The World Bank Implementation Status & Results Report Project for Strengthening Public Financial Management (P161969) Project for Strengthening Public Financial Management (P161969) EAST ASIA AND PACIFIC | Micronesia, Federated States of | Governance Global Practice | IBRD/IDA | Investment Project Financing | FY 2018 | Seq No: 11 | ARCHIVED on 24-Apr-2024 | ISR58773 | Implementing Agencies: Department of Finance and Administration, The Federated States of Micronesia Key Dates Key Project Dates Bank Approval Date: 30-May-2018 Effectiveness Date: 01-Oct-2018 Planned Mid Term Review Date: 31-Jan-2021 Actual Mid-Term Review Date: 15-Mar-2021 Original Closing Date: 25-Sep-2023 Revised Closing Date: 25-Mar-2025 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The objective of the project is to improve tax administration and the completeness, reliability and timeliness of financial reports of the National and State Governments. Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Strengthening the PFM Environment:(Cost $0.51 M) Financial Management Information System (FMIS):(Cost $6.81 M) Revenue Management System (RMS):(Cost $4.80 M) Change Management and Human Resource Development:(Cost $1.63 M) Project Management:(Cost $2.25 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 Moderate Implementation Status and Key Decisions The PDO remains relevant and, on its current trajectory, the project is expected to achieve most of its major outputs efficiently within the current project closing date. Progress has been made in implementing project activities during the period, however, the PDO indicators, disbursements, and all but two Intermediate Results Indicators remain behind schedule mainly due to delays in procurement of the FMIS and RMS. The RMS implementation is underway and the FMIS contract was signed on April 11, 2024. To accommodate the schedule for FMIS implementation and operational acceptance of the system, a project extension of five months through August 25, 2025 was approved on April 11, 2024. 4/24/2024 Page 1 of 7 The World Bank Implementation Status & Results Report Project for Strengthening Public Financial Management (P161969) Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance Substantial Moderate Moderate Macroeconomic Moderate Moderate Moderate Sector Strategies and Policies Moderate Moderate Moderate Technical Design of Project or Program Moderate Substantial Substantial Institutional Capacity for Implementation and Substantial Substantial Substantial Sustainability Fiduciary Substantial Substantial Substantial Environment and Social Low Low Low Stakeholders Substantial Moderate Moderate Other -- Low -- Overall Substantial Moderate Moderate Results PDO Indicators by Objectives / Outcomes To improve completeness, reliability and timeliness of financial reports of National and State Govts IN01367802 ►PDO-1: In-year budget reports prepared and published by National and all four State governments (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target In-year budget reports prepared and cleared for publication by all five Govts meeting In-year budget reports criteria for timing, Value not prepared and not Not yet Not yet accuracy, coverage published and comparability to meet criteria of “B” score for PI-28 based on PEFA Framework Date 29-Jun-2018 20-Oct-2023 15-Mar-2024 30-Sep-2024 No intermediate targets yet achieved. A draft template for in-year budget report with separate reports for the general fund and grants assistance and the consolidated has been prepared and customized reports Comments: will be set up in FMIS, however, achievement is not entirely dependent on FMIS. Quarterly reports will be prepared for September and December 2024. IN01367804 4/24/2024 Page 2 of 7 The World Bank Implementation Status & Results Report Project for Strengthening Public Financial Management (P161969) ►PDO-3: New FMIS used by all five govts for recording and reporting budget, revenue and expenditure (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target New FMIS used for preparation of budget for FY2024 and FundWare accounting recording of revenue Value Not yet Not yet system being phased out and expenditure transactions by National and all State governments Date 29-Jun-2018 20-Oct-2023 15-Mar-2024 30-Sep-2024 Progress needs to accelerate – ICT FMIS advisor started to focus initially on internet connectivity. Fundware Specialist will be mobilized in April to initiate data cleanup and conversion. BER completed and Comments: NO issued in August. FMIS contract will be signed with supplier pending finalization with supplier. To improve tax administration IN01367803 ►PDO-2: Revenue Management System installed and in use by CTA for improved revenue accounting (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Year 1 and 2 targets Year 1 and 2 targets “C” score in 2016 self- Criteria for “B” score of Value achieved. Year 3 target achieved. Year 3 assessment for PI-20.3 PI-20.3 met in process. target in process. Date 29-Jun-2018 20-Oct-2023 15-Mar-2024 30-Sep-2024 Year 1 and 2 targets achieved. Year 3 target in process. RMS contract was signed in September 2022 and completed inception report. The first-round testing was completed in February 2024. The second- Comments: round testing will be completed in June 2024 and requires close monitoring of implementation to avoid further delays. Intermediate Results Indicators by Components Strengthening the Public Financial Management Environment IN01367805 ►IR-1: New chart of accounts for all govts for better management, financial and statistical reporting (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target "C" score in 2016 self- Year 1 and 2 targets “A” score criteria for Value assessment. Functional Year 1 and 2 targets met. met. PI-4 met classification lacking. Date 29-Jun-2018 20-Oct-2023 15-Mar-2024 30-Sep-2024 Year 1 and 2 targets met. Year 3 target missed. New CoA is ready for adaptation to new FMIS. Comments: IN01368049 ►IR-2: Procedures Manuals updated with detailed guidance for all five governments (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target 4/24/2024 Page 3 of 7 The World Bank Implementation Status & Results Report Project for Strengthening Public Financial Management (P161969) Procedures Manuals in place with detailed guidance for budget formulation, Operations Procedure accounting, internal Value not covering all required Not yet Not yet controls, payroll, fixed areas assets, liabilities (including debt), cash management and financial reporting Date 29-Jun-2018 20-Oct-2023 15-Mar-2024 30-Sep-2024 Progress needs to accelerate. FMR is still pending in one state. Procedures Manuals have been drafted Comments: for national government and replicated for states. Will be finalized based on FMIS. Financial Management Information System (FMIS) IN01368046 ►IR-3: Financial data integrity maintained to meet “B” score for PI-27 (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Criteria for "B" score “B+” score for PI-27 in Value No change No change for PI-27 fully met 2016 self-assessment Date 29-Jun-2018 20-Oct-2023 15-Mar-2024 30-Sep-2024 Progress needs to accelerate. BER completed and NO issued in August. FMIS contract will be signed with Comments: supplier pending outcome of discussions with supplier on fulfillment readiness. Revenue Management System (RMS) IN01368047 ►IR-4: Taxpayer accounting in Customs and Tax Administration (CTA) automated (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Year 1 and 2 target met. Implementation will be Year 1 and 2 target All modules of RMS completed in one phase Value No RMS in place met.Year 3 and 4 implemented and in due to an accelerated targets in progress. use timeline. Year 3 and 4 targets in progress. Date 29-Jun-2018 20-Oct-2023 15-Mar-2024 30-Sep-2024 Year 1 and 2 target met. Implementation will be completed in one phase due to accelerated Comments: timeline. Year 3 and 4 targets in progress. Change Management and Human Resource Development IN01368048 ►IR-5: Competency framework specifying minimum skillsets adopted and used for all PFM related jobs (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target No competencies defined Y1 target partially Y1 target partially Competency Value for PFM related roles complete, pending complete, pending framework specifying 4/24/2024 Page 4 of 7 The World Bank Implementation Status & Results Report Project for Strengthening Public Financial Management (P161969) gender analysis. Y2 gender analysis. Y2 minimum skillsets target not yet achieved target not yet achieved required adopted for Y3 target in process. Y3 target in process. PFM related jobs across National and State governments and used for recruitment and training to build gender-balanced workforce Date 29-Jun-2018 20-Oct-2023 15-Mar-2024 30-Sep-2024 Y1 target partially complete, pending gender analysis. Y2 target not yet achieved Comments: Y3 target in process, gender analysis completed in all but Budget and Investment. Targets to be set. IN01368050 ►IR-6: External training program partnerships for PFM related certification and degree courses (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Y1 target achieved. Y2 targets in progress, Four (4) external needs assessment training program completed for CTA and No external training partnerships for Yap Y3 target partially Value program partnerships in Target has been met. certification and met – one partnership place degree courses in entered into with Alison, PFM related others under discussion disciplines with CTEC and Charles Strurt. Date 29-Jun-2018 20-Oct-2023 15-Mar-2024 30-Sep-2024 Target has been met. Partnerships entered into with Alison, CTEC, Charles Strurt and Cook Islands Tertiary Training Institute Comments: Partnership Expanding training options with platforms with ICC, WTO, Harvard Business School, etc IN01368051 ►IR-7: Number of staff completing external training programs in PFM related disciplines (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 104.00 21.00 50.00 Date 29-Jun-2018 20-Oct-2023 15-Mar-2024 30-Sep-2024 Year 1-3 targets achieved. Y4 target in process. •Behavioral Competency Training – External-110 Staff (45 M/ 65/F) •Technical Competency Training Comments: 6 Staff ( 3M / 3 F) •Leadership Competency Training 16 Staff ( 7M / 9 F) IN01368052 Of which female (Percentage, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 50.00 4/24/2024 Page 5 of 7 The World Bank Implementation Status & Results Report Project for Strengthening Public Financial Management (P161969) IN01368053 ►IR-8: Gender-sensitive communication conducted for the project for awareness and building ownership (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target DoFA website enhanced and No communication regularly updated with strategy; regular updates information for Value and information not Not yet Not yet government staff and released for government citizens with staff and citizens functionality developed for capturing and summarizing feedback Date 29-Jun-2018 20-Oct-2023 15-Mar-2024 30-Sep-2024 Years 1-3 targets missed – Website has been set up but needs more functionality to reach targets. A Communications Specialist and Social Safeguards Specialist (Gender) have recently been recruited by Comments: the CIU to support this work. Gender analyses developed for Treasury, Chuuk, Yap, Kosrae IN01368054 ►IR-9: Transparency and citizen engagement in budget preparation and execution by National government (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target DoFA website includes functionality to capture citizen feedback. Information on budget preparation stages, final budget and quarterly updates on DoFA website exists but budget execution does not provide platform posted regularly Value Yr.1 target achieved. Yr.1 target achieved. for receiving citizen including: feedback. 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 20-Oct-2023 15-Mar-2024 30-Sep-2024 Yr.1 target achieved. Website has been improved to capture feedback but is not updated with budget information. Citizen-friendly budget FY2024 was published in February 2024 and dissemination event in June. Comments: https://dofa.gov.fm/fmis-general-comments/ https://dofa.gov.fm/rms-general-comments/ Performance-Based Conditions Data on Financial Performance Disbursements (by loan) 4/24/2024 Page 6 of 7 The World Bank Implementation Status & Results Report Project for Strengthening Public Financial Management (P161969) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P161969 IDA-D3240 Effective USD 11.00 11.00 0.00 6.33 3.94 62% P161969 IDA-D9360 Effective USD 5.00 5.00 0.00 0.00 4.81 0% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P161969 IDA-D3240 Effective 30-May-2018 01-Aug-2018 01-Oct-2018 25-Sep-2023 25-Mar-2025 P161969 IDA-D9360 Effective 04-Jan-2022 21-Jan-2022 18-Jun-2022 25-Mar-2025 25-Mar-2025 Cumulative Disbursements Restructuring History There has been no restructuring to date. Related Project(s) P176041-ADDITIONAL FINANCING FOR THE PROJECT TO STRENGTHEN PUBLIC FINANCIAL MANAGEMENT 4/24/2024 Page 7 of 7