Public Disclosure Copy The World Bank Implementation Status & Results Report DRC: Strengthening PFM and Accountability (P145747) DRC: Strengthening PFM and Accountability (P145747) AFRICA | Congo, Democratic Republic of | Governance Global Practice | IBRD/IDA | Investment Project Financing | FY 2014 | Seq No: 3 | ARCHIVED on 29-Dec-2015 | ISR22329 | Implementing Agencies: COREF Key Dates Key Project Dates Bank Approval Date:30-Jan-2014 Effectiveness Date:23-May-2014 Planned Mid Term Review Date:30-Sep-2016 Actual Mid-Term Review Date:-- Original Closing Date:31-Dec-2018 Revised Closing Date:31-Dec-2018 Project Development Objectives Project Development Objective (from Project Appraisal Document) The proposed project development objective is to enhance the credibility, transparency, and accountability in the management and use of central government and selected sub-national governments’ finances. Considering the complementarity with other donor and Bank-funded programs, the proposed MDTF operation will focus on downstream PFM reforms of the central government and public financial management in selected provinces ( Equator, Kasai Oriental and North Kivu). Has the Project Development Objective been changed since Board Approval of the Project Objective? No PHRPDODEL Components Name Component 1- Improving budget execution processes:(Cost $4.50 M) Component 2 - Strengthening budget oversight:(Cost $5.10 M) Component 3 - Strengthening public financial management systems at provincial level:(Cost $10.00 M) Component 4- Project management:(Cost $2.50 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO  Satisfactory  Satisfactory Overall Implementation Progress (IP)  Satisfactory  Satisfactory 12/29/2015 Page 1 of 7 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report DRC: Strengthening PFM and Accountability (P145747) Overall Risk Rating  Substantial  Substantial Implementation Status and Key Decisions The Public Financial Management and Accountability Project (PFMAP) has been designed using a basket-funding mechanism by establishing a Multi- Donor Trust Fund (MDTF) for PFM reform, administered by the World Bank while the project is executed by the DRC Government. The initial allocation for the proposed operation is US$26 million (US$5 million from the World Bank and US$21 million from DFID). The Belgium Cooperation has recently joined the MDTF with a contribution of EUR 4 million; Canada and EU supporting PFM reforms in DRC are expected to join the MDTF in the course of its implementation. The PFMAP was approved by the WB Board on January 30th, 2014 and became effective on May 23rd 2014. The Project officially launched its activities on June 27, 2014. After almost one year and half of implementation; positive progress has been made; providing solid foundation for future project' activities at both central and provincial level. 1. In the area of Budget execution improvement, the project has managed to work politically, achieving remarkable progress in an increasingly volatile and difficult political environment. The issuance of the decree to create DAFs in 12 line ministries has been achieved thanks to proactive, reactive engagement with the Prime Minister’s office, line ministries, unions, the public, and the Ministry of Civil service, with support from PFMA. Recruitment is now ongoing through a competitive transparent process funded by the project. This is the first competitive civil service recruitment organised in over 20 years. More than 5,000 applicants for a total of 1,560 posts. 2. On Budget control and citizen participation, good progress has been made to date. The audit report of the Cours des Comptes was sent to the parliament in September 2015, which is a significant progress in the reduction of lead time to audit government financial statements, from 7.5 months in 2012 (PEFA) to one month in 2015. The Project is supporting (i) the Cours des Comptes to benefit from technical assistance provided by Regional supreme audit organization (CREFIAF) and (ii) the economic and financial commissions of the National Assembly and Senate to recruit technical assistants to support their analysis of the budget and budget execution, as well as audit reports. Also, the project has allowed civil society participation to the budget process and discussions in Parliament at national and provincial level. However, support to citizen control and participatory budgeting has taken a slower start than expected. Lessons have been learnt from the experience of this first year: dedicated staff will be recruited in COREF at national and provincial level, a joint workplan will be approved between COREF, WB and DFID and continued effort will be made to involve as wide of a range of civil socity actors as possible. Efforts to work directly with the private sector federations have been very constructive and will be continued. 3. At provincial level, progress has been made in increasing the transparency and reliability of data on provincial budgets – as three provinces (except Equateur) produced a budget settlement law (loi de reglement) in 2014. This is a significant progress, as data for the 2012 milestones had to be established through a specific study funded by DFID. However, very limited progress has been made towards more realistic and credible budgets, spent in line with forecasts. This is due not only to the continued unreliability of “retrocession” (transfers from Central Governement), but also to weak forecasting of provinces’ own revenue and weak budgeting and budget execution processes. Data on 2015 budget execution for Kasai Oriental and Equateur will be strongly influenced by the decoupage process. This not only has led to provinces being split in smaller parts, but also to citizens refusing to pay taxes in newly created provinces. Tax collection has been significantly reduced in the newly created provinces of Sankuru and Kabinda between March and April 2015. In the three provinces (Equateur, Nord Kivu, Kasai Oriental), support was provided to carry out a census and sensitisation of tax payers, equip and train the provincial revenue collection agencies. These activities were carried out effectively, and were in line with priorities identified at the provincial level. In Kasai Oriental, the census resulted is an increase of taxpayers number from 11,000 to 93,000, as appreciated by the Governor of province. 4. At local level, activities in support of participatory budgeting at ETD level were voluntarily delayed in order to wait for the scoping study of citizen participation to local finance in DRC and for the organisation of the national forum on participatory budgeting. The study report was shared in October 2015. It provides a comprehensive overview of the seven (diverse) methodologies developed by various actors to promote participatory budgeting at ETD level across DRC, identifying best practices and criteria for success. These lessons learnt will serve as a basis to develop the PFMA methodology. The forum is also expected to constitute a major step forward towards a more coherent approach building on evidence of what works, and sensitisation of provincial and national government. 5. On project and Donors Coordination; COREF has completed the selection process of its fiduciary and provincial staff. A weekly meeting is organized jointly with the Task Team Leader to monitor the implementation of project's activities and address the bottlenecks. Progress has also been excellent in terms of coordination and dialog with the Government. The "Cadre de concertation" is fast becoming one of the most efficient framework for Donors- Government dialog at PFM sector level in DRC. The 6th "Cadre de concertation" was jointly chaired by the Minister of Budget and the Minister of Finance; and received very positive feedback on the relevancy of topics discussed and the level of attendance. The agreement on the Plan d’Action Prioritaire (PAP) has been a positive milestone, which now allows focused, more transparent and informed discussion on progress. Belgium has joined the MDFT with a contribution of EUR 4 million, which extended the project's coverage to the province of Kinshasa. The Bank is also working with Canada on a proposal of US$8 million. EU has also expressed interest and is exploring possibilities to join the MDTF. 12/29/2015 Page 2 of 7 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report DRC: Strengthening PFM and Accountability (P145747) 6. After almost a year of effective implementation of project's activities, the overall disbursement rate of the project is estimated at 30 percent for IDA and 72 percent for the Trust Fund. The latter disbursement rate is supposed to change with the additional contributions from Donors. The closing date is scheduled for December 31, 2018. Key actions to follow up 1. The restructuring of the project is critical to factor in the impact of the "Decoupage" on project's activities in provinces. 2. The PFMAP will work closely with the Minister of Civil Service to establish the new organization chart of line ministers including the position of Financial and Administrative Directorate (DAF). This will be an initial strong step towards the devolution of commitment authority to line ministries factored in the country's PFM Law. 3. The momentum gained at central level on transparency and citizen participation to the budget cycle should be secured and disseminated at provincial level, especially in the area of provincial and local revenue collection. 4. The " Cardre de Concertation"should remain the framework of dialog between Donors, Government and Civil Society on critical aspects of PFM reform in DRC. The PAP ( Plan d Action Prioritaire) should be the reference point for all initiatives aiming to support PFM reform in the country under the leadership of COREF. 5. Attention should also be paid to support provinces to increase their revenue collection while also working on improving transparency and accountability of expenditures. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance  --  High  High 12/29/2015 Page 3 of 7 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report DRC: Strengthening PFM and Accountability (P145747) Macroeconomic  --  Substantial  Substantial Sector Strategies and Policies  --  Substantial  Substantial Technical Design of Project or Program  --  Moderate  Moderate Institutional Capacity for Implementation and Sustainability  --  Substantial  Substantial Fiduciary  --  Substantial  Substantial Environment and Social  --  Moderate  Moderate Stakeholders  --  Substantial  Substantial Other  --  --  -- Overall  --  Substantial  Substantial Results Project Development Objective Indicators PHINDPDOTBL  PEFA-PI-1: Aggregate expenditure out-turn compared to original approved budget. At least 90% of the aggregate expenditures comparedto original approved budget were executed (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value D No data Yet No data Yet C Date 31-Oct-2012 -- -- 31-Oct-2017 PHINDPDOTBL  PEFA-PI-10: Public access to key fiscal information. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value C No Data yet No Data yet B Date 31-Oct-2012 -- -- 31-Oct-2017 PHINDPDOTBL  PEFA-PI.16- Predictability in the availability of funds for commitment of expenditures (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value D No data yet No data yet C+ Date 31-Oct-2012 -- -- 31-Oct-2017 12/29/2015 Page 4 of 7 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report DRC: Strengthening PFM and Accountability (P145747) PHINDPDOTBL  PEFA- PI-20: Effectiveness of internal controls for non-salary expenditure (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value C -- -- B Date 31-Oct-2012 -- -- 31-Oct-2017 PHINDPDOTBL  PEFA- PI-26: Scope, nature and follow-up of external audit (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value D+ -- -- C+ Date 31-Oct-2012 -- -- 31-Oct-2017 PHINDPDOTBL  PEFA-PI-28: Legislative oversight of audit report. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value D -- -- C Date 31-Oct-2012 -- -- 31-Oct-2017 PHINDPDOTBL  SNG PEFA PI-1: Aggregate expenditure out-turns compared to original approved budget. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value -- -- -- C Date -- -- -- 31-Oct-2017 PHINDPDOTBL  SNG PEFA PI-2: Composition of expenditure out-turn compared to original approved budget (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value -- -- -- C 12/29/2015 Page 5 of 7 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report DRC: Strengthening PFM and Accountability (P145747) Date -- -- -- 31-Oct-2017 PHINDPDOTBL  SNG PEFA PI-3: Aggregate revenue out-turn compared to original approved budget (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value -- -- -- C Date -- -- -- 31-Oct-2017 Overall Comments The final result figures will be obtained with the PEFA 2017 assessment, in the meantime the Government is planning to undertake a self- assessment which will provide intermediate results. On the province side, the Local PEFA assessment to be conducted in the first quarter of 2016, will allow to set up the baseline. Intermediate Results Indicators PHINDIRITBL  Average lead time of processing the expenditure until the payment in the 5 pilots line ministries (Days, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 37.00 -- -- 15.00 Date 31-Oct-2012 -- -- 31-Oct-2017 Overall Comments The final result figures will be obtained with the PEFA 2017 assessment, in the meantime the Government is planning to undertake a self- assessment in 2016; which will provide immediate results. Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P145747 IDA-H9070 Effective USD 5.00 5.00 0.00 1.49 3.17 30% 12/29/2015 Page 6 of 7 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report DRC: Strengthening PFM and Accountability (P145747) P145747 TF-17290 Effective USD 6.50 6.50 0.00 4.67 1.83 72% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P145747 IDA-H9070 Effective 30-Jan-2014 20-Feb-2014 23-May-2014 31-Dec-2018 31-Dec-2018 P145747 TF-17290 Effective 28-May-2014 28-May-2014 28-May-2014 31-Dec-2016 31-Dec-2016 Cumulative Disbursements Restructuring History There has been no restructuring to date. Related Project(s) There are no related projects. 12/29/2015 Page 7 of 7 Public Disclosure Copy