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: 10 | ARCHIVED on 31-Oct-2023 | ISR58150 | 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 achievable within the extended project closing date. Significant progress has been made with respect to the implementation of project activities, however the PDO indicators, Intermediate Results Indicators and disbursements are behind schedule mainly due to delays in procurement of the FMIS and RMS. These are expected to improve in the final 18 months of the project as the two IT systems are implemented. The key achievements of the project include: the award of the FMIS contract, mobilization of the RMS supplier, drafting of Procedure Manuals, successful recruitment of key positions and continued progress with change management and human resource development activities. Achievement of Component 1 activities have been impacted by the slow adoption of State FMRs and are dependent of the FMIS for finalization. Achievement of Component 4 activities requiring gender analysis and communications activities have also been delayed but are expected to 10/31/2023 Page 1 of 8 The World Bank Implementation Status & Results Report Project for Strengthening Public Financial Management (P161969) progress with support from the recently hired specialists by the CIU to support these activities across all projects. Continued momentum and monitoring of project activities is required to ensure all activities are completed within the remaining project life. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance Substantial Low 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 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 IN01350391 ►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 24-Mar-2023 20-Oct-2023 30-Sep-2024 10/31/2023 Page 2 of 8 The World Bank Implementation Status & Results Report Project for Strengthening Public Financial Management (P161969) 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 but will need to be finalized with FMIS supplier to meet the FMIS system requirement. Quarterly reports will be prepared for Comments: June and September 2024. IN01350393 ►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 24-Mar-2023 20-Oct-2023 30-Sep-2024 Progress needs to accelerate – ICT FMIS advisor started, to focus initially on internet connectivity. Fundware Specialist contract in process, to help with data cleanup and conversion. FMIS contract Comments: awarded on September 18th and will be signed with supplier pending outcome of discussions with supplier on fulfillment readiness. To improve tax administration IN01350392 ►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 “C” score in 2016 self- Criteria for “B” score of Value Not yet achieved. Year 3 assessment for PI-20.3 PI-20.3 met target in process. Date 29-Jun-2018 24-Mar-2023 20-Oct-2023 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. However, testing delayed and require to revise the implementation plan Comments: and RMS contract timeline Overall Comments PDO No intermediate targets have yet been achieved for PDO-1. Substantial progress has been made, but achieving annual targets is dependent of FMIS and adoption of State FMRs. Year 1 and 2 targets have been achieved for PDO-2. Year 3 and 4 targets are in progress. The Year 1 target has been achieved for PDO-3. The FMIS contract was awarded on September 18th and will be signed with supplier pending outcome of discussions with supplier on fulfillment readiness. Intermediate Results Indicators by Components Strengthening the Public Financial Management Environment IN01350394 10/31/2023 Page 3 of 8 The World Bank Implementation Status & Results Report Project for Strengthening Public Financial Management (P161969) ►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 Not yet met. PI-4 met classification lacking. Date 29-Jun-2018 24-Mar-2023 20-Oct-2023 30-Sep-2024 Year 1 and 2 targets met. Year 3 target missed. New CoA is ready for adaptation to FMIS Comments: IN01350398 ►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 24-Mar-2023 20-Oct-2023 30-Sep-2024 Progress needs to accelerate. FMRs are still pending in three states. Procedures Manuals have been Comments: drafted for national government and replicated for states. Will be finalized based on FMIS. Financial Management Information System (FMIS) IN01350395 ►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 24-Mar-2023 20-Oct-2023 30-Sep-2024 Progress needs to accelerate. FMIS contract awarded on September 18th and will be signed with supplier Comments: pending outcome of discussions with supplier on fulfillment readiness. Revenue Management System (RMS) IN01350396 ►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 All modules of RMS Value No RMS in place Not yet will be completed in implemented and in one phase due to an use accelerated timeline. 10/31/2023 Page 4 of 8 The World Bank Implementation Status & Results Report Project for Strengthening Public Financial Management (P161969) Year 3 and 4 targets in progress. Date 29-Jun-2018 24-Mar-2023 20-Oct-2023 30-Sep-2024 Year 1 and 2 target met. Implementation will be completed in one phase due to an accelerated Comments: timeline. Year 3 and 4 targets in progress. Change Management and Human Resource Development IN01350397 ►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 Y1 target partially PFM related jobs complete, pending No competencies defined across National and Value Not yet gender analysis. Y2 for PFM related roles State governments target not yet achieved and used for Y3 target in process. recruitment and training to build gender-balanced workforce Date 29-Jun-2018 24-Mar-2023 20-Oct-2023 30-Sep-2024 Y1 target partially complete, pending gender analysis. Y2 target not yet achieved Y3 target in process, Comments: has been completed for CTA and Yap. IN01350399 ►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, needs assessment Four (4) external completed for CTA training program No external training and Yap Y3 target partnerships for Value program partnerships in Not yet partially met – one certification and place partnership entered degree courses in into with Alison, others PFM related under discussion with disciplines CTEC and Charles Strurt. Date 29-Jun-2018 24-Mar-2023 20-Oct-2023 30-Sep-2024 Y1 target achieved. Y2 targets in progress, needs assessment completed for CTA and Yap Y3 target partially met – one partnership entered into with Alison, others under discussion with CTEC and Charles Comments: Strurt. IN01350400 ►IR-7: Number of staff completing external training programs in PFM related disciplines (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target 10/31/2023 Page 5 of 8 The World Bank Implementation Status & Results Report Project for Strengthening Public Financial Management (P161969) Value 0.00 58.00 104.00 50.00 Date 29-Jun-2018 24-Mar-2023 20-Oct-2023 30-Sep-2024 Year 1-2 targets achieved. Y3 target in process in PFM related disciplines trainings. Delivered the Comments: behavioral training to 104 staff (59% are female.). IN01350401 Of which female (Percentage, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 50.00 IN01350402 ►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 24-Mar-2023 20-Oct-2023 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.. IN01350403 ►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 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 24-Mar-2023 20-Oct-2023 30-Sep-2024 Comments: Yr.1 target achieved. Website has been improved to capture feedback but is not updated with budget information. Citizen-friendly budget will be published in January, dissemination event in March. https://dofa.gov.fm/fmis-general-comments/ https://dofa.gov.fm/rms-general-comments/ 10/31/2023 Page 6 of 8 The World Bank Implementation Status & Results Report Project for Strengthening Public Financial Management (P161969) Overall Comments IR While IR-2 and 3 continue to lag due to the delays in FMIS implementation and adoption of State FMRs, the remaining IRs have progressed since the previous mission and stated annual targets have been partially achieved. Performance-Based Conditions Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P161969 IDA-D3240 Effective USD 11.00 11.00 0.00 5.58 4.63 55% 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 10/31/2023 Page 7 of 8 The World Bank Implementation Status & Results Report Project for Strengthening Public Financial Management (P161969) Restructuring History There has been no restructuring to date. Related Project(s) P176041-ADDITIONAL FINANCING FOR THE PROJECT TO STRENGTHEN PUBLIC FINANCIAL MANAGEMENT 10/31/2023 Page 8 of 8