Indonesia Strengthening National Tuberculosis Response Program (P178517) Fiduciary Systems Assessment October 23, 2022 i Table of Contents I. Conclusion………..……………………………………………………………………………………………………………………Err or! Bookmark not defined. II. Scope………………………………………………………………………………………………7 III. Review of Public Financial Management Cycle Planning and Budgeting…………………………………………………………………….…..9 Procurement Regulation and Procedures applicable to the NTP Program……………..…10 Procurement Plans………………………………………………………………………….…10 The use of Government e-procurment system (SPSE)……………………..……………..…11 MOH Procurement Profile and Market Readiness………………………….………………11 Contract Administration……………………...……………………………….………………11 Budget execution, accounting and reporting……………………………………………..… 11 Scope and Implementation of Procurement under PforR……………………………….….12 Internal Control………………………………………………………………………………..14 Record Keeping and Document Management……………………………………………….16 Internal Audit…………………………………………………………………………………..15 External Audit………………………………………………………………………………….15 Transparency…..……………………………………………………………………………….16 Complaint Handling…..……………………………………………………………………….16 Fraud and Corruption…………………………………………………………………………17 IV. Program Systems and Capacity Improvements………………………...……………………19 V. Implementation Support…...…………………………………………….……………………20 Annex 1: Draft Anti-Corruption Protocol……………………………………………………...21 Annex 2: MOH’s Procurement Profile…………………………………………………………23 ii iii ABBREVIATIONS AND ACRONYMS ACG Anti-Corruption Guidelines (Guidelines on Preventing and Combating Fraud and Corruption in Program-for-Results Financing) ADB Asian Development Bank APBN Anggaran Pendapatan dan Belanja Negara (National Budget) APIP Aparat Pengawas Internal Pemerintah (Government Internal Supervisory Apparatus) Bappenas Badan Perencanaan Pembangunan Nasional (Ministry of National Development Planning) BPJS-K Badan Penyelenggaraan Jaminan Sosial-Kesehatan (Social Health Insurance Agency) BPK Badan Pemeriksa Keuangan (Supreme Audit Institution) BPKP Badan Pengawasan Keuangan dan Pembangunan (Finance and Development Monitoring Agency) BPPK Badan Pendidikan dan Pelatihan Keuangan (Financial Education and Training Agency) BSSN Badan Siber dan Sandi Negara (National Cyber and Crypto Agency) COSO Committee of Sponsoring Organizations of the Treadway Commission COVID-19 Corona Virus Disease DIPA Daftar Isian Pelaksanaan Anggaran (Budget Implementation Document) DLI Disbursement Linked Indicators F&C Fraud and Corruption FMIS Financial Management Information System FSA Fiduciary Systems Assessment FY Fiscal Year GFMRAP Government Financial Management and Revenue Administration Project GICS Government Internal Control System GOI Government of Indonesia IA Implementing Agency IA-CM Internal Audit Capability Model IFMIS Integrated Financial Management Information System iv IG Inspectorate General IMAPS Integrated Management Asset and Procurement System IPF Investment Project Financing IPPF International Professional Practices Framework IsDB Islamic Development Bank I-SPHERE Indonesia’s Supporting Primary Health Care Reform ISSAI International Standards of Supreme Audit Institutions IVA Independent Verification Agency KemenPAN- Kementerian Pendayagunaan Aparatur Negara dan Reformasi Birokrasi (Ministry of RB Administrative and Bureaucracy Reforms) KSP Kantor Staf Presiden (Executive Office of the President) LAPOR! Layanan Aspirasi dan Pengaduan Online Rakyat (National Public Services Complaints Mangement System) LG Local Government LKPP Lembaga Kebijakan Pengadaan Barang/Jasa Pemerintah (National Public Procurement Agency) MAPS Methodology for Assessing Procurement Systems MOF Ministry of Finance MOH Ministry of Health MOHA Ministry of Home Affairs NTP National Tuberculosis Program OECD Organization for Economic Cooperation and Development OPRC Operations Procurement Review Committee PAP Program Action Plan Perpres Peraturan Presiden (Presidential Regulation) PEFA Public Expenditure and Financial Accountability PFM Public Financial Management PFM MDTF Public Financial Management Multi Donor Trust Fund v PforR Program-for-Results Pokja Kelompok Kerja (Working Group) PP Peraturan Pemerintah (Government Regulation) PPID Pejabat Pengelola Informasi dan Documentasi (Public Information Officer) PPK Pejabat Pembuat Komitmen (Commitment Making Officer) PPL Public Procurement Law PPSPM Pejabat Penanda Tangan Surat Perintah Membayar (Payment Verification Officer) RETF Recipient-Executed Trust Fund SAKTI Sistem Aplikasi Tingkat Instansi (Ministry Financial Application System) SIAP Saluran Informasi, Aspirasi dan Pengaduan (MOH’s Public Information and Complaints Channels) SIRUP Sistem Informasi Rencana Umum Pengadaan (Information System for Procurement Planning) SPAN Sistem Perbendaharaan dan Anggaran Negara (Central Government FMIS) SPKN Standard Pemeriksaan Keuangan Negara (National Financial Audit Standards) SPSE Sistem Pengadaan Secara Elektronik (Government e-Procurement System) Stranas-PK Strategi Nasional Pencegahan Korupsi (National Corruption Prevention Strategy) TSA Treasury Single Account UKPBJ Unit Kerja Pengadaan Barang/Jasa (Procurement Service Working Units) WBS Whistleblowing System vi I. Conclusions 1. The Program’s fiduciary system for Procurement, Financial Management and Governance has been assessed by the Bank against the operational requirements outlined in the Program-for- Results (PforR) Financing Framework. The Fiduciary Systems Assessment (FSA) of the Program1 concludes that the Program fiduciary systems are adequate and provide overall reasonable assurance that the PforR Financing will be used for its intended purposes, with due attention to the principles of economy, efficiency, effectiveness, transparency, and accountability.2 The FSA assessment has also identified potential risks and areas for further strengthening, and is proposing mitigation measures listed in the Program Action Plan (PAP). The fiduciary risk is rated Moderate. 2. Key Fiduciary Risks. The key fiduciary risks under the Program include (i) inadequate verification by MOH of the Bank’s list of debarred/temporary suspended firms prior to awarding contracts; (ii) lack of information regarding the procurement profile and contract data during Program implementation; (iii) weak payment verification on program implementation, especially on the procurement of goods (medicine, consumables and machine) related to the Program; and (iv) failure to utilize major allocation of funds for their intended purposes (COVID-19 PforR) and delay in updating the Bank on the follow up actions from audit findings (I-SPHERE) in the previous Programs implemented by the MOH. On the positive side, the FSA noted that (i) the MOH has experience in managing Bank-financed PforR projects, based on the latest supervision of the ongoing I-SPHERE and Emergency Response to COVID- 19 PforRs, both of which are rated satisfactory; (ii) the IFMIS implementation in the country, which implemented the government processing budget revision to enable remote payments, i.e. through virtual means, during the COVID-19 pandemic without relaxing the internal control; (iii) accounting and reporting is operated entirely through the IFMIS; (iv) the MOH Inspectorate has been working effectively to monitor ongoing PforR operations; and (vii) the external audit report has been submitted to the Bank in a timely manner. 3. Mitigation measures. To mitigate the above-mentioned risks, the Program’s design proposes measures for (i) the MOH to require its Procurement Service Working Units (UKPBJs)/Procurement Officers and Commitment making officers (PPK) to check into the Bank’s debarment (www.worldbank.org/debarr) and temporary suspension lists, as well as to record the verification in the bid evaluation report prior to awarding contracts in order to ensure that no contract under the Program is awarded to a firm or individual that is under debarment and/or temporary suspension by the World Bank; (ii) the MOH to provide the Bank with the procurement profile and contract information regularly or every 6 months of the PforR Program implementation; (iii) ensure that the Commitment Maker (PPK), Payment Verification Officer (PPSPM) and staff positions for the program (especially in DG Prevention &Control and DG Pharmacy and Medical Devices) are held by staff who already completed training on payment verification for goods from the MOF Financial Education and Training Agency (BPPK); (iv) the MOH Inspectorate to conduct internal audit on national TB program implementation and its related procurement process financed under the program, and updating the Bank on the status of follow up action on audit findings; and (v) the MOH to inform the Bank promptly of all credible and material allegations or other indications of Fraud and Corruption in connection with the Program that come to its attention, together with the investigative and other actions that it proposes to take. The overall fiduciary risk before mitigation is Substantial and the residual risk after mitigation is Moderate. 1 The Government of Indonesia’s National Tuberculosis Program, thereinafter the “NTP Program”. 2 Section III.8 of the Bank Policy: Program-for-Results Financing. 4. Exclusions. No contracts to be financed under the PforR Program are expected to meet the Operations Procurement Review Committee (OPRC) review thresholds. II. Scope 5. The objective of the Indonesia Strengthening National Tuberculosis Response Program (thereinafter PforR Financing or the PforR Program is to improve coverage, quality, and efficiency of tuberculosis services in Indonesia. The total financing of the PforR Financing is US$300 million. The PforR will be implemented with a focus on strengthening key aspects of Indonesia’s TB response by (i) increasing the TB treatment coverage rate (coverage, quality); (ii) increasing the TB treatment success rate (quality, efficiency); (iii) increasing the number of notified TB cases managed at the private primary care level (efficiency); and (iv) putting a functional, integrated information system in place, which is linked to a citizen mobile health application (efficiency, citizen engagement). The NTP Program has ambitious targets to reduce the incidence of new TB cases by 50 percent by 2025, and by 90 percent by 2030. The strategy is to increase case findings with outreach activities, undertake contact tracing and increase screening, and control identified risk factors. The National TB Strategy for 2020 – 2024 also includes improved quality of TB case management to increase retention and compliance in treatment, strengthened engagement with private health providers and with the national social health insurance agency (Badan Pengelola Jaminan Sosial Kesehatan or BPJS-K), as well as improved linkages between publicly provided confirmatory diagnostic, notification, and treatment services. The use of digital technologies and the simplification of the existing information system for TB will be a critical element to support the efforts to achieve the ambitious targets. At the same time, the Ministry of Health is intensifying performance-based payments to the subnational level, including to primary health facilities (puskesmas). It is envisaged that much more funding should be channeled directly to the puskesmas, and half of this should be performance based. 6. The Government of Indonesia National Tuberculosis Program (NTP) is valued at around US$1.3 billion. Out of this, the Bank-supported NTP implementation by the Ministry of Health for the period of 2022-2027 (December 2022- March 2027) is valued at about US$348 million, of which the Bank’s PforR Financing is about US$300 million. The Program (US$231 million or about 66 percent of the government program) is mainly allocated to the Sub-Directorate of Tuberculosis in the Directorate of Communicable Disease, Directorate General (DG) of Disease Prevention and Control, which assumes the main responsibility in implementing the NTP. US$41 million or about 12 percent is allocated to the DG of Pharmacy and Medical Devices to finance the procurement of TB diagnostic equipment, drugs, and supplies, especially cartridges for the rapid molecular diagnostic machines. Around US$28 million (about 8 percent) is allocated to the Board for Health Development Policy (Badan Kebijakan Pembangunan Kesehatan/ BKPK), especially for its Center for Health Financing and Decentralization (Pusjak PDK), which plays a key role in designing performance-based Health Operational Funds (Bantuan Operasional Kesehatan/BOK). US$23 million or about 6.5 percent is allocated to the Secretariate General, where the Center for Data and Information ( Pusdatin) and the Digital Transformation Office (DTO) will be involved in the implementation of digital transformation initiatives to support the NTP. The remaining US$25 million (about 7.5 percent) is allocated to the DG of Health Services and DG of Public Health for health promotion, technical guidelines and to ensure facility readiness and quality of service at the primary and secondary level of care. The Bank support is only directed at the central government level, subnational stakeholders are merely beneficiaries. Please find below the Program boundaries in table format: No Directorate General (DG) Amount (in million) % 1 DG of Disease Prevention and Control 231 66 2 DG of Pharmacy and Medical Devices 41 12 3 BKPK 28 8 4 Secretariate General 23 6.5 5 DG of Health Services and DG of Public 25 7.5 Health Total 348 100 7. Data and Information gathering for the Fiduciary Systems Assessment (FSA). The FSA was carried out in accordance with the Bank Policy and the Bank Directive Program-for-Result Financing (PforR), as to determine whether the Program fiduciary systems arrangements are adequate and “provide reasonable assurances that the financing proceeds will be used for intended purposes, with due attention to the principles of economy, efficiency, effectiveness, transparency, and accountability”. The FSA findings and conclusions are based on information derived from (i) the FY2022 DIPA of the Ministry of Health (MOH); (ii) the FY 2019-2021 annual audit report of the MOH; (iii) publicly available procurement data from the MOH’s website, SPSE and M&E system; (iv) virtual meetings with several directorates of the MOH, which will be involved in the implementation of the program. The fiduciary team met and received inputs from Directorate of Planning and Budgeting, Directorate for Communicable Diseases Control, Directorate of Finance and State Assets, Inspectorate General of the MOH and the Bureau of Procurement of Goods/Services. The Bank team received a detailed list of procurable expenditure from the MOH for FY2022. The Bank collected publicly available procurement data from the MOH’s e-procurement system, as well as the National Public Procurement Agency’s (Lembaga Kebijakan Pengadaan Barang/Jasa Pemerintah or LKPP) website to assess the procurement profile and performance. 8. Procurement spending under the PforR Program is expected to mainly consist of the: (i) procurement of goods, such as TB drugs and commodities, especially for diagnostics, such as cartridges for the rapid molecular machine; (ii) procurement of non-consulting services, including socialization and dissemination, public campaigns, optimization of promotion and prevention effort activities; and (iii) procurement of consulting services, such as technical assistance, monitoring and evaluation, and the acceleration of the integration of information systems. Procurement spending under the PforR Program is not expected to exceed 30 percent of the total NTP Program expenditures. No contract under the Bank PforR Program is expected to fall under the OPRC’s review threshold. Additional details on the procurement profile under the Program are provided below in this FSA. Procurement under the Program is to be carried out at the central level under the responsibility of MOH. The MOH has recent experience in managing Bank-financed PforR operations through the ongoing I-SPHERE and Emergency Response to COVID-19 Programs, including its Additional Financing PforR. Procurement under the Program will be governed by Government Procurement Regulations, technical guidelines, and circular letters. The Directorate for Communicable Diseases will assume the main responsibility as the lead technical unit, and multiple implementing units will be involved for different DLIs, including the Center for Data and Information, and the Digital Transformation Office, the Bureau of Planning, and the Center for Health Financing and Decentralization Policy. The Bureau of Planning will also provide support to facilitate coordination across working units within the MOH, as well as the coordination with the Ministry of Finance. III. Program Fiduciary Arrangements Overview of the country Public Financial Management (PFM) cycle 9. The Public Financial Management system in Indonesia has shown significant improvements over time. The 2017 (latest) Public Expenditure and Financial Accountability (PEFA) report concludes that Indonesia has established a strong legal and regulatory framework that aligns with most international standards on PFM. Indonesia’s fiscal management institutions have enabled prudent fiscal management and control of its budget execution. The roll-out of the SPAN as the financial management information system (FMIS), together with the implementation of strict cash consolidation management rules, a well- defined treasury management system at the central government level, consistency between the accounting and budgetary classifications, and the convergence of national accounting with international accounting standards for the public sector, have created a solid platform for the automation and integration of PFM processes for the improved quality of financial reporting. On oversight, Indonesia Government has implemented the COSO framework for its internal control and 422 out of 624 of its internal audit units have achieved level 3 of IA-CM, which is considered an implementing world class internal audit practice and the effort is still on going to obtain an 85 percent achievement rate of level 3 of IA-CM. The 2019 peer review of BPK, the State Audit Institution, indicated overall high-quality financial audits. However, there is room for improvement in the effectiveness of the expenditure management institutions and the performance orientation and monitoring of the PFM system. The Bank, through financing from the ongoing PFM MDTF phase III, has provided allocations and will continuously support improvements of the Public Financial Management in Indonesia. Following the implementation of SPAN, the DG Treasury of the MOF is currently rolling out SAKTI (spending units’ s application as a feeder into the SPAN) to connect 24,000 spending units in the country with SPAN. The DG Treasury also plans to integrate SPAN with other digital databases and applications, such as those for public procurement, human resources, tax compliance, as well as the subnational budget, in order to enhance the budget execution efficiency and control. PFM MDTF II is also supporting continuous improvements in the internal and external audit practices in Indonesia. Review of the PFM Cycle of the entities involved in the Program 10. Planning and budgeting. The planning and budgeting process within the MOH is adequate. The latest PEFA was conducted in 2017, but Government of Indonesia has continued to make progress in improving its Public Financial Management, with the support of the World Bank and number of development partners. The Government of Indonesia budgeting issued a comprehensive annual budget preparation calendar to allow sufficient time for preparation. The parliament strictly scrutinizes the budget submitted. The budget (DIPA) is approved before the start of the fiscal year and is defined by law. Significant budget revisions are processed through a relatively transparent process. The MOH budgeting process follows the Government budgeting process. Review of the MOH’s FY 2019-2021 audit reports implied in general no issues or weakness in the planning and budgeting process. The table below illustrates the MOH’s budget realization during the past 3 years. Fiscal Year Budget (in IDR) Expenditures (in IDR) % 2019 71,121,938,460,000 67,279,326,079,500 94.6 2020 107,033,608,465,000 102,207,399,746,493 95.5 2021 214, 443,818,867,000 208,317,674,868,246 97% 11. The budget reallocation or revision process is based on the Ministry of Finance’s (MOF) Regulation no 208/PMK.02/2020 and is processed online through the MOF’s budget application system. The current system includes One Budget (Satu Anggaran) and the DJA Single Window (DSW), which were established for budget development, as well as to review and monitor the performance for internal process within the DG Budget of the MOF, as well as the Ministry Financial Application System (System Aplikasi Tingkat Instansi/SAKTI), which was developed to support the budgeting process at the ministry level. SAKTI enables all ministries, including the MOH, to process budget revisions electronically with the DG Budget, MOF. In this context, all information and supporting documents are submitted through the system and original documents are filed within the ministry. Review conducted by DG Budget staff is based on the information provided. Clarifications or additional meetings can be conducted online through email or video conference facilities. Access to the system is limited to registered users and requires email address identification. Request for new user IDs can be processed through the DG Budget service center. All of the above-mentioned processes are expected to be completed within 2 days. Procurement 12. The NTP Program procurement systems have been assessed and the FSA concludes that the Program will achieve the intended results through its procurement processes and procedures.3 13. Procurement regulation and procedures applicable to the NTP Program. All procurement processes under the NTP Program are required to follow the Government Procurement Regulations (Peraturan Presiden/Perpres No. 16/2018) as amended through Perpres No.12/2021 and its technical guidelines (Peraturan Lembaga/Perlem LKPP), under which the use of competitive methods is mandated for procurement of works, goods and non-consulting services exceeding IDR 200 million (approx. US$13,333 at US$1 = IDR 15,000) and for consulting services exceeding IDR 100 million approx. US$6,666). Contracts for works, goods, and other services with an estimated cost more than IDR 5 billion (approx. equivalent to US$333,333) are required to be procured through an open public bidding method, which requires advertising of the bidding notice for at least 7 working days. For smaller value contracts of a non-complex nature with an estimated cost between IDR 200 million (approx. US$13,333) and IDR 5 billion (approx. US$333,333), other simplified competitive methods may be used, such as the Lelang cepat (fast tender). The SPSE system is mandated for competitively procured contracts and has been periodically reviewed by the LKPP, based on feedback from stakeholders, especially procuring entities. The latest version is SPSE4.5. Contract information of those awarded through a competitive method are subsequently published on a national website. The Perpres also includes provisions for handling complaints, the resolution of disputes, as well as remedies for breaches in integrity during the procurement process. A wide range of Standard Bidding Documents for the national competitive procurement for all procurement categories (goods, works, non-consulting services and consulting services) have been issued by the National Public Procurement Agency (Lembaga Kebijakan Pengadaan Barang/Jasa Pemerintah or LKPP) and are available for use by the procuring agencies. However, there is currently no standard bidding document or standard form of contract agreement available for the international procurement of goods, works or non-consultant services for use by procuring agencies in the country. The use of local content is required by Perpres 16/2018, as amended Perpres No.12/2021. Article 66(1) of Perpres 16/2018, as amended Perpres No.12/2021, requires ministries/agencies/local governments to provide a margin preference for domestically manufactured goods and domestic contractor (services). Assessment of the level of domestic content uses a calculation combining the National Contribution Value (Tingkat Komponen Dalam Negeri, TKD) plus the Corporate Contribution Value (Bobot Manfaat Perusahaan, BMP), with TKDN set out in an inventory list issued by the Minister of Industrial Affairs. Article 66(5) also mentions that it is possible to procure imported goods on the condition that: (i) such goods are not produced domestically; or (ii) the domestic volume cannot meet the demand. 3 Section III.8 of the Bank Policy: Program-for-Results Financing. 14. Procurement plans and bidding opportunities are publicly disclosed in the Sistem Informasi Rencana Umum Pengadaan/Information System for Procurement Planning (SIRUP) website (https://sirup.lkpp.go.id/sirup). The bidding reference number, package description, procuring agency, owner estimate, and location are published in the SIRUP’s website. Bidding information, from advertisement to award information, including bidding schedule, name of registered bidders, quoted and evaluated prices, and bid evaluation are publicly disclosed in the SPSE e-procurement system. Contract award information is also published on the national website of the public procurement agency, which is freely accessible to the public. In new SPSE version 4.5, procurement through direct procurement and direct contracting (non-tender) are recorded in SPSE system. 15. The use of the Sistem Pengadaan Secara Elektronik (SPSE) e-procurement system is mandated for competitively procured contracts exceeding IDR 200 million (equivalent to US$13,333) and the procurement process is required to be carried out by dedicated procurement services working units (Pokja UKPBJs) established in each implementing agency. LKPP has updated and launched the new SPSE system version 4.5 in early 2021. In the latest version of SPSE system, procurements below the open competitive threshold (non-tender), as well as those carried out through non-competitive methods (Direct Contracting) or the e-catalogue, are recorded in SPSE system. 16. Perpres No. 16/2018 as amended Perpres No. 12/2021 also mandates the use of the e-catalogue system for procuring goods/services listed in the system. The e-catalogue may include national, sectoral, or local e-catalogues. The suppliers in the e-catalogue system are selected by LKPP or ministries/agencies/local governments either competitively or through direct contracting. As per LKPP Regulation No. 16/2018 and its amendment No. 12/2021, the head of line ministry, head of institution, and head of the LG can also propose goods/services to be included in the e-catalogue by submitting the technical specification of the goods/services and their annual volume requirement to the LKPP. In addition, the suppliers of goods/services can also propose that the LKPP includes their products in the e-catalogue system by submitting the technical specification, unit cost, and service coverage to the LKPP. In addition, the LKPP regulation allows line ministries and LGs to select suppliers for the catalogue for their specific needs. In such cases, after the selection of suppliers by line ministries/LGs has been made, the LKPP includes the items and suppliers in the e-catalogue. 17. MOH’s Procurement Profile and Market readiness. The MOH’s Procurement Profile is shown in Annex 2 of this FSA. The FSA assessed the Program procurement data, provided by the MOH and obtained from the SPSE system, and concluded that the market capacity to cope with the NTP Program is adequate. Competition has been achieved, with bidders' participation ranging from 4-6 per package (depending on the type of goods and services), executing the Program with a suitable level of economy and efficiency in procurement (Annex 2 Figure 4). 18. Procurement Organization and Capacity. The procurement process is required to be carried out by procurement service units (Procurement Services Working Unit/UKPBJ), which are established in each DG in the MOH and are required to include procurement accredited staff, whose certification is valid for three years and can be extended by the National Public Procurement Agency, LKPP, if they are still working as procurement staff. 19. Contract Administration. After the issuance of notification of award by Pokja UKPBJ, the Commitment Making Officer (Pejabat Pembuat Komitmen, PPK) shall sign the contract, and is responsible for the monitoring and supervision of the contract implementation. 20. In sum, the assessment of the NTP Program procurement systems indicates that Program planning, bidding, evaluation, contract award, and contract administration arrangements and practices provide reasonable assurance that the PforR will achieve the intended results through its procurement processes and procedures. 21. Budget execution, accounting, and reporting. The program budget execution, accounting, and reporting procedures are adequate. PI-21 on Predictability of in-year Resource allocation in PEFA 2017 was rated A for the capacity of the MOF to forecast cash commitment and requirement. A Treasury Single Account (TSA) is in place. Although cash forecasts are defined and updated monthly, cash balances are consolidated on a daily basis. The MOH received an unqualified opinion from the BPK in the past 3 years. In the past 3 years, budget realization in the MOH was around 95 percent from the allocated budget. Based on FY 2019-2021 review of the MOH’s audit report, the budget execution seems to have improved in general. Findings from the past few years were not occurred in FY 2019 and FY 2020. However, the Bank has not received an update status regarding the follow up actions from the FY 2020 audit findings of I-SPHERE. The Bank is reminding MOH to expedite the follow up action and monitor such progress until the follow up actions are completed through the regular supervision. The budget execution, accounting, and reporting process of the Program in the MOH follow the central government procedures. The majority of the Program budget is allocated to the Sub Directorate of Tuberculosis in the Directorate of Communicable Disease, under the DG of Disease Prevention and Control to implement the NTP through strengthening institutional capacity and system processes needed to monitor improvements in the quality of care and efficiency of TB service delivery. This is done in coordination with the DG of Pharmacy and Medical Devices, the DG of Health Services, the DG of Public Health, the Center for Health Research and Development and the Secretary General. The risk on budget execution is mainly due to the limited capacity of the MOH to monitor the implantation of the NTP at the sub-national levels. To mitigate this risk, the Program recommended to build capacity in the MOH/NTP and at the subnational level in its design through technical assistance, hands-on technical support, and knowledge exchange events. A strong secretariat has already been established for the Global Fund’s direct financing of the NTP, which will also help mitigate some of the risks related to institutional capacity and coordination, thereby also helping to enable early progress. 22. The Law No. 17 FY 2003 on State Finance requires the Government of Indonesia to implement accrual accounting. In addition, based on State Treasury Law No. 1 FY 2004, through the establishment of the Treasury Single Account (TSA), the MOF streamlined budget execution, thereby improving reporting on budget execution. The MOF is also improving government financial reporting through the implementation of the government accrual accounting standard. Through the issuance of Government Regulation (Peraturan Pemerintah/PP) no 71 FY 2010, accrual accounting is fully implemented since FY 2015. The implementation of IFMIS (System Perbendaharaan dan Anggaran Negara/SPAN) in Indonesia facilitates the accounting and financial reporting in the central government. Indonesia’s accounting standards are consistent with international standards. The Program implementation will follow the government accounting and reporting system, which records the overall Program expenditures. The Government has also implemented a review of internal controls for the central government financial reporting, starting in FY 2017. All ministry financial statements shall should be reviewed by its internal auditor before being submitted to State Audit Institution (Badan Pemeriksa Keuangan/ BPK) for audit. Specifically, for the Program, the finance bureau in the MOH will assist in the preparation of the Program annual financial statements (part of MOH’s annual financial statements). The Program will moreover adopt the same practice as for the preparation of the I-SPHERE and COVID-19 PforR financial statements. 23. Scope and implementation of Procurement under the PforR Program. Procurement spending under the PforR Program is not expected to exceed 30 percent of the total Program expenditure. No contract is expected to fall under OPRC’s review threshold. The Implementing Agency for this program is the Ministry of Health (MOH) who has experience in implementing Bank-financed projects, including the ongoing I-SPHERE and COVID-19 Emergency Response PforRs. Based on the information available, the procurement is expected to mainly consist of the procurement of goods, such as procurement of TB test machines (GeneXperts), cartridges for the rapid molecular machines, TB drugs, TB reagents and freezers, and N95 masks. The majority of the procurable expenditure, based on the information provided by the MOH related to the proposed budget for FY2022, is related to the procurement of TB drugs, with estimated cost of IDR 213 billion (equivalent to US$14 million), the procurement of GeneXpert machine, with estimated cost of IDR 232 billion (equivalent to US$15.6 million), and the procurement of TB cartridges, with estimated cost of IDR 128 billion (equivalent to US$6 million). Based on the data available in SPSE, it is likely that the procurement of those goods will occur via multiple contracts. In addition to the procurement of goods, several consulting services for monitoring and evaluation and non-consulting services for socialization and dissemination may also be procured under the Program. At the time of assessment, the procurement of civil works is not expected under the Program. 24. Procurement under the Program will be governed by the Government Procurement Regulation (Perpres 16/2018) as amended Perpres 12/2021, and its technical guidelines. Perpres 16/2018 sets out the main principles of a sound public procurement system and provides for use of competitive procurement methods as the default requirement. 25. The main unit within the MOH who will be responsible for the Program is the Directorate of Communicable Disease Control, within which the Sub Directorate Tuberculosis/National Tuberculosis Program is housed. The Bureau of Planning, under the Secretary General of MOH, and the newly established Board for Health Policy (BKPK), especially one of its centers, the Center for Health Financing and Decentralization (Pusjak PDK) will have significant roles in the Program. The Directorate for Pharmaceuticals has a significant role in the procurement of TB program drugs and commodities, especially for diagnostics, such as cartridges for the rapid molecular machines. The Center of Data and Information (Pusdatin) and the Digital Transformation Office (DTO) will be involved in the application of the of digital transformation to support the TB program. Other units that are involved in the NTP include the those within the Directorate General of Health Services, especially those responsible for health facility readiness and quality of service at the primary and secondary level of care. The Procurement Service Unit at the central level, which is now under Procurement of Goods/Services Bureau, has been managing all procurement packages (works/goods/other services and consulting services) within the ministry, and its current staffing level and capacity is considered adequate for meeting the continuing procurement needs of the Program. It is proposed that the overall coordination remains the responsibility of the Planning and Budgeting Bureau. 26. The NTP Program procurement system provides reasonable assurance that the overall Program will achieve its intended results. 27. The Treasury Management and funds flow for the MOH is adequate. The State Treasury Law No 1 FY 2004 provides the legal basis for the MOF to maintain a centralized cash management and establish a TSA. The TSA was fully implemented in FY 2010. In general, Program funds will be disbursed to the Government’s account at Central Bank upon achievement of the DLIs. However, the PforR implementation in the Bank allowed for the Government to obtain an advance. The Bank has agreed to provide a 25 percent advance for the Program. All payments will be made through the Government’s centralized treasury system. Please find below the funds flow diagram for the Program. 28. Internal Control. The internal control system of the program in the MOH is adequate. The Government Internal Control System (GICS) for Indonesia’s public sector follows the COSO framework (control environment, risks assessment, control activities, communication and information and monitoring. The GICS strictly defines (i) clear segregation of duties; (ii) formal authorization levels; (iii) effective control over commitment and payments; and (iv) that the overall access and adjustment to the budget records, accounting and payment information are restricted. PEFA assessment in 2017 rated PI-25 internal control for non-salary expenditures as A. Based on Government Regulation no 60 FY 2008, BPKP as national internal audit institutions received the mandate to assist all government institutions to implement the GICS for an effective, efficient, and accountable management of government funds. BPKP has developed a tool to measure the maturity of GICS implementation, with level 3 considered to be the good practice implementation of internal control. Good practice internal control includes the requirement for the head of the institutions/minister to create and maintain an environment that promotes positive and conducive behavior, which includes (i) upholding integrity and ethical behavior; (ii) committing to competency; (iii) providing positive leadership; (iv) establishing an appropriate organization structure; (v) providing an appropriate delegation of authority and responsibility; (vi) formulating and implementing a dynamic human resource development program; (vii) facilitating an effective role of internal auditor; and (viii) creating a positive working relationship with other government institutions4. In January 2019, BPKP confirmed that the MOH achieved level 3 of GICS implementation. Based on the review of the MOH’s FY 2019-2021 annual audits, FMS noted that the payment verification needs to be strengthened, especially in the main implementing units of the Program. 29. Record Keeping and Document Management. Record Keeping and Document Management Systems in the MOH is adequate. Article 39 of PP 60 FY 2008 indicates that the head of a government institution or minister is required to restrict access to ensure accountability for resources and records. In restricting access to resource and records, the head of government institution/minister is required to (i) provide access to authorized officers; (ii) designate certain staff to be responsible for the safe keeping of resources and records; and (iii) conduct periodic reviews of such restrictions with a view to verifying their effectiveness. Based on the FY 2017 PEFA review, the MOH has implemented restricted access to its resources and records. PI-27 on Financial Data Integrity rated A in PEFA 2017. The use of SPAN has significantly improved financial data integrity. Review of the MOH’s FY 2019-2021 annual 4 4.2 Effectiveness of the internal control framework, PEFA 2017 financial audit report did not reveal any issues related to record keeping and document management system. The Program records will be maintained as part of the MOH’s records and will follow the existing government document management system. 30. Internal Audit. The program internal audit system in the MOH is adequate. PI-26 Internal Audit rated C+ in PEFA 2017. Internal audit units are established in all agencies, including the MOH. There are national internal audit standards and peer review standards. The C rating was due to the fact that in general, internal audit activities are primarily focused on financial compliance. To improve it, Indonesia started adopting the Internal Audit Capability Model (IA-CM) in late 2015. IA-CM is a framework that identifies the fundamental needs for effective internal auditing in the public sector. IA-CM intends to ensure that internal audits become an integral component of effective governance in the public sector and helps organizations achieve their objectives and be accountable for their results. IA-CM consists of five levels, tied to leading practices. In this context, level 3 (integrated) designates a situation where internal audit management and professional practices are uniformly applied. At the end of 2019, 360 (57 percent) out of total 628 government internal audit units are already rated as Level 3, according to the Internal Audit Capacity Model (IA-CM). The government is continuing its effort to achieve an 85 percent rate of internal audit units to be at level 3 of IA-CM, as targeted by the President. The Bank, through financing from ongoing PFM MDTF phase III, has provided allocations and will continuously support the improvement of internal audit practices in Indonesia, including the effort to improve the PEFA rating in internal audits. The internal audit unit of the MOH achieved level 3 of IA-CM, as confirmed by the BPKP in January 2019. This means that the internal auditor in the MOH is already conducting evaluations on the adequacy and effectiveness of internal controls. The IG of the MOH confirmed that there is no recent internal audit conducted for TNP implementation. Specifically, for the Program, following the Presidential Instruction, the Government Procurement Agency (Lembaga Kebijakan Pengadaan Barang/ Jasa Pemerintah/LKPP) has issued circular letter no 4 FY 2020, which instructed all commitment maker to prepare a statement from the supplier on the price reasonableness when the contract is signed. LKPP is also working with the BPKP to conduct ex-post review on procurement activities related to program. The IG of the MOH will moreover conduct an ex-post internal audit to the NTP implementation, and its related procurement process financed under the Program. 31. External Audit. The external audit arrangements are adequate. BPK, the Supreme Audit Institution (SAI), is responsible for conducting external audits of the Government of Indonesia. The PI-30 External Audit was rated C+ in PEFA 2017. The national financial audit standards (Standard Pemeriksaan Keuangan Negara/SPKN) used by BPK are consistent with the ISSAIs. The FY 2019 peer review on BPK conducted by Supreme Audit of Poland indicated that BPK performs high quality financial audits overall, as well as has sophisticated guidelines and educated, professional and motivated staff5. Currently, through PFM MDTF II, the Bank is planning to enhance BPK’s capacity to conduct performance audits, in accordance with the International Standards of Supreme Audit Institutions (ISSAIs). The MOH has received an unqualified opinion from BPK since the FY 2013 financial audit. The FY 2021 audited financial statements for I-SPHERE and COVID-19 (as part of the MOH’s FY 2021 financial statements), which were received within a timely manner by the Bank and BPK, provided an unqualified opinion in the audit reports. However, it was noted that the Bank has not received an update regarding the follow up actions of the FY 2020 audit findings of the I-SPHERE program. Contrarily, all FY 2020 COVID-19 audit findings have been completely followed up. Monitoring on follow up actions on the audit findings is conducted during Program supervisions. 5 Peer review report on the Audit Board of the Republic of Indonesia / Badan Pemeriksa Keuangan (BPK) dated August 2019 https://www.bpk.go.id/assets/files/attachments/attach_page_1581990588.pdf 32. In the past 3 years, (FY 2019 – 2021) audit reports, the MOH obtained an unqualified opinion. However, specifically in the FY 2021 audit report, BPK identified weaknesses in the DG of Disease Prevention & Control and the DG of Pharmacy and Medical Devices (the main implementing unit of NTP), related to (i) the payment verification on procurement process and production of COVID-19 vaccines and procurement of reagents, RDT-Ag, and consumables for COVID tests; and (ii) the inventory management of province level medicine buffer stocks and COVID-19 vaccines. To ensure such weaknesses will not be repeated in the future, the MOH expects to improve the payment verification process, including strengthening the capacity of PPK, PPSPM and staff in the DG of Disease Prevention & Control and the DG of Pharmacy and Medical Devices. Payment verification for the NTP program should be conducted by PPK, PPSPM and staff who have already completed training on payment verification for goods from BPPK. In Addition, the MOH Secretary General (finance bureau and planning & budgeting bureau) will assist in the preparation of the Program annual financial statements (part of the MOH’s annual financial statement) for audit by BPK. The proposed format of the Program Financial Statements is presented in Annex 3. The program annual financial statement is expected to be submitted to BPK for audit at the latest by 60 days after the end of the fiscal year. Program annual financial report should be reviewed by the IG of the MOH before it is submitted to BPK. The audit report should be submitted to the Bank at the latest within nine months after the end of the fiscal year. The procurement process at the MOH is also audited by BPK as part of the annual audit of all the government agencies. 33. MOH Staff capacity to implement the Program is adequate. The Program will include a hands on capacity building plan to strengthen the implementation of the Program at the existing primary health centers and general practitioners at sub national level. Furthermore, to strengthen payment verification capacity, PAP proposed PPK, PPSPM and staff for the program (especially in the DG of Disease Prevention & Control and the DG of Pharmacy and Medical Devices) should have completed training on payment verification for goods from BPPK. 34. Transparency. Based on Law No. 14, year 2008 regarding Transparency of Public Information, public information should be open and accessible. An exception to public information is information that is restrictive and limited, such as for the protection of privacy or national security. An applicant should be able to obtain public information promptly, and at low cost. When it is classified as confidential information pursuant to the law, ethics, and the interest of the public, a decision for the information to be shared is based on an examination of the consequences that occur if the information is provided to the public. The MOH has established a Public Information Officer (PPID) mechanism in accordance with Law 14/2008, which manages public requests for information (http://ppid.kemkes.go.id/). Information, such as the MOH annual performance accountability report, is routinely disclosed to the public on its website. However, certain information has been restricted through a Ministerial Regulation regarding Excluded Information (Permenkes No.1/2015), such as documents related to finances, state assets, personnel, and personal identification. The MOH budget and expenditures is public information, though the documents published on the MOH website are currently not up to date. Audit reports for the MOH are accessible to the public from BPK, upon request. 35. Complaints Handling. All public services in Indonesia are required to establish a complaint handling system, as per Presidential Regulation 76/2013 regarding Public Services Complaints Management, including the Ministry of Health. To implement this regulation, the Executive Office of the President (KSP), Ombudsman, and Ministry for State Apparatus and Bureaucracy Reform (KemenPAN-RB) have developed an online public complaint system, called LAPOR! (Laporan Aspirasi dan Pengaduan Online Rakyat/online public aspiration and complaint). LAPOR! is web- based, and can be accessed via a mobile application (both android and iOS), text message (SMS), or on social media platforms, such as Twitter and Facebook. Actionable complaints are directed to the relevant government agency for followed up and resolution. The application requires the public to register prior to submitting their complaint, but the complaints received and the responses from relevant government agency are publicly accessible. Information on public complaints and inquiries about MOH programs that are submitted through the government-wide complaint handling system—SP4N- LAPOR!—is publicly accessible through the LAPOR website, including their progress and resolution status (https://www.lapor.go.id/instansi/kementerian-kesehatan). Some hospitals are also connected to the LAPOR system under the MOH component. The Bureau of Communications and Public Services under the Secretariat General manages the LAPOR! system, as well as other MOH public communication channels, such as SIAP (Saluran Informasi, Aspirasi dan Pengaduan) and Halo Kemenkes hotline. Complaints and feedback are also collected by the National TB Program team through routine monitoring and evaluation meetings with the regional health agencies and hospitals, and coordination meetings with CSOs. 36. The national procurement regulation includes provisions for the submission and handling of procurement complaints. It allows submission of procurement related complaints within a specified period after the announcement of the bidding result and requires the complaint to be reviewed in the first instance by the procurement service working unit (UKPBJ) of the implementing agency, which must be responded to within a specified number of days. In case the UKPBJ’ s response is not satisfactory to the bidder, the complainant can submit an appeal to higher levels within the same implementing agency. The complaints should be submitted by the bidder to the UKPBJ with a copy to APIP (Government Internal Supervisory Apparatus). For contracts above the threshold procured through the SPSE e-procurement system, complaints can be submitted by bidders through SPSE and responses by the UKPBJ can also be sent through SPSE, which are recorded in the system. In addition to complaint sent by the bidders through SPSE system related to procurement process, complaints can also be sent by stakeholders outside SPSE system to APIP. These can be submitted through the LAPOR! system for the general public as referenced above, or through the MOH Inspectorate General’s complaint handling or whistleblower system described below. 37. Fraud and Corruption. For the reporting of complaints and allegations of fraud and/or corruption, the MOH’s Inspectorate General (IG) maintains a public complaint handling mechanism and a whistleblower system through its website6 (reports can also be submitted offline). The complaint handling mechanism was established through the MOH Regulation (Permenkes) No. 49/2012 regarding Guidelines on Integrated Public Complaints Handling in the MOH environment, while the whistleblowing system (WBS) is managed in accordance with Permenkes No. 29/2014. The IG forwards complaints pertaining to public services to the relevant units within the MOH, while it reviews the reports that have potential state loss implications and follows up on credible and material allegations. 38. The national procurement regulation, Perpres 16/2018 as amended Perpres No.12/2021, includes provisions against fraud and corruption. Also, the Commitment Making Official (PPK), procurement officer, and work acceptance officer are required to sign integrity pacts to declare that they will not be involved in fraudulent and corrupt practices and that they will report to the authorities if there is any fraud and corruption practice in the procurement process. Contractors are also required to sign integrity pact to declare that they (i) will not be involved in fraudulent and corrupt practices; (ii) will provide correct and accountable information and be transparent; and (iii) are aware of the consequences (to be blacklisted) if they violate the regulations and the provisions in the integrity pact. 6 MOH-IG Public Complaints and Whistleblower Systems https://itjen.kemkes.go.id/pengaduan 39. Ineligibility of firms sanctioned by the Bank to participate in the Program. The assessment revealed that the MOH generally complies with the requirement of ineligibility of firms blacklisted by the Government and published on the LKPP’s website. The requirement for developing and putting in place a mechanism within the MOH for enforcing the ineligibility of the Bank’s debarred/temporarily suspended firms and individuals to be awarded contracts under the Program has been discussed with the MOH. The establishment of such mechanism is also specified in the Program Action Plan and will be monitored by the Bank for compliance. Based on the MOH’s experience under ongoing Program, a circular letter issued by Bureau Planning and Secretary General was issued to request each working unit that involve under the program to comply with fiduciary action plan. Pokja UKPBJ or Commitment Making Officer (PPK) confirmed to the Bank that they did check into the Bank’s debarment list before they award the contract. 40. Applicability of the World Bank Anticorruption Guidelines for the PforR. Through the PforR’s legal documents, the recipient of the loan is formally committed to the obligations under the ACG for PforR operations. In particular, in the context of this PforR, the MOH will be required to agree to the application of the ACG, and promptly inform the World Bank of any credible and material allegations of fraud and/or corruption regarding the PforR as part of the overall PforR reporting requirements. The MOH has been implementing the COVID-19 Emergency Response PforR, including its Additional Financing, and is familiar with the requirements of the ACG, including regular reporting on F&C under the Program. The World Bank will promptly inform the recipient of all credible and material allegations or other indications of F&C in connection with the Program that come to its attention, consistent with Bank policies and procedures. 41. In addition, the MOH will be requested to issue specific guidelines instructing compliance with the requirements of the ACG, including by their staff, suppliers and consultants under the PforR, which will include any person or entity debarred or suspended by the World Bank not being awarded a contract under or otherwise being allowed to participate in the Program during the period of such debarment or suspension. The auditor’s TOR will also include verifying whether the implementing agency before award of the contract investigated and confirmed that the recommended firm for award was not on the World Bank’s suspension and debarment list throughout the period of PforR. 42. The World Bank has a right to conduct an inquiry into such allegations or other indications, independently or in collaboration with the borrower, regarding activities and expenditures supported by the PforR and the related access to require persons, information, and documents in accordance with the standard arrangements for this purpose. IV. Program Systems and Capacity Improvements Risk Assessment: Based on the information available at the time of assessment, the overall fiduciary Risk is rated as Substantial before mitigation and the residual risk after mitigation is Moderate. Description of risks and mitigation actions, including actions to be included as PAP, is given below: Risk Mitigation Measure Type of Action Inadequate verification by the MOH of the The MOH requires its Procurement Service PAP Bank’s list of debarred/temporary suspended Working Units (UKPBJs)/Procurement firms before awarding contracts. Officers and Commitment making officers (PPK) to check into the Bank’s debarment (www.worldbank.org/debarr) and temporary suspension lists as well as record the verification in the bid evaluation report prior to awarding the contract in order to ensure that no contract under the Program is awarded to a firm or individual that is under debarment and/or temporary suspension by the World Bank. Lack of information regarding procurement The MOH shall regularly provide the Bank with PAP profile and contract data during program the procurement profile and contract implementation information (at least every 6 months of PforR Program implementation). There is a risk that weak payment verification on The MOH shall ensure that 100 percent PPK, PAP program implementation, especially on PPSPM and staff positions for the program procurement of goods (medicine, consumables, (especially in DG Disease Prevention & and machine) related to the program Control and DG Pharmacy and Medical Devices) is held by staff who already completed training on payment verification for goods from BPPK. The MOH shall monitor and update the Bank on a semi-annual basis. There is risk that the major funds allocation under The MOH Inspectorate shall conduct internal PAP the program not utilized for intended purposes. audits on the national TB program implementation and its related procurement process financed under the program. The MOH Inspectorate shall update the Bank on a semi-annual basis. There is risk of delay in updating the Bank on The MOH Inspectorate shall update the follow follow up action of audit findings of the Program up actions on audit findings of the Program on a semi-annual basis. Risk of unattended complaints under the Program The MOH shall promptly inform the Bank of all PAP and indications of Fraud and Corruption in credible and material allegations or other connection with the program are not detected and indications of Fraud and Corruption in reported in a timely manner. connection with the Program that come to its attention, together with the investigative and other actions that it proposes to take. V. Implementation support. Fiduciary support would include: 1. Monitoring implementation progress and working with the Bank Task Team to ensure the achievement of Program results and DLIs that are of a fiduciary nature. 2. Monitoring the performance of fiduciary systems and audit report submission, including implementation of the PAP. 3. Monitoring changes in fiduciary risks to the Program and compliance with the fiduciary provisions in the legal document (if any). 4. Provide support to MoH to resolve implementation issues and conduct capacity building. Annex 1: Draft Anti-Corruption Protocol In order to operationalize the “Guidelines on Preventing and Combating Fraud and Corruption in Program - for-Results Financing”, dated February 1, 2012 and revised on July 10, 2015 (the “Anti -corruption Guidelines”), issued by the International Bank of Reconstruction and Development (“Bank”) and applicable to the “Indonesia Strengthening National Tuberculosis Response Program” pursuant to Section 5.13 of the General Conditions, as defined in the Loan Agreement for the financing of the Program, the Borrower and the Bank agree to the following supplementary Anti-Corruption Protocol: 1. The Borrower shall be responsible for carrying out any criminal and administrative investigations of all materials and credible allegations of fraud and corruption under the Program, keeping the Bank abreast of their progress and findings, and make public their conclusions/results. 2. The Borrower shall provide the Bank, on a semi-annual basis, or more frequently as warranted and reasonably required by the Bank, with a report on allegations of fraud and corruption under the Program received during such period, as well as any related investigations and actions taken. Reciprocally, if the Bank finds evidence of corrupt practices, the Bank shall, to the extent consistent with Bank policy, refer the case to the Borrower for investigation under the relevant criminal and civil laws. 3. In the event that the Bank decides to conduct an administrative review into allegations or other indications of fraud and corruption in connection with the Program – whether alone, jointly with the Borrower, or in parallel with a Borrower’s investigation –, the Borrower shall cooperate fully with the representatives of the Bank and take all appropriate measures to ensure full cooperation of relevant persons and entities subject to the government jurisdiction in such investigation, including, in each case, allowing the Bank to meet with such relevant persons/entities and to inspect all of their relevant accounts, records and other documents and have them audited by, or on behalf of, the Bank. If the Bank were to find evidence of corrupt practices, the Bank shall refer the case to the Borrower for investigation under the relevant criminal and civil laws. Notwithstanding the foregoing, the Bank may, however, and reserve the right to, debar private individuals and firms from participating in Bank financed projects and programs, including the Indonesia Strengthening National Tuberculosis Response Program. 4. The Bank’s right to investigate or conduct reviews shall not extend to criminal investigations which shall remain the exclusive jurisdiction of the Borrower. 5. The Borrower shall ensure that any person or entity debarred or suspended by the Bank is not awarded a contract under, or otherwise allowed to participate in the Program during such period of debarment or suspension by the Bank. Template for Reporting on Handling of Allegations of Fraud and Corruption Location Date Complainant Alleged Means of Description of Grievance Handling Allegation (Full name & Perpetrator Submission Allegation • Stage of Handling of Received Address, if of Allegation [Initial not Complaint Review, Investigation, anonymous) (e.g. Referral, Prosecution, etc.] telephone, • Description of Progress e-mail, in Investigation writing, • Outcome of verbal) Investigation Annex 2: MOH’s Procurement Profile 1. MOH’s Procurement Profile in FY2022 - based on data publicly available on the MOH’s website and e-procurement system, including the monitoring and evaluation system. In FY2022, the annual procurement profile for all procurement categories shows the number of procurement of goods is 10,446 packages, works is 611 packages, non-consulting services is 5,548 packages and consulting services is 457 packages. In terms of value of contracts, the total estimated cost for procurement of goods is IDR 20,167 billion, works is IDR 4,749 billion, non-consulting services is IDR 2,606 billion and consulting services is estimated IDR 323 billion. The number of packages and estimated cost for each procurement category in FY2022 are shown in figure 1 below. Procurement Plan Profile MoH FY 2022 Procurement Plan Profile MoH FY 2022 Based on Number of Packages Based on Cost Estimates in IDR billion Consulting Services, 457, 3% Consulting Non-Consulting Services, 323 Services, 5548, 32% , 1% Non-Consulting Services, 2,606 , 9% Goods, Works, 4,749 , 10446, 61% 17% Goods, 20,167 , 73% Works, 611, 4% Goods Works Non-Consulting Services Consulting Services Goods Works Non-Consulting Services Consulting Services Figure 1: Number of packages and Total Estimated Cost based on Procurement Category in FY 2022 Source of Data: https://lpse.kemkes.go.id/eproc4/amel 2. In terms of procurement method type used in the procurement process in FY2022, it shows that majority of packages follow direct procurement method (10,840 packages), e-purchasing through e-catalogue system (3,100 packages), and open tender method (1,140 packages). For the period of 2020 to 2021, it shows that the procuring entity follows open tender method for 1,196 and 1,560 packages respectively, while for non-competitive method (including e-catalogue, direct procurement, and direct contracting) is 5,6382 and 4,2421 packages for 2020 and 2021 respectively as described in Figure 2 below. This high number of packages procured through non-competitive methods is due to the fact that many pharmaceutical and medical equipment are already included in the government e-catalogue system, whereby the procuring entity is mandated to use e-catalogue for procurement of goods/services that are included in the e-catalogue system. According to SPSE system, it is also indicated that many packages were carried out either through direct procurement or direct contracting in relation to the COVID-19 response. In this context, the Government Procurement Regulation (Perpres 16/2018), which also elaborated through LKPP’s Chairman Decree (Perlem No.13/2018) and issued Circular Letter No.3/2020, emphasized the need to expedite urgently required procurement in response to COVID-19, including by using direct contracting methods. Procurement Profile MoH FY 2022 Based on Procurement Method 12,000 10,840 10,000 8,000 6,000 4,000 3,100 2,000 1,140 1,090 164 - Tender Fast Tender Direct Direct E-Purchasing Procurement Contracting Figure 2a: Number of packages for each type of Procurement Method in FY 2022 Source of Data: https://lpse.kemkes.go.id/eproc4/amel Procurement Profile MoH FY 2020-2021 Based on Procurement Method 60000 50000 40000 Non-tender incl 30000 e-catalogue, Non-tender incl 56382 e-catalogue, 20000 42421 10000 Tender, 1196 Tender, 1560 0 2020 2021 Non-tender incl e-catalogue Tender Figure 2b: Number of packages for each type of Procurement Method in FY 2020-2021 3. MOH’s Procurement Performance during FY2022 – based on data publicly available on MOH’s website and e-procurement system including monitoring and evaluation system. (i) In terms of budget spending for procurable expenditures, as well as the number of packages procured by the MOH from January to August 2022, it appears that the majority of actual spending and the actual number of packages procured are mainly for procurement of goods and non-consulting services, which are about 300 packages of total IDR 73 billion and 297 packages of total IDR 80.9 billion respectively. Detailed information is shown in figure 3 below. Actual Awarded Contract in FY 2022 (Jan - August 2022) Based on Contract Amount in IDR billion Consulting Services, 4.29 , 3% Goods, 73.44 , Non-Consulting 43% Services, 80.99 , 48% Works, 10.80 , 6% Goods Works Non-Consulting Services Consulting Services Figure 3: Actual Awarded Contract in FY2022 (Jan – Aug 2022) based on contract amount in IDR billion Source of Data: https://lpse.kemkes.go.id/eproc4/amel (ii) In terms of timeliness of the procurement process and level of participation of bidders, based on the data available in the MOH’s e-procurement system (SPSE), in FY2022, the procurement of TB drugs and commodities, cartridge TB test, and rapid diagnostic tests (GeneXpert MTB/RIF) was carried out by the MOH through open competitive tenders, which took an average of 58 calendar days from invitation to bid until contract signing, with an average of 37 bidders registered for the bidding, while 6 actually submitted bids. The procurement of cartridge TB tests and diagnostic reagents followed fast tender, which took about 11 calendar days from the invitation to bid and contract signing, with an average of 16 bidders registered for bidding and 4 submitted bids. Regarding the use of the direct contracting method (non-competitive) in FY2022 to procure packages with an estimated cost ranging from IDR 611 million up to IDR 48 billion, it took an average of 6 days from the bid received until contract signing. Please see figure 4 below. Procurement of Goods through Open Tender FY2022 value in IDR billion 60 40 39 24 20 14 12 11 9 8 10 4 5 4 2 0 1 1 19,085 30,885 419 723 1,645 Time taken from IFB to Contract Signing Number of bidder registered Figure 4a: Procurement of Goods through Open Tender Procurement of Goods through Fast Tender FY2022 value in IDR billion 50 40 39 30 24 20 14 12 10 9 11 10 8 4 5 4 0 1 1 2 19,085 30,885 419 723 1,645 Time taken from IFB to Contract Signing Number of bidder registered Number of bidder submitted the bids Figure 4b: Procurement of Goods through Fast Tender Procurement of Goods through Direct Contracting FY2022 value in IDR billion 60,000 50,000 48,269 48,269 40,000 30,000 20,000 10,000 - 6 611 10 6 462 3 1 2 3 4 Cost Estimates Time taken from bid submission to Contract Signing Figure 4c: Procurement of Goods through Direct Contracting (iii) For selection of consulting firms through open tender using Quality-and Cost Based Selection method in FY2021, based on data provided, it took about 76 calendar days from invitation for prequalification/shortlisting until contract signing. Annex 3, Program Financial Statement Format “STRENGTHENING NATIONAL TUBERCULOSIS RESPONSE PROGRAM” Financial Statements Format Introduction Table of content Statement of Responsibility Program Financial Statements “STRENGTHENING NATIONAL TUBERCULOSIS RESPONSE PROGRAM” FY 20….. Budget Realization Report Notes to Financial Statements /Catatan Atas Laporan Keuangan (CaLK) 1. General Description 2. Accounting Policy 3. Budget Realization Report by DGs 4. Annual Target Achievement and Problems Encountered (if any) “STRENGTHENING NATIONAL TUBERCULOSIS RESPONSE PROGRAM” BUDGET REALIZATION REPORT FOR THE PERIOD ENDED 31 DESEMBER ……… AND ………………… (in IDR) Directorate General (DG) Code Program/ Activity Budget Realization % 1 Disease Prevention & 1 Control 2 3 2 Pharmacy & Medical 1 Devices 2 3 3 BKPK 1 2 3 4 Secretariate General 1 2 5 Health Services 6 Public Health NOTES OF FINANCIAL STATEMENT 1. GENERAL DESCRIPTION 1.1. General Description 1.2. Loan Profile Program’s Name : Strengthening National Tuberculosis Response Program Loan No. : Loan IBRD …………….-ID Negotiation Date : Loan signed Date : Loan Effective Date : Loan Closing Date : Implementing Agency : Total Loan Amount : USD 300 million Scope of Implementation : 1.3. Organization and dan Project Management 1.4. Program Annual Target 1.5. Project Administration 2. Accounting Policy 3. Budget realization by Directorate Generals 3.1. DG of Disease Prevention and Control Code PROGRAM/ ACTIVITY Ref. Budget Realization % Total 3.2. DG Pharmacy and Medical Devices Code PROGRAM/ ACTIVITY Ref. Budget Realization % Total 3.3. BKPK Code PROGRAM/ ACTIVITY Ref. Budget Realization % Total 3.4. Secretariate General Code PROGRAM/ ACTIVITY Ref. Budget Realization % Total 3.5. DG of Health Services Code PROGRAM/ ACTIVITY Ref. Budget Realization % Total 3.6. DG of Public Health Code PROGRAM/ ACTIVITY Ref. Budget Realization % Total 4. Annual Target Achievement and Problems Encountered (if any)