OFFICIAL DOCUMENTS Supplemental Letter INDIA June 25, 2019 International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America INDIA: Loan No. 8928-IN (Uttarakhand Public Financial Management Strengthening Project) Performance Monitoring Indicators Dear Sirs and Mesdames: We refer to Section II of Schedule 2 to the Loan Agreement of even date between India and the International Bank for Reconstruction and Development ("Bank") Unless otherwise agreed with the Bank, we shall monitor and evaluate implementation of the Project in accordance with the Performance Monitoring Indicators attached to this letter. Very truly yours, INDIA By Authorized Representative Attachment - Performance Monitoring Indicators Results Framework COUNTRY: India Uttarakhand Public Financial Management Strengthening Project Project Development Objectives(s) The project development objective is to enhance accountability in public finances and increase effectiveness of revenue management systems in Uttarakhand Project Development Objective Indicators Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 Enhanced accountability in public finances (a) Stand- alone (a) Treasuries (a) Full state applications for (a) online have submitted accounts treasury and Payment Bills Payments and monthly submitted to budgeting and processed by accounts of all accounts to the Accountant manualDrawing and Works Budget Accountant FD has provided General through Complete and timely in Works Disbursing departments are preparation, General, to the public IFMIS in paperless State financial reports departments. Officers (DDOs), processed allocation and including for online access to form, within ten made available in LI 1 (b) Employee other than of through IFMIS distribution have Works Budget days from close of public domain (Text) service records Works (b) Payroll been done departments, execution the month are manual and departments, processing and through IFMIS through IFMIS, reports in user (b) Payroll and not linked with and Treasuries approvals have within ten days friendly format. employee service current payroll through IFMIS been done from close of the records are database and through HRMIS calendar month integrated and up there are delays (b) Service to date in processing of records have Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 pension data been validated for all employees, digitized and linked to Payroll module of HRMIS. Improved coverage of internal audit for high DLI 2 10.00 10.00 20.00 40.00 60.00 60.00 60.00 risk auditees (Percentage) (a) FD has (a) Budget disclosed execution reports publicly:(i) and procurement action taken (a) Budget contract awards report on FD has provided reports and are not Online portal (a) FD has budget public access to procurement published. established for notified the proposals for information contract awards Enhanced (b) Absence of citizens to SBDs in the last completed electronically on are published. transparency of key Standard Bidding provide Official year; (ii) at least 90% of (b) SBD notified budget and DLI 3 Documents. comments Gazette(b) GRM Medium Term procurement and procurement (c) Limited citizen during budget for procurement Fiscal Plan contracts operationalized information (Text) complaints (MTFP) in awarded over (c) GRM partiption proe n established and compliance with the e- established bdgetng procefunctional. the FRBM Act; procurement (d) Citizen pd)crmet for and (iii) Citizen threshold provide inputs to procurement not Bde;()F Budget; (b) FD budget has published budget information Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 bilingually in open format Improved timeliness in prepartion and pplation od A DLI 4 0.00 0.00 0.00 10.00 50.00 70.00 70.00 publication of AFS of ULBs (Number) Increased effectiveness of revenue management systems Increased property tax collections of participating ULBs DLI 5 0.00 0.00 0.00 10.00 20.00 30.00 30.00 over baseline (Percentage) Intermediate Results Indicators by Components Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 Strengthening the Public Finance Management Functions (a) GO issued for (a) GO issued (a) Core modules transition of works mandating budget Stand- alone of FMIS namely accounting to preparation, Approval obtained New generation FMIS applications for budget, payments, IFMIS (b) Works allocation and from Accountant with enhanced controls treasury and e-DDO rolled out module have been distribution General for New generation and processes budgeting and (b) GO issued implemented through e-budget submission of IFMIS implemented implemented (Text) manual systems in mandating bill including project module of IFMIS combined works departments. processing through wise budget, (b) e-Budget accounts IFMIS commitments and module expenditure (c) operationalized Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 Cash credit limit and integrated system with other discontinued modules of IFMIS (a) Computerized (a) Payroll module . (a) Initiation of ready for HRMIS to cover payroll system with mandating payroll emplo of manual deployment (User rocessing and Online HRMIS with interventions Acceptance pro s g 60% of service selected state own Payroll and .nerae senterventionsan approvals through60ofsrie elcdsteow Paolan integrated service Tsting and records digitized enterprises and employee service recrd ad pyrll(b) Service records TsigadHRMIS esare maintained a p training and validated by parastatals records integrated implemented (Text) completed)(b) o ie DDOs (b) 100% of service and are up to date mnuedtaly ot Contract awarded records digitized linked to payroll fo evc eod and validated byreodditzd for service record advldtdb . DDOs and validated by digitization DDOs (a) Cash and Debt Debt records are Management Cell maintained established and (a) An Annual Cash (a) Training manually, Medium Cash and Debt and Borrowing (a) Training provided to staff Term Debt Strategy Management Plan has been prvi provided to staff (b) Debt (MTDS) and Public Committee prepared and on software and management on software and o otaead mngmn Improved cash and debt Debt Statistical constituted. updated monthly debt management. software manageent pactics DLI7 Bulltin nt updted mnt ly debt managementdetmng et.sfwr management practices DLI 7 Bulletin not (b) Debt recording (b) Complete debt (b) MTDS has been implemented. institutionalised (Text) prepared and Debt and management data is available on (b) Public Det prepared and used (c) Debt statistical Sustainability Software an electronic Debt Statistical Bulletin for the annual bulletin, MTDS,DSA Analysis (DSA) not identified. Recording and published for last borrowing and Cash & conducted (c) GoUk has Management FY calendar. Borrowing Plan notified the Public system prepared. Debt Procedures Manual. Improved planning, (a) Weak alignment Training on (a) Guidelines (a) Preparation of Evaluation of Improved planning Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 budgeting and evaluation in government goals outcome and developed and MTEF, outcome gender budget and and budgeting and framework implemented and expenditures gender budget adopted by GoUk budget, and outcome budget evaluation (Text) (b) Limited provided for MTFP, Medium gender budget for for five key framework evaluations done Term Expenditure five major schemes institutionalised post budget Framework departments conducted by (MTEF), outcome (b) Training on evaluation and gender budget outcome, gender committee and evaluation.(b) budget and Preparation of evaluation process MTEF, outcome provided budget, and (c) Training on gender budget for MTEF and MTFP five major provided departments (a) Updated Guidelines for (a) Consultant appraisal of capital (a) Appraisal appointed to projects approved (a) At least 30% of (a) At least 60% of (a) At least 80% of guidelines exist but develop guidelines and new high value new high value operatonaliedneyprojecshappaisedprojects appraised need improvement and project operationalized by projects appraisedappraised Improved appraisal and . GoUk(b) under the new pre a ed under the new monitoring of high value sbe orig otori Rationalization of guidelines gunde .new guidelines capital projects (Text) syste ofehigh Psoe (b schemes (b) FD reviews guIDeies (b) FD reviews all valu prjecs Prces ofcompleted and progress of high (b Drvesal high value projects needs improvement schemes corported n value projects high value projects ratonliaton incorporated in value projects using PMDusnPM rationalization using PMD initiated budget(c) Project using PMD monitoring dashboard (PMD) developed Audit Directorate (a) Audit processes (a) Manuals for (a) Manuals on Training on (a) Quality (a) Manuals Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 strengthened (Text) are manual Internal, Works Performance thematic audit Assurance operationalized, (b) High risk and Revenue /Thematic and provided to staff conducted based staff trained and Thematic audit not Audit, and Procurement Audit on established two thematic audits conducted Financial Attest notified and guidelines (b) One completed audit notified and published on the thematic audit (b) Annual report on published on the website of GoUk completed audit of local bodies website of GoUk (b) Training placed in state (b) Training provided to audit legislature for the provided to audit staff on the above year ending March staff on the above audit manuals 31, 2022 audit manuals 40% of ALL Internal 60% of ALL Internal 60% of ALL Internal No automated audit Audit reports have Audit reports have Audit reports have Online Audit management Audit module of Compliance been issued been issued been issued through Management System system presently OAMS rolled out module of OAMS through OAMS, through OAMS, OAMS, within two Implemented (Text) used by the rolled out within two months within two months months from department from completion from completion of aditof aditcompletion of audit of audit of audit First response First response . .Auditees trained in entered in OAMS entered in OAMS Frtrsos Improved auditee First response rate entered in OAMS by response to Internal is currently not NA use of the by auditees for by auditees for auditees for 50% of Audit reports (Text) monitored Compliance 30% of audit 40% of reports reports issued audit module of OAMS reports issued issued audit through OAMS through OAMS Improved coverage of Financial Attest Audit of Local Bodies (Urban and DLI 6 0.00 0.00 40.00 60.00 80.00 80.00 Rural) (Percentage) Number of staff trained 900.00 Training Needs (a) Structured Additional 1000 Additional 1000 Total 3000 staff Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 in targeted PFM areas Assessment training curriculum staff trained in the staff trained in the trained in the (Text) completed and and courses targeted areas targeted areas targeted areas mid-term training developed. (b) plan developed. 1000 staff trained in the targeted PFM areas Number of Female staff 12 percent of total NA 15 percent of total 20 percent of total 25 percent of total 25 percent of total trained (Text) trainees trainees trainees trainees trainees Grievances responded by project level GRM 0.00 0.00 0.00 25.00 50.00 75.00 (Percentage) Strengthening Revenue Management Systems System (a) New online Integrator/Vendor excise BPR and Functional appointed and management New online excise e-Governance application Basic Excise e- Review System software rolled out Online excise management for excise function Governance Specification for . (b) IT enablement software . .Specifications software rolled out implemented (Text) application exists the new Excise of excise offices .w implemented in system developed. (SRS) developed completed in a offices Excise Department for online excise management software GIS based Property tax system implemented in participating ULBs 0.00 0.00 2.00 8.00 14.00 14.00 (Number) House hold survey completed (umer) 0.00 0.00 2.00 8.00 14.00 14.00 completed (Number) Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 ULBs have digitized their manual property tax 0.00 4.00 14.00 14.00 14.00 14.00 registers (Number) (a) Consultants (a) GIS training appointed for provided to staff of (a) GIS training prrovided to staff of Dedicated GIS cell property tax GIS Cell and 4 ULBs Capacity building on GIS not formed and GIs digitization and GIS ( GIS training GIS training 20 ULBs mapping policyon provided to staff of provided to staff of (b) GIS cell fully in UDD (Text) trainings not (b)aedo (b) Dedicated GIS prae additional 8 ULBs additional 8 ULBs operational and provided alternative Cell setup with manages GIS for adequate technical perax ULBs staffmechanisms staff IT applications for IT application for Roadap fr MnualandStrategic Business Roadmap for Manual and including IT revenue systems IT application for revenue systems strengthened Revenue disaggregated identified/Systems revenue systems has gone live and systems in GMVN (Text) revenue systems rom aIntegrator has gone live strategic business appointed plan operationalised Strengthening PFM in Urban Local Bodies and State owned enterprises (a) Manual (a) Reform action accounting process plan for transition (a) MAS deployed followed in the to Double entry in 10 ULBs (b) GO Staff of all ULBs state and no state accrual based mandating Staff of additional Staff of all ULBs have been trained .wide uniform computerized accounting on ULBs institutionally 30 ULBs have been have been trained in revised UMAM strengthened (Text) accounting software accounting system MAS issued (c) trained in revised in revised UMAM and MAS and MAS implemented developed and Training on the (b) Staff not trained approved by GoUk revised UMAM and ULe i U LBs on accrual double (b) Revised software provided entry accounting Uttarakhand to 20 ULBs system accounts Municipal Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 Accounts Manual (UMAM) notified by GoUk(c) Municipal Accounting Software (MAS) has been identified and contract signed with vendor Double Entry Accrual based computerised accounting system 0.00 0.00 10.00 50.00 70.00 92.00 implemented in ULBs (Number) ULBs opening balance 0.00 0.00 20.00 50.00 92.00 92.00 sheet prepared (Number) Monitoring & Evaluation Plan: PDO Indicators . .Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Cetion Coleon Collection Collection This indicator measures the implementation of new FMIS and HRMIS leading to FMIS and enhanced internal controls, HRMIS Review of systems and Directorate of Complete and timely State financial online bill processing, faster Annual maintained reports generated from Treasuries reports made available in public domain payments, online by Director system accounting and reporting. of Treasuries This indicator will measure the completeness and timeliness of accounts submission to Accountant General and disclosing financial reports in public domain. This indicator measures the increase in number of high risk auditees (Category A) actually audited as actully uditd asAudit directorate would compared to the total AnulReports from Auidretaewol Improved coverage of internal audit for Annual provide this data from Directorate of Audit improvedicovera auditauditees. Audit will be OAMS OAMS. deemed as completed when the audit report is issued through OAMS within two months from completion of audit. Reports available on . . websites for each of the This indicator measures the agreed areas. Citizen Enhanced transparency of key budget and tasency and Annual FD portal and GRM portal PMU in CTRFA procurement information o uet a n available and procurement information to the citizen. operationalized.SBIDs notified in Official Gazette. This indicator measures the preparation of AFS by ULBs Data will be collected within six months from the year wise by UDD from Improved timeliness in prepartion and close of the FY. The Annual UDD the ULBs and AFS as UDD publication of AFS of ULBs accounts needs to be generated from the prepared as per revised MAS. UMAM and through the approved MAS. Increased property tax collections of T ULB Data will be collected UDD participating ULBs over baseline increase in the collection of electronic by UDD from ULBs Property Tax in participating Property ULBs subsequent to Tax Registers digitization of property registers and GIS maps. The current baseline of property tax is INR 400 Million for 14 participating ULBs. Monitoring & Evaluation Plan: Intermediate Results Indicators Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Cetion Coleon Collection Collection This indicator tracks the User Acceptance implementation of the new Directorate Testing sign off, New generation FMIS with enhanced Annual Training Reports and Directorate of Treasuries controls and processes implemented generation ofwar e Usage Reports from and generation of completeIFMS reports on a timely basis. User Acceptance .Directorate Testing sign off, Online HRMIS with integrated service This indicator tracks the Annual Directorate of Treasuries records and payroll implemented implementation of HRMIS of Treasuries Training Reports and Usage Reports from HRMIS Reports from software This indicator measures Cash and andot reor adoption of modern cash Debt adtingreos. Cash and Debt Improved cash and debt management ad de rnmcasht Annual Managemen MTDS, Debt Statistical .D.bandTDeb,managementManagementManagement Cell and ED practices institutionalised practices and institutional Cell publie DSA strengthening Training details would . . .be collected from MIS. This indicator tracks the Planning Te qulity o t Ig Improved planning, budgeting and implementation of new Annual department PMU in CTRFA and FD on budget evaluation framework implemented framework for planning, and FD g budgeting and evaluation. interventions would be measured from quality of budget documents and GO. This indicator will review Expenditure EFC will provide development and Finance projects appraised Improved appraisal and monitoring of operationalization of Annual Committee while reports from PMU in CTRFA and FD high value capital projects appraisal guidelines and (EFC) MIS PMD will provide project monitoring and PMD MIS project monitoring dashboard This indicator tracks the Audit Manuals development and Audit . . Audit Directorate and Audit Directorate strengthened implementation of Directorate pbls CTRFA modernized audit manuals and training of staff User Acceptance Online Audit Management System This indicator tracks the Annual Audit Testing sign off, Audit Directorate implementation of the Directorate Training Reports and OAMS Usage Reports from OAMS This indicator tracks Audit Improved auditee response to Internal measures the improvement Annual Directorate Reports from OAMS Audit Directorate Audit reports in response by auditees to audit reports OAMS of Ai of Reports would be This indicator measures the . collated from OAMS Improved coverage of Financial Attest Annual Directorate . Audit Directorate audit completion rate for and MIS maintained by Audit of Local Bodies (Urban and Rural) available AFS of local bodies. and MIS of Audit Directorate UDD This indicator measures the Training records to Number of staff trained in targeted PFM capacity building of GoUk Annual CTRFA capture the required CTRFA areas staff, including female staff, data in targeted PFM areas Number of Female staff trained This indicator measures the Annual CTRFA CTRFA training records CTRFA capacity building of GoUk female staff, in targeted PFM areas GRM system would This indicator measures the Project GRM provide the details of Grievances responded by projectGrievances received and system grievance received and PMU in CTRFA GRM responded by project. responded by the project This indicator tracks the User Acceptance implementation of the Excise Testing sign off, e-Governance application for excise Annual Training Reports and Excise Department online excise management Department function implemented software in Excise Usage Reports from new software Department . . .MIS of UDD and This indicator measures the reSpci ULB number of participating . GIS based Property tax system ULBs who have Annual UDD certification on UDD and GIS cell implemented in participating ULBs implemented GIS property completion and . . maintenance of GIS tax maps. This indicator will be measured cumulatively. maps This indicator measures the Certification by ULBs completion of house hold Annual ULBs and report submitted UDD House hold survey completed surveys for ULBs. This by consultants indicator will be measured on a cumulative basis. This indicator measures the digitization of existing ULBs have digitized their manual property property tax registers of Annual ULB Reports UDD ..tax databaseUD tax registers ULB. This indicator will be measured on a cumulative basis. This indicator measures Annual UDD Data will be collected UDD number of ULBs trained in year wise by the GIS and operationalization Directorate. of GIS cell This indicator tracks the Reports approved by development of Strategic GoUk and User Plan for the two selected Acceptance Testing sign Roadmap for strengthened Revenue verticals in GMVN and Annual GMVN off, Training Reports GMVN systemssubsequent implementation and Usage Reports of of the computerized the new computerized revenue systems revenue system . . Data will be collected This indicator measures Aar wise by thelUDD ULBs institutionally strengthened number of ULBs trained in Annual ULB year wise by the UDD accounting and software Directorate from training MIS This indicator measures the Data will be collected number of ULBs who have year wise by the transitioned to Double Entry Directorate. The Double Entry Accrual based computerised Accrual based computerized Annual UDD accounts would be UDD accounting system implemented in ULBs accounting system. This generated from the includes generating final system and maintained accounts in prescribed by UDD. format from the software. This indicator measures the Data will be collected ULBs opening balance sheet prepared number of ULBs who have Annual UDD year wise by the UDD created opening balance Directorate sheet