The World Bank Report No: ISR9677 Implementation Status & Results Lebanon Lebanon Emergency Fiscal Management Reform Implementation Grant (P111602) Public Disclosure Copy Operation Name: Lebanon Emergency Fiscal Management Reform Project Stage: Implementation Seq.No: 5 Status: ARCHIVED Archive Date: 14-Mar-2013 Implementation Grant (P111602) Country: Lebanon Approval FY: 2009 Product Line: Special Financing Region: MIDDLE EAST AND NORTH AFRICA Lending Instrument: Emergency Recovery Loan Implementing Agency(ies): Key Dates Board Approval Date 12-Mar-2009 Original Closing Date 30-Sep-2011 Planned Mid Term Review Date Last Archived ISR Date 28-Jun-2012 Effectiveness Date 29-Apr-2009 Revised Closing Date 30-Jun-2013 Actual Mid Term Review Date Project Development Objectives Project Development Objective (from Project Appraisal Document) The objective of the project is to contribute to improving the control, allocation and use of public financial resources, by implementing a number of inter-linked measures in budgeting, debt and aid management designed to improve efficiency and transparency in government financial management. Has the Project Development Objective been changed since Board Approval of the Project? Yes No Component(s) Component Name Component Cost Macro-Fiscal Analysis Function 0.30 Public Expenditure Management 1.78 Debt Management 0.54 Aid Coordination and Management 0.29 Training and Capacity Building 0.37 Public Disclosure Copy Project Management + Contingency 0.72 Overall Ratings Previous Rating Current Rating Progress towards achievement of PDO Moderately Satisfactory Moderately Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Satisfactory Overall Risk Rating Moderate Implementation Status Overview Page 1 of 7 The World Bank Report No: ISR9677 The prospects of achieving the Project’s expected output and outcomes have improved, particularly for the two components, macro-fiscal and debt management, which started late. The macro fiscal unit has been established, following the Ministerial decree issued in March and most importantly it has been staffed. Thus, the Project’s technical assistance and training activities aimed at helping build the Ministry’s macro-fiscal analytical capacity could start since the last mission. Likewise, the new public debt department has started the work on the medium term debt strategy, in close cooperation with the macro-fiscal team and forecast. This strategy is due to be validated by the new High Level Debt Committee by June, Public Disclosure Copy 2013. Good progress has been made on the budget preparation and budget execution components, despite important external constraints, such as the absence of a voted budget and severe human resource constraints in the IT department. Numerous public financial management training and capacity building activities took place, thus supporting the technical work done under the various components. Some progress has been made on aide coordination, although the institutional positioning of this cross-cutting function within government is unclear and the aid management information system is not yet fully operational. Locations No Location data has been entered Results Project Development Objective Indicators Indicator Name Core Unit of Measure Baseline Current End Target More effective budget execution based on Text Value timely information and increased coverage of Date 10-Dec-2010 30-Jun-2013 central budget Comments Intermediate Results Indicators Public Disclosure Copy Page 2 of 7 The World Bank Report No: ISR9677 Indicator Name Core Unit of Measure Baseline Current End Target The MoF has established a cash management Text Value No MoF cash management 39. The cash MoF established daily cash unit and built adequate capacity unit management and reporting plans and monitors all Public Disclosure Copy capabilities have also been treasury accounts online improved Date 01-Apr-2009 21-Dec-2012 30-Jun-2013 Comments The cash management unit is producing daily reports on the Government’s cash position, based on the BDL’s electronic Online Bank Balance System (e-OBBS). However, the unit still has access to three main treasury accounts (in LL, $ and €), and all other accounts held by public administrations at the BDL are not monitored. Cash plans for 2012 have been submitted by all line Ministries, but a number of inconsistencies exist and the quality of information needs to be improved. The absence of approved budget laws since 2005, and special spending procedures through treasury advances have negative impact on the quality of cash plans. New procedures have beendeveloped to register cash grants in the General Budget (special account under BDL treasury account 36) and a related decree has Public Disclosure Copy been approved by CoM for 2012 Budget Law. Medium-term macro-economic framework and Text Value Linkage between medium Ongoing progress in Macroeconomic programming the medium-term fiscal framework are term fiscal framework and strengthening the Macro- is strengthened for better prepared in coordination with relevant bodies GoL policies is weak Fiscal Department aligning the budget with the and reflecting GoL policies. GoL policies while providing a stronger basis forexpenditure control and strategic resource allocation, including through the establishment of hard Page 3 of 7 The World Bank Report No: ISR9677 budget constraints for each ministry and spending agency. Date 17-Dec-2009 21-Dec-2012 30-Jun-2013 Public Disclosure Copy Comments Action Plan for strengthening reporting and Text Value No such systemic approach to Ongoing Implementation of the Action monitoring system, and treasury management improving treasury function Plan is in advance stage. functions, including the improvement of Date 17-Dec-2009 21-Dec-2012 30-Jun-2013 business process/informations is under Comments implementation. Real-time access of the MoF to the CDR Text Value Ground work for the operation improved cooperation Fully operating interface. database through smoothly operating interface of the interface is at an between the MoF and the between the respective databases of two advanced stage CDR regarding data institutions. exchange and the updating of the Aid Management and Reporting (AMR)system, which has been transferred to MoF. AMR is not yet fully operational. Date 17-Dec-2009 21-Dec-2012 30-Jun-2013 Comments Coordination between the MoF and BdL in debt Text Value No such formal coordination Draft MoUs have been High level committee is management area is improved through developed with Banque du effectively established. establishment of a high level committee with Liban, Central Administration participation from both institutions based on a of Statistics, and concerned Memorandum of Understandin line ministries Date 17-Dec-2009 21-Dec-2012 30-Jun-2013 Comments A medium-term debt management strategy is Text Value A full-fledged medium term The Public Debt Directorate The medium-term debt developed, published and put into debt management strategy is (PDD) seems well-prepared, management strategy is implementation, providing a solid framework for absent and the PDD is gradually developed. Public Disclosure Copy day-to-day borrowing decisions and supporting growing into a genuine public a clear cost-risk trade-off an debt management office. While staff numbers appear adequate at the moment, the fact that no director is in place is a serious challenge in a situation where a debt manage strategy is to be published shortly, and where the back office will be reorganized. It is strongly Page 4 of 7 The World Bank Report No: ISR9677 recommended that a senior and experienced director is appointed as soon as possible. Public Disclosure Copy Date 17-Dec-2009 21-Dec-2012 30-Jun-2013 Comments The efforts to build analytical capacity in the middle office centered around the application of the Bank-Fund Medium Term Debt Management Strategy (MTDS) toolkit, and supported by the external consultant, Patrick van der Wansem, continued. Based on discussions with the team and reviewing the analysis of alternative debt management strategies that will provide the analytical framework for themedium term debt management strategy to be published no later than May 1013, it seems clear that necessary capacity is available. A small aid coordination and management Text Value MoF is involved in broader aid Aid Management team A well structured aid team serve as a technical secretariat for high coordination but structured working well at the front office. coordination and level meetings with donors aid management function is management team is in place absent. serving as a technical secretariat for donor meetings. Date 17-Dec-2009 21-Dec-2012 30-Jun-2013 Public Disclosure Copy Comments A training program for key project components Text Value Institute of Finance provides Numerous ongoing training A structured training program is defined and courses initiated. orientation support and basic and capacity building activities has been identified under the training to the MoF staff/new project and is being recruits. implemented. Date 17-Dec-2009 21-Dec-2012 30-Jun-2013 Comments See Aide Memoire Data on Financial Performance (as of 30-Jan-2013) Page 5 of 7 The World Bank Report No: ISR9677 Financial Agreement(s) Key Dates Project Ln/Cr/Tf Status Approval Date Signing Date Effectiveness Date Original Closing Date Revised Closing Date P111602 TF-93850 Effective 16-Mar-2009 16-Mar-2009 29-Apr-2009 30-Sep-2011 30-Jun-2013 Public Disclosure Copy Disbursements (in Millions) Project Ln/Cr/Tf Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P111602 TF-93850 Effective USD 4.00 4.00 0.00 2.75 1.25 69.00 Disbursement Graph Key Decisions Regarding Implementation Progress on reforms and institutional strengthening now needs to translate into tangible results in the remaining six months of the project's life to achieve the envisaged objectives. Public Disclosure Copy These priority results are: • Macro-fiscal forecasting: the development, by the new team, of a macro-fiscal framework that will feed the 2014 budget preparation circular as well as the medium term debt strategy; • Budget preparation: o Implementation in the IT system of the new budget classification in line with the international standards (GFS 2001) and reinforcing the IT department to enable the implementation of the IT systems diagnostic’s core recommendations and address the risks identified; o Transmission of the new draft budget law for Cabinet approval. • Budget execution: Page 6 of 7 The World Bank Report No: ISR9677 o Adopt the public financial management reform strategy as well as a sequenced implementation plan for the development of an integrated financial management information system before purchasing any off the shelf solutions. o Issuance of a ministerial circular on the new accounting charter and procedures, developed with the project’s support; o Strengthen further cash management by consolidating MEF accounts in a single treasury account and extending it to other public bodies. Public Disclosure Copy o Strengthening payment and cash forecasts through capacity building for line ministries. • Debt management: finalize the medium term debt strategy and submit it to the new High debt committee for its first meeting. • Training: development of a training policy for the new recruits and continuous training for current officials of the Ministry of Finance. These results would further represent important building blocks for the new project. Restructuring History There has been no restructuring to date. Related Projects There are no related projects. Public Disclosure Copy Page 7 of 7