Document o f The World Bank FOR OFFICIAL USE ONLY Report No: 50283-JM PROJECT APPRAISAL DOCUMENT ON A PROPOSED LOAN I THE AMOUNT OF US$16 MILLION N TO JAMAICA FOR AN EDUCATION TRANSFORMATION CAPACITY BUILDING PROJECT October 27, 2009 Human Development Department Caribbean Country Management Unit Latin America and the Caribbean Region This document has a restricted distribution and may be used by recipients only in the performance o f their official duties. I t s contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective October 21,2009) Currency Unit = Jamaican Dollar JMD$88.20 = US$l.OO FISCAL YEAR April 1 - March 31 ABBREVIATIONS AND ACRONYMS --.----------.--.---II--.-I---.----.-----_--__.__I___._.___._____.___-___-_ __ .___I__---- APL Adaptable Program Lending AWP ____I_.__ Annual Work P r 3 r a m I _ _ I I____._I_._________.__._________ _____-_-_._-__- ___I rCARICOM Caribbean Community ' LMU C -_I____-__ Change Management Unit o f the M i n i s m f Education -_____ -_ 1 DLT Disbursement-Linked Target ESTP - - Education System Transformation Progamme ETT Education Transformation Team GNAT I - Grade Nine Achievement Test ____-~-_____- _ _ _l_l - __l_. GOJ Government o f Jamaica GDP Gross Domestic Product ~ IDB Inter-American Development Bank IDP -_____-l_____-" International DevelTment Partner - . I -- IFC International Finance Corporation ____--______ J-EFx--- Interim Unaudited Financial Report _- - - i JTC _ - . Jamaica Teachingcouncil 1 _ 1-.I .. 1 1_ _ _._--_--_ ..-.I__.._I___-______..._.I___1 - 1 1 1 .-._._ _ - _ _ I. --- --- . -1 1 .- _ _ 1_ - MOE Ministry o f Education -- Ministry o f Finance and the Public Service ___-______ National Education Inspectorate ____.___ __ -__I ... - .__ National College for Education Leadership ____..______I_-_I.__ - ___..__.._- ____...___ .._..__.------..----I NET National Education Trust - - .1. . PIOJ - _1_1___1__11__ I _~ -Planninghstitute o - __ - - - _ - - ---____--___-__I.___-_ I _ I _11 . . __1_ - . 1 f Jamaica - __ PMSC Programme Management Steering Committee P O M .__.-.____.__ Programme Operations Manual -_.-_I_____.--___.__._-_.I___.._..__ ~ ~ ------___I PPP Public-Private Partnership PSMD ---..-_.I_-________-___II_ Public Sector Modernization Division _ - - -l__l__ __-.___. ll_-_l___- Public Sector Modernization Programme Quality Education Circle ____- REA Regional Education Authority SIL _...I_I____ Investment Loan Specific _-_Iii______l__-_-_il_-~.--.- __._.I _I_ SIP School Improvement Plan i USAID - - United States Agency - - Development Vice President: . Pamela Cox Country Director: Yvonne Tsikata Sector Director Evangeline Javier Sector Manager: Chingboon Lee - Task Team Leader: Cynthia Hobbs JAMAICA Education Transformation Capacity Building Project CONTENTS Page . I STRATEGIC CONTEXT AND RATIONALE ................................................................. 1 A . Country and sector issues.................................................................................................... 1 B. Rationale for World Bank involvement.. ............................................................................ 3 C. Higher level objectives to which the project contributes .................................................... 4 . I1 PROJECT DESCRIPTION ................................................................................................. 5 A . Lending instrument ............................................................................................................. 5 B. Project development objective and key indicators .............................................................. 5 C. .............................................................................................................. Project description 5 D. Lessons learned and reflected in the project design.......................................................... 12 E. Alternatives considered and reasons for rejection ............................................................ 12 I11 . IMPLEMENTATION .................................................................................................... 13 A. Partnership arrangements .................................................................................................. 13 B. Institutional and implementation arrangements.. .............................................................. 13 C. Monitoring and evaluation o f outcomeshesults., .............................................................. 14 . . . D. Sustainability ..................................................................................................................... 15 E. Critical risks and possible controversial aspects., ............................................................. 15 F. Loadcredit conditions and covenants ............................................................................... 18 IV . APPRAISAL SUMMARY ............................................................................................. 18 A . Economic and financial analyses ...................................................................................... 18 B. Technical ........................................................................................................................... 19 C. Fiduciary ........................................................................................................................... 19 D. Social ................................................................................................................................. 20 E. Environment...................................................................................................................... 20 F. Safeguard policies ............................................................................................................. 21 G. Policy Exceptions and Readiness ...................................................................................... 21 ... 1 11 Annex 1: Country and Sector Background .............................................................................. 22 Annex 2: Major Related Projects Financed by the Bank and other Agencies ........... 29 Annex 3: Results Framework and Monitoring........................................................................ 33 Annex 4: Detailed Project Description...................................................................................... 40 Annex 5: Project Costs ............................................................................................................... 48 Annex 6: Implementation Arrangements ................................................................................. 49 Annex 7: Financial Management and Disbursement Arrangements..................................... 54 Annex 8: Procurement Arrangements...................................................................................... 65 Annex 9: Economic and Financial Analysis ............................................................................. 70 Annex 10: Safeguard Policy Issues............................................................................................ 76 Annex 1 : Project Preparation and Supervision ..................................................................... 1 77 Annex 12: Documents in the Project File ................................................................................. 78 Annex 13: Statement of Loans and Credits.............................................................................. 80 Annex 14: Country at a Glance ................................................................................................. 81 Annex 15: Map IBRD 33423 ...................................................................................................... 83 iv JAMAICA EDUCATION TRANSFORMATION CAPACITY BUILDING PROJECT APPRAISAL DOCUMENT L A T I N AMERICA AND CARIBBEAN LCSHE Date: October 27,2009 Team Leader: Cynthia Hobbs Country Director: Yvonne M. Tsikata Sectors: General education sector (100%) Sector Manager/Director: Chingboon Lee Themes: Education for the knowledge economy (100%) Project ID: P107407 Environmental category: Not Required Lending Instrument: Specific Investment Loan Joint IFC: Joint Level: Project Financing Data [XI Loan [ ] Credit [ 3 Grant [ ] Guarantee [ ] Other: ~ For Loans/Credits/Others: Total Bank financing (US$m.): 16.00 Proposed terms: The loan would be an IBRD Flexible Loan, in U S Dollars, with a variable spread, a 26 years disbursement-linked level repayment term including a 5-year grace period, Borrower: Jamaica Responsible Agency: Ministry o f Education 2 National Heroes Circle Kingston Jamaica Tel: (876) 922-1400 V Project implementation period: Start April 1,201 0 End: March 3 1, 20 14 Expected effectiveness date: April 1, 20 10 Expected closing date: March 3 1,2014 Does the project depart from the CAS in content or other significant respects? Ref: PAD I.C. [ No Does the project require any exceptions from Bank policies? Ref: PAD IKG. [ ]Yes [XINO Have these been approved by Bank management? [ ]Yes 1 IN0 I s approval for any policy exception sought from the Board? [ ]Yes [XINO Does the project include any critical risks rated "substantial" or "high"? [ ]Yes [XINO Ref: PAD III.E. I . Does the project meet the Regional criteria for readiness for implementation? [XIYes [ ] N o Ref: PAD I K G. I . Project development objective Ref: PAD ILC., TechnicalAnnex 3 The objective o f the Project i s to build the capacity o f the emerging key agencies (National Education Inspectorate, Jamaica Teaching Council, Regional Education Authorities, and National Education Trust) that are being established to support the national Education System Transformation Programme (ESTP). The Objective o f the ESTP i s to improve the efficiency, accountability and performance o f the different levels o f the education system. Project description [one-sentence summary o each component] Ref: PAD II.D., Technical f Annex 4 The Project will support the implementation o f the ESTP by focusing on capacity building within the key education sector institutions established to implement the Programme (NEI, JTC, REAs, and NET). The Project will use a series o f Disbursement-Linked Targets to help monitor progress o f the agencies in attaining individual and collective goals which will advance the ESTP. Activities to be carried out under this Project are grouped under the following three components: Component 1: Enhanced Performance and Accountability would contribute to the implementation o f the GOJ's ESTP by making operational the following key agencies to form a coherent system to monitor progress and improve accountability and quality: National Education Inspectorate, Jamaica Teaching Council, and Regional Education Authorities. Component 2: Mechanisms to Mobilize Resources to the National Education Trust (NET) would contribute to the implementation o f a marketing strategy to mobilize resources for the NET, and training for NET and other relevant GOJ staff in the use o f public-private partnerships. Component 3 : Communications, Project Management, and Monitoring and Evaluation would support the implementation o f a strategic communications strategy; provision o f staffing, training, purchase o f necessary equipment and materials, and operating costs for the Ministry o f Education's Change Management Unit, responsible for overseeing implementation o f the ESTP; and support to carry out evaluations o f the ESTP, and annual external audits o f project financing. vi Which safeguard policies are triggered, if any? Ref: PAD IKF., TechnicalAnnex 10 None. Significant, non-standard conditions, if any, for: Ref: PAD III. F. Board presentation: None. Loan effectiveness: The Programme Operations Manual i s adopted by the MOE. Covenants applicable to project implementation: Covenants include: (i) compliance o f the Eligible Expenditures Program with the eligibility criteria and procedures set forth in the Programme Operations Manual; (ii) review, by mid- joint term, o f the Disbursement-linked Targets; (iii) commitment by the GOJ not to carry out under the Project any construction, expansion or maintenance o f infrastructure; and (iv) within two months o f project effectiveness, hiring o f a procurement manager according to the terms o f reference included in the Programme Operations Manual. vii I. STRATEGIC CONTEXT AND RATIONALE A. Country and sector issues 1. Economic growth in Jamaica has been slow; investment in human capital i s necessary to jumpstart Jamaica's economic development. Jamaica, with a population o f 2.7 million and gross domestic product (GDP) per capita o f US$ 5,196, i s the largest economy in the English-speaking Caribbean. In the past decade, the economy has been growing at a relatively slow 0.8 percent per year, which lags behind many other Caribbean nations. The United Nations Development Programme's Human Development Index shows that Jamaica i s ranked 86th out o f 179 countries, behind other Caribbean nations. The economic downturn has significantly affected Jamaica, leading to an increase in unemployment. Remittances, the leading source o f foreign exchange earnings at US$2 billion in 2008, have begun to decline while earnings from tourism have barely remained steady. 2. Jamaica i s burdened by a high level of debt. For FY2008/2009, the public debt to GDP ratio was1 15.7 percent. The annual bill for public debt service i s the largest item in the national budget. The debt puts a brake on economic growth and limits resources available for development. Within this context, the Government o f Jamaica (GOJ) i s prioritizing education for development investment, and the education sector has been more protected from budget cuts than other sectors. The global economic slowdown makes it even more urgent for Jamaica to develop a better educated work force that i s more productive and resilient. 3. Jamaica has made substantial progress in the education sector over the past four decades, but many challenges remain. At independence, in 1962, education coverage was low, particularly beyond the primary level. In 1971, the enrollment rate in secondary education was only 46 percent. Since then, there has been substantial improvement in coverage; universal coverage in primary education was attained around 1990. The net enrollment rates (NER) for primary education averaged nearly 95 percent in the past decade and increased at the secondary level from 57 percent in 1975 to 78 percent in 2007. Access to post-secondary education i s s t i l l limited. 4. While coverage i s high, the quality of public education needs to be improved. There i s an urgent need to improve education quality and raise standards if Jamaica i s to build a dynamic economy that i s globally competitive. While Jamaica does not currently participate in international education assessments such as the Programme for International Student Assessment (PISA) or the Trends in Mathematics and Science Study (TIMMS), it does have a wide array o f national and regional learning assessments. The 2009 Grade 4 Literacy Test showed that 30 percent o f 4th grade students had not achieved mastery at their grade level. The National Grade Nine Achievement Test (GNAT) scores for 2009 reveal l o w student performance in English language (51.5%) and math (43.9%)'. The percentage o f Grade 11 cohort in public schools passing the Caribbean Secondary Education Certificate (CSEC), administered by the Caribbean Examinations Council (CXC), has only increased in English language from 28.5 percent in 2001 to 35.4 percent in 2009 and in math from 16.6 percent to 19.8 percent. ' Jamaica Ministry o f Education, 2009. 1 5. The underlying causes of low education quality are varied. A number o f key obstacles have been identified2: (i) Although the level o f teacher training i s relatively high (most teachers have some post-secondary education), there are significant differences in teacher capacity, and Jamaica does not have a licensing or certification scheme for teachers. (ii) The curriculum i s not well articulated and does not prepare students adequately to advance in school or into the workplace. (iii) Many students, especially at the secondary level, lack physical access to schools and often students are crowded into schools, forcing "double shifting" and reducing time available for learning. (iv) Management o f the education system i s centralized with limited resources and authority at the regional and school levels. Although schools generally have some form o f community participation, in many cases these mechanisms are not adequately developed and cannot take concerted action to improve school quality. 6. The Government of Jamaica (GOJ) launched a Public Sector Modernization Programme (PSMP) to improve public service delivery by moving operational functions and support closer to the "client" and introducing results-based management. A s part o f this public sector reform effort, and in response to the global environment in which knowledge-based economies gain importance, the GOJ has placed a high priority o n reforming the education sector and i s continuing the transformation o f the education system. 7. The design of the Education System Transformation Programme (ESTP) has much in common with the approach adopted under Jamaica's PSMP. The PSMP includes a Performance Management Appraisal System (PMAS), which establishes a more decentralized accountability framework: under the PMAS, service delivery units operate under individual business plans approved by their central policy ministry. There are 11 public sector departments presently implementing the PMAS. Another pillar o f the PSMP i s the Managing for Results Programme (2006), supported by the Inter-American Development Bank (IDB) PRODEV Project. The Managing for Results Programme aims to produce clear performance targets, reporting relationships, and lines o f accountability. The ESTP incorporates aspects o f both pillars. The PSMP i s led by the Public Sector Modernization Division (PSMD) within the Cabinet Office o f the Prime Minister. The PSMD has extensive experience supporting public reform processes and i s collaborating with the Ministry o f Education (MOE) team. 8. The ESTP aims at ensuring more effective and efficient education service delivery by expanding access, improving teaching and learning, and transforming the governance structure of the education system. This i s a sector-wide program to be implemented over a ten- year period. The transformation o f the governance structure comprises a core element o f the program. It seeks to bring greater levels o f accountability and improved quality to the system by: 2 This i s largely based on findings from the Ministry o f Education's Task Force on Education Reform (2004), A Transformed Education System. 2 (a) decentralizing decision-making; (b) increasing the capacity o f teachers and administrators; (c) strengthening monitoring and evaluation to provide more targeted support to schools; and (d) creating mechanisms to mobilize more resources to meet the educational needs. An overview of the ESTP i s presented in Box 1.1 o f Annex 1. 9. The GOJ has invested significant financial and technical resources to design and plan the ESTP,3and there i s strong bi-partisan and national support for education reform. The ESTP i s now at a critical juncture where plans become reality. The GOJ has turned to the World Bank (the Bank), the IDB, the United States Agency for International Development (USAID), and other development partners to support different elements o f the program. The ESTP addresses major issues facing the education sector and reflects the solutions the M O E has sought through extensive research and technical assistance. 10. A cornerstone o f the ESTP i s the establishment o f independent agencies which are accountable for results and are capable of assuring quality of service delivery and monitoring progress on reforms. These agencies have been designed to work together to improve the efficiency and effectiveness o f the education system and to address the quality and accountability issues outlined above. The new agencies include the National Education Inspectorate (NEI), the Jamaica Teaching Council (JTC), and the Curriculum and Assessment Agency4. At the same time, the GOJ i s establishing Regional Education Authorities (REAS)to decentralize some o f the quality assurance function to the local level. The proposed Project will support the NEI, JTC, and REAs in their efforts to respond to issues (i) (iv) above (see and paragraph 5). The creation o f a National Education Trust (NET) i s seen as critical for mobilizing public and private resources, particularly for school infrastructure to respond to issue (iii) above. The NET will receive technical assistance under the Project. Although the GOJ has already begun the process o f establishing these agencies, a key challenge over the next four years would be to build up the human resources, institutional structures, and systems required for them to become fully functioning entities. A time-bound plan has been developed to make each agency operational, with milestones defined for contracting staff and carrying out new functions, development o f monitoring and evaluation (M&E) systems, and stakeholder outreach. The GOJ has asked the Bank to assist with the implementation o f this plan. B. Rationale for World Bank involvement 11. The Bank has extensive experience working in the education sector in Jamaica and has built solid relationships with key stakeholders. The ESTP has strong local support, but the reform needs both financial and technical support to ensure implementation and positive impact on education outcomes. The GOJ has emphasized the importance o f bringing the Bank's international experience and strategic support to the ESTP. The Bank can provide value added 3 In 2004, the GOJ appointed a high-level Task Force Team on educational reform to examine the reform options. The Team conducted a comprehensiveanalysis of the problems facing the education sector and identified constraints to improving education effectiveness. Following National Task Force recommendations, the GOJ established an Education Transformation Team (ETT) in 2005 to design the ESTP. The ETT has been replaced by the Change Management Unit, which will be responsible for implementing the MOE's transition to a policy ministry. 4 The Curriculum and Assessment Agency has not yet been established. The MOE i s determining whether the creation o f this additional agency i s necessary or whether the current Curriculum Unit could cany out the necessary functions. 3 through technical assistance and flexible lending instruments that respond to the needs o f the ESTP as it evolves. 12. Jamaica's education transformation i s ambitious and i s based on detailed study o f international good practice. The Bank has extensive international experience in school inspection and accreditation, teacher licensing and establishment o f qualifications, devolvement o f responsibilities from central level ministries to the regions, and capacity building for education leaders. Reform o f the public administration in the education sector i s a central part o f the education transformation, and the Bank also has extensive experience in these reforms in numerous countries and sectors. The Bank's experience has been useful to the GOJ in considering reform options during the project preparation process, and the Bank will continue to share experiences and lessons learned with the M O E during project implementation. 13. The GOJ has requested specific Bank assistance in reviewing the administrative and financial management framework for the NET, building on the Bank's strengths in financial management to ensure transparency in this new agency and to build public confidence. The NET will use public-private partnerships (PPPs) as one method for financing school infrastructure, and the M O E i s drawing from the Bank's experience in implementation o f PPPs. The Bank has facilitated contacts between the M O E and International Finance Corporation (IFC) on different options for PPPs. In addition, the Bank has entered into a dialogue with the M O E on a broader range o f public-private options.' C. H i g h e r level objectives t o w h i c h t h e p r o j e c t contributes 14. The proposed Project will support implementation o f the national Education System Transformation Programme (ESTP), whose objective i s to improve the efficiency, accountability, and performance o f the education system. The ESTP has been developed and the new agencies have been designed to meet this ultimate goal. The Project will provide targeted assistance to make operational the agencies that are fundamental to improved capacity for delivering high quality education, and establish mechanisms to mobilize additional resources for the education sector. 15. The proposed Project i s aligned with the World Bank Group's new Country Partnership Strategy (CPS), which i s under discussion and i s expected to be presented to the Executive Directors in this fiscal year. The Project's focus on capacity building across the education system falls squarely within the parameters o f the CPS's development pillar to promote inclusive and sustained growth and the sub-pillar to strengthen human capital. To improve education quality and accountability, the Project will support the establishment and effective use o f school evaluation and o f standards and qualifications for teachers and principals; training in instructional leadership and school management for school principals, middle managers and school boards; additional programs for school boards, bursars, and regional school improvement officers to ensure a team approach to improving school management; and training in the implementation o f public-privatepartnerships to gain additional resources to support the sector. The World Bank publication on public-private cooperation, The Role and Impact o Public-Private Partnerships in f Education, has been well received in Jamaica. 4 11. PROJECT DESCRIPTION A. Lending instrument 16. The proposed Project i s being financed as a Specific Investment Loan (SIL) in the amount o f US$16 million to be disbursed over four years, which will cover the Jamaican 2010, 201 1,2012, and 2013 fiscal years (April 2010 to March 2014). B. Project development objective and key indicators 17. The objective o f the Project i s to build the capacity o f the emerging key agencies (NEI, JTC, REAs, and NET) that are being established to support the national Education System Transformation Programme (ESTP). 18. Success in achieving this objective will be assessed using the following indicators: (a) The NE1 has developed an effective inspection system that accurately identifies school weaknesses, as evidenced by the fact that at least 75 percent o f inspected schools have School Improvement Plans (SIPs) reflecting recommendations made in NE1 school inspections. (b) The JTC has identified teacher training needs, through NE1 inspections, and offers relevant training through Quality Education Circles to ensure the teachers meet the professional standards to be licensed, as evidenced by the fact that at least 50 percent o f teachers meet professional standards for licensing. (c) School principals have received sufficient training and support through the N C E L (JTC) and from the REAs to develop SIPs, as evidenced by the fact that at least 60 percent o f schools are implementing SIPs. (d) The marketing strategy has attracted alternative resources and NET staff has sufficient understanding and knowledge o f PPPs to use this as a tool to finance school infrastructure, as evidenced by the fact that the NET i s receiving financial and other resources from non-traditional sources. 19. In addition to these outcome indicators, intermediate outcome/output indicators are detailed in Annex 3. C. Project description 20. The Bank-financed project will support the implementation o f the ESTP by focusing on capacity building within the key education sector agencies (NEI, JTC, REAs and NET) established to implement the Programme. It will do so by co-financing budget lines dedicated to specific activities for these agencies. Such a close link to specific eligible expenditures i s necessary because Jamaica has a very tight budget position, which i s made even more challenging by the ongoing global crisis. As a result, most budgeted expenditures do not have sufficient cash resources assigned to them, and competition for funds among various programs i s fierce. This means, in practice, that unless Bank hnding i s explicitly linked to specific inputs, there i s a high probability that reliable funding will not be available to finance these inputs even if the program in question is a high priority for the country. 5 21. At the same time, the Government and the Bank have agreed to shift the focus o f project implementation from inputs to results, in line with the general move towards performance-based budgeting in Jamaica. Therefore the Project will use a series o f Disbursement-Linked Targets (DLTs) to help monitor progress o f the agencies in attaining individual and collective goals, which will advance the ESTP. Disbursement arrangements are further described below and in Annex 7 . 22. Activities to be carried out under this Project can be grouped under the following three components: Component 1: Enhanced Performance and Accountability will contribute to the implementation o f the GOJ's ESTP, specifically by making operational the following key agencies to form a coherent system to monitor progress and improve accountability and quality: 1.1. National Education Inspectorate (NEI). The Project will provide support to the NE1 to establish a systematic inspection process and baseline data on school and student performance in the approximately 1,000 public primary and secondary schools, including: (a) establishment o f an inspection management information system (provision o f technical assistance, procurement and installation o f software and hardware, and training in the use o f the system); (b) training o f inspectors; (c) baseline inspections (including the contracting o f inspectors, inspection costs and publications); and (d) national consultation meetings on NE1 mandates. The inspection management information system will store the inspection reports and track progress on recommendations made during the inspections. The inspection process i s intended to bring greater accountability to and improve the quality o f education. Recommendations from the inspection reports will be shared with the JTC and REAs in order to coordinate support to the schools in teacher development, education leadership training and school improvements. Progress in implementing this group o f activities will be monitored through the following Disbursement-Linked Targets: 0 Training program for NE1 inspectors initiated (November 20 10) 0 10 pilot school inspections completed and reports published on the MOE's website (November 20 10) 0 Inspection handbook approved by the M O E (November 201 1) 0 At least 300 school inspections completed and inspection reports published on the MOE's website (November 2012) 0 At least 600 school inspections completed and inspection reports published on the MOE's website (November 20 13) 1.2. Jamaica Teaching Council (JTC). The Project will provide support to operationalize the JTC including: (a) establishment and implementation o f a licensing and registration system for teachers; (b) carrying out o f training o f teachers and JTC staff, as well as orienting teachers in the licensing process and procedures; (c) review o f the existing mentoring program; (d) professional development . o f JTC staff and college lecturers; (e) in-service 6 teacher training in areas required for licensing; (Q publishing o f a journal describing best practices in teaching and school leadership; (g) development o f a teacher management information system; and (h) establishment o f programs for the National College for Education Leadership (NCEL). The licensing and registration system will ensure that teachers meet minimum qualifications, while the teacher management information system will track the teachers who have been registered and licensed and ensure regular re-licensing every five years. An in-service teacher training program will support the licensing system and professional development o f teachers. This will be done through some 60 Quality Education Circles (QECs), which are being established across the country. The N C E L falls under the umbrella o f the JTC and will work to improve the standards and qualifications for school principals and education leaders and the preparation o f staff to move into positions o f leadership. Areas for training o f teachers and school principals will be identified through the school inspections. Progress in implementing this group o f activities will be monitored through the following Disbursement-LinkedTargets: Teacher registration system operational (November ,2010) Conceptual framework for N C E L approved by Cabinet (November 20 10) At least 10 QECs in operation (November 20 11) At least 3,000 teachers registered by JTC (November 201 1) At least 10,000 teachers registered by JTC (November 20 12) 0 Leadership training programs developed for delivery through N C E L (November 20 12) Licensing system fully established by JTC (November 20 13) 0 At least one group o f education leaders certified by N C E L (November 2013) 1.3. Regional Education Authorities (REAs). The functions, roles and responsibilities o f current Regional Offices will be re-focused from administrative oversight to more direct, enhanced support to schools, aimed at improving outcomes. They will focus on clinical supervision, school safety and security, leadership, management and governance, citizenship, and community outreach and parenting. Training will be provided for Education Officers to assume new functions as School Improvement Officers and School Support Officers. Training to School Boards will enable them to participate more fully in school leadership. The Project will provide support for the setting up and operationalization o f the REAs, including: (a) capacity building for School Improvement Officers and School Support Officers; (b) specialist training in areas to support children with special learning needs; (c) training o f school boards to understand and carry out the mandates o f the Education Act and other new legislation and M O E policies; and (d) provision o f equipment and software for the REAs. Progress in implementing this group o f activities will be monitored through the following Disbursement-LinkedTargets: 0 Functional profiles for REA operations approved by the MOE (November 20 12) 0 Following a pilot in two model regions, training commenced for REA staff in the other five regions (November 20 13) 7 Component 2: Mechanisms to Mobilize Resources to the National Education Trust (NET). The NET will be the vehicle through which the M O E will secure a consistent and reliable source o f funds to support capital programs in education with a particular focus on, but not limited to, infrastructure. Mechanisms will be established to attract funding from the Diaspora, the private sector, and other sources. The work o f the NET will comprise: (a) management o f an endowment fund; (b) employment o f alternative methods for school construction and maintenance, such as Public-Private Partnerships (PPPs); (c) technical services to establish guidelines for school design, school construction, environmental safeguards, and supervision; and (d) support for capital programs in education. The Project will support: (a) training for NET and other relevant GOJ staff in the implementation o f PPPs; and (b) carrying out o f a marketing campaign to mobilize resources for the NET. Progress in implementing this group o f activities will be monitored through the following Disbursement-LinkedTargets: NET formally established (incorporated as a Limited Liability Company) (November 2010) NET operational plan approved by the M O E (November 201 1) NET'Slegal and financial staff trained in relevant areas (November 2012) NET international marketing campaign launched (November 20 13) Component 3: Communications, Project Management, and Monitoring and Evaluation would support: 3.1. Communications. The ESTP entails fundamental structural changes o f the education system, and it will have a substantial impact on all the stakeholders, including M O E staff, education officers, school principals, teachers, parents, and students. Engaging all stakeholders and sustaining their interest and support for the ESTP i s fundamental to the success o f the transformation process. The Project will support implementation o f a communications strategy to raise public awareness and seek support for the ESTP, including the carrying out of: (a) public meetings on the ESTP across the Borrower's territory, for all interested citizens; (b) stakeholder consultations for the new education agencies; (c) internal meetings on the human resource policy for the M O E staff; and (d) media campaigns. Progress in implementing this group o f activities will be monitored through the following Disbursement-LinkedTarget: Communications plan for stakeholders developed and approved by M O E (November 201 1) 3.2. Proiect Management. The Project will be implemented by a Change Management Unit (CMU), which has been established within the M O E to oversee the entire ESTP, including those activities financed by the Bank and other international development partners (IDB, USAID, etc). The Project will provide support to the C M U in i t s oversight o f the ESTP, including the hiring o f staff, provision o f training and o f necessary equipment and materials, and other operational costs. 8 3.3. Monitoring and Evaluation. The C M U will also oversee the annual external audit o f project finances, as well as the monitoring and evaluation (M&E) o f the project and the ESTP. The M&E activities will include both process and summative evaluations. Further details on the M&E can be found below in Section 1II.C. The Project will support conducting of audits, hiring o f consultants to carry out the evaluations, and provision o f necessary equipment, Disbursement arrangements 23. T o ensure reliable financing, most o f the loan funds will be disbursed to the GOJ through advances twice a year (in May and November). Loan funds will be transferred to a designated account to be administered by the Change Management Unit (CMU) o f the MOE. An initial advance will be provided on the basis o f a withdrawal application and the projected expenditures during the period from Loan Effectiveness to the second withdrawal in November o f that year. All subsequent M a y advances will be on the basis o f planned expenditures only, as determined by eligible budget lines. All November advances will be disbursed on the basis o f expenditures in the eligible budget lines and the attainment o f five disbursement-linkedtargets. Advances are expected to be made on the dates and in the proposed amounts shown in Table 1. The advances represent the MOE's estimates o f the finding requirements to finance the project activities agreed during appraisal. If eligible expenditures are less than expected in any semester, which i s unlikely, then the amount o f the shortfall would be withheld from the subsequent advance. As explained below, this schedule o f advances would be subject to periodic adjustments, based on annual reviews o f the CMU's work program for the coming fiscal year, taking into account actual project implementationexperience. Table 1: Disbursement Schedule for Loan Advances Date Type of Advance Amount, U S dollars April, 20 10 Initial advance $2.0 million I May,2011 I Advance I $3.0 million I November, 201 1 DLT-linked advance $1.O million May, 2012 Advance $3.5 million November, 20 12 DLT-linked advance $1.O million May, 2013 Advance $2.0 million November, 20 13 DLT-linked advance $1 .O million 24. While most o f the Project will be financed through advances, some activities will be financed through other disbursement methods. Certain Project expenses will be financed on the basis o f direct payments by the Bank. These include: 0 The front-end fee. The Project will finance the standard front-end fee for IBRD loans o f US$40,000. 9 0 Retroactive expenses. The GOJ and the Bank have agreed to finance up to US$500,000 in retroactive expenses. These expenditures will be financed on the basis o f reimbursement, and the funds will be transferred directly to the GOJ's consolidated fund. L a r g e procurement packages. The M O E has identified two or three large procurement items (technical assistance for marketing and/or software for NEI) that may be paid through direct payments by the Bank. These will total approximately U S $ l ,000,000. 25. T h e Project uses a results-based incentive to ensure that key actions are taken to advance the ESTP. Once a year, with the November advance, the M O E will provide to the Bank evidence that five key actions have been carried out (see Table 2), subject to Bank review. If all five disbursement-linked targets (DLTs) are met in a timely fashion, the Bank will transfer 100 percent o f the requested advance to the designated account. For each target that i s not met, the transfer to the designated account will be reduced by 20 percent. For example, if three targets are met in a given year, 60 percent o f the November advance will be transferred to the designated account. The M O E will prepare a time-bound action plan to achieve any DLTs that have not been met, and as soon as the delayed DLTs are attained, the Bank will include the withheld amount in the next advance payment. 26. L o a n proceeds w i l l finance eligible expenditures to support key E S T P activities. Specific program activities have been identified as eligible. They include operational expenditures, contained in five ESTP budget sub-objects6 for the NEI, JTC, REAs, NET, and the CMU. Those expenditures that are deemed ineligible include the purchase of land and infrastructure. The GOJ will provide a detailed breakdown o f the project activities to be supported under each budget line, known as a Cash Flow Statement, which will be used for documenting expenditures against which advances will be made. This i s a standard reporting mechanism in Jamaica. This information can be verified independently through M O E and Ministry o f Finance and the Public Service (MOFPS) documents. 27. T h e use o f advances i s designed to give the MOE flexibility to implement the E S T P . The C M U will prepare an Annual W o r k Program (AWP) at the beginning o f each fiscal year (April 1) that will delineate the use o f the project funds and present a detailed budget, taking into account actual project implementation experience. The A W P will also discuss the likelihood o f meeting the annual DLTs and other challenges facing project implementation. The Bank's concurrence with the A W P i s required for disbursement o f advances for that fiscal year. 28. T h e proposed results-based disbursements have four significant advantages over traditional financing arrangements. First, the proposed arrangements broadly follow the incentive framework that the GOJ i s introducing as part o f i t s public sector reform. The M O E i s working with the Cabinet Office and the MOFPS to improve public sector management under the ESTP in order to ensure the timely release o f budgeted funds and hold new agencies accountable for achieving targets. Second, by linking disbursementsto the reform o f policies and the achievement o f concrete intermediate outcomes, the loan will leverage i t s resources to This includes the following sub-objects: 2 1-Compensation o f Employees, 22-Travel Expenses and Subsistence, 23-Rental of Property, Machinery and Equipment, 25-Purchases o f Other Goods and Services, and 3 l-Purchases o f Equipment (Capital Goods). 10 support the overall education modernization process. Loan funds only constitute a small percentage o f the total amount dedicated for the ESTP over the four years (about 4 percent o f the estimated US$4 10 million). However, the Project targets critical areas necessary to establish institutions that are central t o the reform, and represents 45 percent o f the estimated US$35 m i l l i o n needed t o make operational these agencies. Third, since only one disbursement per year i s linked to targets, the proposed approach will result in a steadier, more predictable f l o w o f funds, which i s particularly important given the on-going financial crisis. Finally, the annual Disbursement-Linked Targets focus the attention o n achieving agreed results while allowing for some flexibility in the activities and inputs necessary to achieve these results. Table 2: Disbursement-LinkedTargets November 2010* November 201 1 November 20 12 November 20 13 Training program for At least 10 Quality Functional profiles for Training commenced for NE1 inspectors initiated Education Circles in REA operations REA staff for five operation approved by M O E regions 10 pilot school Inspection handbook At least 300 school At least 600 school inspections completed approved by M O E inspections completed inspections completed and reports published on and inspection reports and inspection reports MOE's website published on MOE's published on MOE's website website Teacher registration At least 3,000 teachers At least 10,000 teachers Licensing system fully system operational registered by the JTC registered by the JTC established by JTC Conceptual framework Communications plan for Leadership training At least one group o f for National College for stakeholders developed programs developed for education leaders Educational Leadership and approved by M O E delivery through NCEL certified by NCEL (NCEL) approved by Cabinet NET formally N E T operational plan NET'Slegal and NET international established (incorporated approved by M O E financial staff trained marketing campaign as a Limited Liability in relevant areas launched Company) *Disbursement-linked targets will be measured on the 3 0 o f September o f each year, and verification will be ~ provided by end October to qualify for the November advance. Alternate advances would be disbursed in May of each year, based on verification o f expenditure of the previous advance. 11 D. Lessons learned and reflected in the project design 29. Results-based financing i s understood in Jamaica. The Jamaica Early Childhood Development (ECD) Project has introduced the model with a similar set o f incentives, bringing together various sectors to work on one common program. This i s comparable to the ESTP, where different agencies will be responsible for working towards national sector goals under the direction o f the CMU. The C M U i s developing an implementation plan to clearly establish and coordinate activities across the agencies. The proposed Project has a clearly defined, realistic set o f disbursement-linked targets and a C M U with adequate technical and fiduciary capacity to administer the Project, building on the experience o f the E C D project's initiation to results-based financing. 30. Fiscal space i s limited and must be taken into account in project design. Even before the current economic recession, Jamaica was burdened by a high debt level, and servicing the debt accounts for more than 50 percent o f the national budget. This limits the capacity o f Jamaica to finance innovative initiatives. This requires a careful prioritization o f funds and a selection o f activities that are likely to have catalytic impact on the rest o f the education system. The M O E and the Bank have worked together to identify the areas for support that are most critical to moving the ESTP forward. Advances and results-based disbursements provide a steady, predictable flow o f funds, thus ensuring continued progress o f the reform program. 31. I t i s important to engender local ownership. The M O E has included teacher union representatives in the diagnosis and planning o f the ESTP, and has already carried out a number o f consultations across the country to inform stakeholders about the ESTP and gather feedback on the reform process. The Project will support a broad communications campaign to keep the national, regional and local education communities informed, as well as internal communications to facilitate the change management process. Training o f school boards and managers will encourage more inclusive collaboration with school management and leadership. E. Alternatives considered and reasons for rejection 32. The use o f a Development Policy Loan (DPL) o r a standard Sector-wide Approach (SWAp) to support education reform was considered. However, Jamaica's budget execution i s carried out through a system o f warrants issued by the MOFPS to authorize any expenditure. For a warrant to be issued, funds must be available in the relevant account. If the loan were to co-finance a broader Government program (through a D P L or SWAp), allowing for greater fungibility o f resources, in the prevailing conditions whereby there i s a shortage o f funds, loan resources could be claimed by other M O E programs. In this case, activities necessary to meet the agreed targets would not receive guaranteed funding. Therefore, a decision was made to combine the use o f disbursement-linked targets with defined eligible expenditures. This will ensure that funds are made available directly to the ESTP and will allow this relatively small loan to have maximum impact. 33. The GOJ originally requested some funding for school construction. Though a traditional investment in school infrastructure would have responded to an ongoing national priority and assisted in ending "double shifting," it was decided that the Project would have 12 greater impact if it focused on targeted support to build technical capacity o f the NET, thus helping the GOJ to develop a mechanism that could be sustainable over time. 34. An Adaptable Program Loan (APL) was considered. However, a Specific Investment Loan (SIL) was seen as the best means to reach the GOJ's objectives because the reform i s in i t s early phases. While the Bank has made a long t e r m commitment to work with the GOJ on education reform, there i s s t i l l uncertainty as to how the ESTP will evolve, making it difficult to develop triggers at this stage. The GOJ has expressed interest in a follow-up operation once the ESTP i s up and running, focusing on implementation issues to be identified as the new agencies begin to carry out their intended functions. The proposed SIL will provide a guarantee o f government financing for critical areas to initiate the education transformation process. 111. IMPLEMENTATION A. Partnership arrangements 35. The GOJ has invested a substantial amount (over US$62.5 million) on the initial phase o f the ESTP, but there i s s t i l l a financing gap. Although there i s no formal co-financing or parallel financing arrangement, the Bank i s collaborating closely with other international development partners to support the ESTP. The IDB has provided US$30 million in general budget support to the national treasury through policy-based lending focused on education. Additional policy loans are scheduled to be disbursed in 2010 and 2012 against achievements o f the ESTP. The Bank and the IDB have agreed to one common Programme Operations Manual to guide the work o f the CMU. USAID will provide targeted technical assistance for the NET, which will complement Bank support. UNICEF, UNESCO, and UNDP are supporting specific programs to improve education quality. The International Finance Corporation (IFC) i s exploring with the GOJ and the private sector the possibility o f establishing PPPs to support the government's education infrastructure program under the NET; the Bank i s facilitating these contacts. Finally, the GOJ meets regularly with an international development partners (IDP) group focused on education, to ensure compatibility o f donor support. The Bank actively participates in the I D P group and collaborates in activities to support the MOE. B. Institutional and implementation arrangements 36. Overall Responsibility. The Ministry o f Education (MOE) oversees the planning, coordination, and implementation o f the national education reform program (the ESTP), which i s partially supported b y this Project. The M O E will have overall project execution responsibility. 37. Management o f the ESTP. The M O E has created a Change Management Unit (CMU) as the body responsible for executing the ESTP. The C M U will manage the required changes for Human Resources financial and program reporting and evaluation o f the education system transformation process. The C M U operates out o f the MOE's Project Management and Technical Services Division (see Annex 6, Figure 6.1: Organizational Structure o the MOE) and f is subject to the governance and oversight requirements o f the MOE. The procedures established within the Project Management and Technical Services Division for due diligence and fiscal accountability/ responsibility will support the execution o f the ESTP. 13 38. The C M U i s under the leadership o f a Programme Director who reports directly to the Permanent Secretary o f the M O E (see Annex 6, Figure 6.2: ESTP Management Structure). The C M U i s responsible for oversight o f the technical inputs to the ESTP and as such, for consolidating the work programs o f the agencies (NEI, JTC, REAs, and NET) and determining the budgetary and programmatic priorities for each fiscal year. 39. A Programme Management Steering Committee (PMSC) will monitor and oversee the management o f the ESTP at the policy level, giving the M O E the strategic direction and guidance necessary for the effective and efficient implementation o f ESTP activities and ensuring that these activities are in accordance with the policies, procedures, timelines and budget o f the GOJ and MOE. The PMSC will meet once a month for the first six months and quarterly thereafter. The C M U Director also will report to the PMSC. 40. Execution o f the Project. The C M U will be responsible for the management o f the Project. The C M U will manage the designated account and will ensure that it i s used properly. I t will be ultimately responsible for procurement o f goods and services, fiduciary reporting, the Annual Work Program, and monitoring and evaluation o f the Project. The C M U will be the primary liaison with the Bank and other development partners (IDB, U S A I D and others). The C M U will coordinate the activities o f the agencies (NEI, JTC, REAs, and NET), whose work is supported by the Project, and will ensure that the agencies receive inputs and support in a timely fashion. The agencies will not directly handle Bank financing or manage procurement under this Project. 41. The Annual Work Program (AWP). At the beginning o f each fiscal year, including the first year, the C M U will prepare an A W P satisfactory to the Bank. The A W P will outline activities to be financed under the Project and contain a detailed budget for the funds in the designated account. The A W P will also identify key challenges that the ESTP may face, including the likelihood o f meeting the DLTs and the allocation o f budget to support key ESTP activities. 42. The Programme Operations Manual for the Project specifies the implementation arrangements and fiduciary responsibilities, which are described further in Annexes 6, 7, and 8. It will also contain a detailed description o f the DLTs (including their means o f verification) and o f the AWP. C. Monitoringand evaluation o f outcomeshesults 43. Twenty disbursement-linkedtargets were developed to monitor outputs and intermediate outcomes related to the project development objective over the four years o f the Project (see TabZe 2 in Section 1I.C above). Project outcomes and outputs will be assessed using various methods, depending on the activities to be carried out (e.g. completion o f school inspections would be measured by the published report). Information to measure the project outcomes will derive from various sources, including the NE1 and JTC management databases, M O E and more general GOJ statistics. In addition, two types o f evaluations will be carried out by consultants under the direction o f the MOE. Process monitoring will allow for an external review o f critical areas related to setting up and operating the new agencies (NEI, JTC, REAs, and NET). 14 Objective assessments and feedback to the agencies will facilitate efficient and effective operations and encourage implementers to make required changes. Summative evaluation will assess the execution o f the ESTP at the mid-term and end o f the four-year program, when the agencies are set up and incorporated in the MOE. The evaluation will include financial and technical reviews and will provide valuable lessons going forward. Results could also inform the Bank's Implementation Completion Report for the Project. D. Sustainability 44. The GOJ has consistently supported the education sector, and there has been a bi- partisan commitment over the past five years to the ESTP despite a change in government. In addition, the Minister driving the reform effort i s strongly committed, highly energetic and i s a senior member o f the Cabinet and the Leader o f Government Business in the Parliament. The GOJ has made significant investment to date (over US62.5 million), and i s funding the staffing and some operating costs for the new agencies, assuming responsibility from the onset for the recurrent costs o f the ESTP. Many o f the costs incurred for Project activities are one-off expenses to set up the agency systems and processes. 45. The ESTP stems from a thorough review of sector issues and a lengthy planning period with international technical assistance and consideration o f best practices worldwide. Care has been taken to select and develop a reform program that i s meaningful to the Jamaican context and would be sustainable over time. Under the Project, a pool o f some 350 trained inspectors will be established to draw from for future school inspections. NCEL's accredited training programs and the JTC's established standards and qualifications will be in place and should upgrade the teaching force and available cohort o f trained school principals, making the improved system sustainable over time. As a result o f Project training activities, improved capacity in school management and instructional leadership and more targeted support to students with special needs should improve the quality and accountability o f the education system, making it more responsive to citizens' needs. 46. The coordination role the GOJ i s playing with the IDPs ensures harmonized efforts and efficient use of scarce resources. The PIOJ and MOFPS play an active role in monitoring project planning and spending, which helps to keep donor-financed programs on track and assures adequate budgetary support. The MOE, PIOJ and MOFPS have agreed on the activities to be carried out under the proposed Project, and care has been taken to ensure that Bank financing i s used to support areas that will have a longer-term impact, such as the agencies being established to improve the quality, accountability, and governance o f the education system. E. Critical r i s k s and possible controversialaspects 47. The overall risk rating for the Project i s considered to be Moderate. A review o f critical risks and mitigation measures i s listed in the table below: 15 E I* I - cd 8 .e 2 .e * E! 3 E E c * * F. L o a d c r e d i t conditions and covenants 48. The following conditions for negotiations were met and the corresponding documentation was received: (i) update o f the Accounting Procedures Manual to include a chart- of-accounts and forms; (ii) completion o f the draft Programme Operations Manual; (iii) final design o f the content and format o f the Interim Unaudited Financial Reports; (iv) agreement on the Flow Chart o f the flow o f funds; (v) confirmation from the Auditor General on undertaking the Project audits; and (vi) a signed Procurement Plan to cover the Project's first 18 months. 49. The condition for effectiveness i s that the Programme Operations Manual be finalized and adopted by the MOE. 50. Covenants include: (i) compliance o f the Eligible Expenditures Program with the eligibility criteria and procedures set forth in the Programme Operations Manual; (ii) joint review, by mid-term, o f the Disbursement-linkedTargets; (iii) commitment by the GOJ not to carry out under the Project any construction, expansion or maintenance o f infrastructure; and (iv) within two months o f project effectiveness, hiring o f a procurement manager according to the terms o f reference included in the Programme Operations Manual. 5 1. Disbursement conditions include attainment o f Disbursement-LinkedTargets which are listed above in Table 2 in Section II.C, and preparation o f an Annual Work Program corresponding to each Jamaican fiscal year. IV. APPRAISAL SUMMARY A. Economic and financial analyses 52. Annex 9 summarizes the economic rationale behind the Bank's support for Jamaica's ESTP with a US$16 million loan. The annex provides an analysis o f the fiscal impact of the ESTP and the impact o f the loan on the overall debt situation. The annex also analyzes the expected impact o f the ESTP on the country's economy and the value-added o f the Bank- financed activities on the process. Through the use o f an economic forecast model (Threshold 21 Jamaica or T21J), it i s possible to estimate the impact o f the ESTP on the economy. The economic analysis looks at the current trends in the economy, including education, to develop a baseline scenario o f no ESTP. This baseline scenario i s then compared to different ESTP scenarios which captures the impact o f the ESTP on the Jamaican population. The difference between the baseline and the ESTP scenarios gives an estimate o f the impact on the economy. 53. The results show that investing in the ESTP i s likely to be a good investment for the Jamaican economy. In four out o f five scenarios, the ESTP yields a positive rate o f return, ranging from 4 to 7 percent. Considering the size o f the investment (2 percent o f the GDP in some years), this i s a high level o f return. The Bank's contribution provides critical support which will allow the M O E to implement the ESTP on schedule. This contribution may be worth as much as J$7 billion and lead to a 10 percent rate o f return for the Bank's contribution. 18 B. Technical 54. The international development partners (IDPs), including the Bank, have reviewed the ESTP design and assumptions and agree that the program is technically sound, feasible, and realistic with sufficient levels o f technical support and training. The IDPs have regular meetings with the M O E to discuss progress o f the ESTP and to provide coordinated support. 55. The ESTP addresses technical issues that are central to improving education quality and raising standards. Student performance has not improved over the years, and schools need to be held more accountable. To achieve this, there needs to be more systematic support to improve school planning and leadership, and management o f resources. The new agencies under the ESTP (NEI, JTC, REAs) will be accountable for results and are capable o f improving the quality o f service delivery as well as monitoring progress on reforms. For this to be effective, they will need to work in a coordinated fashion. For example, school improvement needs will be partly identified by national school inspections through the NEI. The FEAs will then provide support to the schools. The JTC will oversee the training opportunities for teachers and school leaders. School boards and parents will be more actively involved in the education process. The NET i s an innovative way o f addressing the continuous need for funding. C. Fiduciary 56. Financial Management: The fiduciary aspects o f the project will be carried out by the Change Management Unit (CMU) recently established in the M O E to implement the ESTP. The project's financial management will be handled by a core team comprising a Financial Manager, and Junior and Senior Accountants. The Financial Manager and Junior Accountant have been appointed already. The overall assessment risk o f the project i s substantial given the issues at the country level that have been exacerbated by the financial crises, limited fiscal space for project implementation and the complexity o f the project. The implementation o f the mitigation measures i s expected to reduce the overall assessment from substantial to moderate. At the project level, project risks are rated as substantial; however, these risks are expected to be reduced to moderate levels as a result o f the project design features calling for increased involvement o f the MOE's Internal Audit Department in monitoring internal controls and intensive supervision o f project implementation. Details o f the proposed financial management arrangements and required actions can be found in Annex 7. 57. Procurement for the Project will be carried out in accordance with the World Bank's `Guidelines: Procurement under IBRD Loans and IDA Credits,' dated M a y 2004, revised October 1, 2006; and `Guidelines: Selection and Employment o f Consultants by World Bank Borrowers,' dated May 2004 and revised October 1, 2006, and the provisions stipulated in the Loan Agreement. The Procurement Plan will stipulate the different procurement methods or consultant selection methods, the need for pre-qualification, estimated costs, prior review requirements, and time frame for each contract to be financed by the Loan. This Plan will be updated annually or as required to reflect the actual project implementation needs. 58. The combined Country Financial and Procurement Assessment carried out in 2006 indicated that substantial improvement i s needed to render the Jamaican procurement system more transparent. An assessment o f the capacity o f the MOE's C M U to implement procurement 19 actions under the Project was carried out by the Bank in September 2009. The assessment, whose findings and main recommendations are summarized in Annex 8, focused on capacity o f the C M U to manage contracts using both World Bank and national procedures. Given that the risk associated with the implementing agency i s assessed as substantial, an action plan has been developed to address the weaknesses revealed by the assessment. Implementation o f this action plan will moderate the procurement risk for the Project. D. Social 59. Extensive consultations have taken place over the last four years with a wide range o f stakeholders. There i s general support for the ESTP, although the MOE will need to invest in more targeted communications to address specific issues arising around human resource and ' organizational changes. This will be supported by the Project. 60. The ESTP addresses social issues at different levels. At the individual level, it provides direct support to students through more on-site assistance by REA staff, pre- and in-service teacher training, and capacity building for school leaders. This extra support i s especially important to low-achieving boys. Across the Caribbean region, girls out-perform boys in education, in terms o f academic achievement and school retention. By the time they reach tertiary education, females account for 70 percent o f student^.^ Schools need to learn how to better support student learning for both boys and girls. L o w performance leads to dropouts and lack o f preparedness for the j o b market, contributing to the high levels o f crime and violence. 61. At the institutional level, the ESTP will improve the efficiency o f the education system through the development o f well coordinated agencies that work together to evaluate, provide professional development and skills training (leadership, management, specialist training, etc.), and monitor and support school improvements. Mechanisms are being developed to expand the inclusion o f other stakeholders, such as school boards and parents, in the reform process. 62. At the broader societal level, the ESTP will improve education quality and accountability. This would result in better performing students and more skilled workers entering into the labour market. This, in turn, would increase employability and productivity, and improve growth rates. E. Environment 63. The project financing does not support any activities that impact o n the environment. The Project does not finance any infrastructure construction or maintenance. The Project does provide technical assistance to the NET, which will eventually become responsible for infrastructure investment in the education sector. The Bank has reviewed Jamaica's National Environmental Protection Agency (NEPA) guidelines for infrastructure and a detailed description o f the MOE's approval process. The review found that the N E P A procedures are well defined and the M O E has a solid process for approving infrastructure investments. The M O E has requested technical assistance to review standard school designs and environmental management o f c i v i l works in the education sector as part o f the support for the NET. The Bank has offered 'University o f the West Indies, Jamaica, 2008. 20 future support to the GOJ for capacity building o n environmental and social safeguards issues. This would take place during project implementation. F. Safeguard policies Safeguard Policies Triggered by the Project Yes No EnvironmentalAssessment (OP/BP 4.01) [I [ XI Natural Habitats (OP/BP 4.04) [I [ XI Pest Management (OP 4.09) [I [ XI Physical Cultural Resources (OP/BP 4.1 1) [I [ XI Involuntary Resettlement (OP/BP 4.12) [I [ XI Indigenous Peoples (OP/BP 4.10) [I E XI Forests (OP/BP 4.36) El [XI Safety o f Dams (OP/BP 4.37) [I [XI Projects in Disputed Areas (OP/BP 7.60)* [I [ XI Projects on International Waterways (OP/BP 7.50) [I XI G. Policy Exceptions and Readiness 64. N o policy exceptions are required to proceed with the project, and the project fully complies with all Bank policies. 65. In terms o f project readiness, some project activities are already ongoing and others will be ready for implementation by effectiveness. The M O E has advanced considerably with the establishment o f the agencies that will implement the ESTP, including the development o f institutional frameworks and the hiring o f some key staff. The NEI, JTC, and NET have been approved by Cabinet (framework and mandate). The NE1 and JTC are staffed and operational. The NE1 can inspect schools under the current Education Act. . The JTC i s setting up the Quality Education Circles to facilitate in-service training and information sharing among teachers, and is working on legislation to allow for the licensing requirement. A decision has not yet been made on the institutional framework for the REAs, but the general functions o f the REAs and the required training have been identified. The NET i s being established as a Limited Liability Company (LLC) and i s currently advertising key staff positions. Some members o f the Education Transformation Team, which provided the initial planning for the ESTP, have joined the C M U that will follow through on implementation o f the project. The C M U has staff with experience in donor-financed project implementation and i s fully versed in the Programme Operations Manual and the requirements for this project. Greater details are provided in Annex 4. * By supporting the proposed project, the Bank does not intend to prejudice the final determination of the parties' claims on the disputed area.s 21 Annex 1: Country and Sector Background JAMAICA: Education Transformation Capacity Building Project A. Country Background 1. Jamaica i s the third largest island in the Caribbean with a population o f 2.7 million and a per capita gross domestic product (GDP) o f US$5,196. It has the largest economy in the English- speaking Caribbean. The country's economic performance has improved slowly but steadily since 2001, with the highest GDP annual growth o f 2.5 percent recorded in 2006 and 2007. This growth was due to an increase in foreign and domestic private investment led by tourism, mining and agriculture. The inflation rate dropped to 6.6 percent in 2007 from over 13.2 percent in 2004. 2. The country has a strong growth potential with its well-developed tourist industry, agricultural resources, high investment rates, and English-speaking labor force. Jamaica participates in the Caribbean Single Market Economy and CARICOM and could benefit from regional integration and trade flows. Likewise, the country has strong social and governance indicators. Despite these advantages, Jamaica has sustained l o w economic growth. Growth has underperformed other Caribbean countries and i s substantially below growth rates in other similar economies. Real GDP grew, on average, by only about 1.3 percent in the last decade while investment averaged above 30 percent during the same period. Growth has been volatile, reflecting the vulnerability o f the country to natural disasters, adverse external shocks, and shifts in investors' sentiment. 3. Jamaica's economic performance i s severely constrained by its high level o f debt. Jamaica's public debt was calculated at 115.7 percent o f the Gross Domestic Product in 2008/09. The annual bill for public debt service i s the largest item in the national budget. The high level o f debt constrains social spending and investment, which in turn limits higher growth and poverty reduction. The high debt and limited fiscal space also increases the economy's vulnerability to external shocks, commodities prices, and natural disasters. The private sector's access to finance i s limited, in particular for small domestic producers, due to the narrow scope o f the financial sector and the crowding out o f credit by the public sector. While investment i s high, it i s concentrated in a few sectors and in purchasing government debt. 4. Jamaica has made significant gains in reducing poverty with poverty rates declining from 30.4 percent in 1989 to 14.3 percent in 2006. Drawing on the 2007 Poverty Assessment, poverty i s closely related to the l o w human capital accumulation. Poor children have parents that tend to under-invest in education due to liquidity and credit constraints. L o w investments in human capital increase the likelihood o f poverty for adults because a person with inadequate schooling has a lower probability o f finding productive employment. The Poverty Assessment also traces the interconnected issues o f youth unemployment, crime, and poverty. About 42 percent o f the unemployed in Jamaica are youth between 15 and 24 years o f age. The unemployment rate for this age group i s more than three times higher than for adults. Poor areas are the most crime-prone areas o f the country, and residents o f communities where crime i s endemic are often perceived as criminals and discriminated against. Violent crime i s extremely high by international standards and has increased in schools over the last year. The Poverty 22 Assessment estimates that the high levels o f crime and violence cost the economy 3.7 percent of GDP. 5. The Government of Jamaica (GOJ) has embarked on an ambitious reform program aimed at achieving higher growth and addressing social challenges. The GOJ i s preparing a comprehensive development plan, Vision 2030, to address the many long-term challenges that Jamaica faces as well as a Medium-Term Socio-Economic framework to achieve more near-term goals. The GOJ recognizes that without reducing debt and controlling the debt generating process, public investment and social needs, such as improving health and education and addressing crime and violence, will not be met. The GOJ has outlined critical fiscal priorities to lower debt, including rationalization o f public enterprises, comprehensive tax reform, improving public sector efficiency, and improving the business climate as a means for placing the country on a more sustainable fiscal and growth trajectory. As part o f this public sector reform effort, and in response to the global environment which the knowledge based economies gain in importance, the GOJ has placed a high priority on reforming the education sector and i s continuing the transformation o f the sector through the ESTP. B. Sector Background 6. The GOJ has invested significant financial and technical resources to design and plan the Education System Transformation Programme (ESTP).8 The ESTP i s now at a critical juncture where plans become reality. The GOJ has turned to the World Bank, IDB, USAID, and other development partners to finance different parts o f the program. The M O E and the Bank have selected areas that are critical to establish the foundation for the ESTP. The following describes the ESTP and outlines the major issues facing the education sector and the solutions the M O E has sought through extensive research and technical assistance. 7. The ESTP aims at more effective and efficient education service delivery by expanding access, improving teaching and learning, and transforming the governance structure of the education system. This i s a sector-wide program to be implemented over a ten- year period. The initial four-year phase i s supported by the proposed Project. The transformation o f the governance structure comprises a core element o f the program. I t seeks to bring greater levels o f accountability and improved quality to the system by: (a) decentralizing decision- making; (b) increasing the capacity o f teachers and administrators; (c) strengthening monitoring and evaluation to provide more targeted support to schools; and (d) creating mechanisms to mobilize more resources to meet the educational needs. The overview o f the ESTP i s presented in B o x 1.1 below. The proposed project will support aspects o f each o f the five key areas (as described below and in Annex 2). In 2004, the GOJ appointed a high-level Task Force Team on educational reform to examine the reform options. The Team conducted a detailed, comprehensive analysis o f the problems facing the education sector and identified constraints to improving education effectiveness. Following National Task Force recommendations, the GOJ establisheda national Education Transformation Team (ETT), which worked from 2005 to 2009 to design the ESTP. In mid-2009, a Change Management Unit was established to oversee the implementation process of the ESTP and carry out periodic evaluations. 23 Box 1.1: Overview o f Jamaica's National Education System Transformation Programme (ESTP) The ESTP, designed as a ten-year program, i s estimated to cost approximately US$2.7 billion over the program period. It was endorsed by the Cabinet in 2008. Despite severe fiscal constraints, the GOJ has invested a substantial amount (over US$62.5 million) on the initial planning o f the program. An overview o f the ESTP states the following: 1. Many new schools will be built and all existing schools will be upgraded to world class standard. Among other changes, the shift system will be eliminated. 2. The MOE will be modernized; accordingly, we will create a: - National Education Inspectorate - National Teaching Council - Curriculum and Assessment Agency - Autonomous Regional Education Agencies - Central Policy Ministry to provide overall guidance and direction. 3. Curriculum, Teaching and Learning are being transformed and upgraded with particular attention focused on Literacy and Numeracy. 4. Special attention will be paid to leadership and administration in schools with emphasis placed on exposing school boards and principals to new concepts of governance. 5. Increased emphasis will be placed on building community participation and ownership o f schools to influence positive behavioral changes and stimulate a higher level o f involvement. Source: Jamaica Ministry o f Education 8. The ESTP was designed to address the major issues facing Jamaica's education sector, namely l o w academic performance, unequal opportunities for learning and an inadequate learning environment, and an ineffective governance structure with poor performance management and l o w levels o f accountability. The following outlines these issues and briefly describes how the ESTP will address them. 9. Quality, as measured by academic achievement, has been alarmingly low. There have been a number o f initiatives to enhance education quality, particularly since the 1 9 9 0 ~ . ~ Nevertheless, performance at the primary and secondary school levels, as measured by student scores on national and regional assessments, has been significantly low. A new Grade Four literacy test revealed that only 67 percent o f public school students achieved mastery compared with 93.2 percent o f students in private schools". National Grade Nine Achievement Test (GNAT) scores for 2009 reveal l o w student performance in English language (5 1.5%) and math (43.9%)". The percentage o f Grade 11 students passing the Caribbean Secondary Education Certificate (CSEC), administered by the Caribbean Examinations Council (CXC), has only increased in English language from 28.5 percent in 2001 to 35.4 percent in 2009 and in math from 16.6 percent to 19.8 percent. The issue i s particularly serious among boys, although girls 9 These initiatives include: standardization o f national curriculum at the primary and secondary school levels; the provision o f free textbooks at the primary level and a highly accessible book rental scheme at the secondary level; a highly subsidized school feeding program; and teacher training. 10 Jamaica Ministry o f Education, 2009. l1 Jamaica Ministry o f Education, 2009. 24 also generally show l o w academic achievement. Under the ESTP, newly established agencies such as the Jamaica Teaching Council (JTC) and the Curriculum and Assessment Agency (CAA)12 will provide enhanced support to teachers, improve curriculum and assessment framework, and further implement the literacy and numeracy strategies. Age 2007 3-5 y r s 99.4 6-1 1 yrs 98.7 12-14 y r ~ 99.8 15-16 yrs 93.0 17-18 yrs 53.3 I 19-24 y r s 7.7 Table 1.2: Enrollment Rates by Consumption Quintile, 2007 Age Poorest Q2 Q3 Q4 Q5 3-5 y r s 100 98.7 98.3 100 100 6-1 1 yrs 99.5 99.5 100 100 100 12-14 y r ~ 99.2 100 100 100 100 15-16 vrs 84.9 92.7 96.8 93.5 100 17-18yrs I 30 37.2 61.4 59.2 74.5 19-24 yrs I 0 2.1 6.3 8.2 19.9 11. I n addition, the high level o f enrollment exceeds capacity in primary and lower secondary schools, and many schools have massive overcrowding, particularly in urban areas.13 To alleviate this issue, some schools have introduced a shift system. This has resulted in a number o f problems, such as reduced contact teaching time, limited opportunities for extra- '*The C A A has not yet been established. The MOE i s determining whether the creation o f this additional agency i s necessary or whether the current Curriculum Unit could carry out the necessary functions. l3 the other hand, some schools in rural areas do not reach their capacity. On 25 curricular activities, increased burden on principals and teachers, and security risks for children traveling from school after dark and for those who stay home unsupervised. Under the ESTP, new school buildings and more classrooms will be constructed with a focus on eliminating the shift system. The National Education Trust (NET) will be established to raise and manage finds for education development, focusing first on school infrastructure needs. 12. T h e governance structure o f the education system has been a key constraint to responding effectively to educational needs. A highly centralized decision-making system, insufficient support mechanisms for teachers, lack o f accountability for school performance, and a substantial resource gap have hindered effective and efficient service delivery. (a) Lack o autonomy and capacity at the school level. Highly centralized f management o f the education system with limited discretionary resources and authority at the school level prevents effective decision-making to address teaching and learning challenges. The M O E has authority over allocation and use o f funds, but it has been unable to respond to school needs in a timely manner. The six regional education offices also have little authority and discretionary resources to support the schools. Schools lack capacity to adequately use community participation mechanisms and cannot take concerted action to improve school quality. Under the ESTP, the regional offices will be transformed into Regional Education Authorities (REAs), with broad accountability for results in their jurisdiction. Once established, the REAs will receive funding to provide direct and enhanced support to schools, including training o f School Boards. Under the recently established JTC, the National College for Education Leadership (NCEL) will build leadership and management capacity o f principals and education officers through the introduction o f a qualifications system and professional development training. The organizational chart o f the modernized M O E shows the proposed reporting and organizational arrangements (see Figure I .I below), (b) Lack o systematic support for teachers. The current system lacks a quality f assurance and skill upgrading mechanism for teachers. Although the level o f teacher training i s relatively high (approximately 80 to 90 percent o f primary and secondary teachers are trained14), there i s no requirement for teachers to continue to improve their learning once they receive their teaching qualifications. There are a number o f teachers who are unable to perform well, lacking capability, motivation and commitment to professional standards. The JTC will set up the minimum standards and licensing system for teachers, and provide continuous support for their professional development. (c) Little accountability for performance. The current system does not provide incentives for principals and teachers to produce higher achieving students, nor does it hold them accountable for student achievement. Performance targets, set in the MOE, are not cascaded throughout the system, and the educational outcomes against inputs are rarely measured with a systematic approach to examining the actual impact a school has made. Lack o f basic, up-to-date, school-specific information makes it difficult to provide adequate support to schools. The National Education Inspectorate (NEI), established under the ESTP, will strengthen the monitoring and evaluation o f school performance l4Teachers in Infant, Primary, and Secondary Level Schools, 2006/2007. (http://www.moec.gov.jm/) 26 through regular inspections to hold the school accountable and provide the REA and JTC with the information needed to give targeted support to schools. (d) '` Resource Constraints. The GOJ has shown a strong commitment to education, spendin an average o f 5.56 percent o f GDP and 10.64 percent o f its fiscal budget since 2000.15 Due to the cost o f servicing the debt, however, the government's capacity to increase i t s investment in education i s quite limited. Teacher and school staff salaries represent more than 90 percent o f the total education expenditure and are essentially a fixed cost. Unless the M O E finds new revenue sources and increases efficiency o f current spending, it i s difficult to increase investment in other aspects o f education. In order to meet this financial gap, the National Education Trust (NET) i s being established under the ESTP as a mechanism to mobilize resources, especially for infrastructure. It will garner funds for sector investment from the Diaspora and private sector, and will be the focal point for public-private collaboration in the education sector. 13. The World Bank i s supporting the modernization of the Ministry by contributing to making operational four of the key independent agencies that will drive the ESTP, the National Education Inspectorate (NEI), Jamaica Teaching Council (JTC), Regional Education Authorities (REAs), and the NET. These are the cornerstone o f the ESTP and underpin the new governance framework (see education organizational relationships in Figure 1.1 below). Support will be given to the NET to develop mechanisms to mobilize resources. While the GOJ has begun the process o f establishing these agencies, a key challenge over the next four years will be to build up the human resources, institutional structures, and systems required for them to become fully functioning entities. 15 UNESCO Institute o f Statistics. Latin America and the Caribbean Regional average of public education expenditure: 4.1 percent (as % o f GDP); 15 percent (as % o f total government expenditure) in 2006. l6 Education in Jamaica i s highly subsidized by the Government. The Ministry o f Education (MOE) has overall responsibility for early childhood, primary, secondary, and tertiary education, although universities are autonomous. The MOE consists o f the administrative head office and six regional offices; the latter are responsible for the personnel, supervision and maintenance o f schools, although they have to seek funding and approval ftom the central level to carry out related activities (training, etc.). The public sector i s the major provider o f education at all levels, accounting for 85.7 percent o f the total enrolment in 2007 (Jamaica Survey o f Living Conditions 2007). 27 Figure 1.1: Education Organizational Relationships Inspection License/Qualification Teachers' Colleges Basic Schools TeacherdPrincipals Inspection Inspection w Reports on education to Parliament, Ministry of Education, Jamaican Public 28 Annex 2: M a j o r Related Projects Financed by the Bank and other Agencies JAMAICA: Education Transformation Capacity Building Project Sector Issue Addressed Project Duration/ Latest Supervision Amount (ISR) or OED (USD) Ratings (Bank- financed woiects) IP I DO Bank-financed operation in Jamaica Assistance to vulnerable M J Social Protection (P105024). The project households, subject to aims at strengthening i t s social protection investing in the education system by: (i) further improving the o f their children effectiveness o f the Program o f Advancement through Health and Education (PATH) t o foster 2008- 2013 investment by poor families in human capital 40 million S S accumulation; (ii) developing a structured system for assisting working-age members o f P A T H eligible households seek and retain employment; (iii) enabling the formulation o f a reform program for the public sector pension schemes; and (iv) developing a holistic social protection strategy. Capacity building o f JM Early Childhood Development (P095673). organizations to support The objectives o f the Project are to: (i) improve the education sector at the the monitoring o f children's development, the ECD level; establishment screening o f household-level risks affecting o f minimum standards to such development, and early intervention improve quality through systems to promote such development; (ii) 2008-2013 required registration o f enhance the quality o f early childhood schools 15 million MS S E C institutes; inclusion o f and care facilities; and (iii) strengthen early parents and other childhood organizations and institutions. stakeholders. JM Inner City Basic Services (P091299). The After-school programs to work with youth at risk; project aims at improving quality o f l i f e in 12 targeted skills Jamaican inner-city areas and poor urban informal settlements through improved access to development and 2006-2011 basic urban infrastructure, financial services, MS MS attention; mechanisms to 29.3 million land tenure regularization, enhanced community develop community capacity and improvements in public safety. capacity and include community stakeholders. 29 Quality improvement JM- Reform of Secondary Education (ROSE (teacher training, TI) (p071589). In support o f Jamaica's fifteen- especially to identify year program to reform secondary education, the students with learning Project aims at improving the quality and equity difficulties and develop o f secondary education, expanding access t o 2002-2009 strategies to help.them); upper secondary education, and strengthening 39.8 access to secondary the capacity o f the central ministry and regional million/ S S education (construction offices to manage and monitor the reform. The reduced to o f school extensions); restructured project dropped the capacity 12.5 million capacity strengthening strengthening. and improved governance at the school, regional and central levels (planned but did not take place -has been built into the proposed Proiect'l. JM- Social Safety Net Project (p067774). The Better and more cost- objective o f the project i s to transform the social effective social assistance safety net into a fiscally sound and efficient 200 1-2009 S S to the extreme poor system o f social assistance for the poor and 40 million vulnerable groups. Modernization o f the DFID/IDB: Public Sector Modernization ministries, including the 1 Program 1 . The objectives o f the project are Ministry o f Education to: (i)enable government ministries, departments and agencies to develop and deliver high quality, integrated, public service programs; (ii) strengthen results-based management in government; (iii) align human resource management strategies with the strategic direction o f the modernization programme; (iv) build a customer service structure that facilitates continuous improvement in the delivery o f service and accountability to the public; and (v) implement a performance management and appraisal system in all ministries and departments to improve governance and accountability in the public sector. 30 Improvement o f Basic Caribbean Development Bank: Enhancing 2002-2008 school infrastructure. Basic Schools Project (EBSP). The objectives 13.4 o f the project are to: (i)provide institutional million strengthening and constructhefurbish or expand twelve model basic schools; (ii) refurbish 11 resource centers; (iii) train and certify 960 E C practitioners; (iv) support the development o f teaching and learning materials; and (v) provide public education via audio and visual media. ESTP school IDB: Primary Education Support Project 2009- (not infrastructure component. (PESP) supplement. This i s supplemental Yet financing to the c i v i l works component o f the approved) PESP, which includes the replacement, 14 m i l l i o n expansion, construction and maintenance o f 7 schools in order to provide a better, more comfortable environment that i s expected to have a positive impact on students' achievements. ESTP co-financing of: (1) IDB: Education Sector Reform Project 2008- Modernization o f the (policy-based loan did not go directly to the 30 million MOE, (2) curriculum, MOE). T o support the ESTP with the focus on: teaching and learning, (3) (i)modernization o f the MOE; (ii) improving school management, and the quality o f curriculum, teaching, learning and (4) stakeholder/ school management; and (iii)improving community involvement. stakeholder and community involvement in education. Improvement o f quality IDB: Primary Education Support Project 2000-2009 o f primary education and (PESP). The project was to improve the 31.5 enhancement o f school delivery o f quality primary education and million management capacity at strengthen school management capacity at the regional and local levels. regional and local levels. It entailed: (a) quality improvement, (b) institutional strengthening and school-based management, and (c) school infrastructure. 31 Improvement o f IDB: Youth Development Program I.The 2008- academic performance, program aims at: (i) tighter arkulation a 11 million particularly for boys. between the curriculum and skills offered by the National Youth Service and employer demand; (ii) modalities for addressing the needs o f new youth with l o w levels o f literacy and numeracy, particularly males; (iii) increased accessibility o f information on education, training and work opportunities; and (iv) a more cohesive governance and policy framework. IDB: Jamaica Social Safety Net Program 2001-2006 1.1 million (Grant) Improvement o f the USAID: ExpandingEducation Horizon - 2007- quality o f basic Achieve Equitable Access to Quality Basic 2.23 education. Education. The project i s to: (i) improve million literacy and numeracy among students in poor performing primary schools and secondary schools; and (ii) build more strategic to community and private sector partnerships as well as linkages with the Mission's other strategic objectives (e.g. economic growth, health, and environment) to improve the quality o f basic education. Vocational/technical USAID: Improve Quality o f Workforce 2007- education for youth at through Vocational/TechnicalEducation.The 1.05 risk project addresses the educational needs o f at- million risk youth by supporting pilot initiatives which focus on teacher preparation, professional support for literacy, language arts skills, provision o f adequate resource materials, and parental and community involvement. UNICEF: Early Childhood Care and 200 1-2007 Development Education and HIV/AIDS 3.5 million Project (Grant) Organization of American States: Reduction 2005-2007 in the Incidence o f Rural Poverty through 0.048 Interactions in Multi-grade Schools million (Grant) 32 Annex 3: Results Framework and Monitoring JAMAICA: Education Transformation Capacity Building Project This i s a capacity building project, and as such, the Project Outcome Indicators were determined on the basis o f what the MOE would expect to see happening within the education system if the new agencies were functioning as expected. If these indicators are met, it will demonstrate that the capacity o f the agencies i s sufficient to carry out their intended functions. PDO Project Outcome Indicators Use o f Project Outcome Information Capacity will have been built within O f schools inspected, % that have YR 2-4: Determine effectiveness of the key emerging agencies (NEI, School Improvement Plans reflecting NEI's inspection system JTC, REAs, and NET) to support the recommendationsmade in NE1 ESTP. school inspections % of teachers meeting professional YR 1-4: Determine effectiveness o f standards for licensing the support system provided to teachers by the Jamaica Teaching Council (JTC) % of schools implementing School Y R 2-4: Assess effectiveness o f Improvement Plans support provided to schools by the JTC and REAs, and the level o f school management capacity NET receiving financial and other YR 4: Assess the feasibility o f resources from non-traditional attracting a1ternativ.e financing for sources education development Intermediate Outcomes Intermediate Outcome Use o f Intermediate Indicators Outcome Monitoring Component 1.1 National 0 School Improvement Act YR 3: Gauge willingness o f central Education Inspectorate (NEI) approved government to devolve Inspection system introduced at the 0 Legal identity conferred and responsibilities and extend primary and secondary school levels resources directly allocated ownership .of the ESTP 0 No. of Inspectors trained 0 % of schools inspected and YR 1-4: Lack o f progress may inspection reports published indicate cumbersome inspection process 33 Intermediate Outcomes Intermediate Outcome Use o f Intermediate Indicators Outcome Monitoring YR 3: Gauge willingness o f central Component 1.2 Jamaica Teaching Legal identity conferred and government to devolve Council (JTC) resources directly allocated responsibilities and extend Regulatory systems and support % o f teachers registered ownership o f the ESTP strengthened for teachers and % o f teachers licensed education leaders Professional development YR 1-4: Limited numbers o f mechanism in operation participating teachers would indicate (Quality Education Circles) need for other training strategies % o f teaching cohort receiving in-service training through the YR 3-4: Low numbers o f teachers QECs licensed might indicate need for No. o f education leaders trained further teacher training to meet the under the NCEL required criteria YR 4: Trained group under NCEL would indicate viability o f this strategy for preparation o f education leaders Component 1.3 Regional Governance structure YR 2-4: Deployment and training o f Education Authorities (REAs) determined staff, and training o f school boards, New functions assumed by REAs No. o f school board members would indicate MOE's intent to and greater support provided to trained adequately prepare regions to take schools School Improvement Officers on new responsibilities receiving specialist training in regions Component 2 National Education Legal identity conferred YR 1-4: Lack o f proper training Trust (NET) No. o f staff trained in relevant might affect staffs ability to manage NET established as alternative areas alternative sources o f finding financing mechanism for education Local/ international marketing development campaign launched YR 2-4: Lack o f effective campaigns might affect NET'Sability to attract alternative sources o f funding Component 3 Communications, No. o f stakeholder meetings YR 1-4: Low stakeholder support Project Management, and carried out on the ESTP might indicate the need for improved Monitoring and Evaluation No. o f MOE staff consultations communication strategies Communications strategy ongoing to and sensitization meetings ensure ownership across all levels, carried out YR 2-4: Evaluation results should be and process and summative No. of process evaluations reviewed annually and used to make evaluations o f the national ESTP carried out adjustments to ESTP carried out to evaluate process and No. o f summative evaluations implementation strategy, as measure progress carried out necessary 34 Arrangements for results monitoring 1. Twenty disbursement-linked targets (DLTs) were developed to monitor outputs and intermediate outcomes related to the project development objective over the four years o f the Project (see Table I in Section 1I.A. o the main text). The C M U will be responsible for gathering f the evidence for the attainment o f each DLT. Technical staff from the NEI, JTC, REAs and NET will provide the supporting documentation for the results-based disbursements under the Project. The following verification documents were agreed to for the DLTs: FY2010/11 - Training pladcurriculumfor NE1inspectors, report on persons trained - Published school inspection reports on the MOE's website - Verification o f on-line teacher registration system and printed listing o f teachers who have registered - Cabinet approval o f the N C E L conceptual framework - Certificate o f incorporation o f the NET as an L L C from Company's Office o f Jamaica FY2011/12 - Minutes and/or reports from QEC meetings - Inspection handbook and letter o f approval - Printed report o f teachers registered - M O E Communications plan and letter o f approval - NET operational plan and letter o f approval FY2012/13 - Document outlining REA functions and letter o f approval - Report from NE1 and listing o f published school inspection reports - Printed report o f teachers registered - N C E L program outlines - Copy o f training program for NET staff and report listing names and posts o f people trained FY2013/14 - Training plan for REAs in five regions and demonstration o f contracting o f trainer - Report from NE1and listing o f published school inspection reports - Teacher licensing standards document and report on number o f teachers licensed - Report from N C E L with l i s t o f people registered and certified - NET marketing campaign materials (advertisement, web pages, meeting registration, etc.) 2. Information to measure the project outcomes and outputs will derive from various sources, including the NE1 and JTC information databases, school inspection reports, M O E and more general GOJ statistics. Two types o f evaluations will be carried out by consultants under the direction o f the C M U in the MOE. Process monitoring will allow for an external review o f critical areas related to setting up and operating the new agencies (NEI, JTC, REAs, and NET). The three process evaluations will examine whether the agencies are functioning as designed, and will identify bottlenecks and recommend remedial actions. Objective assessments and 35 feedback to the agencies will facilitate efficient and effective operations and encourage implementers to make required changes. Summative evaluations will assess the execution o f the ESTP at the mid-term and end o f the four-year program, when the agencies are set up and incorporated in the MOE. The evaluations will include financial and technical reviews and will provide valuable lessons going forward. Results could also inform the Implementation Completion Report. 3. Finally, annual independent audits will be carried out by an external auditor and will provide useful information on the progress o f project implementation. The auditor will be asked to confirm the attainment o f the disbursement-linked indicators that were used to justify disbursements during the year under audit. 36 x n 8 8 P : I t - I B - > b m @ I t 0 0 r tj u u u u z k k k O W 0 0 10 W W 0 3 s 10 g 0 a 0 10 rn N d I = : as 0 10 *z N 0 0 0 0 0 0 0 0 3 'E * 6 n i U 5 - n 8 E : : rr 0 z" I O lo Annex 4: Detailed Project Description JAMAICA: Education Transformation Capacity Building Project 1. The Government o f Jamaica (GOJ) has prioritized education as a key area for development investment and has devoted significant financial and technical support to design and plan a national Education System Transformation Programme (ESTP) to reform the sector, bringing greater levels o f efficiency, accountability and improved quality to the system. The Ministry o f Education (MOE) and the World Bank have selected areas that are critical to establish the foundation for the ESTP and introduce modernization aspects to improve governance o f the education system. The following describes the proposed project components and sub-components, and provides a summary o f actions taken and planned to make operational the new agencies (NEI, JTC, REAs, NET) established to implement the Programme (see also Table 4.1 below). 2. The proposed Project will support implementation o f the ESTP through co-financing o f budget lines dedicated to specific activities for the key education sector agencies (NEI, JTC, REAs and NET). Such a close link to specific eligible expenditures i s necessary because Jamaica has a very tight budget position, which i s made even more challenging by the ongoing global crisis. As a result, most budgeted expenditures do not have sufficient cash resources assigned to them, and competition for funds among various programs i s fierce. This means, in practice, that unless Bank funding i s explicitly linked to specific inputs, there i s a high probability that reliable funding will not be available to finance these inputs even if the program in question i s a high priority for the country. 3. At the same time, the Government and the Bank would like to shift the focus o f project implementation from inputs to results, in line with the general move towards performance-based budgeting in Jamaica. Therefore the Project will use a series o f Disbursement-Linked Targets (DLTs) to help monitor progress o f the agencies in attaining individual and collective goals, which will advance the ESTP. The DLTs are listed in Table 2 in Section 1I.C o f the main text. Disbursement arrangements are described in Annex 7 . Project Component 1 - Enhanced Performance and Accountability (US$12.5 million) 4. Consistent with the GOJ's policy for public sector modernization, the ESTP aims to decentralize the educational system by transferring operational and policy implementation functions to a number o f semi-autonomous bodies, while transforming the MOE into a focused policy Ministry. The M O E has identified the following key agencies (National Education Inspectorate-NEI, Jamaica Teaching Council-JTC, Curriculum and Assessment Agency-CAA17, and Regional Education Authorities-REAs) to form a coherent system to monitor progress and enhance accountability and quality. The NE1 will carry out comprehensive school evaluations to identify schools, and areas within schools, that demand immediate attention. The REAs, which will include School Performance Officers and School Support Officers, will work directly with the schools to assist them in carrying out the action plans that derive from the inspections. The l7The CAA has not yet been established. The MOE i s determining whether the creation o f this additional agency i s necessary or whether the current Curriculum Unit could cany out the necessary functions. 40 JTC will establish standards and qualifications for teachers, principals and education leaders and will extend professional development opportunities for ongoing capacity building. The GOJ has asked the Bank to focus financing on the NEI, JTC, and REAs. Sub-component 1.1 - National Education Inspectorate (NEI) 5. The ESTP aims at increasing accountability by strengthening monitoring and evaluation o f school performance. The NE1 institutional framework was approved by Cabinet in 2009. The Minister has appointed a Chief Inspector and a Deputy Chief Inspector, and several other key staff members have already been hired. The NE1 will have a core staff o f about 30 people assigned to the inspection, inspection support, and research divisions. The NE1 i s expected to become an Executive Agency by April 2010. N e w legislation (School Improvement Act) i s required to enforce inspection recommendations with schools and set up a pool o f resources to support underperforming or failing schools. The School Improvement Act i s to be submitted to Cabinet by 20 11. However, the NE1 can carry out inspections under the current Education Act, so no delays are anticipated in implementing the pilot and baseline inspections as outlined below. 6. The NEI's mandate i s to: (a) provide a rigorous, independent evaluation o f schools; (b) conduct inspection o f schools; (c) work with schools to develop action plans arising from recommendations made during school inspections; (d) monitor failing schools and take appropriate remedial action; (e) work with REAs to ensure they assist schools to improve; and (0 publish inspection reports and an annual report on the standards and quality o f education in Jamaica." 7. An inspection framework i s currently being developed based on international best practices. The inspection will be conducted based on a two-tier system: a self-evaluation by the school community and a comprehensive inspection by a team o f inspectors. The self-evaluation entails the involvement o f all stakeholders such as the principal, teachers, parents, and students. I t will be followed by the formal inspection, which assesses: (i) student outcomes (academic, social, and personal achievements); (ii) process (teaching and learning, leadership management) and; (iii) inputs (curriculum, resources, safety and security). 8. The first pilot inspection o f at least 10 schools i s scheduled for October 2009. The NE1 will inspect a variety o f schools o f different location, size, and performance in order to test the structure, instruments, system, process, staffing (inspectors) and training (of trainers and school communities) and make necessary adjustments before rolling out the inspection process in January 2010. The Terms o f Reference (TORS) for contract and staff inspectors have been developed, j o b advertisements were posted, and applications have been received. Training o f the first cadre o f some 40 inspectors i s complete. The NE1 will build a pool o f some 350 inspectors from which they can draw to carry out the inspections. M O E staff may be seconded to support the establishment o f the NEI. 9. The Project will provide support to the NE1 to establish a systematic inspection process and baseline data on school and student performance for approximately 1,000 public primary and secondary schools over four years, including: (a) the establishment o f an inspection management l8Jamaica Ministry o f Education, "Education Transformation Project Report" (October 2008). 41 information system (including the provision o f technical assistance, procurement and installation o f software and hardware, and training in the use o f the system); (b) training o f inspectors (sessions and study tours); (c) baseline inspections (including the contracting o f inspectors, inspection costs and publications); and (d) national consultation meetings on NE1mandates. 10. Progress in implementingthis group o f activities will be monitored through the following Disbursement-Linked Targets: 0 Training program for NE1inspectors initiated (November 20 10) 0 10 pilot school inspections completed and reports published on the MOE's website (November 20 10) Inspection handbook approved by the M O E (November 201 1) At least 300 school inspections completed and inspection reports published on the MOE's website (November 2012) 0 At least 600 school inspections completed and inspection reports published on the MOE's website (November 2013). - Sub-component 1.2 Jamaica Teaching Council (JTC) 11. Quality teachers and good school management and leadership capacity are critical elements for improving school performance. Currently, Jamaica does not have any institutional body to formally regulate, license and advocate for professional development o f teachers. There i s also no quality assurance and support system for school principals and other education leaders. The JTC has been established to ensure minimum quality standards and professional development opportunities for teachers and education leaders, including school principals and aspiring principals, middle managers, and education officers. The JTC's support for education leaders will be provided through the National College for Education Leadership (NCEL), which will be established under the umbrella o f the JTC. The N C E L will also develop programs for school boards, bursars, and regional staff such as school improvement officers, to ensure a team approach to improving school management. 12. The JTC developed the framework document that defines i t s objectives, mission, key functions, organizational structures, relationship with different groups, and reporting and financing processes. The document was approved by the national Cabinet. With that approval, the M O E has requested the Chief Parliamentary Council in the Ministry o f Justice to draft the legislation that will establish the JTC as a Statutory Body and will authorize it to set up the teachers licensing system. The legislation will then be enacted by Parliament. While it i s difficult to predict the exact timing for this process, as it i s outside the control o f the MOE, the legislation i s expected to be approved no later than 2012. Although the licensing o f teachers may begin only after the enactment o f the legislation by Parliament, other tasks such as registration o f teachers, teacher training, and establishment o f the N C E L to train educational professionals may be carried out under the current legislative arrangements. 13. The JTC will be responsible for: (a) the establishment o f professional standards for teachers and principals; (b) regulation o f the teaching profession and registration and licensing o f teachers, aimed at improving the status and profile o f the teaching profession; (c) establishment 42 o f national qualifications for principals and capacity building for education leaders through the NCEL; (d) development o f a strategic direction for professional development opportunities for teachers (through Quality Education Circles-QECs where teachers will have the opportunity to learn from and share with each other) and education leaders, and coordination o f training programs under the N C E L (the N C E L will develop the program and will deliver specialized components while franchising accredited training institutes to deliver others); (e) the review and supervision o f conditions o f service; and (f) monitoring o f teacher supply and deployment. The JTC and NE1 will work together to ensure coherence between teacher training and teacher performance. The annual reports o f the NE1 on teacher performance will be a crucial input to the preparation o f the JTC's rolling three-year work plans. 14. The Project will support: (a) establishment and implementation o f a licensing and registration system for teachers; (b) training o f teachers and JTC staff, as well as orienting teachers in the licensing process and procedures, through the QECs; (c) review o f the existing mentoring program; (d) professional development o f JTC staff and college lecturers; (e) in-service teacher training in areas required for licensing (e.g. IT, literacy and numeracy); (f) publishing o f a journal describing best practices in teaching and school leadership; (g) development o f a teacher management information system; and (h) establishment o f programs for the NCEL, which will require coordination with teacher colleges and the University o f the West Indies (UWI) to develop the course schedule, and assessment and preparation o f documents for accreditation o f the N C E L by the University Council o f Jamaica. 15. Progress in implementing this group o f activities will be monitored through the following Disbursement-Linked Targets: Teacher registration system operational (November 20 10) Conceptual framework for N C E L approved by Cabinet (November 20 10) At least 10 QECs in operation (November 201 1) At least 3,000 teachers registered by the JTC (November 201 1) At least 10,000 teachers registered by the JTC (November 2012) 0 Leadership training programs developed for delivery through N C E L (November 2012) 0 Licensing system fully established by JTC (November 2013) 0 At least one group o f education leaders certified by N C E L (November 2013). Sub-component 1.3 - Regional Education Authorities (REAs) 16. Currently, six Regional Education Offices serve as an extension o f the central ministry with limited authority and few resources to support schools. The ESTP aims to decentralize the system by delegating many operational and policy implementation responsibilities to the REAs. The six regional offices will be organized into seven REAs that better reflect parish boundaries, enabling coordination with local government and harmonization with other programs. 17. The governance model, structure, and role and responsibilities o f the REA staff are being drafted and will be finalized by June 2010. There are several institutional options for the REAs (e.g. executive agency, statutory body, department o f MOE, or education district) that have been presented to the Minister. Once a decision has been made on which model to be adopted, the 43 appropriate steps will be taken to establish them. Regardless o f the necessary legal steps for their establishment, however, the REAs would s t i l l be able to carry out the functions that are being defined, since the legal status o f the REAs mainly refers to their reporting requirements and level o f autonomy. The proposed school improvement and school support activities are covered under the current Education Act. 18. The TORS for the REA staff are being drafted. Once the structure has been determined and the new posts have been classified, staffing will take place. Staff will comprise people currently working for Regional Education Offices and others who will be selected through a competitive process. Training will be provided for Education Officers to assume new functions as School Improvement Officers or School Support Officers under the REAs. The training programs will be developed over the next year, and training could begin in 2010 in the two model REAs which will be established first. The other five REAs will come on board by 2013, following evaluation o f results from the pilot. 19. The REAs will provide direct, enhanced support to schools by a team o f officers and specialists. They will focus on clinical supervision, school safety and security, leadership, management and governance, citizenship, and community outreach and parenting. School Improvement Officers in the REAs will be responsible for improving education delivery through monitoring targets established for school improvement (via self evaluation and NE1 school inspections), in collaboration with experts in respective areas such as curriculum and assessment, special education, behavior, and child welfare. They will be accompanied by School Support Officers who will work closely with the school guidance counselors. Community support teams will work to ensure that families and communities engage in the education process. l 9 20. The Project will support: (a) capacity building for School Improvement and School Support Officers; (b) specialist training in areas to support children with special learning needs; (c) training o f School Boards to understand and carry out the mandates o f the Education Act and other new legislationand MOE policies; and (d) provision o f equipment and software for the REAs. 21. Progress in implementing this group o f activities will be monitored through the following Disbursement-Linked Targets: Functional profiles for REA operations approved by the M O E (November 2012) 0 Following a pilot in two model regions, training commenced for regional staff in the other five regions (November 20 13). Component 2 - Mechanisms to Mobilize Resources to the National Education Trust (NET) (US$ 1.5 million) 22. The National Education Trust will be the vehicle through which the M O E will secure a consistent and reliable source o f funds to support capital programs in education with a particular focus on, but not limited to, infrastructure. Mechanisms will be established to attract funding from the Diaspora, the private sector, and other possible sources. The NET will be established initially as a limited liability company (LLC) to source and allocate funding for education 19 Jamaica Ministry o f Education (2008). 44 development. It may be converted at a later date into an executive agency. Cabinet has approved the establishment o f the NET. As soon as the NET i s fully set up, the accounts and other business processes will be developed. 23. The work o f the NET wiIl comprise: (a) management o f an endowment fund; (b) employment o f alternative methods for school construction and maintenance, such as Public- Private Partnerships (PPP); (c) technical services to establish guidelines for school design, school construction, environmental safeguards, and supervision; and (d) support for capital programs in education. 24. The Project will support: (a) training for NET and other relevant staff in the implementation o f public-private partnerships; and (b) carrying out o f a marketing campaign to mobilize resources for the NET. Key staff would attend an established training course on PPPs. Several plausible options have been identified. The GOJ also has initiated discussions with the IFC to explore the possibility o f developing PPPs, and some training and evaluation and monitoring processes might be developed under the I F C program if it were established. Technical assistance would be procured to develop the marketing campaign (USAID will provide an on-site consultant for two years to assist with legal expertise regarding donations from Diaspora from different countries and to develop the marketing strategy). 25. Progress in implementing the NET-related activities will be monitored through the following Disbursement-LinkedTargets: 0 NET formally established (incorporated as a Limited Liability Company/LLC) (November 20 10) 0 NET operational plan approved by the M O E (November 201 1) NET'Slegal and financial staff trained in relevant areas (November 20 12) NET international marketing campaign launched (November 20 13). Project Component 3 - Communications, Project Management, and Monitoring and Evaluation (US$2.0 million) Sub-component3.1 - Communications 26. The ESTP entails fwndamental structural changes o f the education system, and it will have a substantial impact on all the stakeholders, including M O E staff, education officers, school principals, teachers, parents, and students. Engaging all stakeholders and sustaining their interest and support for the ESTP i s fundamental to the success o f the transformation process. The communications strategy aims at creating ownership across all levels and assuaging anxiety among key stakeholders resulting from the organizational changes. The M O E will organize a series o f face-to-face stakeholder meetings across the country in addition to various forms o f advertising. The ESTP communications team has developed a communications strategy. The Project will support the implementation o f the strategy, including the necessary expenses for organizing the meetings. 45 27. The Project will support: (a) public meetings on the ESTP, across the country, for all interested citizens; (b) stakeholder consultations for the new education agencies; (c) internal meetings o n the Human Resource policy for the M O E staff; and (d) media campaigns. 28. Progress in implementing this group o f activities will be monitored through the following Disbursement-Linked Target: Communications plan for stakeholders developed and approved by MOE (November 201 1). Sub-component3.2 - Project Management 29. The Project will be implemented by the Change Management Unit (CMU) established within the M O E to oversee the entire ESTP, including those activities financed by the Bank and other international development partners (IDB, UNICEF, USAID, and others). The Project will support the CMU, including hiring o f staff2', provision o f training and o f necessary equipment and materials, and other operational costs. - Sub-component3.3 Monitoring and Evaluation 30. This sub-component includes the annual external audit o f project finances, as well as the monitoring and evaluation (M&E) o f the project and the ESTP. The M&E activities would include both process and summative evaluations. While the task o f monitoring execution i s that o f the Director, external evaluation i s an important part o f quality assurance. I t i s the external look that will indicate whether the processes being monitored are effective, and the summative evaluation will measure the effectiveness o f the program against the objectives. The Project will support conducting o f audits, hiring o f consultants to carry out the evaluations, and provision o f necessary equipment (a software system). 20 Some ten key staff positions have been identified to be hnded under the Project. Other staff positions will be funded by the GOJ or by other IDPs. 46 Table 4.1: Key Steps to the Establishment o f Agencies NE1 JTC REA NET Institutional/ Approved by Approved by Establishment o f Approved by Operating Cabinet Cabinet in 2009. 7 REAs approved Cabinet in 2009. Framework (Inspection by Cabinet by document framework 2010. completed by the Governance end of Sept 2009). model, structure, and role and responsibilities o f REA staff to be drafted - expected by June ~~ 2010. Classification Completed in First set Expected by Expected by of posts, September 2009. completed; others 2013. 2010. structure ongoing and determined by expected by mid- 2010. Cabinet and MOFPS Hiring o f staff Chief Inspector Key staff in place Some staff Public-private and two senior and 3-4 new staff already in place partnership directors hired. to be hired by in Regional relationship Other staff 20 10. Additional Education manager post expected by staff to be Offices, to be already December 2009 deployed from trained in 20 10 advertised. Other (seconded from MOE (transfer of and 201 1 for two staff to be hired within MOE). fknctions and pilot REAs. n i 2009-2010. personnel) by Other MOE staff 2010. deployed andor new staff hired by 2013 for five other REAs. Legislation to Current Education Current Depends on the Current enable Act allows for legislation allows institutional Education Act agencies to inspections. for registration model to be allows for carry out all School and training o f adopted. planned NET Improvement Act teachers. New activities. functions will provide legislation schools with required to allow resources and for set-up o f require them to licensing system carry out (being drafted; to recommendations be presented to (to be drafted and Cabinet by 2010 presented to and to MOFPS Cabinet by 201 1). by 201 1). 47 Annex 5: Project Costs JAMAICA: Education Transformation Capacity Building Project Summary of Project Cost Estimates (US$ Million) Components Local Foreign Total A. 1.0 Enhanced Management and Accountability 1 .INational Education Inspectorate (NEI) 4.4 2.5 6.9 1.2 Jamaica Teaching Council (JTC) 2.9 1.1 4.0 1.3 Regional Education Agencies (REAs) 0.7 0.1 0.8 Subtotal 8.0 3.7 11.7 B. 2.0 Mechanisms to Mobilize Resources to the National Education Trust (NET) 1.1 0.1 1.2 C. 3.0 Communications and Project Management 3.1 Communications 0.4 0.4 3.2 Project Management 1.o 0.0 1.o 3.3 Monitoring and Evaluation 0.3 0.3 Subtotal 1.7 0.0 1.7 Total BASELINE COSTS 10.8 3.8 14.6 Physical Contingencies 0.2 0.1 0.3 Price Contingencies 1.o 0.1 11 Total PROJECT COSTS 12.0 4.0 16.0 48 Annex 6: ImplementationArrangements JAMAICA: Education Transformation Capacity Building Project 1. Overall Responsibility. The Ministry o f Education (MOE) oversees the planning, coordination, and implementation o f the national education reform program (the ESTP), which i s partially supported by this Project. The M O E will have overall project execution responsibility. 2. Management of the ESTP. The planning o f the ESTP was carried out by the M O E in collaboration with the Public Sector Modernization Division o f the Cabinet Office. The international consultants who reported to the previous management team, the Education Transformation Team (ETT), have finished their contracts. The M O E has created a Change Management Unit (CMU) as the body responsible for executing the ESTP. The C M U will manage the required changes for Human Resources financial and program reporting and evaluation o f the education system transformation process. The C M U operates out o f the MOE's Project Management and Technical Services Division (see Figure 6. I : Ministry o Education f Organizational Chart) and i s subject to the governance and oversight requirements o f the MOE. The procedures established within the Project Management and Technical Services Division for due diligence and fiscal accountability/ responsibility will support the execution o f the ESTP. 3. The C M U will be under the leadership o f a Programme Director reporting directly to the Permanent Secretary o f the M O E (see Figure 6.2; ESTP Management Structure). The C M U i s responsible for oversight o f the technical inputs to the ESTP and, as such, for consolidating the work programs o f the agencies (NEI, JTC, REAs, and NET) and determining the budgetary and programmatic priorities for each fiscal year. The C M U will be staffed with the following additional personnel: Financial Manager, Senior Project Accountant, Junior Project Accountant, Procurement Manager, Records/document Clerk, Welfare Officer, two Communications Specialists, Administrative Manager, Organization and Methods Officer, Administrative Assistant, a Secretary, and a Driver. Some o f these posts will be covered by the Bank loan, while others will be paid for by the government. The Programme Director, Financial Manager, Junior Project Accountant, communications specialists, and Administrative Assistant are already on board. Recruitment o f other key staff will begin by project effectiveness. 4. Inter-Governmental Supervision/Coordination. A Programme Management Steering Committee (PMSC) will monitor and oversee the management o f the ESTP at the policy level, giving the M O E the strategic direction and guidance necessary for the effective and efficient implementation o f ESTP activities and ensuring that these activities are in accordance with the policies, procedures, timelines and budget o f the GOJ and the MOE. The PMSC will meet once a month for the first six months and quarterly thereafter. The C M U Programme Director will also report to the PMSC. 5. The GOJ's Planning Institute o f Jamaica (PIOJ) and Ministry o f Finance and the Public Service (MOFPS) work closely with the M O E to monitor project planning and spending. In addition, the Public Sector Modernization Division (PSMD) o f the Cabinet Office has supported the transformation o f 11 other public departments over the last seven years and i s working with the M O E to implement the ESTP, specifically through management o f key areas for technical 49 assistance (HR transition planning, establishment o f policy ministry and corporate functions across all new entities, establishment o f the REAs, and development o f the framework and training programs for the NEI). 6. Execution o f the Project. The C M U will be responsible for the management o f the Project. The C M U will manage the designated account and will ensure that it i s used properly. It will ensure the implementation o f the lines o f action detailed in the loan program and will be ultimately responsible for procurement o f goods and services, fiduciary reporting, the Annual Work Program, and monitoring and evaluation o f the Project. The C M U will be the primary liaison with the Bank and other donors (IDB, USAID and others). The Programme Operations Manual for the Project specifies the implementation arrangements and fiduciary responsibilities. 7. The C M U will coordinate the activities o f the agencies (NEI, JTC, REAs, and NET), whose work i s supported by the Project, and will ensure that the agencies receive inputs and support in a timely fashion. The M O E / C M U will be responsible for: (i) ensuring that the agencies are adequately resourced with the tools and staff to carry out their activities; (ii) coordinating and monitoring the activities funded by the World Bank and other donor-financed programs; and (iii) ensuring that the loan requirements and conditions are adhered to. The C M U Director will meet regularly with the heads o f the NEI, JTC, REAs, and NET. The agencies will not directly handle Bank financing or manage procurement under this Project. 8. At the beginning o f each fiscal year, including the first year, the C M U will prepare an Annual Work Program (AWP) satisfactory to the Bank. The A W P will outline activities to be financed under the Project and contain a detailed budget for the funds in the designated account. The A W P will also identify key challenges that the ESTP may face, including the likelihood o f meeting the DLTs and the allocation o f budget to support key ESTP activities. 9. The Programme Operations Manual for the Project specifies the implementation arrangements and fiduciary responsibilities, which are described further in Annexes 7 and 8. It will also contain a detailed description o f the DLTs (including their means o f verification) and o f the AWP. 10. Component 1: For subcomponents 1.1 and 1.2, the activities will be carried out by the NE1 and JTC, respectively. The head o f each agency will be responsible for planning, estimating budget needs, and overseeing execution o f i t s respective activities, and will report to the C M U Director on the progress o f activities funded by the Project loan. The C M U will affect the procurement and financial arrangements, and will report to the Permanent Secretary, PMSC and the Bank, on implementation progress o f all Project activities and fulfillment o f all contractual obligations. 11. The M O E i s currently studying various options for the institutional framework for the Regional Education Authorities (sub-component 1-3). Once a decision has been made, the framework will be applied in two model REAs. A process evaluation will be carried out, followed by the expansion o f the framework to the other five REAs. The Project will finance training to REA staff to give more direct support to schools, as well as training o f School Boards to assist them in improving and providing better leadership to schools and carrying out the 50 mandates o f the Education Act and Regulations and other new legislation and MOE policies. The training activities under subcomponent 1.3 will be executed by the National College for Education Leadership (NCEL), which falls under the umbrella o f the JTC. As such, the C M U will affect the procurement and financial arrangements, and will report to the Permanent Secretary, PMSC and the Bank as described above. 12. Component 2: The NET will be established as a Limited Liability Company (LLC) and will operate as a not-for-profit entity, as all gains will be used to further the primary purpose for i t s establishment. The NET will be managed by a Managing Director (MD) who will be responsible for the operations o f the NET. The C M U will procure the marketing and public relations support for the NET, as well as arrange for the required training to build the NET'S capacity to discern and manage Publidprivate Partnership arrangements. The C M U Director will liaise directly with the NET'S MD, who will provide progress updates on NET activities and facilitate all due diligence procedures and reports as required. 13. Component 3: The C M U i s responsible for the execution o f the activities under this component. The Communications Specialists will work closely with the M O E agencies (for external communications, such as information regarding the school inspection process) and technical divisions (for internal communications, such as the MOE's plans for redeployment o f staff to the new agencies). The C M U Director will be responsible for gauging the operating needs o f the CMU, as well as for oversight o f the process and summative evaluations (to be carried out by an independent agent) and the annual external audits. 51 "-?----- I ccr 0 c1) L u 0, E V Q) U S W W -0 .w a, > .w 0 S v1 m JI v) 9 CT Q) -5 L c M 0 .- Y- E E Q E 8 W CT W e8 E 5 g U S m G z W -5 L 0 w- 8 L 1 W iz C .- 0 .w -m v) ,- on W -I * Annex 7: Financial Management and Disbursement Arrangements JAMAICA: Education Transformation Capacity Building Project A. Executive Summary 1. This annex summarizes the findings o f the financial management capacity assessment for the Education Transformation Capacity Building Project. The objective o f the assessment was to determine whether the Change Management Unit (CMU), recently established in the Ministry o f Education (MOE) to oversee the national Education System Transformation Programme (ESTP) and implement donor-funded projects like the proposed Project, has acceptable financial management systems, including accounting systems, reporting, auditing and internal controls to provide reasonable assurance that project funds would be utilized for the purposes intended and to ensure that financial management and accounting systems are implemented within the approved budgetary provisions in conformity with the terms o f the World Bank-funded project and the national ESTP. The staffing o f the Finance Section o f the C M U i s underway with the hiring o f the Financial Manager and Junior Project Accountant. Other agencies that will be strengthened under the Project include the newly established National Education Inspectorate (NEI), the Jamaica Teaching Council (JTC), the Regional Education Authorities (REAs), and the National Education Trust (NET). Thus, one o f the objectives o f the project would be to make operational these new agencies to improve the capacity o f the M O E to deliver high quality education efficiently. The full financial management assessment was carried out in accordance with the OP/BP 10.02 and the Guidelines for Assessment o f Financial Management Arrangements in Bank Financed Projects, issued by the Financial Management sector board on October 15,2003. 2. The conclusion o f the financial management assessment i s that the M O E has taken a number o f actions to ensure that financial management arrangements for the Project will satisfy the World Bank's minimum requirements under OP/BP10.02. The main financial management actions already taken by the M O E are: For the Ministry o f Education: Steps have been undertaken to address the internal control lapses that were documented in the 2007/2008 audit report (see paragraph 14 below). 0 For the C M U : A qualified Financial Manager and Junior Project Accountant have been recruited to oversee the financial management aspects o f the project. A Senior Project Accountant remains to be recruited. 0 For the NEI, JTC, REAs, and NET: Competent staff would need to be hired to operate their respective financial management systems and to enable the preparation o f financial reports, once they become fully autonomous and are receiving direct budgetary resources. Prior to their full establishment and for the l i f e o f the Project, per agreement with the Bank, their financial management arrangements would be handled by the CMU. 0 The Accounting Policies and Procedures Manual has been updated to include a chart-of- accounts and forms. In addition, Accpac has been installed as the accounting software for the project. 0 The Programme Operations Manual o f the Project i s being finalized. A draft was presented at Negotiations and it will be completed by Effectiveness. 54 An action plan delineating measures to be taken before project negotiations i s provided in Appendix 7.1. The flow o f funds chart i s attached as Appendix 7.2. B. Summary o f Project Description 3. The Project consists o f three components: Component 1: Enhanced Performance and Accountability will make operational the NEI, JTC, and REAs to form a coherent system to monitor progress and improve accountability and quality o f the education system. Component 2: Mechanisms to Mobilize Resources to the National Education Trust (NET) will contribute to the development o f a marketing strategy to mobilize resources for the NET, and training for NET and other relevant GOJ staff in the use o f public-private partnerships. Component 3: Communications, Project Management, and Monitoring and Evaluation will support the development and implementation o f a strategic communications strategy to ensure ownership across all levels and assuage anxiety among key stakeholders resulting from the organizational changes. I t will also cover provision o f staffing, training, and purchase o f necessary equipment and materials for project management. Finally, it will support annual external audits and process and summative evaluations o f the ESTP. C. Country Issues 4. The C F A N C P A R and the PEFA that were recently prepared provide a good overview o f the public financial management system in Jamaica. Key recommendations o f these analytical works are to: (i) strengthen the link between policy, planning and budget allocation by moving toward a Medium Term Expenditures Framework and costing the Corporate Plans; (ii) improve the quality and timeliness o f financial reporting; (iii) improve cash predictability by defining a transparent mechanism for warrant releases that maintain budget consistency with Government priorities; and (iv) strengthen the capacity o f the Internal Audit Directorate and increase the financial independence o f the Auditor General's office. The country i s implementing the C F A A and the PEFA recommendations with the support o f the IDB and the European Union. In addition, the Bank i s preparing an Institutional Development Fund (IDF) proposal in the area of budget execution and internal and external controls. The 2008-2009 financial crises have heightened the budget constraints that have adversely affected the implementation o f some o f the on-going projects in the Bank's portfolio in Jamaica. D. Risk Assessment and Mitigation Measures 5. Appendix 7.3 shows a risk assessment and mitigation matrix. The overall assessment i s substantial given the issues at the country level that have been exacerbated by the financial crises, limited fiscal space for project implementation, and the complexity o f the project. The implementation o f the mitigation measures i s expected to reduce the overall assessment from substantial to moderate. In addition to section C above, sections F and G provide greater detail o n the current and proposed actions to achieve these improvements. 55 E. Financial Management Arrangements 6. Implementing Entity. The overall responsibility for the project's financial management will l i e with the Change Management Unit (CMU) that has recently been established within the Project Management and Technical Services Division o f the MOE. The Unit i s headed by a Programme Director. Other staff would include a Financial Manager, Senior Project Accountant, Junior Project Accountant, Procurement Manager, Records/document Clerk, Welfare Officer, Communications Specialists (2), Administrative Manager, Organization & Methods Officer, Administrative Assistant, a Secretary, and a Driver. The C M U Director, Financial Manager and Junior Project Accountant have been appointed. The project's financial management will be handled by a core team comprising the Financial Manager, Senior Project Accountant, and Junior Accountant. The appointed Financial Manager i s highly qualified and experienced. The Junior Accountant will undertake the routine accounting tasks such as journal entries, maintenance o f the fixed asset register, and the preparation o f bank reconciliation statements. The presence o f the Junior Accountant will facilitate the supervision o f the financial management activities o f the newly established implementing agencies and improve internal control by fostering a better segregation o f duties. It i s expected that the TORS for the Senior Accountant would be prepared for review by the Bank and hiring would take place before Project Effectiveness. 7. Accounting System. An Accounting Policies and Procedures Manual has been developed for the Project to ensure uniform treatment o f all accounting transaction cycles. It i s also aimed at formalizing and streamlining the operations o f the project and facilitating communication with all project stakeholders, including meeting the documentation requirements o f the proposed Loan. Agreement has been reached that the Manual would be expanded to include the chart-of-accounts and forms. The Manual sets the key objectives o f each major accounting transaction, specifies the policies to achieve the stated objectives and the procedures to be followed in accordance with the policies, and identifies the responsible official to execute the procedures. The chart-of-accounts for the project has been prepared. I t i s based on the budgetary object codes o f the Government o f Jamaica. This feature will facilitate the preparation o f the financial statements that are consistent with the Government accounts. A decision was recently taken to use Accpac as the accounting software for the project. I t has been installed and i s operational. 8. Financial Management Procedures. The Programme Operations Manual (POM) under preparation will contain the key financial procedures covering all major financial transactions that cover the needs o f the project, including the procedures that relate to the activities o f the NEI, JTC, REAs, and NET. In addition, the P O M will complement the procedures included in the Accounting Policies and Procedures Manual on budgeting, reporting and internal control procedures. This would be mainly accomplished through the incorporation o f the activities o f the Internal Audit Department (see below). Finally, the P O M would include measures to address the financial aspects o f the relationship that the MOE will have with the specialized agencies being set up (NEI, JTC, REAs, and NET) in connection with the ESTP. 9. Reporting and Monitoring. Interim Unaudited Financial Reports (IUFRs) will be prepared b y the C M U and sent to the Bank every six months. One single set o f reports will be 56 used for monitoring and disbursement. As such, the IUFRs will include a description o f the status o f the attainment o f the disbursement-linkedtargets (DLTs), key performance indicators, a summary o f the physical progress o f project implementation, and the status o f procurement. The Bank reviewed the draft IUFRs with the C M U during appraisal. Agreement has been reached on the IUFR format. The IUFRs will include: (a) disbursement by project components; (b) report o f progress on the disbursement-linked targets; (c) cumulative investment statement (with actual and budgeted figures) and cash balances; and (d) notes to the financial statements. The information from the CMU's accounting software will be used to generate IUFRs and, more generally, to provide better information for C M U fiduciary managers, MOE staff, and other stakeholders o f the Project. 10. IUFRs will be sent to the Bank each semester, within 45 days after the end o f each such period. The IUFRs will serve as a basis for the annual audited financial statements. These financial statements will also include the CMU's assertion that loan funds were used in accordance with the intended purposes, as specified in the Loan Agreement. The annual financial statements, once audited, will be submitted to the Bank not later than four months after the end o f each fiscal year. 11. The supporting documentation o f the financial statements will be maintained by the C M U and made easily accessible to Bank supervision missions and to the external auditors. All financial reports will be made public, including through posting in the C M U web pages. 12. Flow o f Funds. The Bank will disburse the proceeds o f the loan into a Designated S Account (DA) in U dollars in the name o f the project, held in a commercial bank satisfactory to the Bank. The DA will be segregated. Funds will be periodically transferred from the DA to a Jamaican Dollar denominated Project Account which will be used to finance project expenditures. Loan proceeds will finance eligible expenditures to support key ESTP activities, to be documented by expenditures in designated budget lines. The initial advance will be provided o n the basis o f a withdrawal application. The amount i s based on the projected expenditures during the period from Loan effectiveness to the second advance in November o f that year. After the initial advance, disbursements under the project will be o n the basis o f two advances per year, in M a y and in November each year o f project implementation. All subsequent M a y advances will be o n the basis o f planned expenditures only, as determined by the eligible budget lines. All November advances will be disbursed on the basis o f expenditures in the eligible budget lines and the attainment o f five disbursement-linked targets. Agreement has been reached on the estimated amount o f the advance to be provided each semester. The advances represent the MOE's calculation o f funding requirements to finance the project activities agreed during appraisal. This schedule o f advances will be subject to periodic adjustments, based on annual reviews o f the CMU's work program for the coming fiscal year, taking into account actual project implementation experience. While most o f the Project funds will be provided as advances, two or three contracts amounting to about US$1 million will be financed via direct payment by the Bank to the concerned supplier(s) and/or service provider(s). There will also be retroactive financing o f up to US$0.5 million. 13. Withdrawal requests will be prepared in accordance with budget authorization approved by the M O E and Ministry o f Finance and the Public Service (MOFP$). Each request will be 57 approved by the MOFPS, which then provides a cashless warrant to the C M U to withdraw funds from the designated account, controlled by the MOFPS which controls all U S dollar- denominated accounts. The commercial bank holding the DA would prepare a check for the Jamaican dollar equivalent which i s deposited in the Project Account by the C M U to pay for project activities. Details o f the flow o f fund arrangements are contained in the Programme Operations Manual. A flow chart o f the flow o f funds i s attached as Appendix 7.2. 14. Internal Audit. The M O E has approved expansion o f the audit program for FY2010/11, andthereafter, to include the Project. During appraisal, the IAD was advised o f the possible areas that could be covered during the first year o f the Project. These include a risk-based approach in the review o f project activities as well as a systems approach. The mechanism for follow-up o f the IAD's recommendations and the modalities for collaboration with external auditors would also be addressed. Subject to the availability o f funding, targeted training for IAD staff would be arranged, as needed, to address internal control issues arising from project implementation. 15. External Audit. Discussion has taken place for one audit to be carried out for the two expected loans, one from the Bank and one from the IDB, subject to the concurrence o f the IDB. This would be in keeping with the harmonization o f financing from international development partners for the ESTP. Agreement has been reached on the TORs for the audit. I t i s expected that the auditor would be asked to confirm the attainment o f the disbursement-linked indicators that were used to justify disbursements during the year under audit. In addition, because o f the current internal control weaknesses within the MOE, the audit o f the C M U would be subject to additional audit tests and procedures. During appraisal, the audit TORs were discussed with the Audit Office o f Jamaica which has indicated that it would be willing to undertake the project audits. The Audit Office i s currently undertaking the audit o f the P A T H project. In order to adhere to the Bank's requirement that audit reports be issued no later than four months after the end o f each fiscal year, the Auditor General (AG) stressed that project statements and schedules should be made available to the Audit Office in a timely fashion. The M O E presented documentation to confirm that the Audit Office has formally agreed to carry out the external audits for the Project. 16. Disbursement Arrangements. Disbursements under the project will be for eligible expenditures incurred under the following budget sub-objects for the NEI, JTC, REAS,NET, and C M U : 2 1-Compensation o f Employees; 22-Travel Expenses and Subsistence; 23-Rental o f Property, Machinery and Equipment; 25-Purchases o f Other Goods and Services; and 31- Purchases o f Equipment (Capital Goods). As the above sub-objects will come from Capital A and Capital B budget estimates, they will afford the Government the flexibility in documenting the advances up to the amount stipulated in the project expenditure reports prepared by the C M U and approved by the M O E and the MOFPS. Following the initial advance, most o f the loan funds will be disbursed to the M O E through advances made twice each fiscal year, in M a y and November. Loan funds will be transferred to a designated account denominated in U S Dollars to be administered by the C M U o f the MOE. Since the MOFPS i s legally in charge o f U S Dollar denominated accounts, the C M U will establish a Project Account denominated in Jamaican Dollars from which project expenditures would be funded. This approach will minimize the exchange risks to the CMU. Except for direct payments, all disbursements under this project would be made on the basis o f reports. 58 17. Initial Advance. An initial advance o f US$2.0 million would be made upon Loan Effectiveness. The initial advance will be provided on the basis o f a withdrawal application and the projected expenditures during the period from Loan Effectiveness to the second withdrawal in November o f that year. 18. Disbursements in May. All subsequent advances in the first semester in May will be on the basis o f planned expenditures only, as determined by eligible budget lines. Disbursement requests for May will be submitted no later than May 15th each year. They will consist of: (i) the IUFRs for the semester ending March 31" each year which will include an Expenditure Statement showing the actual expenditures incurred under the aforementioned budget sub-objects as well as a Cash Flow Statement showing the forecast o f expenditures planned for the following semester; and (ii) l i s t o f payments against contracts that are subject to the Bank's prior review. a The Expenditure and Cash Flow Statements would be generated from Accpac o f the CMU. 19. Disbursements in November. All subsequent advances in the second semester in November will be disbursed on the basis o f expenditures in the eligible budget lines and the attainment o f five disbursement-linked targets (see Table 2 in Section 1I.C o the main text). f Disbursement requests for November will be submitted no later than November 1gfh each year. They will consist of: (i) report summarizing the evidence that the disbursement-linkedtargets a have been attained, with supporting documentation (see Annex 3for a list o agreed documents); f (ii) the IUFRs for the semester ending September 30 each year which will include an Expenditure Statement showing the actual expenditures incurred under the aforementioned budget sub-objects as well as a Cash Flow Statement showing the forecast o f expenditures planned for the following semester; and (iii) a l i s t o f payments against contracts that are subject to the Bank's prior review. The Expenditure and Cash Flow Statements would be generated from Accpac o f the CMU. 20. Direct Payments. About two or three large contracts (NE1 software and/or a large technical assistance contract for NET'S marketing campaign) would be disbursed on the basis o f direct payments by the Bank to the concerned suppliers or service providers. These contracts would not be linked to DLTs or funded through the designated account. They are estimated to cost around US$1 million. The applications for direct payments would be fully documented and would include the original records such as invoice and receipts. 21. Retroactive Financing. The GOJ requested that US$0.5 million be considered for retroactive financing. This corresponds to eligible project expenditures incurred up to 12 months before the expected date o f Loan Agreement signing (February 1 2009 to February 1,20 10). The disbursement request for retroactive financing will consist o f expenditure reports o f the eligible budget sub-objects. 59 22. Disbursements through the Designated Account. The table below sets out the Schedule o f estimated advances that would be made through the designated account. Date Type o f Advance Amount in US$ million April, 2010 Initial Advance 2.0 November. 20 10 DLT-Linked Advance 1.o May, 2011 Advance 3.0 November. 20 11 DLT-Linked Advance 1.o May, 2012 Advance 3.5 November, 20 12 DLT-Linked Advance 1.o Mav. 20 13 Advance 2.0 November, 20 13 DLT-Linked Advance 1.o TOTAL 14.5 23. Disbursement Schedule. The following table sets forth the disbursement categories and the percentage o f expenditure to be financed out o f the loan proceeds. Category Percentage of Expenditures to be financed (expressed in USD) (1) Eligible Expenditures 100% subject to disbursement Program (EEP), except as 14,960,000 conditions, as defined in the covered by Category (2) below Loan Agreement (2) Goods and consultants' 100% services for NE1 software and/or 1,000'000 marketing (3) Front-end Fee I 40,000 TOTAL AMOUNT 16,000,000 60 F. Loan Conditions and Summary o f Annual Audits Requirements 24. The main loan conditions are the following: The Negotiation conditions were met and the corresponding documentation was received: (i) update o f the Accounting Procedures Manual to include chart-of-accounts and forms; (ii) completion o f the draft Programme Operations Manual; ( i ) i i final design o f the content and format o f the Interim Unaudited Financial Reports; and (iv) agreement on the F l o w Chart o f the F l o w o f Funds. Effectiveness condition: Programme Operations Manual finalized and adopted by the MOE. Legal covenants: (i) Standard financial management provisions; (ii) transmission o f audit reports within four months o f the end o f Jamaica's fiscal year, i.e. by the end o f July each year; (iii) transmission o f the IUFRs together with the disbursement requests not later than 45 days after the end o f each semester. G. Supervision Plan 25. Given that the C M U i s newly established, and in light o f internal control issues within the Ministry o f Education, the financial management supervision will focus on: (i) evolution o f the the internal control mechanisms o f the project with more frequent and intensive transactions testing; (ii)more frequent consultation with the Internal Audit Department o f the Ministry; and (iii)review o f the semester IUFRs which will help monitor financial performance o f the Project. Bank Financial Management staff would undertake two supervision missions a year during the first year o f implementation and at least one supervision mission every year thereafter. The overall financial management system o f the C M U would be monitored o n an on-going basis to ensure it continues to be satisfactory. The financial information flows between the C M U and the newly established project entities will be monitored during supervision. 61 Appendix 7.1 : Financial Management Action Plan Action Responsible Completion date 1. Complete the Programme Operations Manual CMU By effectiveness 2. Update Accounting Procedures Manual CMU By negotiations 3. Prepare Chart-of-Accounts CMU By negotiations 4. Agree on Flow Chart o f Flow o f Funds CMU/WB By negotiations 5. Complete preparation o f IUFRs CMU By negotiations 62 Appendix 7.2: Flow o f Funds The World Bank MOE/PMTS 1 Designated I CMU 1 Account I Project Bank Account Project Expenditures 1 Direct Payment (WB) 63 Appendix 7.3: Risk Assessment and Mitigation Matrix Risk Assessment Risk Mitigation Measures Residual H I S I M I L Risk - Country Level The Bank has developed an IDF proposal to S X contribute to the implementationbfthe CFAMCPAR action plan. This IDF grant will complement the actions undertaken by other donors. I t will focus on the areas identified in the text above. Entity Level X The CMU has recently been formally established. L The Programme Operations Manual i s under preparation. The Task Team will work with the C M U to ensure that it i s soundly established, as well as assist in the preparation of the Programme Operations Manual by providing constructive comments. Project Level Project Implementation will entail the M strengthening o f a number o f new entities. Specific measures have been included in the action plan in Appendix 1 to mitigate the risks. Overall Rating M Inherent Risk Control Risk Budget X Despite problems with fiscal space, 100% M financing of project expenditures would help mitigate risks. But risk remains that warrants to fully utilize project funds will be issued by the MOFPS. Accounting X Implementationo f the action plan in Appendix 1 L will help reduce the risks. Internal Controls I Ix/ I I Implementationof the action plan in Appendix 1, involvement of the IAD, and close suuervision will help reduce the risks. M Funds Flow X Flow o f funds arrangements will be agreed upon M prior to Loan approval. Financial Reporting X Format and contents o f the reports (IUFRs) will be agreed upon during negotiations. The Bank L will prepare the initial draft and assist the CMU in i t s preparation. Auditing X The Auditor General's Department has agreed to audit the project. The Bank i s working with the L Auditor General's Department to facilitate the preparation of the audit reports Overall Control Risk x M .* Residual Risk Rating t r * 6 % r M 64 Annex 8: Procurement Arrangements JAMAICA: Education Transformation Capacity Building Project A. General 1. Procurement for the proposed Project will be carried out in accordance with the World Bank's "Guidelines: Procurement under IBRD Loans and IDA Credits," dated M a y 2004 and revised October 2006; and "Guidelines: Selection and Employment o f Consultants by World Bank Borrowers," dated M a y 2004 and revised October 2006, and the provisions stipulated in the Loan Agreement. The various items under different expenditure categories are described below. For each contract to be financed by the Loan, the different procurement methods or consultant selection methods, the need for pre-qualification, estimated costs, prior review requirements, and time frame are agreed between the Borrower and the Bank in the Procurement Plan. The Procurement Plan will be updated at least annually or as required to reflect the actual project implementation needs and improvements in institutional capacity. 2. Procurement o f Goods: Goods procured under this project will include: computers, software and licenses, interactive white boards, cameras, DVDs, and office equipment. The procurement will be done using the Bank's standard bidding documents (SBD) for all international competitive bidding (ICB) and National SBD agreed with or satisfactory to the Bank. 3. Selection o f Consultants: Consultant services will include technical assistance to set up the inspection and teacher management information systems for the National Education Inspectorate (NEI) and Jamaica Teaching Council (JTC), to provide capacity building for staff o f the NEI, JTC and Regional Education Authorities (REAS),to develop an inspection handbook and a best practice professional development journal, to review and revise the teacher mentoring program, to create the website for teachers licensing and registration, and to carry out process and summative evaluations o f the national Education System Transformation Programme (ESTP) and Project activities. Consultants will be hired to develop programs for the National College o f Education Leadership (NCEL) and assess and prepare documents for accreditation o f the NCEL. Other services will include a firm to carry out the media campaign for the NET and the project auditing. Short l i s t s o f consultants for services estimated to cost less than US$200,000 equivalent per contract may be composed entirely o f national consultants in accordance with the provisions o f paragraph 2.7 o f the Consultant Guidelines. 4. Operating Costs: These will include communication (phone/fax/intemet) fees, project management and administration utilities and suppliers, rental fees, equipment maintenance, study tours and professional development courses, tuition, airfare, hotel, and per diem for training activities. These will be procured using procedures acceptable to the Bank and defined in the Programme Operations Manual (POM). 5. The procurement procedures and SBDs to be used for each procurement method, as well as model contracts for goods and services procured, will be presented in the P O M that has been approved by the Bank. 65 B. Assessment o f the agency's capacity to implement procurement 6. The coordination and monitoring o f the activities funded by World Bank loan resources will be managed by the Change Management Unit (CMU) in the Ministry o f Education's Project Management and Technical Services Division. The C M U will be responsible for effecting the procurement and financial arrangements and other related services necessary to ensure successful implementation o f program activities. Program reporting and fulfillment o f contractual obligations will be the responsibility o f the C M U under the Programme Director. The program activities will be carried out by the respective proposed new agencies (NEI, JTC, REAs, and NET). The heads o f these agencies will report to the C M U Director and the Permanent Secretary o f the M O E . 7. Assessments o f the country procurement system and the capacity o f the Change Management Unit to implement procurement actions for the project were carried out by the Bank in September 2009. The assessment reviewed the organizational structure for implementing the project and the interaction between the C M U staff responsible for procurement and the Ministry's relevant central unit for administration and finance. 8. The key issues and risks concerning procurement for implementation o f the project have been identified. Though the C M U Director has good knowledge o f international donors' procurement procedures and requirements, the current lack o f a qualified procurement staff i s a handicap. The assessment also revealed that the chapter on procurement in the draft Programme Operations Manual does not yet fully detail all the procedures and channels o f responsibilities and flow o f documentation. In addition, it was noted that the various checkpoints for procurement under the country procurement system could constitute a risk o f delays for large contracts. 9. The following recommendations and corrective measures have been agreed and constitute the action plan for mitigating the procurement risk: (a) Annual procurement reviews. Results-based operations are not exempt from Bank procurement requirements and are expected to ensure that underlying procurement processes conducted for the acquisition o f normally procurable inputs are sound and in line with Bank procurement principles. The purpose o f this i s to assure that competitive and fair practices will be used. In the case o f small scale outputs, some service inputs may not be subject to procurement or there may be no obvious benefits to having Bank prior review. The Bank will annually review national procedures to ensure that they meet N C B criteria and other Bank procurement requirements. There will be an increased reliance on ex-post reviews to ensure that contracting, shopping or larger purchases have met Bank standards o f transparency, competitiveness and fairness. (b) Hiring, after Effectiveness, o f a Procurement Manager with relevant experience in Bank procurement to strengthen the C M U . Terms o f reference for the proposed specialist have been reviewed and approved by the Bank. The C M U agreed to advertise the request for expression o f interest regarding the selection o f the Procurement Manager before the project i s declared effective. A dated covenant has 66 been included in the Loan Agreement, requiring hiring o f said manager no later than two months following project effectiveness. (c) Submission to the Bank o f a preliminary Procurement Plan (PP) to cover the first 18 months o f the project. A signed PP was approved at Negotiations. (d) Training in procurement provided by the Bank to the C M U staff as soon as the project i s declared effective. Further training i s to be provided during the first year o f implementation and through the Bank's annual fiduciary training for Caribbean country project staff. (e) Preparation by the C M U o f a Programme Operations Manual with a specific chapter on procurement, detailing all the procedures and channels o f responsibilities and flow o f documentation. The draft P O M was reviewed by the Bank at Negotiations. The final POM, adopted by the MOE, i s due b y Effectiveness. (f) In addition to the actions detailed above, the procurement thresholds and methods have been set to mitigate the procurement risk. Nevertheless, the overall project risk for procurement i s substantial. C. Procurement Plan 10. The Borrower, by appraisal, developed a draft procurement plan for Project implementation which provides the basis for the procurement methods. This plan was agreed between the Borrower and the Bank's task team on October 16, 2009 and i s available at the CMU. I t will also be available in the Project's database and on the Bank's external website. The Procurement Plan will be updated in agreement with the Bank's task team annually or as required to reflect the actual Project implementation needs and improvements in institutional capacity. D. Frequency o f Procurement Supervision 11. In addition to the prior reviews, the Procurement Capacity Assessment recommends that supervision missions should be conducted every six months. Post review o f procurement actions will be carried out once a year. 67 E. Details o f the Procurement Arrangements Involving International Competition Goods and Non-Consulting Services (a) List o f contract packages to be procured following ICB and direct contracting: 1 2 3 4 5 6 7 8 9 Ref Contract Estimated Procureme P-Q Domestic Review Expected Comments . (Description) cost nt Preference by Bank Bid- No. Method (yedno) (Prior / Post) Opening Date 1 IT 210,000 ICB Na Prior May 10 Equipment 2 Application 1,000,000 ICB Na Prior May 10 Software 3 ITsupport 890,750 ICB Na Prior May 10 NE1& JTC (b) I C B contracts estimated to cost above US$150,000 for Goods and per contract and all direct contracting will be subject to prior review by the Bank. Consulting Services 111 1111 (a) List o f consulting assignments with short-list o f international firms. 4 5 6 7 Ref. No. Description o f Estimated Selection Review Expected Comments cost Method by Bank Proposals (Prior / Submission Post) Date Capacity $2,100,000 QCBS Prior May 10 building for JTC & NE1 NCEL $1,000,000 QCBS Program Development & Accreditation NET $1,000,000 QCBS Prior June 10 Marketing Program REA Capacity $323,3 00 QBS Building 68 (a) Consultancy services estimated to cost above US$lOO,OOO per contract and single source selection o f consultants (firms) will be subject to prior review by the Bank. (b) Short lists o f consultants for services estimated to cost less than US$200,000 equivalent per contract may be composed entirely o f national consultants in accordance with the provisions o f paragraph 2.7 o f the Consultant Guidelines. t F. Thresholds for Procurement Methods and Prior Review 12. Recommended thresholds for use o f the procurement methods specified in the legal agreement, and for Bank prior review o f procurement actions, are identified in the table below. Specific contracts which are subject to prior review will be detailed in the Procurement Plan agreed at negotiations. Thresholds for Procurement Methods and Prior Review Expenditure Contract Value Procurement Contracts Subject to Category (Threshold) Method Prior Review U S $ thousands 1. Goods >150 ICB In accordance with the proc. plan 25-150 NCB None <25 Shopping None Regardless o f value Direct Contracting None -2.A Firms >loo QCBS,QBS,FBS, LCS In accordance with the proc. plan