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: 9 | ARCHIVED on 27-Apr-2023 | ISR55620 | 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 Project progress has been made in several areas; however yearly targets remain behind schedule with delays primarily relating to the procurement of the two major IT contracts. The contract for the RMS was signed in September 2022 and the RMS inception plan has been delivered. The revised FMIS BER was prepared with revised bid specifications, the Bank's NO issued and the procurement has been launched. The draft aggregate level custom budget reports for Pohnpei State are in progress. The Financial Management Manuals are still pending in three states. State procedures manuals are dependent upon state FMRs. Procedures Manuals are being drafted for the national government and will be finalized based on FMIS. A draft competency framework has been developed. Preliminary soft skills training needs have been identified and a training plan established. A training plan will evolve as Competency Framework is developed. Identified training partners (USP, EIT, CITTI). 4/27/2023 Page 1 of 7 The World Bank Implementation Status & Results Report Project for Strengthening Public Financial Management (P161969) The disbursement rate continues to be at 28.9 percent, mainly due to the delays in procuring the two major IT contracts. Once these contracts are under implementation, the disbursement rate is expected to increase thereafter. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance Substantial Low Low 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 Low Moderate Other -- Low 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 IN01273419 ►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 31-Oct-2022 24-Mar-2023 30-Sep-2024 4/27/2023 Page 2 of 7 The World Bank Implementation Status & Results Report Project for Strengthening Public Financial Management (P161969) Progress needs to accelerate. Work has been initiated in developing draft aggregate-level custom budget reports for Pohnpei State. Comments: IN01273431 ►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 31-Oct-2022 24-Mar-2023 30-Sep-2024 FMIS is being rebid with a simplified cloud design. Comments: To improve tax administration IN01273420 ►PDO-2: Revenue Management System installed and in use by CTA for improved revenue accounting (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target “C” score in 2016 self- Criteria for “B” score of Value Not yet Not yet assessment for PI-20.3 PI-20.3 met Date 29-Jun-2018 31-Oct-2022 24-Mar-2023 30-Sep-2024 The RMS contract was signed in September 2022. The Inception Report has been completed and work Comments: has commenced with IU Networks with regard to the customization of the system. Overall Comments PDO The PDO remains relevant and achievable within the extended project closing date. Although substantial progress has been made in moving forward with project activities, most of the PDO indicators and Intermediate Results Indicators remain behind schedule. Intermediate Results Indicators by Components Strengthening the Public Financial Management Environment IN01273432 ►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- “A” score criteria for Value assessment. Functional Not yet Not yet PI-4 met classification lacking. 4/27/2023 Page 3 of 7 The World Bank Implementation Status & Results Report Project for Strengthening Public Financial Management (P161969) Date 29-Jun-2018 31-Oct-2022 24-Mar-2023 30-Sep-2024 New CoA is ready for adaptation to FMIS. Comments: IN01273436 ►IR-2: Procedures Manuals updated with detailed guidance for all five governments (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target 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 31-Oct-2022 24-Mar-2023 30-Sep-2024 FMRs are still pending in two states. State procedures manuals are dependent upon state FMRs. Comments: Procedures Manuals are being drafted for the national government and will be finalized based on FMIS. Financial Management Information System (FMIS) IN01273433 ►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 31-Oct-2022 24-Mar-2023 30-Sep-2024 Revised FMIS BER submitted and NO issued. Comments: Revenue Management System (RMS) IN01273434 ►IR-4: Taxpayer accounting in Customs and Tax Administration (CTA) automated (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target All modules of RMS Value No RMS in place Not yet Not yet implemented and in use Date 29-Jun-2018 31-Oct-2022 24-Mar-2023 30-Sep-2024 The RMS contract was signed in September 2022; the inception plan has been delivered and work has Comments: commenced with IU Networks with regard to the customization of the system. Change Management and Human Resource Development IN01273435 4/27/2023 Page 4 of 7 The World Bank Implementation Status & Results Report Project for Strengthening Public Financial Management (P161969) ►IR-5: Competency framework specifying minimum skillsets adopted and used for all PFM related jobs (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Competency framework specifying minimum skillsets required adopted for PFM related jobs No competencies defined across National and Value Not yet Not yet for PFM related roles State governments and used for recruitment and training to build gender-balanced workforce Date 29-Jun-2018 31-Oct-2022 24-Mar-2023 30-Sep-2024 HRD Advisor arrived in Feb 2023. Competency Framework is in initial draft form. Comments: IN01273437 ►IR-6: External training program partnerships for PFM related certification and degree courses (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Four (4) external training program No external training partnerships for Value program partnerships in Not yet Not yet certification and place degree courses in PFM related disciplines Date 29-Jun-2018 31-Oct-2022 24-Mar-2023 30-Sep-2024 Potential training partners have been identified (USP, EIT, CITTI). Comments: IN01273438 ►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 0.00 58.00 50.00 Date 29-Jun-2018 31-Oct-2022 24-Mar-2023 30-Sep-2024 The Project supported online courses to improve the IT literacy of finance staff while external training Comments: programs and partnerships in PFM-related disciplines are being developed. IN01273439 Of which female (Percentage, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 50.00 IN01273440 ►IR-8: Gender-sensitive communication conducted for the project for awareness and building ownership (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target 4/27/2023 Page 5 of 7 The World Bank Implementation Status & Results Report Project for Strengthening Public Financial Management (P161969) 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 31-Oct-2022 24-Mar-2023 30-Sep-2024 The Website has been set up but needs more functionality to reach targets. The recruitment for the Comments: Communications and gender Specialists is in progress by the CIU. IN01273441 ►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 Not yet Not yet 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 31-Oct-2022 24-Mar-2023 30-Sep-2024 The website has been improved. Citizen-friendly budget information and a feedback function will be Comments: incorporated by Communications Specialist. Overall Comments IR With the exception of component 1, marked progress has been made across all project components. However, all indicators except one remain behind schedule due to the initial procurement delays. Keeping the project on track to achieve the PDO and Intermediate Results Indicators will be critical. Performance-Based Conditions Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed 4/27/2023 Page 6 of 7 The World Bank Implementation Status & Results Report Project for Strengthening Public Financial Management (P161969) P161969 IDA-D3240 Effective USD 11.00 11.00 0.00 4.97 5.37 48% 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 4/27/2023 Page 7 of 7