The World Bank Implementation Status & Results Report Public Financial Management Improvement Project (P162850) Public Financial Management Improvement Project (P162850) MIDDLE EAST AND NORTH AFRICA | West Bank and Gaza | Governance Global Practice | Special Financing | Investment Project Financing | FY 2018 | Seq No: 3 | ARCHIVED on 05-Oct-2019 | ISR38490 | Implementing Agencies: Ministry of Finance and Planning, Ministry of Finance and Planning Key Dates Key Project Dates Bank Approval Date: 01-Jun-2018 Effectiveness Date: 19-Jul-2018 Planned Mid Term Review Date: 04-May-2020 Actual Mid-Term Review Date: Original Closing Date: 30-Jun-2022 Revised Closing Date: 30-Jun-2022 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The Project Development Objective (PDO) is to enhance the expenditure controls, financial accountability and procurement management of the Palestinian Authority. Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Component 1: Improving Budget Expenditure Management and Control:(Cost $1.07 M) Component 2: Improving Financial Accountability of the PFM System:(Cost $1.00 M) Component 3: Modernizing Public Procurement:(Cost $0.80 M) Component 4: Project Implementation Support and Management Costs:(Cost $0.63 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO ►Satisfactory ►Satisfactory Overall Implementation Progress (IP) ►Satisfactory ►Satisfactory Overall Risk Rating ►Moderate ►Moderate Implementation Status and Key Decisions Recent discussions with MoFP noted very good progress in overall project implementation. The Ministry is working closely with all relevant line ministries on introducing commitment control systems; linking the health e-referral system with the Integrated Financial Management Information System; clearing the financial statements backlog; 10/5/2019 Page 1 of 7 The World Bank Implementation Status & Results Report Public Financial Management Improvement Project (P162850) and enhancing the ministries personnel capacity in expenditures control and cash planning. . Moreover, the public disclosure of the financial statements for year end 2017 may occur in 2020. The High Council for Public Procurement Policies has achieved a major milestone through introducing the mandatory use of the public procurement portal for all line ministries and 12 municipalities. Standard bidding document templates have been finalized and are awaiting Cabinet decree. The establishment of a procurement Dispute Review Unit has recently been initiated and training on the procurement law and its regulations to national procurement officials is provided by the High Council for Public Procurement Policies. Progress towards achievement of the Project Development Objective and Implementation Progress are therefore rated Satisfactory (S) for this reporting period. Financial Management and Procurement are also rated Satisfactory. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance ►High ►High ►High Macroeconomic ►High ►High ►High Sector Strategies and Policies ►Substantial ►Substantial ►Substantial Technical Design of Project or Program ►Moderate ►Moderate ►Moderate Institutional Capacity for Implementation and Sustainability ►Substantial ►Substantial ►Substantial Fiduciary ►Substantial ►Substantial ►Substantial Environment and Social ►Low ►Low ►Low Stakeholders ►Moderate ►Moderate ►Moderate Other -- -- -- Overall ►Substantial ►Moderate ►Moderate Results PDO Indicators by Objectives / Outcomes Enhance expenditure control of the PA IN00742017 ►Improved process for budget allotments established that increases predictability to line ministries based on cash forecasts (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target No institutionalized As an initial step towards Quarterly budget procedure of commitments achieving this indicator, allotments for 7 pilot line Value control (CCS) and cash No value yet and as of Oct 1, 2019 - in ministries are determined forecasts. Adhoc Cash line with the Minister of by a MoFP ad hoc Committee has been Finance instructions, the Committee taking into 10/5/2019 Page 2 of 7 The World Bank Implementation Status & Results Report Public Financial Management Improvement Project (P162850) established but will need to first phase of the account budget be strengthened for cash Commitment Control affordability and cash planning for quarterly System (CCS) function availabilities (cash allotments. will be activated for all planning) in order to line ministries reduce the risk of arrears. The data is provided to the Committee by the Accountant General Date 28-Nov-2017 14-Mar-2019 26-Sep-2019 30-Jun-2022 Enhance expenditure control in the health sector IN00742018 ►Reduction in the gap between the budgeted and actual expenditure on referrals to less than 10 percent (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Gap between budgeted and actual expenditures less than 10 percent. An Gap is currently over a 100 MoH and MoFP are ad hoc Committee at the percent. There is no working closely together to MoH conducts a quarterly Value forecasting and control of No value yet introduce the necessary review of referrals-related Referrals-related budget system linkages expenditure projections vs expenditures. the available budget measured on commitment basis Date 28-Nov-2017 14-Mar-2019 26-Sep-2019 30-Jun-2022 Enhance financial accountability of the PA IN00742019 ►Public disclosure of audited financial statements takes place within two years of the end of reporting period (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 28-Nov-2017 14-Mar-2019 26-Sep-2019 30-Jun-2022 Good progress achieved on the backlog of financial statements and the public disclosure of financial statements for year end Comments: 2017 may occur in 2020. Enhance procurement management of the PA IN00742020 ►Public procuring entities disclose their procurement plans, procurement notices and contract awards on the single portal procurement web (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The procurement portal 80% of procurement Value Zero No value yet has been recently entities at the central level 10/5/2019 Page 3 of 7 The World Bank Implementation Status & Results Report Public Financial Management Improvement Project (P162850) launched and is currently and 50% of municipalities mandatory to all line post their procurement ministries and 12 plans, procurement notices municipal entities. and contract awards on the single portal procurement website Date 28-Nov-2017 14-Mar-2019 26-Sep-2019 30-Jun-2022 Intermediate Results Indicators by Components Component 1: Improving expenditure management and control IN00742036 ►A Commitment Control System (CCS) is established in line ministries (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target As October 1st, 2019 and All line ministries in line with the Minister of implement a CCS with Finance instructions, the policy notes and manual of No CCS in general, but a first phase of the implementation that will Value commitment recording Not yet Commitment Control serve as a guide for piloted in 6 line ministries System (CCS) function calibrating quarterly will be activated for all budget allotments of the line ministries ministries Date 28-Nov-2017 14-Mar-2019 26-Sep-2019 30-Jun-2022 IN00742040 ►The role of the Financial Controllers (FC) is amended in line with the new proposed CCS and good international practices (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The FC’s function is FC’s function is ill-defined redefined in line with the and not in line with (i) the The firm that will review new CCS and inspired by new proposed CCS, and (ii) the role of the financial Value No value yet good international good international practices controllers is being practices. Policy notes and with more autonomy recruited. manual of implementation devolved to line ministries of the FC are issued Date 28-Nov-2017 14-Mar-2019 26-Sep-2019 30-Jun-2022 IN00742041 ►E-Referrals (MoH) and IFMIS (MoFP) are interconnected for exchange of data (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target No link between both IT E-Referrals (MoH) and MoH and MoFP are systems and thus no IFMIS (MoFP) systems working closely together to Value meaningful analysis of No value yet are interconnected establish the needed referrals-related expenditure enabling exchange of data system linkages vs. commitments is possible for a better monitoring of 10/5/2019 Page 4 of 7 The World Bank Implementation Status & Results Report Public Financial Management Improvement Project (P162850) the referral-related expenditure Date 28-Nov-2017 14-Mar-2019 26-Sep-2019 30-Jun-2022 IN00742042 ►The Payroll and HR systems (MoFP and GPC respectively) are interconnected (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The business analysis was No interconnection between Both systems are conducted and the system both systems at MoFP interconnected to allow design has been (Payroll) and GPC (HR exchange of data between completed. Value system) so that shared No value yet MoFP and GPC and Implementation is information is missing to subsequently development awaiting EU's approval. develop a wage bill control of a wage bill control The team will monitor procedure procedure developments. Date 28-Nov-2017 14-Mar-2019 26-Sep-2019 30-Jun-2022 Component No. 2: Improving financial accountability of the PFM system IN00742037 ►MOFP publicly disseminates audited financial statements and holds an event to engage the public (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 28-Nov-2017 14-Mar-2019 26-Sep-2019 30-Jun-2022 Component No. 3: Modernizing Public Procurement IN00742038 ►A Dispute Review Unit (DRU) responsible for administrative review of appeals from aggrieved bidders, established in accordance with the PPL (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Appeals from aggrieved bidders concerning alleged non-compliance by procuring entities in The formation of a dispute conducting procurement Value No DRU exists No value yet review unit has been proceedings are reviewed initiated by the HCPPP. by a robust DRU in accordance with the PPL, and decisions are publicly disclosed via the single procurement portal Date 28-Nov-2017 14-Mar-2019 26-Sep-2019 30-Jun-2022 Component No. 4: Project Management Arrangements IN00742039 10/5/2019 Page 5 of 7 The World Bank Implementation Status & Results Report Public Financial Management Improvement Project (P162850) ►Training for middle management employees conducted at the Palestine Public Finance Institute will include a minimum of 20% female employees (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Training on IPSAS for over 150 staff from line ministries is currently under preparation in close coordination with the The Project will track all Palestine Finance training at the PFI and the Institute. Furthermore, gender ratio. Training for 8.6% of middle managers HCPPP contracted the Value No value yet middle managers will trained are female. Public Finance Institute to reach 20% female prepare and deliver a employees by the end of training program to 150 the project procurement officials from procuring entities at the central and local level on the use of the SBDs, once decreed by the Cabinet Date 28-Nov-2017 14-Mar-2019 26-Sep-2019 30-Jun-2022 Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P162850 TF-A6949 Effective USD 3.00 3.00 0.00 0.50 2.50 17% P162850 TF-A9433 Effective USD 0.50 0.50 0.00 0.10 0.40 20% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P162850 TF-A6949 Effective 28-Jun-2018 28-Jun-2018 19-Jul-2018 30-Jun-2022 30-Jun-2022 P162850 TF-A9433 Effective 27-Jan-2019 27-Jan-2019 26-Feb-2019 30-Jun-2022 30-Jun-2022 Cumulative Disbursements 10/5/2019 Page 6 of 7 The World Bank Implementation Status & Results Report Public Financial Management Improvement Project (P162850) Restructuring History There has been no restructuring to date. Related Project(s) There are no related projects. 10/5/2019 Page 7 of 7