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: 6 | ARCHIVED on 23-Dec-2021 | ISR48164 | 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-Oct-2021 Actual Mid-Term Review Date: 18-Oct-2021 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 $2.40 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Moderately Satisfactory Moderately Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Satisfactory Overall Risk Rating Moderate Substantial Implementation Status and Key Decisions The achievement of project development objectives (PDO) and implementation progress remain moderately satisfactory the PDO remains relevant and achievable. As of 30 September 2021, the project had disbursed US$ 1.56 million, or 17.58 percent of the project funds. Since the December 2020 mission, the project disbursed US$0.66 million. The disbursement significantly lags the expected USD 6.16 million by 2021 Q4. The FMIS contract was signed with the vendor in November 2021. Accordingly, disbursements are expected to increase significantly as FMIS implementation progresses. The mission noted progress on all project components despite the unexpected departure of the project manager and COVID-19 related impacts. The RCU has drafted as-is procedures manuals for payroll, fixed assets, and accounting. A consultant will be engaged under the project to draft the 12/23/2021 Page 1 of 8 The World Bank Implementation Status & Results Report Project to Strengthen budget execution and financial reporting systems (P163131) to-be manuals as well as the manuals for budget, internal controls, cash management, and financial reporting. The household income and expenditure survey (HIES) has been completed and EPPSO is working to develop the Statistical Abstract. The competency framework has been approved by the Public Service Commission (PSC) which forms the basis of establishing external partnerships. After delays, the CIU is now fast tracking the recruitment of the Project Manager and the renewal on key international consultants’ contracts in the PIU. The PFM working group and the PFM Steering Committee have experienced significant turnover recently and hence have not supported the project as envisioned during project design. The Financial Management Act (FMA) has been drafted and will be reviewed to ensure alignment with the newly passed Fiscal Responsibility and Debt Management Act (FRDMA). Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance Moderate Low Low 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 Low Substantial Other -- Moderate Substantial Overall Substantial Moderate Substantial Results PDO Indicators by Objectives / Outcomes To improve the completeness, realiability and timeliness of Government’s annual financial statements IN01037017 ►PDO-1: Completeness, quality and timeliness criteria met for Annual Financial Statements by MoF (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target New Chart of Accounts Single audit submission AFS for FY2022 New Chart of Accounts drafted and adopted deadline (9 months after submitted for audit by Value drafted and adopted by by the Steering year-end) not met Dec 31, 2022 the Steering Committee Committee and FMIS contract signed Date 29-Jun-2018 29-Jun-2021 30-Nov-2021 30-Jun-2023 12/23/2021 Page 2 of 8 The World Bank Implementation Status & Results Report Project to Strengthen budget execution and financial reporting systems (P163131) IN01037019 ►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 New FMIS used for recording revenue and Accounting software 4- expenditure Value Gov in use but being No change No change transactions and phased out preparation of budget for FY2024 Date 29-Jun-2018 29-Jun-2021 30-Nov-2021 31-Jul-2023 To improve the availability of reliable socioeconomic statistics IN01037018 ►PDO-2: Production, publication of statistical abstract featuring key findings from the HIES (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Statistical abstract No HIES data available Data cleaning Value Data cleaning completed featuring key findings since 2002 completed from HIES published Date 29-Jun-2018 29-Jun-2021 30-Nov-2021 31-Mar-2021 Overall Comments PDO The project development objective (PDO) indicators are behind scheduled third-year targets, mainly due to the overall project procurement delays and COVID-19 related lockdown consequences. However, with the project implementation progress, the mission noted that there is a high likelihood that two of the three PDO indicators will be achieved as scheduled by end of the project. Implementation has progressed well on Component 3 (Human Resource Development and Change Management) and Component 4 (Household Income and Expenditure Survey). Components 1 (Public Financial Management (PFM) environment) and 2 (Financial Integrated Management System (FMIS)) have made progress but are lagging in meeting annual targets. Under Component 5, the project has established excellent working relationships with all stakeholders but has had several project planning oversights that must be addressed. Intermediate Results Indicators by Components Strengthening the Public Financial Management Environment IN01037020 ►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 formulation, As-is manuals for three Value No change No change accounting, internal functions available controls, payroll, fixed assets, cash management and financial reporting Date 29-Jun-2018 29-Jun-2021 30-Nov-2021 31-Mar-2022 12/23/2021 Page 3 of 8 The World Bank Implementation Status & Results Report Project to Strengthen budget execution and financial reporting systems (P163131) IN01037024 ►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 COA meets execution and reporting, CoA adopted by Value No change criteria for "A" score for but not for preparation Steering Committee PI-4 and appropriation. No functional or sub- functional classification. Date 29-Jun-2018 29-Jun-2021 30-Nov-2021 30-Dec-2020 IN01037027 ►IR-3: Update to Public Procurement Code and Implementation Guidance issued (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Updated Public Code in need of update Updates to Updates to Procurement Procurement Code Value and no implementation Procurement Code Code drafted and IRR in use for guidance available drafted public procurement Date 29-Jun-2018 29-Jun-2021 30-Nov-2021 30-Jun-2023 Financial Management Information System IN01037021 ►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 PI-22. Bank account reconciliation and Criteria for “B” score Value No change No change clearance of suspense for PI-27 fully met and advance accounts delayed and incomplete Date 29-Jun-2018 29-Jun-2021 30-Nov-2021 31-Dec-2022 IN01037025 ►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 change criteria for timing, published accuracy, coverage and comparability to meet criteria of “B” score for PI-28 Date 29-Jun-2018 29-Jun-2021 30-Nov-2021 30-Jun-2023 12/23/2021 Page 4 of 8 The World Bank Implementation Status & Results Report Project to Strengthen budget execution and financial reporting systems (P163131) Change Management and Human Resource Development IN01037022 ►IR-6: Competency framework with gender targets adopted for PFM related jobs across govt (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Competency Competency framework specifying Competency framework framework used as minimum skillsets submitted to PSC basis for preparing required adopted for No competencies for December 2020 - training plans without PFM related jobs PFM related roles awaiting endorsement, Value targets to increase across government defined. Gender targets Training strategy and female employment at and used for not identified. Training Plan developed technical and recruitment and based on competency managerial level in training to build framework MoF gender-balanced workforce Date 29-Jun-2018 25-Sep-2020 30-Nov-2021 30-Jun-2023 IN01037026 ►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 22.00 22.00 50.00 Date 29-Jun-2018 29-Jun-2021 30-Nov-2021 30-Sep-2023 IN01037028 ►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 Change Management MoF website enhanced and strategy drafted. Five enhanced and No communication regularly updated with outreach events launched with gender- strategy; regular updates information for conducted. Media sensitive content and Value and information not government staff and collateral distributed via design, including released for government citizens with PFM social media functionality to capture staff and citizens. functionality developed external presence feedback from for capturing and (Facebook) beneficiaries summarizing feedback. Date 29-Jun-2018 29-Jun-2021 30-Nov-2021 30-Jun-2023 IN01037029 ►IR-9: Transparency and citizen engagement in budget preparation and execution (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target MoF website includes MoF website functionality to capture enhanced to include citizen feedback. functionality for MoF website exists but Information on budget capturing feedback does not provide platform No change - Year 3 preparation stages, Value from project for receiving citizen interim target final budget and beneficiaries feedback. quarterly updates on (government staff and budget execution citizens) posted regularly including: 12/23/2021 Page 5 of 8 The World Bank Implementation Status & Results Report Project to Strengthen budget execution and financial reporting systems (P163131) 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 29-Jun-2021 30-Nov-2021 30-Jun-2023 IN01037030 ►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 Training plan developed to develop skills as per Competency framework Competency drafted. Training needs Framework without Training plans in place Value No training plans in place identified and training targets for increased for MoF staff plan developed female participation at technical and managerial level Date 29-Jun-2018 29-Jun-2021 30-Nov-2021 31-Jan-2022 IN01037031 ►IR-11: Number of external training program partnerships for certification and degree courses in PFM (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Two (2) external Four (4) external training program training program Competency framework partnerships for No external training partnerships for drafted and training certification and Value program partnerships in certification and needs assessment degree courses in place degree courses in completed PFM related PFM related disciplines disciplines Date 30-Jun-2018 29-Jun-2021 30-Nov-2021 30-Jun-2023 Household Income and Expenditure Survey (HIES) Implementation IN01037023 ►IR-12: Household Income and Expenditure Survey (HIES) fieldwork and data cleaning completed (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target HIES Fieldwork HIES data cleaning HIES not conducted completed. Data cleaning HIES draft report Value completed and since 2002 completed and completed. documented documented Date 30-Jun-2018 29-Jun-2021 30-Nov-2021 31-Dec-2020 Performance-Based Conditions 12/23/2021 Page 6 of 8 The World Bank Implementation Status & Results Report Project to Strengthen budget execution and financial reporting systems (P163131) 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 1.56 7.33 18% 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 PBC Disbursement Achievement Disbursed amount in Disbursement % PBC ID PBC Type Description Coc PBC Amount Status Coc for PBC 12/23/2021 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. 12/23/2021 Page 8 of 8