The World Bank Implementation Status & Results Report Zambia Devolution Support Program (P178492) Zambia Devolution Support Program (P178492) EASTERN AND SOUTHERN AFRICA | Zambia | Governance Global Practice | Requesting Unit: AECE1 | Responsible Unit: EAEG1 IBRD/IDA | Program-for-Results Financing | FY 2022 | Team Leader(s): Donna Louise Andrews, Lobna Mohamed Abdellatif Ahmed Seq No: 4 | ARCHIVED on 26-May-2024 | ISR60555 | Created by: Lobna Mohamed Abdellatif Ahmed on 23-Apr-2024 | Modified by: Lobna Mohamed Abdellatif Ahmed on 21-May-2024 Program Development Objectives PDO Table Program Development Objective (from Program Appraisal Document) To strengthen the financing, institutional performance and accountability of rural local authorities in Zambia. Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Moderately Satisfactory Overall Implementation Progress (IP) Satisfactory Moderately Satisfactory Implementation Status and Key Decisions Following the World Bank’s Board approval on June 28, 2022, the Financing Agreement (FA) was signed on October 27, 2022, and the program became effective on November 24, 2022, with the first disbursement of US$50 million, in advance, made on December 20, 2022. The PDO is to strengthen the financing, institutional performance, and accountability of rural local authorities in Zambia. An interim Program Management Unit (PMU) is in place and functional since November 2022. During the period under review, the Decentralization Secretariat (DS) had oriented Town Councils (TCs) on the Basic Capital Grant (BCG) eligibility criteria and had conducted the Annual Performance Assessment. In this regard, 50 town councils qualified to receive capital grants. The Ministry of Finance and National Planning achieved the first year Disbursement Linked Result (DLR) by revising the Local Authorities Accounting Manual. The documents provided for the verification of other DLRs for FY 2023 were not sufficient to prove achievements. Capacity Building Activities meant to strengthen institutional, human, and financial capacities of TCs are yet to be identified. The World Bank and Government Agencies involved in implementing the operation identified the need to restructure the program to make it more outcome based than process based. In addition, restructuring the program would help the Government to respond to the drought national disaster considering the program’s national presence. Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P178492 IDA-71780 Effective USD 210.00 210.00 0.00 50.86 159.14 24% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P178492 IDA-71780 Effective 28-Jun-2022 27-Oct-2022 24-Nov-2022 30-Jun-2028 30-Jun-2028 5/26/2024 Page 1 of 12 The World Bank Implementation Status & Results Report Zambia Devolution Support Program (P178492) Program Action Plan Action Description Improve planning and budgeting at local level to enhance performance Source DLI# Responsibility Timing Timing Value Status Fiduciary Systems Town Councils Recurrent Semi-Annually Delayed Completion Measurement Enhance planning, realistic budgets and improved productivity Comments The PMU is yet to report on the progress. Action Description Timely budget releases Source DLI# Responsibility Timing Timing Value Status Fiduciary Systems MOFNP Recurrent Semi-Annually Delayed Yellow book and budget outturns reports. Completion Measurement The PMU is yet to report on progress. Comments Action Description Disclosure of Annual Procurement activities in the official website Source DLI# Responsibility Timing Timing Value Status Fiduciary Systems PMU Recurrent Yearly In Progress Completion Measurement Publication on Website Comments Action Description Measure Fiduciary Key Performance Indicators (KPIs) Source DLI# Responsibility Timing Timing Value Status Fiduciary Systems MOFNP/PMU Recurrent Semi-Annually In Progress Completion Measurement Share monitoring report with the Bank semi-annually Comments Action Description Standardize Accounting systems and software at the TCs Source DLI# Responsibility Timing Timing Value Status Fiduciary Systems MOFNP Due Date 31-Jan-2024 Delayed 5/26/2024 Page 2 of 12 The World Bank Implementation Status & Results Report Zambia Devolution Support Program (P178492) Uniform financial management information systems installed in all TCs. Completion Measurement The PMU is yet to report on progress. Comments The PMU is yet to report on the progress. Action Description Share Internal Audit findings and reports covering fiduciary controls Source DLI# Responsibility Timing Timing Value Status Fiduciary Systems MLGRD Recurrent Yearly Delayed Share internal audit findings and reports on a semi-annual basis. Completion Measurement The PMU is yet to report on progress. Comments The PMU is yet to report on the progress. Action Description Establishment of a procurement related complaint handling mechanism Source DLI# Responsibility Timing Timing Value Status Fiduciary Systems PMU Due Date 29-Dec-2023 Completed Government Notification/Order specifying an interface to accept complaints and detailed provisions on complaint Completion Measurement resolution including appeal. This will be actualized through implementation of a combined complaint/grievance redress mechanism system which Comments will include ESS issues in a separate section. MLGRD to provide a platform on their website for receiving and resolving complaints. The PM Semi-annual reports collating allegation of fraud and corruption, complaints received, and investigations on the Action Description program activities Source DLI# Responsibility Timing Timing Value Status Fiduciary Systems PMU Recurrent Semi-Annually In Progress Completion Measurement Semi-annual report shared with the World Bank Comments Develop Program Environment and Social Risk Management Manual to include full description of environmental and Action Description social management processes and procedures for proposed investment projects Source DLI# Responsibility Timing Timing Value Status DLI 2 By the time of the Environmental and Social PMU Other disbursement of the In Progress Systems Capital Grants Completion Measurement POM adopted by the Recipient (dated covenant) including Environment and Social Risk Management Manual. 5/26/2024 Page 3 of 12 The World Bank Implementation Status & Results Report Zambia Devolution Support Program (P178492) Comments Action Description Develop E-waste recycling and disposal management guideline Source DLI# Responsibility Timing Timing Value Status Environmental and Social DLI 2 PMU Other first year of Program In Progress Systems Completion Measurement POM that includes an Environment and Social Risk Management Manual. Comments Establish coordination and review mechanism/body for environmental and social management systems to be led by Action Description relevant authorities in environment and social dockets. Source DLI# Responsibility Timing Timing Value Status Environmental and Social DLI 2 ZEMA/OSHI Recurrent Yearly Completed Systems Completion Measurement Progress reports. Comments Include reporting on ESMS performance, including social performance in program subprojects reporting Action Description requirements. Source DLI# Responsibility Timing Timing Value Status DLI 2 By the time of Environmental and Social PMU Other disbursement of Capital Not Yet Due Systems Grants Completion Measurement POM that includes an Environment and Social Risk Management Manual. Comments Ensure enough provisions are done for COVID-19 prevention supplies, including personal protective equipment and Action Description sanitizers, and WHO and host countries' protocols on COVID-19 are adhered to. Source DLI# Responsibility Timing Timing Value Status Environmental and Social TCs Recurrent Continuous In Progress Systems Completion Measurement COVID-19 Guidelines consistent with WHO and host countries protocols adopted by the Recipient. Comments 5/26/2024 Page 4 of 12 The World Bank Implementation Status & Results Report Zambia Devolution Support Program (P178492) Action Description Develop induction and training program for all their contractors/suppliers on ESMS, including OHS. Source DLI# Responsibility Timing Timing Value Status Environmental and Social DLI 6 Before commencement TCs, ZEMA, OSHI Other In Progress Systems of projects Completion Measurement POM adopted by the Recipient (dated covenant) including training manual on ESMS, including OHS. Comments Assign qualified and experienced staff to coordinate environmental and social management at implementing agencies Action Description with adequate resources. Source DLI# Responsibility Timing Timing Value Status Environmental and Social TCs Other Program Effectiveness Completed Systems Correspondence to the Bank confirming that staff has been recruited or seconded to the Project Implementation Units Completion Measurement (PIUs). Comments The PMU is now staffed with a competent Environment Specialist and Social Safeguard Specialist Action Description Conduct training in environmental and social management systems for technical staff at the implementing agencies Source DLI# Responsibility Timing Timing Value Status DLI 6 By end of first year of Environmental and Social PMU Other program In Progress Systems implementation Completion Measurement Training reports submitted to the Bank. Comments Action Description Establishment of a Grievance Redress Mechanism. Source DLI# Responsibility Timing Timing Value Status By the time of the Environmental and Social PMU Other disbursement of Capital Not Yet Due Systems Grants POM adopted by the Recipient (dated covenant) including GRM in the Environment and Social Risk Management Completion Measurement Manual. Comments Risks 5/26/2024 Page 5 of 12 The World Bank Implementation Status & Results Report Zambia Devolution Support Program (P178492) Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance Moderate Moderate Moderate Macroeconomic Substantial Substantial Substantial Sector Strategies and Policies Moderate Moderate Moderate Technical Design of Project or Program Moderate Moderate Moderate Institutional Capacity for Implementation and Substantial Moderate Moderate Sustainability Fiduciary Substantial Substantial Substantial Environment and Social Moderate Moderate Moderate Stakeholders Moderate Moderate Moderate Other -- -- -- Overall Substantial Substantial Substantial Results PDO Indicators by Objectives / Outcomes To strengthen the financing, institutional performance and accountability of rural local governments IN01422122 ►Town Councils that achieve the minimum threshold scores in the Annual Performance Assessment (APA) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 35.00 Date 18-Apr-2022 23-Aug-2022 03-May-2024 31-Dec-2027 This indicator will be satisfied when: (1) The TCs have achieved the threshold score in the Performance Indicators as assessed by the APA; (2) PBCG allocations are done based on the APA results as per agreed PBCG allocation formula; (3) The Capital Grant is disbursed to eligible TCs as per agreed time schedule. The Performance Indicators in the APA are grouped according to the following thematic areas: (1) Planning and budgeting, which includes the screening and prioritization of projects based on climate adaptation and Comments mitigation; (2) Local revenue performance; (3) Governance, which includes activities to promote gender equality in the TCs; (4) Financial management; (5) Procurement; (6) Service delivery; and (7) Citizen engagement. This indicator will not be measured until Year 3. IN01422123 ►Intergovernmental fiscal framework strengthened (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The current intergovernmental fiscal Intergovernmental Value framework was formulated 0.00 0.00 fiscal forum set up in 2015 and needs to be revised 5/26/2024 Page 6 of 12 The World Bank Implementation Status & Results Report Zambia Devolution Support Program (P178492) Date 18-Apr-2022 23-Aug-2022 03-May-2024 31-Dec-2026 MoFNP through its agencies such as the IFRU, Accountant General and others undertake the following policy and ins to strengthen the intergovernmental fiscal framework: 1. (a) Review and Revise the formula for intergovernmental res the allocation of Equalization grants) as well as devise a formula for the allocation of sectoral grants in future 2. Facili and ensure robust monitoring of accumulation of debt in the future 3. Strengthen the institutional arrangements for int relations through the setting up of an intergovernmental fiscal forum that will bring together key stakeholders at the Ce Governments to discuss sustainable financing of local service delivery. Comments Central Government has developed the draft IFA but it is still a work in progress and has not been disseminated. MoF conducting consultations on allocative criteria for various transfers. However, Resource Allocative criteria will be upd the design of the local debt monitoring tool, yet, the tool is not ready for utilization as it lacks methods for data collecti MoFNP has not started the discussion on resolutions to the current local debt and how to stop accumulation. MoLGR the Rating Act and plans to empower LAs to perform the rating roll to foster own source revenues, yet those plans are IN01422124 ►Town Councils prepare their annual plans in a participatory manner (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 18-Apr-2022 23-Aug-2022 03-May-2024 31-Aug-2026 The process for preparation of annual plans is carried out in a manner that ensures participation of women, youth and disabled persons. Comments Indicator has not been updated as the PMU is yet to provide an M&E update. Intermediate Results Indicators by Results Areas Result Area One: Capital Grants to Town Councils IN01422125 ►Town Councils that comply with Minimum Conditions (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 50.00 75.00 Date 18-Apr-2022 23-Aug-2022 03-May-2024 31-Dec-2024 Participating TCs will have to achieve the Minimum Conditions (MCs) listed below, for each year of the Program: 1. T four MCs: a. TC has submitted its Annual Financial Statement for the previous year for audit by (specific date) of the c have an adverse or disclaimer audit opinion from previous year audit c. TC should have the following essential staff in Finance Officer, Procurement Officer, and Planning Officer/ Engineer) at the time of assessment d. TC Procurement C the contracts awarded in the previous FY 2. Basic Capital Grant allocations are done based on the achievement of M Grant allocation formula; and 3. The Capital Grant is disbursed to eligible TCs as per agreed time schedule. Comments APA prepared by the Decentralization Secretariate showed that 50 TCs had met minimum condition for providing pro 2023, which is consistent with DLI1.1. IN01422129 5/26/2024 Page 7 of 12 The World Bank Implementation Status & Results Report Zambia Devolution Support Program (P178492) ►Annual Performance Assessment (APA) carried out in a timely manner (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 18-Apr-2022 23-Aug-2022 03-May-2024 31-Aug-2026 APA completed by August 31st of every year for the first year.. Comments APA prepared by the Decentralization Secretariate was prepared on October 20, for FY 2023. IN01422132 ►Citizens benefitting from the capital grants (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 486,400.00 Date 18-Apr-2022 23-Aug-2022 03-May-2024 31-Dec-2027 Number of citizens that benefit from the capital grants. Comments Results have not been updated as the PMU is yet to provide an M&E update. IN01422135 Of which women (Number, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 243,200.00 Result Area Two: Strengthened PFM, transparency and accountability of local authorities IN01422126 ►Improved monitoring of local authority public financial management (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Financial monitoring portal established in the MoFNP and There is no single populated with Town repository of local Value 0.00 0.00 Council financial government financial information (annual information at present. financial reports, debt reports, revenue collection data) Date 18-Apr-2022 23-Aug-2022 03-May-2024 31-Dec-2025 MoFNP will develop an online portal to display the following financial information on all the TCs and keep it updated: 1. All receipts and expenditures of the TCs as reported in their respective annual financial statements 2. Collection of Own Source Revenues 3. Debt liabilities 4. Procurement information relating to large contracts (to be defined) The MoFNP will derive this information from the electronic financial Comments management information systems and e-procurement systems. MoFNP is working on different options to establish data interfacing between TCs and the finanical Information System at the central level.. IN01422130 ►Annual financial audit of Town Councils carried out in a timely manner and audit report published (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target 5/26/2024 Page 8 of 12 The World Bank Implementation Status & Results Report Zambia Devolution Support Program (P178492) Value 60.00 0.00 0.00 96.00 Date 18-Apr-2022 23-Aug-2022 03-May-2024 30-Nov-2027 The OAG has completed the annual financial audit of TCs and audit reports published in the OAG website by the date Although OAG completed the audit of all the 96 TCs, the audit reports were not published by November 30, 2023. Comments IN01422133 ►Improved public procurement systems for Town Councils (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 20.00 0.00 50.00 80.00 Date 18-Apr-2022 23-Aug-2022 01-Apr-2024 31-Dec-2024 e-GP rolled out to Town Councils. As of December 31, 2023, only 36 TCs were using e-GP platform to process transactions. The number had increased Comments 2024. IN01422134 ►Public meetings held by the Town Council to prepare annual plans and to inform about the implementation progress of annual plans (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 20.00 0.00 0.00 80.00 Date 18-Apr-2022 23-Aug-2022 03-May-2024 31-Dec-2027 Number of Town Councils that hold public meetings to to prepare annual plans and to inform about the implementation progress of annual plans. Comments Results have not been updated as the PMU is yet to provide an M&E update. IN01422136 ►Women participating in public meetings convened by the Town Council (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 10.00 0.00 0.00 30.00 Date 18-Apr-2022 23-Aug-2022 03-May-2024 31-Dec-2027 Increased participation of women in Town Council meetings. Comments Results have not been updated as the PMU is yet to provide an M&E update. IN01422137 ►Outreach and communications activities to incentivize women’s participation in public meetings of the Town Council (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 30.00 Date 18-Apr-2022 23-Aug-2022 03-May-2024 31-Dec-2027 Comments Town Councils undertake specific activities to strengthen women’s participation in local government affairs. 5/26/2024 Page 9 of 12 The World Bank Implementation Status & Results Report Zambia Devolution Support Program (P178492) Results have not been updated as the PMU is yet to provide an M&E update. Result Area Three: Strengthened Fiscal Framework for Devolution IN01422128 ►Sector grant allocation formula prepared (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 18-Apr-2022 23-Aug-2022 03-May-2024 31-Dec-2027 The MoFNP introduces formula based allocation of funding for key sectors such as health and education. Comments Results have not been updated as the PMU is yet to provide an M&E update. Result Area Four: Capacity Building of Town Councils IN01422127 ►Institutional capacities of Town Councils improved (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target No comprehensive At least 80% of capacity building plans are activities in the Annual Value 0.00 0.00 currently being prepared Capacity Building Plan for TCs implemented Date 18-Apr-2022 23-Aug-2022 03-May-2024 31-Dec-2026 MLGRD will develop and implement an annual plan for capacity building of Town Councils on key thematic areas rela and service delivery aspects of local governments. As a first step towards preparing a capacity building plan, MLGRD conducted capacity assessment for 41 TCs, instea Comments capacity assessment should be conducted in FY 2024. IN01422131 ►Town Councils that have prepared gender action plans (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 7.00 0.00 0.00 35.00 Date 18-Apr-2022 23-Aug-2022 03-May-2024 31-Dec-2027 Town Councils that develop gender action plans that identify actions to promote women's representation and participation in local decision making and prioritization of projects and services. Comments Results have not been updated as the PMU is yet to provide an M&E update. Disbursement Linked Indicators DLI_IND_TABLE ►DLI 1 Town Councils that comply with Minimum Conditions (Outcome, 25,000,000.00, 0%) Baseline Actual (Previous) Actual (Current) 2027 5/26/2024 Page 10 of 12 The World Bank Implementation Status & Results Report Zambia Devolution Support Program (P178492) Value 0.00 0.00 50.00 0.00 Date -- 23-Aug-2022 03-May-2024 -- 50 Town Councils complied with the minimum conditions for FY 2023 and were eligible to receive basic capital Comments grants (BCG) ►DLI 2 Town Councils that achieve the minimum threshold scores in the Annual Performance Assessment (APA) (Outcome, 45,000,000.00, 0%) Baseline Actual (Previous) Actual (Current) 2027 Value 0.00 0.00 0.00 35.00 Date -- 23-Aug-2022 03-May-2024 -- DLI is not applicable until Year 3. Comments ►DLI 3 Improved monitoring of local authority public financial management (Process, 25,000,096.00, 0%) Baseline Actual (Previous) Actual (Current) 2027 There is no single repository of local Value 0.00 0.00 N/A government financial information at present. Date -- 23-Aug-2022 03-May-2024 -- For FY 2023, DLR 3.1 was achieved and PMU was advised to include a section on arrears and debt in the LAs Comments Accounting Manual. ►DLI 4 Annual financial audit of Town Councils carried out in a timely manner and audit reports published (Output, 20,000,000.00, 0%) Baseline Actual (Previous) Actual (Current) 2027 Value 60.00 0.00 0.00 96.00 Date -- 23-Aug-2022 03-May-2024 -- DLR 4.1 for FY 2023 was not achieved. Consolidated Audit Report not published on OAG website by Comments November 30, 2023. ►DLI 5 Improved public procurement systems for Town Councils (Intermediate Outcome, 20,000,000.00, 0%) Baseline Actual (Previous) Actual (Current) 2027 Value 20.00 0.00 36.00 0.00 Date -- 23-Aug-2022 03-May-2024 -- Comments Only 36 TCs were using e-GP to process transactions. as of December 31, 2023. Target for FY 2023 was 60 TCs. 5/26/2024 Page 11 of 12 The World Bank Implementation Status & Results Report Zambia Devolution Support Program (P178492) ►DLI 6 Enhanced transparency of local authorities (Output, 30,000,000.00, 0%) Baseline Actual (Previous) Actual (Current) 2027 100% of TCs have a functional website where key Value 0.00 0.00 18.00 documents have been uploaded and website updated Date -- 23-Aug-2022 03-May-2024 -- Only 18 TCs had uploaded key documents on their websites as of December 31, 2023. Comments ►DLI 7 Intergovernmental fiscal framework strengthened (Process, 25,000,000.00, 0%) Baseline Actual (Previous) Actual (Current) 2027 The current intergovernmental fiscal Value framework was formulated 0.00 0.00 N/A in 2015 and needs to be revised Date -- 23-Aug-2022 03-May-2024 -- Results have not been updated as the PMU is yet to provide an M&E update. Comments ►DLI 8 Institutional capacities of Town Councils improved (Intermediate Outcome, 10,000,000.00, 0%) Baseline Actual (Previous) Actual (Current) 2027 No comprehensive capacity Value building plans are currently 0.00 0.00 N/A being prepared for TCs Date -- 23-Aug-2022 03-May-2024 -- As a first step towards preparing a capacity building plan, MLGRD conducted capacity assessment for 41 TCs, instead of 96. A comprehensive capacity assessment is yet to conducted. Comments 5/26/2024 Page 12 of 12