The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) Maldives: PFM Systems Strengthening Project (P145317) SOUTH ASIA | Maldives | Governance Global Practice | IBRD/IDA | Investment Project Financing | FY 2014 | Seq No: 14 | ARCHIVED on 30-Mar-2022 | ISR50373 | Implementing Agencies: Ministry of Finance and Treasury, Ministry of Finance and Treasury Key Dates Key Project Dates Bank Approval Date: 26-Jun-2014 Effectiveness Date: 02-Oct-2014 Planned Mid Term Review Date: 16-Apr-2017 Actual Mid-Term Review Date: 10-Apr-2017 Original Closing Date: 31-Jul-2019 Revised Closing Date: 31-Jul-2022 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The proposed project development objectives (PDO) are to enhance budget credibility, transparency, and financial reporting of central government finances. Has the Project Development Objective been changed since Board Approval of the Project Objective? Yes Board Approved Revised Project Development Objective (If project is formally restructured) The PDO (project development objectives) for the proposed AF is to enhance budget credibility, transparency, and financial reporting of public sector finances. The PDO remains relevant and the likelihood of achieving it remains high in view of the project’s implementation progress, disbursement performance, and results achieved to date. Components Table Name Policy-based fiscal strategy and budget credibility:(Cost $2.73 M) Controlled budget execution:(Cost $6.08 M) Accounting, reporting and internal audit:(Cost $1.70 M) External scrutiny and audit:(Cost $0.42 M) Project and Change Management:(Cost $1.07 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Moderately Satisfactory Satisfactory Overall Implementation Progress (IP) Moderately Unsatisfactory Moderately Satisfactory Overall Risk Rating Substantial Substantial Implementation Status and Key Decisions The likelihood of achieving the PDOs is “satisfactory” with 3 out of the four PDO indicators met (deviation between aggregate expenditure out-turn and the original approved budget; public access to key fiscal information; and comprehensiveness of debt data recording and reporting), and one 3/30/2022 Page 1 of 12 The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) partially met for 70 percent disclosure against a target of 100 percent for State-owned Enterprises (SOE) financial reporting. Policy-based fiscal strategy and budget credibility is now satisfactory with the targeted deviation of 5 percent between aggregate expenditure out-turn and the original approved budget now met. The Public Financial Management (PFM) Reform Strategy and Action Plan (2022-2026) was approved on January 31, 2022. It is formulated with a view to address the main challenges in the existing system and gear fiscal policy to maximize the potential for inclusive growth and macroeconomic stability. Increasing the efficiency and efficacy of public spending, fiscal transparency, and accountability in the use of public funds are also key objectives. The mission advised to conduct a webinar to disseminate the strategy and action plan as a major milestone demonstrating the government’s commitment to PFM reforms. key strategic outputs delivered in the past three months include: (i) Migration to accrual-basis International Public Sector Accounting Standard (IPSAS) - the Treasury and Public Accounts Department has prepared a credible plan for first-time adoption of accrual-basis IPSAS with year ending 2023 as the transition year and assertion of compliance in fiscal year ending 2025. With the asset policy now issued, efforts are needed to meet the project target for fiscal year-ended 2021 financial statements to have notes on asset registry. (ii) Standard Procurement Documents (SPD) - as part of strengthening and enhancing public procurement mechanism, development and harmonization of procurement guidelines; national standard bidding documents; contractual documents; and user guides are being finalized based on feedback from the procurement policy board. (iii) Electronic government procurement (e-GP) - the readiness assessment concluded that Maldives has overall favorable alignment of essential factors, both in the public and private sectors, for implementing e-procurement initiatives by building on recent experiences to move the process forward. A single e-GP system approach is recommended with the establishment of a national electronic procurement platform for all government procuring entities at central and local levels and including multiple functionalities under one umbrella to limit costs, enable standard practices, monitoring of all activities, facilitate supplier participation, and simplify integration with other (e-)government systems. The implementation strategy and roadmap aim to enable government stakeholders to define a national execution plan, prioritize actions and allocate necessary resources to implement the e-GP system. The last implementation support mission before project closure is scheduled to take place in June 2022 with the objective of ensuring proper closure of the project and to start preparing for the Implementation Completion and Results (ICR) Report. The ICR will cover among other things, the degree to which the PDOs and results have been achieved and provide lessons learned. Special attention will be given to the data requirements including the need to assemble sufficient results and cost/benefit data for accountability and learning lessons. The PMU and implementing agencies’ role will entail preparing and submitting to the Bank its own ICR and assisting with the preparation of the Bank’s ICR. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance -- High High Macroeconomic -- High High Sector Strategies and Policies -- Moderate Moderate Technical Design of Project or Program -- Moderate Moderate Institutional Capacity for Implementation and -- High High Sustainability Fiduciary -- Moderate Moderate Environment and Social -- Low Low Stakeholders -- Moderate Moderate Other -- High High Overall -- Substantial Substantial 3/30/2022 Page 2 of 12 The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) Results PDO Indicators by Objectives / Outcomes To enhance budget credibility, transparency, and financial reporting of public sector finances IN01107736 ►Deviation between aggregate expenditure out turn and the original approved budget (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 18.74 19.10 0.40 5.00 Date 31-Dec-2013 30-Nov-2021 23-Feb-2022 31-Jul-2022 Met 0.4%. Calculation based on PEFA Framework PI 1: extent to which aggregate budget expenditure outturn reflects the amount originally approved, as defined in government budget documentation and Comments: fiscal reports. IN01107737 ►Public Access to Key Fiscal Information (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Achieved. Achieved. Met: The Proposed Met: The Proposed Budget Book is available Budget Book is to the public on the MoF available to the public website the same day it on the MoF website is submitted to the same day it is Parliament. The submitted to approved budget (the Parliament. The Budget Book) is made approved budget (the available to the public on Budget Book) is made Documents not made the MoF website within available to the public available to the public: two weeks from the on the MoF website (1) Year-end state approval by Parliament. within two weeks from Public disclosure of financial statements of PEFA PI 5.1: Budget the approval by the following key fiscal the Republic of Maldives; documentation - all 4 Parliament. PEFA PI information: (a) Annual (2) In-year budget basic elements and 4 5.1: Budget budget documentation, execution reports; Value additional elements out documentation - all 4 (b) In-year budget (3) Contracts awarded. of 8 ae met by GoM. basic elements and 4 execution reports, (c) PEFA PI 9.1: Public additional elements Year-end financial Budget documents and access to fiscal out of 8 ae met by statements, (d) tenders resources available to information – GoM GoM. PEFA PI 9.1: above USD 100 000. primary service units are makes available to the Public access to fiscal available in public public all nine elements, information – GoM domain. including all four basic makes available to the elements in accordance public all nine with the specified elements, including all timeframe – ‘A’. four basic elements in accordance with the In-year budget execution specified timeframe – reports are made ‘A’. available to the public within a month of their A new dynamic portal issuance on the MoF for user-defined report website is expected to ‘go-live’ 3/30/2022 Page 3 of 12 The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) (www.finance.gov.mv). in March 2022 based Supplementary/virement on which monthly and commitment column reports will be publicly proposed by the WB has available. been added but only https://budget.gov.mv/ used internally. en The audited Annual Due to the COVID-19 Financial Report for situation, FY2019 FY2018 dated January 7, financial statement 2020 was published was submitted for accompanied by the audit to Auditor External Auditor’s Report General Office (AGO) on the Auditor General’s on October 12, 2020. Office website on The 2019 un-audited January 16, 2020. FS was published on (www.audit.gov.mv). Due September 27, 2021. to the COVID-19 The audit report is situation, FY2019 expected to be financial statement was published by end of submitted for audit to March 2022. The Auditor General Office FY2020 financial (AGO) on October 12, statement was 2020. The 2019 un- submitted by Minister audited FS was on April 14, 2021, and published on September audit is ongoing with 27, 2021 and the audit expectation to be report is expected to be published by end of published by end of June 2022 together December 2021. The with report for FY2021. FY2020 financial was Contracts above submitted by Minister on US$160,000 have April 14, 2021 and audit been centralized at is ongoing with National Tender. expectation to be published by end of January 2022. All tenders above US$2,200 are advertised on the gazette portal as per Public Finance Regulations (PFR), chapter 10. https://beelan.egov.mv/bi d-awards Date 28-Feb-2014 30-Nov-2021 23-Feb-2022 31-Jul-2022 IN01107738 ►Comprehensiveness of debt data recording and reporting (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value Annual statement of debt Achieved. Achieved. Domestic and foreign covering domestic and debt records are external debt is 99 percent of the debt 99 percent of the debt complete, includes prepared, but there are service payments are service payments are payable amount gaps and reconciliation done semi-annually. done semi-annually. updated and problems. Budgetary Central Budgetary Central reconciled quarterly. Government (BCG) debt Government (BCG) Comprehensive are reconciled every time debt are reconciled management and 3/30/2022 Page 4 of 12 The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) a debt service payment is every time a debt statistical reports processed; hence it service payment is (covering debt service, eliminates the need to do processed; hence it stock and operations) a separate quarterly eliminates the need to are produced at least reconciliation. Domestic do a separate annually. debt is also reported. quarterly reconciliation. Currently publishing Domestic debt is also quarterly on the MoF reported. website. Reporting as per IMF standards including Currently publishing recording of domestic quarterly on the MoF debt started from Q1 of website. Reporting as 2020 onwards. Submitted per IMF standards up to Q2 of 2021. including recording of domestic debt started Disbursed Outstanding from Q1 of 2020 Debt onwards. Submitted up https://www.finance.gov. to Q2 of 2021. mv/public/attachments/kT 8l56dpUmz8dHeyHvDt6 Disbursed Outstanding A1a4mTI0EshMUw9QPZ Debt u.pdf https://www.finance.go v.mv/public/attachment Debt Bulletin s/kT8l56dpUmz8dHey https://www.finance.gov. HvDt6A1a4mTI0EshM mv/public/attachments/A Uw9QPZu.pdf strL6iLqZcYq8pEzwczner OGWVRPNW2JOUhbEv Debt Bulletin 7.pdf https://www.finance.go v.mv/public/attachment s/AstrL6iLqZcYq8pEz wcznerOGWVRPNW2 JOUhbEv7.pdf Date 28-Feb-2014 30-Nov-2021 23-Feb-2022 31-Jul-2022 99 percent of the debt service payments are done semi-annually. Budgetary Central Government (BCG) debt are reconciled every time a debt service payment is processed; hence it eliminates the need to do a separate quarterly reconciliation. Domestic debt is also reported. Currently publishing quarterly on the MoF website. Reporting as per IMF standards including recording of domestic debt started from Q1 of 2020 onwards. Submitted up to Q2 of 2021. Disbursed Outstanding Debt Comments: https://www.finance.gov.mv/public/attachments/kT8l56dpUmz8dHeyHvDt6A1a4mTI0EshMUw9QPZu.pdf Debt Bulletin https://www.finance.gov.mv/public/attachments/AstrL6iLqZcYq8pEzwcznerOGWVRPNW2JOUhbEv7.pdf IN01107739 ►SOE financial reporting and disclosure (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 50.00 70.00 70.00 100.00 Date 05-Mar-2018 30-Nov-2021 23-Feb-2022 31-Jul-2022 3/30/2022 Page 5 of 12 The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) Partially Met. 20 out of 31 SOEs (i.e., 70 percent) of financial reports of SOEs and Public Companies controlled by the Government of Maldives (GoM) for the year-ended 2020 analyzed to review their performance. https://www.finance.gov.mv/publications/reports-and-analyses/annual-financial-review-of-state-owned- enterprises The intention of this report is to analyze the financial status of (State Owned Enterprises) SOE’s and Comments: Public Companies controlled by the Government of Maldives (GoM) for the year ended 2020 and review their performance. For the roll-out of the online monitoring and reporting system of the SOEs’ financial and non‐financial performance; a detailed and interactive portal (SOE Gateway) is being developed - https://soegateway.egov.mv/ Intermediate Results Indicators by Components Policy-based fiscal strategy and budget credibility IN01107740 ►Increased capacity on debt and cash management (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target MTDS 2022–2024 published: https://www.finance.go v.mv/public/attachment s/Bnru2NDnOXEL7Hsl 4m4quArzjwE5s3lcz3 HtaLEr.pdf Data validation to migrate to the new Commonwealth Secretariat Debt Recording and Management System (CS-DRMS Meridian) MTDS 2022–2024 is ongoing in readiness published: for March 2022 Credible DMS does not Debt management https://www.finance.gov. mission by exist. strategy produced mv/public/attachments/B Commonwealth Value nru2NDnOXEL7Hsl4m4q Secretariat. uArzjwE5s3lcz3HtaLEr.p df Cash flow committee formed with representatives from Maldives Inland Revenue Authority (MIRA) and Maldives Revenue Authority (MMA). Daily cash flow model prepared and being actively used. Cash management is operational with coordination from Debt Management Department (DMD) and Fiscal Affairs Department (FAD), where the budget and 3/30/2022 Page 6 of 12 The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) spending plans are gathered by FAD for Treasury and Public Accounting Department (TPAD) to forecast cash balances. Cash flow meeting is held fortnightly to discuss changes to the cash requirement and debt servicing. MoF is regularly updating the cash flow forecasts and sharing the same with MMA. Date 28-Feb-2014 30-Nov-2021 23-Feb-2022 31-Jul-2022 Medium-term Debt Strategy (MTDS) is done on an annual rolling basis. Comments: IN01107745 ►Increased capacity on macro fiscal planning (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Medium-term Fiscal Framework (MTFF) has been in use for past 3 years to inform Fiscal Strategy Paper and the annual budget. 0% of staff trained on Training on the theory Production of a Macro macro fiscal planning. Macro-fiscal forecasting and revenue aspects, fiscal forecasting tool tool exists and used for and the financial to inform the annual Value No credible MTFF and MTFF to prepare Fiscal programming and budget framework for assessing Strategy Paper and the macroeconomic investment projects annual budgets. linkages has been exists. conducted on the MTFF model. The MTFF model creates a table that is consistent with the budget table which makes it easy to compare and analyze variances. Date 28-Feb-2014 30-Nov-2021 30-Nov-2021 31-Jul-2022 MTFF was used for formulation of 2021 budget. Comments: Controlled budget execution IN01107741 ►Capacity building on procurement through the implementation of a new Procurement curricula (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target 3/30/2022 Page 7 of 12 The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) Procurement policy section established in NT and functional. In the process of developing new module in Bandeyri Portal to monitor procurement and contracts. Procurement policy https://bandeyri.financ section established in NT e.gov.mv/ and functional. Around 150 In the process of participants have been developing new module trained through in- in Bandeyri Portal to house MoF curricula. monitor procurement and However, these are contracts. not affiliated with any https://bandeyri.finance.g accreditation. Maldives ov.mv/ National University Value NIL (MNU) is partnering 15.00 Maldives National with International University (MNU) is Training Centre of the partnering with International Labour International Training Organization (ITC-ILO) Centre of the to develop and International Labour implement the Organization (ITC-ILO) to procurement develop and implement curriculum. The project the procurement supported curriculum. development of training schedules and curricular for procurement training. Maldives National University (MNU) will train 500 staff in- country before June 2022. Date 28-Feb-2014 30-Nov-2021 23-Feb-2022 31-Jul-2022 In the process of developing new module in Bandeyri Portal to monitor procurement and contracts. https://bandeyri.finance.gov.mv/ Comments: Maldives National University (MNU) is partnering with International Training Centre of the International Labour Organization (ITC-ILO) to develop and implement the procurement curriculum. IN01107746 ►BERs subjected to audit by internal auditors (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 25.00 25.00 100.00 Date 28-Feb-2014 30-Nov-2021 23-Feb-2022 31-Jul-2022 Comments: Business Intelligence (BI) module of the SAP is used to generate the BERs. Q2 of 2021 was subjected to internal audit. SAP BI reports are available by line agencies and central MoF Users. 3/30/2022 Page 8 of 12 The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) IN01107747 ►Updated gender disaggregated statistics to inform fiscal policy (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target HIES 2019 is available on MBS’ website in its complete form, along with infographics for specific sections. https://statisticsmaldiv es.gov.mv/hies-2019/ HIES 2019 is available Completing analysis of on MBS’ website in its round 1 and round 2 to complete form, along No recent data on publish a standalone with infographics for Findings from HHIES Value household report along with specific sections. have been published income/expenditures gender-disaggregated https://statisticsmaldives. statistics on how gov.mv/hies-2019/ COVID-19 has affected work participation among males and females and whether there is any recovery between round 1 and round 2. Date 01-May-2018 30-Nov-2021 23-Feb-2022 31-Jul-2022 Gender disaggregated statistics are available on the MBS website. Micro data available for download supports gender focused analyses at household and individual level. Capacity building trainings for MBS staff have been organized under the SL/MV Poverty Monitoring program, while the project has funded data collection for HIES 2019 fieldwork, and the 2 rounds of COVID-19 impacts. Comments: Completing analysis of round 1 and round 2 to publish a standalone report along with gender- disaggregated statistics on how COVID-19 has affected work participation among males and females and whether there is any recovery between round 1 and round 2. IN01107748 ►Improved asset management (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Asset Register not included as notes in Asset Register not the end-year Financial included as notes in the Statements. “Neelan end-year Financial Portal” has been Statements. “Neelan developed and is Portal” has been currently being rolled developed and is out and used to currently being rolled out compile Asset End year Financial Asset registry not Value and used to compile Register. SAP assets Statements with asset annexed to AFS Asset Register. SAP reconciliation work registry assets reconciliation completed for Ministry work on-going for the of Defense and major ministries by Agriculture as the budget size to be major ministries by completed by December budget size. Collection 2021. of legacy assets is on- going for migration to SAP. 3/30/2022 Page 9 of 12 The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) Date 01-May-2018 30-Nov-2021 23-Feb-2022 31-Jul-2022 “Neelan Portal” - asset portal has been developed and is currently being rolled out and used to compile Asset Register. SAP assets reconciliation work on-going for Ministry of Defense and Agriculture as the Comments: major ministries by budget size to be completed by December 2021. Project of collecting legacy assets on-going. External scrutiny and audit IN01107742 ►Inclusion of CPA techniques in Performance Audit (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Peer-to-peer assistance Peer-to-peer Two pilot Performance Value No use of CPA from SAI Philippines is assistance from SAI Audits conducted ongoing. Philippines is ongoing. using CPA Date 01-May-2018 30-Nov-2021 23-Feb-2022 31-Jul-2022 Peer-to-peer assistance from SAI Philippines is ongoing. Comments: Project and Change Management IN01107743 ►Improved communication of PFM reforms (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target One Change Management One Change Workshop was held. Management Workshop Communication Legal unit of Ministry was held. Legal unit of strategy exists of Finance have Ministry of Finance have undertaken several undertaken several All planned reviews of Public reviews of Public Finance consultation Finance Act, Fiscal Act, Fiscal Responsibility workshops held for Responsibility Act, Act, PCB Act, Public legal and business PCB Act, Public No PFM communication Finance Regulation etc. process review Value Finance Regulation strategy Several changes were etc. made to the Public Fifteen change Several changes were Finance Regulation management made to the Public through Circulars for: (i) workshops for key Finance Regulation Procurement, (ii) Budget stakeholders held in through Circulars for: Controls, (iii) Asset total by end of FY5. (i) Procurement, (ii) Management. stakeholders held in Budget Controls, (iii) total by end of FY5. Asset Management. Date 28-Feb-2014 30-Nov-2021 23-Feb-2022 31-Jul-2022 Procure services of institutional development firm to PFM Competency Framework for the key PFM functions, enhance a research-based culture at MoF with flexible working arrangements and support Comments: development and implementation of comprehensive change management strategy and communication plan with mechanism to generate client/beneficiary feedback. 3/30/2022 Page 10 of 12 The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) Accounting, reporting and internal audit IN01107744 ►Timely preparation of annual financial statements (AFS) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Due to the COVID-19 Due to the COVID-19 situation, FY2019 situation, FY2019 financial statement financial statement was was submitted for submitted for audit to audit to Auditor Auditor General Office General Office (AGO) (AGO) on October 12, on October 12, 2020. 2020. The 2019 un- The 2019 un-audited audited FS was FS was published on published on September System-generated AFS not accepted by September 27, 2021 27, 2021 and the audit AFS submitted to audit Value audit as complete and and the audit report is report is expected to be within 4 months from ready for audit. expected to be published by end of year end. published by end of December 2021. The December 2021. The FY2020 financial was FY2020 financial was submitted by Minister on submitted by Minister April 14, 2021 and audit on April 14, 2021 and is ongoing with audit is ongoing with expectation to be expectation to be published by end of published by end of January 2022. January 2022. Date 28-Feb-2014 30-Nov-2021 30-Nov-2021 31-Jul-2022 FY 2019 – expected to be published by end of October 2021 and FY 2020 – expected to be published by Comments: end of December 2021 Performance-Based Conditions Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P145317 IDA-62200 Effective USD 6.00 6.00 0.00 5.17 0.63 89% P145317 IDA-D2950 Effective USD 6.00 6.00 0.00 2.95 2.89 50% P145317 IDA-H9510 Effective USD 6.50 6.50 0.00 6.03 0.00 100% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P145317 IDA-62200 Effective 07-Jun-2018 31-Jul-2018 28-Sep-2018 31-Jul-2022 31-Jul-2022 P145317 IDA-D2950 Effective 07-Jun-2018 31-Jul-2018 28-Sep-2018 31-Jul-2022 31-Jul-2022 3/30/2022 Page 11 of 12 The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) P145317 IDA-H9510 Effective 26-Jun-2014 17-Aug-2014 02-Oct-2014 31-Jul-2019 31-Jul-2022 Cumulative Disbursements Restructuring History There has been no restructuring to date. Related Project(s) P164322-Maldives Public Financial Management Systems Strengthening Project 3/30/2022 Page 12 of 12