The World Bank Implementation Status & Results Report Public Financial Management Improvement Project (P162850) Public Financial Management Improvement Project (P162850) MIDDLE EAST AND NORTH AFRICA | West Bank and Gaza | Governance Global Practice | Special Financing | Investment Project Financing | FY 2018 | Seq No: 9 | ARCHIVED on 24-Jun-2022 | ISR51776 | Implementing Agencies: High Council for Public Procurement Policies, Ministry of Finance, Palestine Liberation Organization (on behalf of the Palestinian Authority) Key Dates Key Project Dates Bank Approval Date: 01-Jun-2018 Effectiveness Date: 19-Jul-2018 Planned Mid Term Review Date: 05-Oct-2020 Actual Mid-Term Review Date: 05-Nov-2020 Original Closing Date: 30-Jun-2022 Revised Closing Date: 30-Jun-2023 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The Project Development Objective (PDO) is to enhance the expenditure controls, financial accountability and procurement management of the Palestinian Authority. Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Component 1: Improving Budget Expenditure Management and Control:(Cost $1.07 M) Component 2: Improving Financial Accountability of the PFM System:(Cost $1.00 M) Component 3: Modernizing Public Procurement:(Cost $0.80 M) Component 4: Project Implementation Support and Management Costs:(Cost $0.63 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Moderately Satisfactory Moderately Satisfactory Overall Implementation Progress (IP) Satisfactory Satisfactory Overall Risk Rating Moderate Moderate Implementation Status and Key Decisions This ISR reflects the findings of a mission conducted between May 23 and June 2 and subsequent meetings with the PMU and HCPPP. Overall, the Project has made good progress albeit with delays in certain activities. Due to the delayed implementation of the commitment control system the rating for Component 1 remains Moderately Unsatisfactory and the rating for progress towards achievement of Project Development Objective (PDO) remains Moderately Satisfactory. Procurement modernization activities under Component 3 have exceeded the end targets originally set for June 30, 2022. The Project Development Objective remains relevant and achievable if the CCS is implemented. 6/24/2022 Page 1 of 7 The World Bank Implementation Status & Results Report Public Financial Management Improvement Project (P162850) Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance High High High Macroeconomic High High High Sector Strategies and Policies Substantial Substantial Substantial Technical Design of Project or Program Moderate Moderate Moderate Institutional Capacity for Implementation and Substantial Moderate Moderate Sustainability Fiduciary Substantial Moderate Moderate Environment and Social Low Low Low Stakeholders Moderate Moderate Moderate Other -- -- -- Overall Substantial Moderate Moderate Results PDO Indicators by Objectives / Outcomes Enhance expenditure control of the PA IN01151146 ►Improved process for budget allotments established that increases predictability to line ministries based on cash forecasts (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Quarterly budget allotments for 7 pilot No institutionalized line ministries are procedure of The first step towards determined by a MoF The first step towards the commitments control the improving the ad hoc Committee improving the budget (CCS) and cash budget allotments is to taking into account allotments is to establish forecasts. Adhoc Cash establish a reliable budget affordability Value a reliable commitment Committee has been commitment control and cash availability control system. The CCS established but will need system. The CCS is to (cash planning) in is to be implemented in to be strengthened for be implemented in Q3 order to reduce the risk Q1 2022. cash planning for 2022. of arrears. The data is quarterly allotments. provided to the Committee by the Accountant General Date 28-Nov-2017 31-Mar-2022 30-Sep-2022 30-Jun-2023 6/24/2022 Page 2 of 7 The World Bank Implementation Status & Results Report Public Financial Management Improvement Project (P162850) Enhance expenditure control in the health sector IN01151147 ►Reduction in the gap between the budgeted and actual expenditure on referrals to less than 10 percent (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The gap was less than Gap between 10% in 2020 with a The gap was less than budgeted and actual budget of 850 million 10% in 2020 with a expenditures less than shekels and actuals of budget of 850 million 10 percent. An ad hoc Gap is currently over a 765 million shekels. The shekels and actuals of Committee at the MoH 100 percent. There is no expectation is that there 765 million shekels. conducts a quarterly Value forecasting and control of will be a gap over 10% in The gap was over 10% review of referrals- Referrals-related budget 2021 as the budget was in 2021 as the budget related expenditure expenditures. reduced to 700 million, was reduced to 700 projections vs the however, a supplemental million, and the available budget budget was submitted to supplemental budget measured on Cabinet to reduce this was not passed. commitment basis gap. Date 28-Nov-2017 14-Dec-2021 08-Jun-2022 30-Jun-2023 Enhance financial accountability of the PA IN01151148 ►Public disclosure of audited financial statements takes place within two years of the end of reporting period (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 28-Nov-2017 14-Dec-2021 08-Jun-2022 30-Jun-2023 No public disclosure at the current time - Audits of 2020 and 2021 expected in 2022 and will be publicly Comments: disclosed in 2022. Enhance procurement management of the PA IN01151149 ►Public procuring entities disclose their procurement plans, procurement notices and contract awards on the single portal procurement web (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target As of November 30, As of June 21, 2022, 80% of procurement 2021, 148 procuring 161 procuring entities entities at the central entities (90 at the central (90 at the central level level and 50% of level and 58 and 71 municipalities), municipalities post municipalities), representing 100% of their procurement Value Zero representing 100% of entities at the central plans, procurement entities at the central level and 60% of notices and contract level and 49% of municipalities, are awards on the single municipalities, are actively using the portal procurement actively using the portal. portal. website Date 28-Nov-2017 30-Nov-2021 21-Jun-2022 30-Jun-2022 Intermediate Results Indicators by Components 6/24/2022 Page 3 of 7 The World Bank Implementation Status & Results Report Public Financial Management Improvement Project (P162850) Component 1: Improving expenditure management and control IN01151150 ►A Commitment Control System (CCS) is established in line ministries (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target All line ministries implement a CCS with No CCS at the current No CCS at the current policy notes and time. Training has No CCS in general, but a time. Training has been manual of been provided to all Value commitment recording provided to all line implementation that line ministries and roll piloted in 6 line ministries ministries and roll out will serve as a guide out expected in Q3 expected in Q1 2022. for calibrating quarterly 2022. budget allotments of the ministries Date 28-Nov-2017 14-Dec-2021 08-Jun-2022 31-Dec-2022 IN01151154 ►The role of the Financial Controllers (FC) is amended in line with the new proposed CCS and good international practices (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target A manual for the A manual for the financial financial controllers to controllers to detail their detail their procedures The FC’s function is FC’s function is ill- procedures was was developed by EY redefined in line with defined and not in line developed by EY and and training was the new CCS and with (i) the new proposed training was provided. provided. Financial inspired by good CCS, and (ii) good Financial controllers are controllers are Value international practices. international practices in the process of continuing the process Policy notes and with more autonomy categorizing each budget of categorizing each manual of devolved to line entity by risk level and budget entity by risk implementation of the ministries control procedures will be level and control FC are issued customized based on procedures will be level of risk. customized based on level of risk. Date 28-Nov-2017 14-Dec-2021 08-Jun-2022 31-Dec-2022 IN01151155 ►E-Referrals (MoH) and IFMIS (MoF) are interconnected for exchange of data (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target E-Referrals (MoH) and E-referrals system and E-referrals system and No link between both IT IFMIS (MoFP) systems the IFMIS are now the IFMIS are now systems and thus no are interconnected connected. However, the connected. The meaningful analysis of enabling exchange of Value system is not fully system is fully referrals-related data for a better automated. There will be automated and will be expenditure vs. monitoring of the work done on automating tested at the end of commitments is possible referral-related the link in Q1 2022. June. expenditure Date 28-Nov-2017 14-Dec-2021 08-Jun-2022 31-Dec-2022 IN01151156 ►The Payroll and HR systems (MoF and GPC respectively) are interconnected (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target 6/24/2022 Page 4 of 7 The World Bank Implementation Status & Results Report Public Financial Management Improvement Project (P162850) No interconnection Both systems are between both systems at interconnected to allow Implementation of the MoFP (Payroll) and GPC Contract for a new exchange of data new payroll system is (HR system) so that payroll system was between MoFP and Value underway and shared information is signed and is under GPC and subsequently expected to be missing to develop a implementation. development of a completed in Q1 2023. wage bill control wage bill control procedure procedure Date 28-Nov-2017 14-Dec-2021 08-Jun-2022 30-Jun-2023 Component No. 2: Improving financial accountability of the PFM system IN01151151 ►MOF publicly disseminates audited financial statements and holds an event to engage the public (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 28-Nov-2017 14-Dec-2021 08-Jun-2022 31-Dec-2022 No public disclosure at the current time – likely in 2022 Comments: Component No. 3: Modernizing Public Procurement IN01151152 ►A Dispute Review Unit (DRU) responsible for administrative review of appeals from aggrieved bidders, established in accordance with the PPL (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The DRU is The DRU is operational. operational. A list of Appeals from A list of DRU experts was DRU experts was aggrieved bidders established by HCPPP. established by concerning alleged Four permanent HCPPP. Four non-compliance by members were appointed permanent members procuring entities in by the Cabinet. The DRU were appointed by the conducting received the first appeal Cabinet. The DRU procurement Value No DRU exists in November 2021, and it received 9 appeals proceedings are was processed in since its establishment reviewed by a robust accordance with the PPL. in November 2021, 7 DRU in accordance Decision will be were resolved a 2 are with the PPL, and published via single under review in decisions are publicly procurement portal once accordance with the disclosed via the single version 2 of the portal is PPL. Decision are procurement portal released. published via single procurement portal. Date 28-Nov-2017 15-Dec-2021 21-Jun-2022 30-Jun-2022 Component No. 4: Project Management Arrangements IN01151153 ►Training for middle management employees conducted at the Palestine Public Finance Institute will include a minimum of 20% female employees (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target 6/24/2022 Page 5 of 7 The World Bank Implementation Status & Results Report Public Financial Management Improvement Project (P162850) The Project will track all training at the PFI and the gender ratio. 8.6% of middle 0.53 – up to November Training for middle Value managers trained are 0.38 – up to May 2022 2021 managers will reach female. 20% female employees by the end of the project Date 28-Nov-2017 14-Dec-2021 14-Dec-2021 30-Jun-2023 Performance-Based Conditions Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P162850 TF-A6949 Effective USD 3.00 3.00 0.00 2.31 0.69 77% P162850 TF-A9433 Effective USD 0.50 0.50 0.00 0.50 0.00 100% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P162850 TF-A6949 Effective 28-Jun-2018 28-Jun-2018 19-Jul-2018 30-Jun-2022 30-Jun-2023 P162850 TF-A9433 Effective 27-Jan-2019 27-Jan-2019 26-Feb-2019 30-Jun-2022 30-Jun-2022 Cumulative Disbursements 6/24/2022 Page 6 of 7 The World Bank Implementation Status & Results Report Public Financial Management Improvement Project (P162850) Restructuring History Level 2 Approved on 10-Mar-2022 Related Project(s) There are no related projects. 6/24/2022 Page 7 of 7