation Status & Results Report Project to Strengthen budget execution and financial reporting systems (P163131) Overall Substantial Substantial Substantial Results PDO Indicators by Objectives / Outcomes To improve the completeness, realiability and timeliness of Government’s annual financial statements IN00807274 ►PDO-1: Completeness, quality and timeliness criteria met for Annual Financial Statements by MoF (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Single audit submission AFS for FY2022 Single Audit report deadline (9 months after Not applicable - monitors submitted for audit by Value was published on June year-end) not met annual progress Dec 31, 2022 28, 2019 Date 29-Jun-2018 30-Apr-2019 31-Jan-2020 30-Jun-2023 IN00807291 ►PDO-3: New FMIS used for preparation of budget and recording of revenue and expenditure transactions (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target As part of the Systems Requirement Study (SRS) the Accounting and Reporting New FMIS used for Not applicable - monitor Framework, Business recording revenue and Accounting software 4- bi-annual progress for Process Design, Chart expenditure Value Gov in use but being design and of Accounts (CoA) and transactions and phased out implementation of new Functional preparation of budget FMIS Requirements has for FY2024 been completed awaiting approval by the Steering Committee. Date 29-Jun-2018 30-Apr-2019 31-Jan-2020 31-Jul-2023 To improve the availability of reliable socioeconomic statistics IN00807275 ►PDO-2: Production, publication of statistical abstract featuring key findings from the HIES (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The fieldwork is on Not applicable - monitors track with the first set Statistical abstract No HIES data available annual progress in HIES Value of results from the featuring key findings since 2002 preparation and HIES expected by May from HIES published implementation 2020. Date 29-Jun-2018 30-Apr-2019 31-Jan-2020 31-Mar-2021 Intermediate Results Indicators by Components 3/3/2020 Page 3 of 8 The World Bank Implementation Status & Results Report Project to Strengthen budget execution and financial reporting systems (P163131) Strengthening the Public Financial Management Environment IN00807292 ►IR-1: Procedures Manual updated with detailed guidance (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Procedures Manual in place with detailed guidance for budget Manual available but formulation, lacking detailed No change - Year 2 Value No change accounting, internal procedures for all deliverable controls, payroll, fixed functions assets, cash management and financial reporting Date 29-Jun-2018 30-Apr-2019 31-Jan-2020 31-Mar-2022 IN00807296 ►IR-2: New chart of accounts adopted to facilitate management, financial and statistical reporting (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target “D” score in 2012 PEFA PI-5; economic classification used for New Chart of account New COA meets execution and reporting, Value No change structure planned by criteria for "A" score for but not for preparation end march 2020 PI-4 and appropriation. No functional or sub- functional classification. Date 29-Jun-2018 30-Apr-2019 31-Jan-2020 30-Dec-2020 IN00807299 ►IR-3: Update to Public Procurement Code and Implementation Guidance issued (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Expert to review the Updated Public Code in need of update Code planned to be Procurement Code Value and no implementation No change onboard by end June and IRR in use for guidance available 2020 public procurement Date 29-Jun-2018 30-Apr-2019 31-Jan-2020 30-Jun-2023 Financial Management Information System IN00807293 ►IR-4: Financial data integrity achieved to meet “B” score for PI-27 (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target “D” score in 2012 PEFA New FMIS bidding PI-22. Bank account package planned for reconciliation and Criteria for “B” score Value No change completion and clearance of suspense for PI-27 fully met issuance by end and advance accounts March 2020 delayed and incomplete 3/3/2020 Page 4 of 8 The World Bank Implementation Status & Results Report Project to Strengthen budget execution and financial reporting systems (P163131) Date 29-Jun-2018 30-Apr-2019 31-Jan-2020 31-Dec-2022 IN00807297 ►IR-5: In-year budget reports prepared and published by MoF to meet PEFA Framework “B” score of PI-28 (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target In-year budget reports prepared and cleared for publication on MoF In-year budget reports website meeting Value not prepared and not No change No progress criteria for timing, published accuracy, coverage and comparability to meet criteria of “B” score for PI-28 Date 29-Jun-2018 30-Apr-2019 31-Jan-2020 30-Jun-2023 Change Management and Human Resource Development IN00807294 ►IR-6: Competency framework with gender targets adopted for PFM related jobs across govt (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Competency framework specifying minimum skillsets HRD Specialist required adopted for No competencies for engaged full-time and PFM related jobs PFM related roles Value No change preparing a draft across government defined. Gender targets workplan for sharing and used for not identified. by end February 2020 recruitment and training to build gender-balanced workforce Date 29-Jun-2018 30-Apr-2019 31-Jan-2020 30-Jun-2023 IN00807298 ►IR-7: Number of staff completing external training programs in PFM related disciplines (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 50.00 Date 29-Jun-2018 30-Apr-2019 31-Jan-2020 30-Sep-2023 IN00807300 ►IR-8: Gender-sensitive communications conducted for the project for awareness and building ownership (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target MoF website No communication enhanced and Change Management strategy; regular updates regularly updated with specialist planned to Value and information not No change information for be onboard May 2020 released for government government staff and and will draft Strategy staff and citizens. citizens with functionality developed 3/3/2020 Page 5 of 8 The World Bank Implementation Status & Results Report Project to Strengthen budget execution and financial reporting systems (P163131) for capturing and summarizing feedback. Date 29-Jun-2018 30-Apr-2019 31-Jan-2020 30-Jun-2023 IN00807301 ►IR-9: Transparency and citizen engagement in budget preparation and execution (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target MoF website includes functionality to capture citizen feedback. Information on budget preparation stages, final budget and quarterly updates on MoF website exists but budget execution does not provide platform No change - Year 3 posted regularly Value No change for receiving citizen interim target including: feedback. a) Summary presented in a citizen-friendly format understandable by non-technical audience; b) Summary of citizen feedback received and government response Date 30-Apr-2018 30-Apr-2019 31-Jan-2020 30-Jun-2023 IN00807302 ►IR-10: Training plan developed to meet standards set in competency framework and address skills gaps (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target HRD Specialist onboard and will share Training plans in place Value No training plans in place No change draft workplan by end for MoF staff February 2020 Date 29-Jun-2018 30-Apr-2019 31-Jan-2020 31-Jan-2022 IN00807303 ►IR-11: Number of external training program partnerships for certification and degree courses in PFM (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Four (4) external training program HRD Specialist is No external training partnerships for onboard and will share Value program partnerships in No change certification and draft workplan by end place degree courses in February 2020 PFM related disciplines Date 30-Jun-2018 30-Apr-2019 31-Jan-2020 30-Jun-2023 Household Income and Expenditure Survey (HIES) Implementation IN00807295 ►IR-12: Household Income and Expenditure Survey (HIES) fieldwork and data cleaning completed (Text, Custom) 3/3/2020 Page 6 of 8 The World Bank Implementation Status & Results Report Project to Strengthen budget execution and financial reporting systems (P163131) Baseline Actual (Previous) Actual (Current) End Target Not applicable - monitors HIES Fieldwork on- HIES data cleaning HIES not conducted annual progress in HIES Value track for completion by completed and since 2002 preparation and end May 2020 documented implementation Date 30-Jun-2018 30-Apr-2019 31-Jan-2020 31-Dec-2020 Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P163131 IDA-D3220 Effective USD 9.00 9.00 0.00 0.51 8.12 5.9% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P163131 IDA-D3220 Effective 30-May-2018 18-Jul-2018 01-Oct-2018 25-Sep-2023 25-Sep-2023 Cumulative Disbursements 3/3/2020 Page 7 of 8 The World Bank Implementation Status & Results Report Project to Strengthen budget execution and financial reporting systems (P163131) Restructuring History There has been no restructuring to date. Related Project(s) There are no related projects. 3/3/2020 Page 8 of 8