Document of The World Bank FOR OFFICIAL USE ONLY Report No: 96274-TZ INTERNATIONAL DEVELOPMENT ASSOCIATION PROGRAM APPRAISAL DOCUMENT ON A PROPOSED CREDIT IN THE AMOUNT OF SDR 145 MILLION (US$200 MILLION EQUIVALENT) TO THE UNITED REPUBLIC OF TANZANIA FOR THE STRENGTHENING PRIMARY HEALTH CARE FOR RESULTS PROGRAM May 6, 2015 Health, Nutrition and Population Global Practice Eastern Africa Region Country Cluster 1 Africa Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effectiveas of March 31, 2015) Currency Unit = Tanzania Shilling (Tsh) US$1.00 = Tsh 1,852 US$1.00 = SDR 0.7249 ABBREVIATIONS AND ACRONYMS ANC Antenatal Care ANIS MDTF Achieving Nutrition Impact at Scale Multi Donor Trust Fund ARI Acute Respiratory Infection BOT Bank of Tanzania BP Bank Policy BEmONC Basic Emergency Obstetric and Neonatal Care BRN Big Results Now BSC Balance Score Card CAS Country Assistance Strategy CAG Controller and Auditor General CCHPs Comprehensive Council Health Plans CCT Conditional Cash Transfer CEmONC Comprehensive Emergency Obstetric and Neonatal Care CHW Community Health Worker CHMT Council Health Management Team CRVS Civil Registration and Vital Statistics CSOs Civil Society Organizations CUIS Common Used Items Systems DALY Disability-Adjusted Life Year DED District Executive Director DFATD The Canadian Department of Foreign Affairs Trade and Development DHP District Health Profile DHIS District Health Information System DLIs Disbursement-linked Indicators DPs Development Partners DQA Data Quality Audits ESSA Environmental and Social Management System Assessment ESMF Environmental and Social Management Framework ESMP Environmental and Social Management Plan DQA Data Quality Audits F&C Fraud and Corruption FSA Fiduciary Systems Assessment GAC Governance and Anti-Corruption GDP Gross Domestic Progress GFF Global Financing Facility GoT Government of Tanzania GPSA Government Procurement Services Agency GRS Grievance Redress Service HBF Health Basket Fund HBS Household Budget Survey HCWM Health Care Waste Management HFs Health Facilities i HFGCs Health Facility Governing Committees HMIS Health Information System HRH Human Resources for Health HRHIS Human Resource for Health Information System HRITF Health Results Innovation Trust Fund HSSP Health Sector Strategic Plan IAG Internal Auditor General ICT Information and Communication Technology IDA International Development Association IPT Intermittent Preventive Treatment IFMIS Integrated Financial Management Information System IHME Institute for Health Metrics and Evaluation IMCI Integrated Management of Childhood Illness IRR Internal Rate of Return INT Institutional Integrity ITN Insecticide – Treated Net JAHSR Joint Annual Health Sector Review LAAM Local Authority Accounting Manual LAAC Local Authority Accounts Committee LAFM Local Authority Financial Memorandum LGAs Local Government Authorities LMIC Low & Middle Income Countries LMIS Logistic Management Information System MDA Ministries, Departments and Agencies MDG Millennium Development Goals MDU Ministerial Delivery Unit MFL Master Facility List M&E Monitoring and Evaluation MKUKUTA National Strategy for Growth and Poverty Reduction MMR Maternal Mortality Ratio MNCH Maternal, Neonatal, and Child Health MOF Ministry of Finance MOHSW Ministry of Health and Social Welfare MOU Memorandum of Understanding MSD Medical Store Department MTR Mid-term Review NCB National Competitive Bidding NHIF National Health Insurance Fund NKRA National Key Results Area NPV Net Present Value OC Other Charges OECD Organization for Economic Cooperation and Development OP Operational Policy OPD Outpatient Department PAC Public Accounts Committee PCCA Prevention and Combating of Corruption Act PCCB The Prevention and Combat of Corruption Bureau PDB President’s Delivery Bureau PDO Project Development Objectives PE Personnel Emoluments PEFA Public Expenditure and Financial Accountability ii PFM Public Financial Management PforR Program for Results PHC Primary Health Care PI Performance Indicators PMO-RALG Prime Minister’s Office – Regional Administration and Local Government PMTCT Protection of Mother to Child Transmission PMU Procurement Management Unit POM Program Operational Manual POPSM Presidents’ Office Public Service Management PPA Public Procurement Act PPAA Public Procurement Appeal Authority PPP Public Private Partnership PPRA Public Procurement Regulatory Authority PSSN Productive Social Safety Net RAS Regional Administrative Secretariat RBF Results-based Financing RHMT Regional Health Management Team RITA Registration Insolvency and Trusteeship Agency RMNCAH Reproductive, Maternal, Neonatal, Child and Adolescent Health SARA Service Availability and Readiness Assessment SBUs Special Business Units SDI Service Delivery Indicators SDR Special Drawing Rights TDHS Tanzania Demographic Health Survey TA Technical Assistant TB Tender Boards TFDA Tanzania Food and Drugs Authority TFR Total Fertility Rate TIIS Training Institute Information System UNICEF United Nations Children’s Fund US$ United States Dollars USAID United States Agency for International Development WDI World Development Indicator WGI World Governance Indicators WHO World Health Organization YLL Years of Life Lost Regional Vice President: Makhtar Diop Country Director: Philippe Dongier Senior Global Practice Director: Timothy G. Evans Practice Manager: Abdo Yazbeck Task Team Leader: Rekha Menon and Son-Nam Nguyen iii UNITED REPUBLIC OF TANZANIA STRENGTHENING PRIMARY HEALTH CARE FOR RESULTS PROGRAM Table of Contents I. STRATEGIC CONTEXT ..................................................................................................... 1 A. Country Context ............................................................................................................... 1 B. Sectoral and Institutional Context .................................................................................... 1 C. Relationship to the CAS/CPS and Rationale for Use of Instrument ................................ 5 II. PROGRAM DESCRIPTION............................................................................................ 6 A. Program Scope ................................................................................................................. 6 B. Program Development Objective ................................................................................... 11 C. Program Key Results and Disbursement Linked Indicators .......................................... 11 D. Key Capacity Building and Systems Strengthening Activities ...................................... 18 III. PROGRAM IMPLEMENTATION ............................................................................... 19 A. Institutional and Implementation Arrangements ............................................................ 19 B. Results Monitoring and Evaluation ................................................................................ 21 C. Disbursement Arrangements and Verification Protocols ............................................... 23 IV. ASSESSMENT SUMMARY ........................................................................................... 24 A. Technical ........................................................................................................................ 24 B. Fiduciary......................................................................................................................... 31 C. Environmental and Social Effects .................................................................................. 32 D. Integrated Risk Assessment Summary ........................................................................... 34 E. Program Action Plan ...................................................................................................... 35 iv ANNEXES Annex 1: Detailed Program Description ...................................................................................... 36 Annex 2: Results Framework........................................................................................................ 46 Annex 3: Disbursement Linked Indicators, Disbursement Arrangements and Verification Protocols ....................................................................................................................................... 50 Annex 4: Technical Assessment Summary................................................................................... 75 Annex 5: Summary of Fiduciary Systems Assessment ................................................................ 97 Annex 6: Summary of Environmental and Social Systems Assessment .................................... 119 Annex 7: Integrated Risk Assessment ........................................................................................ 124 Annex 8: Program Action Plan ................................................................................................... 127 Annex 9: Implementation Support Plan...................................................................................... 129 LIST OF FIGURES Figure 1: Program Results Chain .................................................................................................. 10 Figure 2: Cascade of PHC-related Accountability and Performance at all Levels ....................... 12 Figure 3. The Healthcare Delivery System in Tanzania ............................................................... 36 Figure 4: Institutional Arrangements for RBF .............................................................................. 45 Figure 5: Conceptual Framework of BRN .................................................................................... 80 Figure 6: Total Health Expenditure by Financing Source, 2002/03 - 2011/12............................. 83 Figure 7: Total Health Spending by Provider, 2002/03 – 2011/12 ............................................... 83 Figure 8: Per Capita LGA Block Grant Budget Trends ................................................................ 84 Figure 9: LGA Level per Capita Health Block Grant Spending FY2014-15. .............................. 84 Figure 10: Infant Mortality Rate Projection, 2000 to 2034 .......................................................... 92 Figure 11: Maternal Mortality Ratio Projections, 1990-2034 ...................................................... 93 Figure 12: Tanzania Average PEFA Scores for 2006, 2010, and 2013 ........................................ 99 Figure 13: Funds Flow Diagram for the Program ....................................................................... 102 Figure 14: Analysis of Internal Control Weaknesses at LGAs ................................................... 103 Figure 15: Declining Trend in Governance 2007-2012 .............................................................. 109 LIST OF TABLES Table 1: Benchmarking of Tanzania’s Health Outcomes and Expenditures against 14 Comparator Countries ......................................................................................................................................... 2 Table 2: Tanzania’s Health Outcomes and Health Expenditures ................................................... 2 Table 3: Expenditure Requirements................................................................................................ 9 Table 4: Summary of Disbursement Linked Indicators ................................................................ 13 Table 5: Technical Assessment: Key Risks and Mitigation Strategies......................................... 30 Table 6: The Government’s Program Supported by the PforR Operation.................................... 41 Table 7: Program Expenditure Requirements in US$................................................................... 41 Table 8: Estimated Program Expenditures by Administrative Units, US$................................... 42 Table 9: Program Financing.......................................................................................................... 42 Table 10: Disbursement Linked Indicator Matrix ........................................................................ 50 Table 11: DLI Verification Protocol ............................................................................................. 52 Table 12: Bank Disbursement ....................................................................................................... 54 Table 13: DLI 1 – “Recipient has completed all foundational activities” .................................... 61 v Table 14: DLI 2 – “Recipients have achieved all of the Program annual results in institutional strengthening at all levels” (national, regional, LGA and facilities) ............................................ 62 Table 15: DLI 4 – “LGAs have improved annual MNCH service delivery and quality as measured by the LGA Balance Score Card”................................................................................. 63 Table 16: DLI 6 – “Program implementers have achieved annual PHC results at the national level" ............................................................................................................................................. 65 Table 17: DLI 5 – “Regions have improved annual performance in supporting PHC as measured by Regional Balance Score Card”................................................................................................. 66 Table 18: Top Causes of Life Years Lost (YLLs) in Tanzania .................................................... 75 Table 19: Tanzania’s Health Outcomes and Health Expenditures ............................................... 76 Table 20: Summary of Key BRN Interventions Corresponding to Each PHC Bottleneck .......... 79 Table 21: Tanzania, Demographic and Health Indicators (2004-5 and 2010) .............................. 88 Table 22: Causes of Death for Infants, 2010 ................................................................................ 89 Table 23: Assumptions Used for the Simulations......................................................................... 91 Table 24: Results of the economic analysis for averted infant and neonatal death (2015-2020) . 92 Table 25: Net Present Value and Internal Rate of Return (2015-2035) ....................................... 94 Table 26: Sensitivity Analysis. ..................................................................................................... 95 Table 27: Technical Assessment: Key Risks and Mitigation Strategies....................................... 96 Table 28: PFM Related Legislation in Tanzania .......................................................................... 97 Table 29: Analysis of Allegations Received and Cases Investigated ......................................... 108 Table 30: Measures to Strengthen System Performance for Environmental and Social Management ................................................................................................................................ 120 vi PAD DATA SHEET United Republic of Tanzania Strengthening Primary Health Care For Results Program PROGRAM APPRAISAL DOCUMENT Africa Region . Basic Information Date: May 6, 2015 Sectors: Health (100%) Country Director Philippe Dongier Themes Child Health (25%); Health System Performance (35%); Nutrition and Food Security (15%); Population and Reproductive Health (25%) Practice Abdo Yazbeck / Timothy G. Evans Manager/Senior Global Practice Director: Program ID: P152736 Team Leader(s): Rekha Menon and Son Nam Nguyen Program Start May 27, 2015 End June 30, 2020 Implementation Period: Date: Date: Expected Financing Effectiveness Date: August 25, 2015 Expected Financing Closing Date: June 30, 2020 . vii Program Financing Data [ ] Loan [ X] Grant [X] Other [X] Credit For Loans/Credits/Others (US$M): Total Program 2,620 M Total Bank Financing 200 M (IDA) Cost : : Total 2,420 M Financing Gap : 0 Cofinancing: (including Global Financing Facility; Achieving Nutrition Impact at Scale Multi Donor Trust Fund; United States Agency for International Development Trust Fund) . Financing Source Amount BORROWER/RECIPIENT 2,030 M IBRD/IDA 200 M Global Financing Facility (GFF) 40 M USAID Trust Fund 40 M ANIS MD Trust Fund 20 M Other Partners 290 M Total 2,620 M . Borrower: United Republic of Tanzania Responsible Agency: Ministry of Health and Social Welfare Contact: Dr. Donan Title: Permanent Secretary Mmbando Telephone No.: +255 22 Email: DMmbando@moh.go.tz 2113077 Responsible Agency: Prime Minister’s Office, Regional Administration and Local Government Contact: Mr. Jumanne Title: Permanent Secretary Sagini Telephone No.: +255 22 Email: ps@pmoralg.go.tz 2113984 . Expected Disbursements (in USD Million) viii Fiscal Year FY16 FY17 FY18 FY19 FY20 Annual 20.5 47.5 44.0 44.0 44.0 Cumulative 20.5 68.0 112.0 156.0 200.0 . Program Development Objective(s) The Program Development Objective is to improve the quality of primary health care (PHC) services nation- wide with a focus on maternal, neonatal, and child health (MNCH) services. Compliance Policy Does the program depart from the CAS in content or in other Yes [ No [X] significant respects? ] . Does the program require any waivers of Bank policies applicable to Yes [ No [X] Program-for-Results operations? ] Have these been approved by Bank management? Yes [ No [ ] ] Is approval for any policy waiver sought from the Board? Yes [ No [X] ] Does the program meet the Regional criteria for readiness for Yes [X No [ ] implementation? ] Overall Risk Rating: Substantial Legal Covenants Name Recurrent Due Date Frequency The Recipient shall adopt a Program Three months after operational manual consisting of the effectiveness RBF Operations Manual and the HBF Memorandum of Understanding both in form and substance satisfactory to the Association. The Recipient shall carry out under Yes No later than six Each year terms of reference satisfactory to the months after the Association in each Fiscal Year end of each FY beginning FY2016 an audit of contracts procured in the preceding FY and furnish said audit to the Association. The Recipient shall carry out a Value (i) during the mid- Twice during for Money Audit. term review and program (ii) no later than implementation. ix six months prior to the closing date. Description of Covenant . Team Composition Bank Staff Name Title Specialization Unit Rekha Menon Lead Economist & Program Co-TTL AFCE1 Leader Son-Nam Nguyen Lead Health Specialist Co-TTL GHNDR Yahya Abdallah Ipuge Sr. Health Specialist Health GHNDR Karima Saleh Sr. Economist Economic GHNDR Analysis Petronella Vergeer Sr. Health Specialist RBF GHNDR Yi-Kyoung Lee Sr. Health Specialist Nutrition GHNDR Andréa C. Guedes Sr. Operations Officer Operations GHNDR Chenjerani Simon B. Chirwa Sr. Procurement Specialist Procurement GGODR Gisbert Kinyero Procurement Specialist Procurement GGODR Ruma Tavorath Sr. Environmental Specialist Environmental GENDR Safeguards Michael Okuny Sr. Financial Management Financial GGODR Specialist Management Patrick Umah Tete Sr. Financial Management Financial GGODR Specialist Management Mary C. K.Bitekerezo Sr. Social Development Social GSURR Specialist Safeguards Sahr Kapundeh Adviser Governance GGODR Denis Maro Biseko Sr. Public Sector Specialist Governance GGODR Zoe Kolovou Lead Counsel Legal LEGAM Christiaan Johannes Nieuwoudt Finance Officer Disbursement WFALA Agnes Mganga Program Assistant Administration AFCE1 Gertrude M. Banda Office Manager Administration GHNDR Eva K. Ngegba Program Assistant Administration GHNDR x I. STRATEGIC CONTEXT A. Country Context 1. Tanzania’s gross domestic product (GDP) growth has remained stable at around 7 percent over the past decade thanks to increased private consumption and public investment, together with rapidly expanding sectors such as communication, construction, financial services, and mining. Inflation declined from over 19.0 percent in 2011 to 5.9 percent in 2014 thanks to tight monetary policy and falling international energy and food prices. However, fiscal space has been reduced during the past four years as a result of lower-than-expected domestic revenue collection, diminishing aid disbursements, and higher investment in infrastructure projects. 2. Notwithstanding strong and stable economic growth, poverty has only decreased marginally from 34 percent in 2007 to 28 percent in 2012. In addition, 44 percent of the population lives on less than US$1.25 per day and 90 percent of the population lives on less than US$3 per day. Low elasticity of growth on poverty reduction is explained by: (i) slower than expected improved human capital stock on income generation opportunities; and (ii) a lack of growth in labor intensive sectors, including agriculture in rural areas (where 84 percent of poor households reside) and in manufacturing. 3. In 2000, Tanzania adopted the Tanzania Development Vision 2025 with the aim to build a society characterized by: (i) quality livelihoods; (ii) peace, stability and harmony; (iii) good governance and rule of law; (iv) an educated and learning population; and (v) a vibrant and competitive economy by 2025. Tanzania’s National Strategy for Growth and Poverty Reduction (MKUKUTA II 2010 –2015) has three priorities: (i) growth and reduction of income poverty; (ii) improvement of quality of life and social well-being; and (iii) good governance and accountability. It explicitly identifies improvements in human resources for health (HRH), maternal health, health facilities and service delivery as national priorities. B. Sectoral and Institutional Context 4. Over the last 10 years, Tanzania has successfully reduced death rates in younger age groups and surpassed the Millennium Development Goal (MDG) related to child mortality. Between 1999 and 2010, infant mortality fell from 99 to 51 per 1,000 live births, while under-five mortality declined from 147 to 81 per 1,000 live births 1. A 2008 Lancet article on child survival gains in Tanzania 2 attributed a large proportion of these improvements to investments in health systems and scaling up specific interventions through a decentralized approach. These include improvements in (i) the share of children under five sleeping under bed nets (from 36.3 percent in 2007/8 to 72.6 percent in 2009/10); (ii) full coverage of vaccination and vitamin A supplements; and (iii) the functioning of Integrated Management of Childhood Illness (IMCI) at health facility and community levels. 5. Despite such progress, Tanzania’s health outcomes are still lower than expected for its level of economic development (Table 1). Communicable diseases remain the major burden 1 Tanzania Demographic and Health Survey (TDHS), 2010. 2 Masanja, H., et al, Child Survival Gains in Tanzania: Analysis of Data from Demographic and Health Surveys, The Lancet, 2008; 371: 1276–83. 1 Table 1: Benchmarking of Tanzania’s of mortality and morbidity for the population. Health Outcomes and Expenditures Progress in reducing maternal mortality and against 14 Comparator Countries 3 neonatal mortality has been slow. Maternal Indicator Tanzania’s mortality ratio remains high at 432 deaths per rank Economic Development 100,000 live births in 2012 against a backdrop GDP per capita 8 of low coverage of facility deliveries and Health outcomes family planning. While the neonatal mortality Age-standardized death rate 6 rate is lower than in comparator countries at the Maternal mortality ratio 12 same level of economic development, it is still Life expectancy at birth 8 high at 26 per 1,000 live births. 4 Stunting is Health-adjusted life expectancy at birth 8 persistently high (42 percent among children Neonatal mortality rates 2 under five years of age), affecting over 3 Stunting (children < 5 years) 15 million children (Table 2). Health expenditures Health expenditure per capita, PPP 2 6. Physical access to health services has Total health expenditures as % of GDP 3 significantly improved in Tanzania with the Public expenditure on health as % of 3 construction and renovation of PHC facilities GDP in rural areas. Most people are living within 5 Public expenditures on health as % of 8 government budget to 10 km from a clinic. 5 On the demand side, there have been various initiatives to: (i) Source: IHME 2013 and WDI 2013 provide cash transfers to extremely poor households conditional on their utilization of health services; and (ii) enroll such poor households in Community Health Funds to provide financial protection. Table 2: Tanzania’s Health Outcomes and Health Expenditures Sub- 1 Tanzania Saharan Africa2 Outcome Indicators 2005 2010 2013 Under 5 mortality rate per 1,000 live births 112 453 92.4 Infant mortality rate per 1,000 live births 68 51 61 Maternal mortality ratio per 100,000 live births 578 4323 510 Total Fertility Rate (Children per Woman) 5.7 5.23 5.1 Stunting (Height for Age <-2SD, %) 38 42 37 Underweight (Weight for Age <-2SD, %) 22 16 21 Wasting (Weight for Height <-2SD, %) 3 5 9 Service Coverage Indicators 3 Comparators are 14 countries close to Tanzania in the global ranking of economic development (7 immediately above and 7 immediately below). In the ranking, 1 indicates the best rank, 15 the worst. For Tanzania, a rank above 8 means better performance than expected at the country’s level of development. 4 Ibid. 5 Tanzania Demographic and Health Survey 2007. Dar es Salaam: Bureau of Statistics Planning Commission of Tanzania; 2007. 2 Skilled birth attendance (% of pregnant women) 47 51 50 Contraceptive prevalence rate (% of women 20 27 24 ages 15-49 years) Full immunization coverage (% of children aged 71 75 n.a. 12-23 months) Children who slept under an ITN last night (% 16 64 35.2 of under-5 children) Women who slept under an ITN last night (% of 16 57 n.a. pregnant women) Health Financing Indicators3,4 Total expenditure on health per capita 11.9 41.3 96.2 Total public expenditure on health per capita 5.9 16.3 n.a. Share of health in the government budget 10.3 8.7 n.a. 1Data of MMR, TFR, nutritional and service coverage indicators are for years 2005 and 2010 ; 2Nutrition indicators are for Sub-Saharan African developing countries’ average only, while others are for the whole regional average; 3 2012 Census data 4All health financing indicators listed under “2010” indicate latest year data; 5All per capita expenditure data are in the unit of current US$ (i.e. at exchange rate rather than purchasing power parity). Source: DHS, Census 2012, World Development Indicators and WHO data. 7. Low quality of care remains a major bottleneck. In many cases, low quality of care reduces utilization of services. There is evidence that community perceptions of the quality of local health facilities influence women's decisions to deliver in a clinic. 6 An example of low quality of care is facilities’ poor compliance with service standards for basic and comprehensive emergency obstetric and neonatal care (BEmNOC and CEmNOC). According to the 2012 Service Availability and Readiness Assessment (SARA), only 32.3% of dispensaries and 50% of health centers had the capacity to provide BEmNOC services. Among all hospitals, around 73% met CEmNOC service standards. 8. On the supply side, a range of serious challenges contribute to low quality of care and poor health outcomes: • Tanzania spends significantly less public money on health than comparable countries. Health financing is highly dependent on external support (which accounted for 48 percent of total public expenditure on health in 2011/12) which is fragmented and mostly off- budget. Public expenditure on health has been flat in real terms, while the share of health in the Government’s budget has declined from 11.9 percent in 2010/11 to 8.7 percent in 2013/14. • Service delivery is constrained by both a shortage and inequitable distribution of skilled human resources for health (HRH). Nation-wide, there are 554 dispensaries without skilled health workers. Instead, they are staffed by medical attendants who are not 6 Kruk ME, Rockers PC, Mbaruku G, Paczkowski MM, and Galea S. Community and Health System Factors Associated with Facility Delivery in Rural Tanzania: a Multilevel Analysis. Health Policy. October 2010. 3 qualified to manage patients by themselves. The national average ratio of clinicians and nurses per 10,000 population is low at 7.7, which is only one third of the WHO recommended number of 22.8. While Dar es Salaam represents just 10 percent of Tanzania’s population as per the latest census, it is home to as many as 45 percent of the country’s doctors 7 and 20 percent of its health personnel. On the contrary, rural areas have only 9.1 percent of the doctors and 28 percent of the health workforce. • Decentralization in the health sector has not fully materialized, hindering the operations of facilities. Health facilities have limited financial autonomy to utilize their own funds. Until recently 8, most primary health care (PHC) facilities did not even have a bank account. Funding for PHC was channeled to local government authorities (LGAs) which often serve as a major bottleneck preventing resources to reach lower levels. • Accountability for results is low at all levels, especially between (i) central government and LGAs, (ii) LGAs and facilities and (iii) facilities and communities. As a result, more than half of health workers are either absent or late during work hours. According to the 2014 Service Delivery Indicators (SDI) survey, on average, 14.3 percent of health providers were absent from the facilities. Absenteeism was more prevalent in Dar es Salaam where 1 out of 5 health workers were not found in their work place. Doctors, especially those in urban areas, are the most likely to be absent, often without permission. Adherence to good clinical practices is poor. A review of clinicians’ ability to manage maternal and neonatal complications in the same survey showed only a 30.4 percent compliance rate with clinical guidelines among providers. This rate is somewhat higher among doctors (35.7 percent). There was no significant difference in the performance of public and private (for and not-for-profit) providers. Furthermore, essential drugs are frequently out of stock, and facilities are in poor conditions. • There has been limited progress in engaging the private health sector through public private partnerships (PPPs). 9. The Mid-term Review (MTR) for the Health Sector Strategic Plan (HSSP) III FY09-FY15 concluded that the health sector is making progress in all strategic areas, but the overall pace is slower than anticipated; there is progress in systems development (policies, strategies, guidelines, work plans, etc.) than in service delivery. 9 Innovations are only slowly trickling down to front line health facilities. Vertical disease control programs are performing better than either general or reproductive health services. Low attendance rates of outpatient departments and maternity wards can be an indication of the population’s dissatisfaction with health services. The MTR suggested that for the coming years, the focus should be on: (i) improving value for money by making optimal use of available resources for better quality; and (ii) increasing transparency and accountability for results (including community engagement). The MTR also emphasized the need to improve health 7 This does not include higher level hospitals which are concentrated in Dar es Salaam and are the facilities that have the highest number of doctors. 8 PMORALG has recently directed councils to open bank accounts for all health facilities. 9 Tanzania Ministry of Health and Social Welfare, Health Sector Strategic Plan III, “Partnerships for Delivering the MDGs”, July 2009 – June 2015, Mid Term Review, October 2013. 4 outcomes through sustainable service delivery systems and pointed out that harmonization of processes is not an end in itself. 10. To address the health system challenges identified by the MTR, the Government has recently embarked on a high profile initiative called Big Results Now in Health (BRN in Health) 2015-2018 with the aim to accelerate the reduction of maternal and neonatal mortality through improving performance, governance and accountability in primary health care (PHC). BRN in Health is embedded in the medium-term Fourth Health Sector Strategic Plan (HSSP IV) which guides health sector development in Tanzania over the next 5 years (FY16-FY20). C. Relationship to the CAS/CPS and Rationale for Use of Instrument 11. The Tanzania Country Assistance Strategy (CAS) FY2012-15 10 is aligned with the priorities in the government’s MKUKUTA II 2010/11 – 2014/15 and the World Bank’s Africa Strategy (2011). Consistent with MKUKUTA II, the World Bank’s Africa Strategy has two broad pillars: (i) competiveness and employment, addressing poor business environment, poor infrastructure, and the need for a healthy and skilled workforce; and (ii) vulnerability and resilience, addressing the high risk of idiosyncratic shocks, including those to individuals’ health (HIV/AIDS, malaria, ebola, maternal mortality, etc.). Governance and public sector capacity is a foundation of the Africa Strategy. 12. The proposed operation is fully aligned with two of the four objectives set out in the CAS: (i) strengthening human capital and safety nets, which aims to improve, inter alia, access to and quality of health service; and (ii) promoting accountability and governance, which is a cross- cutting objective to improve accountability and efficiency of public management. The CAS also commits to addressing gender concerns and includes specific interventions to address gender inequalities in various sectors; the very high maternal mortality rates is one of the critical issues highlighted for attention. Specific health indicators under the CAS include reducing overall maternal mortality rates and increasing the proportion of births attended by skilled health personnel. With a focus on maternal health, this operation will help turn such gender commitments into actions and results. 13. The June 2014 CAS Progress Report (80313-TZ) restates the relevance of the CAS, but includes adjustments to not only reflect recent developments in Tanzania and the government’s evolving priorities, but also to align with the World Bank Group’s twin goals of ending poverty and boosting shared prosperity. Such adjustments are organized around two clusters, of which the proposed operation falls under the cluster of programs to reduce extreme poverty and improve quality of social services. The Progress Report also promotes the use of performance-based instruments such as Program for Results (PforR) to facilitate the achievement of results. Finally, as the poor in Tanzania suffer from a higher burden of disease and the impoverishment effects of out-of-pocket payments for care, the proposed operation will contribute to the World Bank’s twin goals of poverty reduction and shared prosperity by improving health outcomes for the poor. 10 The June 2014 CAS Progress Report proposed a 12 month extension to the CAS, until 2016. 5 14. PforR is the most suitable Bank instrument to support the proposed operation for the following reasons: • It promotes a focus towards policies and sector results, moving away from specific inputs found in traditional sector investment or operations. • The Government of Tanzania is committed to results in the health sector as shown in the Big Results Now (BRN) in their health plan. The PforR approach would be aligned with this commitment. • It allows the Bank to effectively harmonize its support with funding from the government and other DPs, increasing the leverage of Bank’s resources. • It makes the Bank's contribution more flexible and responsive to country’s needs with the provision of non-earmarked funds. • It supports the governments' own agenda using country systems with due attention to systems strengthening, which will enhance development impact and sustainability. • It motivates country implementers to find locally relevant and sustainable solutions to overcome operational bottlenecks to the achievement of results. • Tanzania already has experiences with the PforR instrument with two projects (one in urban sector and one in education). 15. The PforR approach also provides a performance-based framework for other development partners to align their support to the government in health. Other development partners contributing to the health basket fund (the pooled funding mechanism to support the operating cost of PHC in the country) will also adopt the several of the DLIs under this proposed PforR for their own disbursements to the GoT. Through this approach, the operation will therefore: (i) continue and enhance development partner coordination in the pooled funding mechanism; (ii) increase the leverage of IDA funding; and (iii) help other development partners apply the PforR approach to their own assistance for health in Tanzania. 16. Tanzania is also proposed to be a front-runner country for the Global Financing Facility (GFF) with a GFF grant of US$40 million. Built on the successes of the Health Results Innovation Trust Fund (HRITF), GFF is a new multi-donor trust fund to support (i) reproductive, maternal, neonatal, child and adolescent health (RMNCAH) and (ii) civil registration and vital statistics (CRVS). This PforR aligns closely with the main objectives of the GFF to: (i) finance national RMNCAH scale-up plans for results; (ii) support countries in the transition toward sustainable domestic financing of RMNCAH; and (iii) contribute to a better-coordinated and streamlined RMNCAH financing architecture. In addition, Tanzania is also a front-runner country for the Achieving Nutrition Impact at Scale Multi-donor Trust Fund (ANIS MDTF) with a grant of US$20 million aimed at scaling up and institutionalizing nutrition interventions. II. PROGRAM DESCRIPTION A. Program Scope 17. This PforR operation will support the government’s primary health care (PHC) program for the 2015/16 – 2019/20 period, with a strong focus on a key government initiative, the Big Results Now in Health (BRN in Health). 6 18. PHC under the Health Sector Strategic Plan IV (including BRN in Health) constitutes the Government’s program. In the structure of Tanzania’s health system, PHC is delivered at the district level and below, involving district hospitals, health centers, dispensaries and community- based health services under the management of Council Health Management Teams (CHMTs). Over the next five years, major reforms and implementation of PHC will be guided by HSSP IV. 19. The 2015-2018 BRN in Health program aims to accelerate the reduction of maternal and neonatal mortality through improving performance, governance and accountability in PHC. It was developed as part of Tanzania’s Development Vision 2025 and has four national key results areas (NKRAs) which are the following: (i) Performance Management: This result area aims to improve health workers’ performance. Interventions include: (i) a stepwise accreditation scheme for all PHC facilities in the country (aka “Star Rating” initiative) which has both nation-wide assessment and a subsequent facility improvement program (including RBF incentives) to help facilities improve their performances and star ratings; (ii) implementation of the Decentralization by Devolution Policy by empowering health facilities to plan; budget and manage revenue in line with the Health Cost Sharing Guidelines; (iii) performance contracts and targets at individual health worker levels; and (iv) social accountability mechanisms. (ii) Human Resources for Health: This result area aims to improve the distribution of skilled PHC workers especially in nine regions with critical shortages in human resources for health (i.e. less than national averages). Interventions include: (i) increasing PHC employment permits for such regions; (ii) engaging the private sector to provide skilled HRH for public health facilities through PPPs; (iii) redistributing health care workers within regions; and (iv) optimizing the pool of new recruits through “bonding” policy or compulsory attachments. (iii) Health Commodities: This result area aims to improve the availability of essential medicines in PHC facilities. Interventions tackle key issues along the health commodities supply chain and include: (i) introducing new governance and accountability mechanisms; (ii) developing a new finance and business model for Medical Stores Department (MSD); (iii) engaging private sector in procurement and distribution; (iv) implementing quality improvement initiatives for inventory management; and (v) using innovative information and communication technology (ICT) to report stock-outs. (iv) Maternal, Neonatal and Child Health: This result area aims to improve the coverage and quality of MNCH along the continuum of care. Interventions include: (i) ensuring the dispensaries and health centers meet basic emergency obstetric and neonatal care (BEmONC) requirements; (ii) expanding comprehensive emergency obstetric and neonatal care (CEmONC) to selected hospitals and health centers; (iii) strengthening the corresponding satellite blood banks which serve facilities with CEmONC; and (iv) extending MNCH services to communities through the use of community health workers (CHWs) and awareness campaigns. Five regions that are poorly performing on maternal and neonatal mortality indicators will receive priority focus. 7 20. As a GFF front-runner country, the Government of Tanzania is developing a RMNACH investment case in line with its existing strategies and policies; namely BRN in Health, the Sharpened One Plan II (the national strategy to accelerate reduction of maternal, newborn and child deaths) and HSSP IV which were developed in a consultative and evidence-based manner. With a long term vision for RMNACH, this investment case identifies priorities for scaling up investments to accelerate the achievements of RMNACH goals. It also builds on the CRVS Strategy and the Health Financing Strategy. These two strategies are in an advanced stage of finalization and their endorsements by the Parliament are expected soon. As part of its development, extensive consultations with development partners, civil society and private sector have been conducted. This program supports the operationalization of this investment case as a critical step towards the realization of the GFF vision to end preventable maternal, newborn, child and adolescent deaths in Tanzania. 21. A core objective of the GFF is to support countries to harmonize RMNCAH financing and to move towards sustainability by harnessing domestic resources. In the case of Tanzania, the draft Health Financing Strategy encompasses several key strategies to realize the above vision, namely: (i) creating fiscal space through efficiencies; (ii) better defining functions of key actors in the sector including purchasers and providers of health services; and (iii) improving value for money with a pay-for-quality element in the planned capitation payment for PHC. The proposed program supports the government to operationalize such strategies and includes targets for improvements in (i) domestic financing for health; (ii) the capacity of institutions involved in purchasing and provision; and (iii) value for money through the introduction and scale-up of performance-based financing at various levels. 22. HSSP IV and the Government’s draft Health Financing Strategy also incorporate the results-based financing (RBF) approach for PHC facilities. This scheme provides quarterly incentive payment to PHC facilities according to their levels of achievement of a set of performance indicators which are independently verified. RBF design is informed by a pilot conducted in Pwani region with support from the government of Norway. An independent impact evaluation of the pilot (conducted between 2011 and 2013) showed promising results, with significant positive effects on a range of incentivized services. On the basis of the evaluation and lessons from other countries, the RBF design includes system strengthening measures and broadens the scope of the scheme to include quality of care measures and the use of CHWs to improve the continuum of RMNCAH care. 23. Planned to be rolled out in a phased manner as part of HSSP IV, the RBF aims to enhance provider accountability for results and encompasses broader health system strengthening measures through incentivizing facilities for improved accountability, governance, management and quality of PHC services at dispensaries, health centers and district hospitals. Phase 1 of the RBF roll-out will cover at least 7 regions by 2020. 24. As nutrition is a multi-sectoral issue, the integration of relevant nutrition interventions in RMNCAH services can achieve better outcomes (for both nutrition and health). The proposed operation will address key bottlenecks in service delivery including those essential to a large scale nutrition action (i.e., human resources, commodity procurement, etc.). Delivering nutrition interventions as part of the routine MNCH services would contribute to the sustainability of the nutrition program in Tanzania. 8 25. The entire PHC component (including BRN in Health) in HSSP IV constitutes the program which the operation supports. The total cost of the program is estimated at US$2.62 billion or 55 percent of the GOT’s health sector budget over the next five years, of which US$300 million (11.5 percent of the total program cost) will be financed under the proposed PforR. Funding for the program includes: (i) US$200 million in IDA credit; (ii) US$40 million in GFF grant; (iii) US$20 million in ANIS MDTF Grant; and (iv) a US$40 million in grant from USAID through a single-donor trust fund arrangement. 11 Other development partners are expected to contribute US$290 million (or 11.1 percent) through parallel financing. The GOT will finance the remaining balance, or 77.5 percent of the program cost. Program scope and funding requirements are summarized in Table 3. Table 3: Expenditure Requirements Planned Expenditures in US$ PHC Initiatives Total Percent 2015/16 2016/17 2017/18 2018/19 2019/20 Personnel Emoluments 237,771,583 264,424,761 274,295,978 284,937,436 296,237,362 1,357,667,120 50.8% Non-salary recurrent Other Charges (block grant) 37,141,442 39,447,427 41,782,912 44,269,303 46,917,025 209,558,110 7.8% Other non-salary recurrent (HBF) 55,000,000 55,000,000 55,000,000 55,000,000 55,000,000 275,000,000 10.3% Medicines 106,630,991 109,772,467 112,904,418 116,178,647 119,547,827 565,034,350 21.2% Infrastructure 2,241,776 2,313,858 2,381,779 2,452,393 2,525,820 11,915,626 0.4% BRN in Health Human Resources in Health 2,337,389 3,238,142 2,927,303 8,502,834 0.3% Performance Management Accreditation, Social Accountability and Fiscal 5,710,588 4,117,600 4,778,342 Decentralization 14,606,530 0.5% Facility Based Incentives 3,500,000 20,000,000 25,000,000 25,000,000 25,000,000 (RBF) 98,500,000 3.7% Health Commodities 8,027,370 4,118,244 4,749,209 16,894,823 0.6% MNCH 29,039,743 17,199,695 16,159,495 62,398,933 2.3% 487,400,882 100.0% 519,632,195 539,979,436 527,837,779 545,228,035 2,620,078,326 Source: Budget data projections and BRN in Health costing data. 26. The scope of the proposed program includes recurrent and operating costs, goods, small works and services. However, it excludes high-risk activities, defined as those that: (i) are judged to be likely to have significant adverse impacts that are sensitive, diverse, or unprecedented on the environment and/or affected the population; and/or (ii) involve procurement of goods, works, and services under high-value contracts. 27. The results chain of the program is illustrated in Figure 1. 11 The estimated amount of the USAID Trust Fund is US$40 million. 9 Figure 1: Program Results Chain Sectoral Processes/Intermediate Results Results challenges Low government - Increased share of health in GOT’s budget More $ for spending on (DLI 2) health, health, poor - Improved budget release and execution (DLI especially at public financial 6) the lower level management, - Improved financial management (DLI 1, 2, (LGA and incomplete fiscal 4) facilities) (DLI decentralization - Improved fiscal decentralization (DLI 2) 2, DLI 3 and DLI 6) PDO: Improve quality of PHC, especially in maternal and neonatal health Low - Better planning at the local levels (DLI 2) Improved performance at - Availability of reliable data for decision performance of LGA and making (DLI 4 and 5) providers (DLI provider levels - Support received by weak LGAs (DLI 5) 3) - Recognition of well-performing LGAs, facilities and staff (DL1 3 and 4) - Incentivized facilities through RBF (DLI 3) - Star rating/accreditation of facilities (DLI 2, 4) - Performance targets and contracts for personnel - Social accountability monitoring (DLI 4) Shortage of - Increased PHC employment permits for Improved skilled HRH critical regions (DLI 2) availability of - Private sector engaged in critical regions HRH in PHC - Redistributed HRH in an equitable manner (DLI 2 and DLI (i.e., % dispensaries with skilled health worker) 4) (DLI 4) - Optimized pool of new recruits Poor supply - New governance and accountability Improved chain mechanisms for medical store department availability of management for (MSD) (including RBF) (DLI 3) essential drugs health - New finance and business model for MSD in PHC (DLI 4) commodities - Private sector engaged in procurement and distribution - Quality improvement techniques applied in inventory management in facilities - Use of ICT to report stock-outs Lack of MNCH - Increased share of dispensaries and health Improve continuum of centers meet BEmONC requirements (DLI 3) RMNCAH care - Increased share of districts hospitals with continuum (DLI CEmONC (DLI 3) 4) - Strengthened satellite blood banks - Extended MNCH services through use of CHWs and awareness campaign (i.e., # of home visits by CHWs for health/nutrition education) (DLI 3) 10 B. Program Development Objective 28. The program development objective is to improve the quality of primary health care (PHC) services nation-wide with a focus on maternal, neonatal and child health (MNCH) services. C. Program Key Results and Disbursement Linked Indicators 29. Key program results indicators include: i. Percentage of PHC facilities with 3-star rating and above; 12 ii. Percentage of antenatal care (ANC) attendees receiving at least two doses of intermittent preventive treatment (IPT2) for malaria; iii. Percentage of institutional deliveries; iv. Percentage of expected pregnant women attending four or more ANC visits; v. Percentage of children 12-59 months of age receiving vitamin A supplementation; and, vi. Percentage of dispensaries with skilled HRH (at least a clinician or nurse). 30. A set of disbursement-linked indicators (DLIs) for the program will form the basis of disbursement. The use of such DLIs is expected to sharpen the program by sending a signal to key stakeholders to focus on critical results. The following principles were applied when formulating these DLIs: i. maximizing the use of existing indicators in the government’s program, especially those in HSSP IV and BRN; ii. corresponding to the key priority areas of PHC in HSSP IV; especially the major bottlenecks along the results chain and providing incentives for removing them; iii. stimulating performance at all levels of the system: national, regional, LGA and PHC facility; iv. prioritizing the use of the government’s routine information system (DHIS2) and existing reporting mechanisms (i.e., RMNCAH scorecard) for sustainability v. balancing ambition (“stretch”) and feasibility (“realism”); vi. taking into account a reasonably even distribution of disbursements; and, vii. where applicable, undisbursed amount of IDA financing for a DLI in a given year will be rolled-over for use in subsequent years (with a cap). 31. There are a total of 7 DLIs, of which five are composite with sub-criteria. They are a combination of actions, intermediate outputs, and output. DLI 1 ensures that a robust framework for the program has been established. The rest, DLIs 2-7, form a chain of PHC-related accountability and performance at all levels in the system (Figure 2). 12 The “star rating” accreditation scale is from 1 to 5 stars, with 5 being the best quality and 3 being the minimally accepted. 11 Figure 2: Cascade of PHC-related Accountability and Performance at all Levels DLI 1: A robust system-level framework for the program DLI 2: Program annual results in institutional strengthening at all levels Facility level: DLI 3: Facility Performance PHC facilities LGA level: DLI 4: LGA Performance CHMT Regional level: DLI 5: Regional Performance RHMT National level: DLI 6: National Performance MOH & PMO- RALG DLI 7: Capacity building at all levels 32. Table 4 summarizes the 7 DLIs. It should be noted that as DLIs 4, 5, 6 and 7 follow the N+1 principle (pay for the performance of the previous year); there will be no disbursement against them in Year 1. 33. Other development partners contributing to the health basket fund (the pooled funding mechanism to support the operating cost of PHC in the country) will also adopt DLIs 2, 4, 5 and 6 for their own disbursements. DLI 3 will also form the basis for disbursement under the single donor trust fund from USAID. 12 Table 4: Summary of Disbursement Linked Indicators Indicative Attainment Disbursement Schedule frequency & US$ Priority Area DLIs approach M* Year 2 Year 3 Year 4 Year 5 Year 1 DLI1: Recipient has X X US$2 million 20 completed all foundational each for the activities first five Program’s activities upon foundational achievement activities and US$10 million for the sixth activity DLI 2. Recipient has achieved X X X X X Annual 75 all of the Program annual Institutional All-or -nothing results in institutional performance at all strengthening at all levels levels (national, regional, LGA and facilities) DLI 3. PHC facilities have X X X X X Quarterly 100 improved maternal, neonatal and child health service Sliding scale Performance at delivery and quality as per facility level verified results and received payments on that basis each quarter DLI 4. LGAs have improved X X X X Annual 82 Performance at annual maternal, neonatal and LGA level child health service delivery Sliding scale and quality as measured by the LGA Balance Score Card DLI 5 Regions have improved X X X X Annual 2.4 Performance at annual performance in regional level supporting PHC services as Sliding scale measured by regional Balance Score Card 13 DLI 6. MOHSW and PMO- X X X X Annual 5.6 Performance at RALG have improved annual PHC service performance as Sliding scale national level measured by the national Balance Score Card Capacity building DLI 7. Completion of annual X X X X Annual 15 capacity building activities at all levels Sliding scale *This includes the USAID single donor TF as well as financing from GFF and ANIS MDTF DLI 1: Recipient has completed all foundational activities 34. DLI Description: DLI 1 is the completion of foundational activities to ensure a robust system-level framework for the program. It has six results related to the preparation for capacity building, data quality improvement, fiscal decentralization, facility accreditation and availability of BEmONC and CEmONC services in the five BRN MNCH regions (see Annex 3 for details). Each result has an allocation and disbursement is made on sliding scale basis. 35. Theory of Change: These are basic requirements to ensure smooth operation of the program. DLI 2: Recipient has achieved all of the program annual results in institutional strengthening at all levels (national, regional, LGA and facilities) 36. DLI Description: DLI 2 is the completion of 6 program results in institutional strengthening which GOT needs to meet every year. Each result corresponds to a specific sector bottleneck which hinders the provision of critical inputs for quality of care; namely planning, budgeting, financial management, human resources for health, and information on quality of care (see Annex 3 for details); each result has an annual target. Each year, disbursement for this DLI will be made on an all-or-nothing basis. Undisbursed amount of IDA financing for this DLI in a given year will be rolled-over for use in subsequent years, with a cap. 37. Theory of Change: To produce quality care, PHC facilities need critical inputs such as resources and skilled staff. Although such inputs are not guarantees for quality of care per se, they present the bare minimum requirements for quality. Various institutional challenges in public finance management and human resources for health prevent such inputs from reaching frontline providers. Also, there is no regular, systematic assessment of quality of care at the provider level to hold them accountable for results. The fulfilment of annual minimum conditions represents Tanzania’s progress in addressing such bottlenecks at all levels. DLI 3: PHC facilities have improved maternal, neonatal and child health service delivery and quality as per verified results and received payments on that basis each quarter 38. DLI Description: DLI 3 represents quarterly performance of MNCH services at the PHC facility level. As per the program description section, the GOT plans to roll out the RBF scheme for PHC facilities in 7 regions. Under this scheme, each PHC facility will receive additional 14 quarterly payments according to its level of performance in: (i) provision of essential maternal, neonatal and child health services; and (ii) quality of care as elaborated in the program operational manual. Provision of such services includes, inter alia, timely ante-natal and post-natal care, institutional deliveries, family planning as well as prevention of mother-to-child transmission of HIV as reported in the existing health management information system (HMIS). Each service has a different unit cost. Quality of care will be assessed quarterly with regard to (i) conditions to provide care (in other words, availability of essential supplies and equipment, water, health care waste management, infection control practices, facility-level accountability mechanisms (i.e.) Health Facility Governing Committee (HFGC) meetings held), attention for vulnerable populations including adolescents; (ii) contents of patient care as reflected in medical records; and, (iii) patient satisfaction. The result of quality of care assessment is expressed in percentage. 39. Internal verification of results will be carried out quarterly (by a team of regional officials and civil society organizations, using standardized protocols) for every PHC facility in the scheme. On the basis of results verification, the GOT will pay incentives to the facilities in the scheme. RBF payments for dispensaries and health centers will be a function of quantity and quality of care. For district hospitals, RBF payments will be exclusively based on quality of care. As facilities’ performance improves, RBF performance indicators will be adjusted over time to expand the performance frontiers and keep providers on their toes. In addition, the scheme also provides incentives for PHC facilities to fulfil their roles in civil registration especially birth and death registration. Counter-verification by Controller and Auditor General (CAG) or Internal Auditor General (IAG) 13 will be carried out for a random subset of facilities to prevent over-reporting of results. The design of the RBF scheme is in line with best practices of RBF schemes supported by the World Bank in more than 30 countries (see Annex 1 and Annex 4 for more details on the RBF design and its technical soundness). 40. Under DLI 3, the operation will reimburse the GoT quarterly for the (i) actual incentive payments to PHC facilities in the RBF scheme and (ii) the operating and verification costs of the scheme (as a percentage of the total incentive payment). Quarterly disbursement for this DLI will be on a sliding scale basis. 41. Theory of Change: The GOT’s performance-based incentive scheme for PHC facilities known as the results based financing (RBF) in essence represents an incentivized continuous quality improvement program. In Tanzania, this is the first time that on a large scale, each facility is being held accountable for its own performance in service delivery. The scheme is robust and in line with best practices emerging from thirty-eight pay-for-performance programs at the provider level supported by the World Bank globally (see Box 1). In such a scheme, internal verification of results is crucial. DLI 3 therefore reflects a major recurrent milestone in the implementation of the scheme to stimulate the performance of PHC facilities. It means implementers have carried out the following: 13 Final arrangements for counter-verifications under the RBF scheme will be specified in the program operations manual (POM). 15 • PHC facilities have completed the implementation of their quarterly RBF business plans. • Internal verification has been carried out to verify the achievement of each PHC facility against an extensive list of facility level performance indicators. • Facilities have received their incentive payments within 28 working days after the verification of results. Box 1: Results-based Financing -- A Smarter Approach to Delivering More and Better RMNCAH Services RBF at the facility level is defined as a cash payment or nonmonetary transfer made to health facilities after predefined results have been attained and verified. This approach helps providers to better achieve results through the following mechanisms: • Linking payment to results based on context-specific health priorities; • Enforcing a contractual relationship between purchaser/financier of health services and service providers in which the respective responsibilities of all stakeholders are clearly defined; • Introducing more autonomy for facilities to use RBF funds to attain the pre-agreed results; • Empowering frontline providers and health facility manager; • Using verification and counter-verification methods to ensure actual results have been achieved; • Enabling the use of real time data by program managers and facilities to better plan, monitor and develop solutions of their own in order to improve performance; and • Facilitating community involvement which acts as a social accountability mechanism. Since 2008, the World Bank has been supporting 38 RBF schemes at the provider level in 32 countries around the globe. A review of the first phase of the World Bank’s support for RBF (though the Health Results Innovation Trust Fund) has provided solid evidence that this approach can improve health outcomes by increasing access to better quality and more equitable services, and promoting greater efficiency in even the poorest countries. Key lessons from in- depth reviews of the RBF programs in Argentina, the Democratic Republic of Congo, Nigeria, Zambia, and Zimbabwe are particularly insightful. With the support of the World Bank, the GOT has incorporated such lessons in the design of the RBF scheme in Tanzania on the basis of the Pwani pilot. Source: RBF: A Smarter Approach to Delivering More and Better Reproductive, Maternal, Newborn, and Child Health Services, The World Bank, 2014 DLI 4: LGAs have improved annual maternal, neonatal and child health service delivery and quality as measured by the LGA Balance Score Card 42. DLI Description: DLI 4 represents annual performance in MNCH service delivery at the LGA level. Such performance is assessed annually for each LGA, using a LGA Balance Score Card (BSC). The BSC has 12 criteria with different weights (according to level of importance and difficulty of each criterion), the majority being the GOT’s own indicators (either from BRN in Health or RMNCAH scorecard which quarterly monitors LGA level performance on maternal and 16 child health indicators and reports to the President’s office) (See Annex 3 for details). The 12 criteria, broadly speaking, can be categorized in two groups: • Six criteria related to “Maternal, Neonatal and Child Health Service Delivery Outputs” • Six criteria related to “Improving Conditions for Quality of Care” Annual disbursement for this DLI (i) only takes place when the country as a whole achieves a minimum threshold of the LGA BSC and (ii) is on a sliding scale basis. 43. Theory of Change: In Tanzania, this is the first time that each LGA is being systematically held accountable for its performance in service delivery. The content and structure of balance score card correspond to key challenges or bottlenecks in the production of quality of care identified by the GOT under the BRN in Health exercise. 44. As discussed in the sectoral context section, low quality of care results in lower utilization of certain MNCH services. For example, a woman might deliver her first child in a health facility, but due to her bad experience and perceived poor quality of care, does not return for subsequent child births. In that context, some of the “service delivery outputs” such as increase in institutional deliveries can be seen as a proxy (albeit imperfect) for improved quality of maternal care. Others such as ANC attendees receiving iron and folic acid supplementation or two doses of IPT2, children receiving vitamin A supplementation are about the clinical interventions which clients actually receive as part of ANC and child health visits, and therefore serve as quality of care indicators which can be incentivized. All of the service delivery outputs are also among the most cost-effective interventions in public health. 45. The second group of criteria correspond to improvements in the conditions for the provision of quality care and facilitate the achievement of the first group. In quality of care literature, such improvements are also known as “improved structural quality of care”. In HSSP IV, under the GOT’s “Star Rating” accreditation initiative, once the initial assessment has been carried out, each facility will have a quality improvement plan and efforts will be made to help such a facility achieve a higher Star Rating subsequently. A special emphasis will be put on this criterion in the LGA BSC to motivate the accreditation process. Other criteria correspond to LGA improvement in HSSP IV and BRN priority areas such as HRH, availability of essential drugs, and social accountability. In addition, as the DHIS2 is the backbone of the health information system in the country and serves as source of information for many DLIs, there is a criterion to incentivize the completeness of data entry at the LGA level. DLI 5: Regions have improved annual performance in supporting PHC services as measured by Regional Balance Score Cards 46. DLI Description: DLI 5 represents annual performance in supporting PHC services at a regional level. Such performance is assessed annually for each region, using a Regional Balance Score Card (BSC). The BSC has two criteria related to supportive supervision and data quality audit by RHMT for LGA. Each criteria has a different weight (according to level of importance and difficulty). Disbursement for this DLI is made annually and on a sliding scale basis. 17 47. Theory of Change: This is the first time in Tanzania that each RHMT is systematically held accountable for its performance. The key roles of RHMT is to provide implementation support to LGAs, especially in two key areas: (i) supportive technical and management supervision and (ii) data quality audits. By incentivizing RHMTs along the lines of their key functions, the GOT will stimulate their performance, which in turn will contribute to improvement in the production of quality of care at the levels of LGA and health facilities. DLI 6: MOHSW and PMO-RALG have improved annual PHC service performance as measured by the National Balance Score Card 48. DLI Description: DLI 6 represents annual performance by MOHSW and PMO-RALG in support of PHC services at the local level. Their performance will be assessed annually using a National Balance Score Card with 4 criteria related to: (i) performance of all LGAs; (ii) performance of all regions; (iii) their support for lower levels and; (iv) public financial management. In this BSC, national implementers will thus be held accountable for the performance in PHC service delivery at the lower levels. Each criteria is given a different weight according to its level of importance and difficulty. Disbursement for this DLI will be made annually and on a sliding scale basis. 49. Theory of Change: The key roles of MOHSW and PMO-RALG are to provide stewardship, regulations and implementation support to lower-level implementers (RHMT, CHMT, facilities). In DLI 6, by using the LGA and regional scores (derived from DLI 4 and 5) in the balance score card for national performance, the two ministries are directly held accountable for the performance of RHMT and LGAs nation-wide. This is expected to motivate the ministries to better carry out their functions to support the achievement of PHC service delivery at the frontline. DLI 7: Completion of annual capacity building activities at all levels 50. DLI Description: Under the foundation activities in DLI 1, the GOT will prepare a 5-year capacity building plan related to PHC at all levels. The plan will be reviewed and agreed each year between the GOT and IDA. This DLI represents the extent of completion of such activities in the agreed plan in the previous fiscal year. Disbursement for this DLI will be made annually and on a sliding scale basis. 51. Theory of Change: Various capacity gaps have been identified in Section D. Addressing such gaps is essential to ensure the success of the program. D. Key Capacity Building and Systems Strengthening Activities 52. Capacity constraints remain a challenge in Tanzania’s health sector. Under the program, such constraints exist at all levels in various areas, inter alia: (i) the capacity to implement quality of care interventions, including RBF, performance management, accreditation, etc.; (ii) supply chain management; (iii) public finance management; (iv) social accountability; and (iv) monitoring and evaluation (M&E). 18 53. To address this challenge, the GOT is preparing a comprehensive capacity building program at all levels as part of PHC strengthening under HSSP IV. The GOT’s plan under development has the following principles: • Targeting the “weakest links” at various levels while prioritizing implementers at the front line (health workers, council and regional health management teams) • Balancing between technical (including social and environmental) vs. management (including fiduciary) capacity building • Promoting on-the-job learning • Encouraging peer-to-peer learning, especially learning from outstanding performers (“positive deviants”) • Combining training with feedbacks and post-training follow-ups • Sensitizing implementers about new initiatives such as BRN in Health and their respective roles and responsibilities • Including “non-traditional” yet important stakeholders such as Health Facility Governance Committees and Council Health Service Board in capacity building 54. The GOT’s comprehensive five-year capacity building plan will be jointly financed by the GOT and various DPs through parallel financing. For instance, USAID has in addition to the single donor trust fund, a US$70 million project over the next five years aimed at improving planning, financial management and governance at the LGA level. GOT resources for capacity building will be allocated through the annual planning process under the medium term expenditure framework (MTEF) and CCHP. Since capacity needs might change over time, the plan can be subject to revision as needed. To facilitate the finalization and implementation of such capacity building plan, as discussed above, the PforR will have (i) one foundational activity in DLI 1 related to the finalization and adoption of the plan in Year 1 and (ii) one DLI (DLI 7) related to the annual implementation of the plan. III. PROGRAM IMPLEMENTATION A. Institutional and Implementation Arrangements 55. The Program’s implementation will be based on the current institutional arrangements for the delivery of PHC services. In Tanzania, the Ministry of Health and Social Welfare (MOHSW) and the Prime Minister’s Office – Regional Administration and Local Government (PMORALG) will be jointly responsible for ensuring achievement of HSSP IV results, including the specific outcomes of the BRN in Health and RBF implemented at the local level. 56. The MOHSW, as the steward of the health system, is responsible for health policies, strategies, regulations, coordination and oversight for the sector and the program. It leads the development of health sector strategic plans (HSSP) and the medium term expenditure framework (or MTEF, which forms the basis for health sector budget allocations) on a rolling basis. MOHSW also exerts stewardship functions over various health agencies such as the Medical Stores Department (MSD), the Tanzania Food and Drugs Authority (TFDA) and the National Health Insurance Fund (NHIF). 19 57. PMORALG, through the LGAs, is responsible for coordinating, providing administrative support and allocating resources for the delivery of PHC services. In Tanzania’s decentralized setting, funds for development and recurrent expenses are transferred from the Treasury to the LGAs, and from the LGAs to the health facilities. LGAs ensure proper accounting at the facility level. In this context, the roles of PMORALG are to: (i) support LGAs in the provision of quality health services; (ii) manage the critical interfaces with MOF, MOHSW, DPs and LGAs; (iii) monitor the support by Regional Administrative Secretariats (RAS) to LGAs; (iv) provide advice, information and capacity building to RAS and LGAs in policies, approaches, systems and planning methodologies. The Council Health Management Team (CHMT) plays an important role in planning and decision-making at the LGA level. It manages district health services and reports to the District Council. At the regional level, the Regional Health Management Team (RHMT) is to: (i) provide technical support to LGAs for the implementation of the Program; (ii) identify capacity building needs; and (iii) monitor, supervise, and evaluate health services, including data quality audits. 58. Health facilities (public, faith-based and private) at the LGA level are responsible for delivering PHC services, in line with Tanzania’s decentralized health service delivery system. As such, they will implement the program at the grassroot level. 59. The BRN in health implementation will be mainstreamed through MOHSW, PMORALG and LGA structures. The President’s Delivery Bureau (PDB) oversees BRN in Health through collaboration with Prime Minsters Office, MOHSW and PMORALG. In the program delivery system, PDB is responsible for: (i) problem solving and solution generation through providing feedback, advice and recommendations; (ii) facilitating the development of performance contracts of Ministers for MOHSW and PMORALG for purposes of accountability for results; and (iii) reporting on progress/actions on BRN Health implementation plans to the Transformation Delivery Council. Additionally, the MOHSW has established a Ministerial Delivery Unit (MDU) for coordinating and monitoring the implementation of activities in the BRN in Health initiative. The MDU will ensure effective coordination and linkages between work streams supported by various Departments, sections, units and agencies. 60. The GOT has developed a RBF scheme which will be used to pay facilities based on their performance which will be incentivized under DLI 3. This scheme provides quarterly incentive payment to PHC facilities according to their levels of achievement of a set of performance indicators which are independently verified. Phase 1 of the roll-out of this scheme aims to cover at least 7 regions by 2020. The scheme’s implementation and institutional arrangements will be mainstreamed into current government structures and are as follows: • As parts of its regulatory mandate, MOHSW will be responsible for developing RBF- related policies, guidelines and tools as well as providing clinical and technical oversight and supervision for RBF implementation. In the Department of Policy and Planning of MOHSW, a national RBF team has been established to oversee the implementation and roll out of the scheme on a day-to-day basis. • The National Health Insurance Fund (NHIF) as the largest public health insurer in Tanzania will carry out the role of purchaser. The NHIF will enter into agreements with providers of health and/or management services, of a specified quality. 20 • In RBF regions, eligible participants include public facilities and select private facilities in areas where service gaps exist or with whom service agreements are already in place for select services. They also need to pass a minimum readiness threshold through a facility assessment. Council and regional health management teams as well as Medical Stores Department (MSD) and their strategic business units (SBUs) will also be paid performance-based incentives. • To ensure that payment will be based on accurate results, verification will be carried out prior to payment by a Regional Administrative Secretariat (RAS) identified team. This verification team will consist of representatives of RHMT, the regional NHIF office as well as civil society organizations to ensure transparency and prevent possible conflicts of interest. Once a year the Controller Auditor General Office will counter-verify the verified results on a sample basis and penalize the verification team if deemed necessary. • Performance-based payment will be made on a quarterly basis by the Ministry of Finance (the fund holder) directly into each participating entity’s bank account. • The Prime Minister’s Office - Regional Authority for Local Government (PMO-RALG) will play a vital role as facilitator to ensure local government authorities function effectively and to provide assistance, guidance and supervision to health facilities, councils and regional secretariats. B. Results Monitoring and Evaluation 61. To the fullest extent possible, this operation adopts GOT’s own indicators as PDO, intermediate and disbursement linked indicators and uses GOT’s routine information systems to monitor them. Out of 19 indicators in the results matrix, 12 are GOT’s own indicators as per HSSP IV and BRN in Health. All of the program indicators will be monitored by the GOT’s routine information system. This approach aims to (i) align the operation’s M&E with that of the GOT, (ii) increase GOT’s ownership in the results matrix, (iii) strengthen GOT’s M&E systems and ensure their sustainability. 62. Five key information systems will generate data for the program indicators. They are: (i) District Health Information System (DHIS-2) which includes information on service delivery by PHC facility; (ii) Logistics Management Information System (LMIS) which includes information on supply chains management for health; (iii) Human Resource for Health Information System (HRHIS) which includes information on staffing; (iv) Planning and Reporting (PLANREP) which includes information on council health plans and their implementation; and (v) Integrated Financial Management Information System (IFMIS) which includes financial management by LGA. The first three information systems are maintained by MOHSW, while (iv) and (v) are maintained by PMO-RALG and MOF respectively. 63. The GOT has developed data interfaces for dissemination and use of data at the district level which are publicly accessible and will form the basis for regular M&E of this program. First, the MOHSW is rolling out nationwide District Health Profiles (DHP) which tracks the progress in health status, health systems and service delivery at the district level systems 21 and health services delivery. Second, a Master Facility List (MFL) listing all health facilities public and private) in the entire country is near completion. Integration between DHIS2 and MFL was initially started in early 2014 to address operational standards and uniformity of health facilities between DHIS2 and MFL. With standard set of health facilities between systems, it will allow sharing DHIS2 information with any other health information system compliant with DHIS2 and MFL facility registry. Third, the RMNCAH Scorecard is a tool developed to track progress in delivery of RMNCAH services at the LGA level on a quarterly basis and foster an environment of accountability at all levels at the request of the President of Tanzania. This card uses HMIS National data warehouse data, generates a progress report every quarter and tracks improvements in key interventions for maternal, newborn and child survival and is shared with the highest levels of Government. 64. The quality of GOT’s information systems will be further strengthened during the program period. DHIS-2, as the backbone of the GOT’s health information system, generates data for many results and indicators in the results matrix. To help improve the quality of DHIS-2, the GOT plans to use RHMTs to conduct data quality audits (DQA) for all LGAs at least twice a year. Such activities will be parts of the Program. As per the above section on DLIs, incentives will be provided for (i) LGAs to improve the completeness and timeliness of their DHIS-2 data and (ii) RHMTs to conduct DQA for LGA, using standardized protocols. In addition, during the next five years, other health-related routine information systems will be further strengthened in MOHSW, PMORALG and health facilities as parts of the government’s program with the support of various DPs. Health is one of the priority sectors under the Open Government Partnership for Tanzania, in which GOT is committed to improving quality of data on public services and making them public for transparency. This will facilitate the monitoring of various indicators in the results framework. 65. Evaluations will be carried out for selected activities of the program. For selected innovative interventions such as RBF roll-out, the government, with the support of the World Bank and the government of Norway, plans to carry out a rigorous impact evaluation of the RBF activity, using an experimental design. The aim is to generate evidence on the cost-effectiveness of RBF activities to (i) fine-tune RBF design and (ii) inform policy making. 66. The program M&E is an integral part of the health sector’s M&E under the sector Wide Approach (SWAp) and GFF monitoring will build on this process. The SWAp arrangements in Tanzania have well-established M&E arrangements, including the Joint Annual Health Sector Review (JAHSR) which discusses the progress of HSSP implementation, the MTEF, and the CCHP. The review of the program will be part of the JAHSR as well as other SWAp M&E mechanisms. The GFF country harmonization platform envisages that all partners will work around a shared investment case and engage in joint monitoring of the performance. The GFF will build on these existing platforms. 67. The program M&E will also benefit from M&E arrangements for BRN in Health. BRN in Health has its own arrangements to monitor the key performance indicators for its four work streams. Progress under BRN in Health will be monitored weekly and monthly (where applicable) by the MDU team within MOHSW, and then collated by the newly established President’s Delivery Bureau into a public Annual Report. As many of the program indicators are 22 derived from the BRN in Health, Program M&E will benefit from such BRN in Health M&E arrangements. C. Disbursement Arrangements and Verification Protocols 68. Disbursements will be made upon the presentation and verification of evidence of attainment of the Program’s disbursement linked indicators (DLIs). Disbursement arrangements include the following key features: • DLI 1 will be disbursed as each foundational activity is achieved. • DLI 2 will be disbursed on an all-or-nothing basis. • All the remaining DLIs will be disbursed on a pro-rated basis to recognize partial achievements. • Disbursement will be made (i) only once for DLI 1 (foundational activities), (ii) annually for DLI 2; (iii) quarterly for DLI 3; (iv) annually but not in Year 1 for DLIs 4, 5, 6 and 7. • For selected DLIs, MOF will be able to request a disbursement should the DLI be achieved earlier or later than the agreed dates in the same fiscal year. • Advances of up to 25 percent of the total disbursement value for selected DLIs will be available at effectiveness to support the GOT in designing and/or implementing activities which could benefit from earlier funding to increase the likelihood of timely achievement of results. 69. The government has appointed the Internal Auditor General’s (IAG) office as the independent verification agency for the program with defined terms of reference (TOR) satisfactory to the World Bank. The verification agency will carry out annual verification for all DLIs, using well-defined protocols. 70. Verification protocols and schedule for the program’s DLIs can be summarized as follows: • MOHSW will submit self-reported data on DLI achievement to the World Bank and the verification agency. On that basis, the verification agency will verify results. • For process DLIs, verification will involve a review of administrative data (i.e., DHIS2, Integrated Financial Management Information System), documents, and records. • For LGA service delivery outputs under DLI 4, verification will be done by checking medical records and registries vis-a-vis DHIS-2 data in a random sample of LGAs and facilities. • The verification agency will submit a final verification report to the World Bank, upon review of evidence against protocols. • The World Bank will reserve the right for further due diligence on the robustness of data (including random spot check) as needed. • As HBF development partners will also use DLIs 2, 4, 5 and 6 for their disbursement into the government’s HBF holding account, they will also coordinate with the World Bank to ensure partners’ due diligence for the soundness of data for these DLIs. 23 • To ensure timely disbursement, there will be a clear annual schedule with specific milestones for (i) GOT’s submission of self-reported data (ii) verification of results by third-party entity and (iii) due diligence by World Bank and HBF partners. 71. For facility level results under DLI 3, detailed mechanisms for reporting, verification, counter-verification and payments have been outlined in the government’s RBF operational manual. To ensure that payment will be based on accurate results, verification will be carried out prior to payment by a regional Administrative Secretariat (RAS) identified team. This verification team will consist of RHMT members and include members of the regional NHIF office as well as civil society organizations to ensure transparency and prevent possible conflicts of interest. Once a year the CAG’s Office or IAG will counter-verify the verified results on a sample basis and penalize the verification team if deemed necessary. The payment will be made on a quarterly basis by the Ministry of Finance, as the so-called fund holder, directly in to the relevant providers’ bank account. 72. Specific details related to flow of funds, in terms of paying for results, will be detailed in the program operational manual. The program operational manual will contain detailed information on procedures to be followed at each stage of the transaction cycle, including commitments, transaction verification and approval, payments and reporting. IV. ASSESSMENT SUMMARY A. Technical Program’s strategic relevance and technical soundness of the approach 73. The GOT’s HSSP IV is comprehensive and technically sound. It encompasses service delivery by (i) different levels of care, (ii) different vertical disease control programs, and (iii) all the relevant support systems. HSSP IV is accompanied by an action plan and a monitoring framework. 74. HSSP IV has a strong focus on PHC, which is the cornerstone of the Tanzania national health policy and forms the basis of the pyramidal structure of healthcare services in Tanzania. Within PHC, maternal and child health and nutrition are prioritized. Without effectively addressing such challenges, Tanzania will not be able to significantly improve health outcomes and benefit from the economic and welfare gains of better health. In this context, the Program represents a significant portion of the government’s broader program and aims to address some of the most critical cross-cutting bottlenecks in PHC which hinder results in maternal and child health. BRN in Health is a major initiative for PHC under HSSP IV for this purpose. 75. The President’s BRN initiative focuses on improving results in key priority sectors, taking into account the global evidence as well as the Tanzania context. Under the overall BRN umbrella, the BRN in Health program was developed through an intensive six-week “Health Lab” process of consultations and syndications. It involved 138 representatives from 65 agencies representing key stakeholders in the sector including academics, government officials, DPs, CSOs, private sector representatives and others. A total of 32,000 person hours was devoted to the development of BRN in Health. 24 76. The BRN in Health has a strategic design which is guided by the key principles of effectiveness, efficiency, equity and accountability. It supports evidence-based, cost-effective technical interventions. Accreditation has been shown to improve quality of care in both advanced and low and middle-income countries –LMICS– (although the number of evaluations for LMIC is fewer). The same applies to quality improvement plans for health facilities. Fiscal decentralization contributes to provide greater managerial autonomy, which in turns facilitates improved service delivery. Social accountability is universally accepted as a mechanism to hold providers accountable for results as per the World Development Report 2004 conceptual framework. HRH represents a critical input for quality of care and, in fact, part of a dimension of quality which is known as “structural quality”. For maternal and neonatal care, the two service packages, BEmONC and CEmONC, are WHO standards which are essential to quality service for mothers and newborns. 77. As part of the BRN Performance Management work stream, the GOT plans to scale up RBF for 7 regions. Facility-based incentives (or RBF) were already a priority in the ongoing Health Sector Strategic Plan 2012-15 (HSSP III). The GOT plans to scale it up in HSSP IV. There is an emerging global body of evidence on the effectiveness of RBF in improving health workers’ performance in low and middle-income countries, including performance related to quality of care. The GOT’s RBF design benefits from a wealth of practical experiences generated by RBF schemes supported by the World Bank in 32 different countries (many of them are in Sub Saharan Africa). The design also takes into account Tanzania-specific issues. The list of payment indicators in the RBF scheme balances pay-for-quantity vs. pay-for-quality to incentivize the delivery of a set of cost-effective interventions at the PHC level. Special attention was paid to ensure there is no overlap between RBF and other activities under the BRN Performance Management work stream. 78. There are various mechanisms put in place by the GoT to ensure the program’s success by holding various actors accountable for results at all levels along the hierarchy. These include: • At the front line, service providers will be held accountable for their own results through RBF and other non-monetary accountability schemes under the BRN Performance work stream. Also, various social accountability mechanisms will be used at the facility level (health facility committees, use of CSOs for verification of results for RBF). • At the council level, each CHMT will be systematically held accountable for its own performance as well as aggregate performance of all PHC providers in the council jurisdiction. • At the regional level, RHMT will be held accountable for its performance in supportive supervision to LGAs and data quality audit. • At the national level, MOHSW and PMO-RALG will be held accountable for the performance of all PHC providers in the country. • In addition, there will be governance and delivery structures at different levels for BRN (PDB, MDU, NKRA Steering Committee). • Last but not least, a very high level of country ownership in HSSP IV and BRN in Health is a major enabling factor for future program results. 25 Program expenditure framework 79. The medium term financial prospects of Tanzania appear to be sound with stable GDP growth and steady inflation. Primary health care is a priority under the BRN starting in 2015/16. While the health sector share in the budget has been declining in recent years, government contribution has been increasing and the inclusion of the health sector in the BRN is expected to further support this trend. Public spending in the sector is allocated efficiently with significant resources aligned to primary and preventive care services. The BRN in Health supported under the program, furthers this objective through its focus on increasing resources for cost-effective primary care interventions especially in areas with high burden of maternal, neonatal and child mortality. The program also addresses inequities in health personnel distribution in rural and poorer areas and inefficiencies in service delivery through improved distribution of medicines, reduced wastage, enhanced citizen engagement in service delivery and incentivized health worker performance. 80. Government intervention in the health sector at the primary care level supported by the program is strongly justified in Tanzania on the grounds of improving equity, as well as positive externalities and public goods. The poor are highly dependent on the public sector for services, especially in the rural areas where choices are limited. However, quality of care in PHC facilities is low. Public subsidy is thus called for to improve quality of PHC care where the poor access services. Improved quality of care also means improved technical efficiency. It should therefore help reduce overall costs in the medium to long-term. The BRN in Health and the program with an emphasis on increased resources to primary care, encourages domestic funding to focus on areas where there is a clear role for government. Further, under the health facility based incentives, facilities are incentivized for providing services to the extreme poor as identified by the conditional cash transfer (CCT under PSSN) program thus directly targeting those most in need. Additionally, as geographic inequality in health block grant distribution amongst LGAs remains substantial and continues to widen, the program emphasizes the allocation of resources in a more equitable manner including the promoting an equity formula for distribution of resources to LGAs. 81. The program supports strengthening fiscal decentralization to the level of the health facilities to foster innovation and cost-effective local solutions. Decentralization of service delivery in Tanzania is still incomplete with local governments still reliant on central levels for key inputs (medicines, part of operating cost funding etc.). The introduction of bank accounts at the facility level with clear financial management guidelines, supported and incentivized by the program, brings resources closer to where services are delivered and helps foster local solutions to shortages in health personnel and medicines. 82. Key beneficiaries of the program are women of reproductive age (including adolescents) and children under the ages of five; key program indicators will be monitored by gender. The BRN in Health supported by the program prioritizes regions with highest burden of maternal, neonatal, and child mortality. In addition, it aims to target and expand coverage of selected evidence-based interventions in RMNCAH that will have the greatest impact on lives saved through strong district level support in decision-making and implementation. 26 83. Widespread shortages of qualified health workers especially in rural and poor districts result in the delivery low quality of primary care services to those most in need. Redistribution of skilled personnel, especially at the dispensary level with a focus on regions with critical shortages as planned under BRN HRH work stream and supported by the program, is expected to further reduce inequities at the LGA level. The program also supports and incentivizes the National Community Based Health Program Strategic Plan 2015-2020 which aims to develop a cadre of community health workers to bring services closer to the population and promotes efficiency and health worker performance management through incentives, contracts and recognition; it also provides opportunities for hiring of skilled HRH through PPP/Private sector engagement. Results Measurement 84. A set of specific, measurable and relevant indicators was agreed with the GOT to monitor the program. As part of the M&E harmonization agenda under SWAP, the vast majority of program indicators were extracted from the government’s M&E framework (e.g. HSSP IV and BRN in Health indicators). Further, as previously stated, program results will be monitored through the routine health management information system (DHIS2) and other administrative data systems of MOHSW and PMORALG described in section B “Results Monitoring and Evaluation”. These are deliberate choices to (i) align program’s monitoring methodology with that of the government and increase ownership of the results; (ii) reduce the country’s reliance on surveys to monitor progress; (iii) maximize the use of routine information platforms such as the district health profile (DHP) and RMNCAH scorecard; (iv) help further strengthen the country’s information systems; and (v) reduce fragmentation in M&E. 85. The cornerstone of the PHC information system is the DHIS2 which is used for data aggregation, analysis and reporting from LGA to regional and national levels. Under HSSP III, Tanzania completed its country wide rollout of DHIS2 in 2013 after deploying a revised HMIS tool nation-wide. Dispensaries and health centers use paper based information systems and then send their data to the district for the CHMT to enter online into the National Data Warehouse. Some district hospitals have started using computer based systems for data entry, analysis and reporting. In addition to DHIS2, the MOHSW has rolled out other improved information systems for human resource management (HRHIS), training institutions (TIIS) and CCHP Planning and reporting (PlanRep) while PMORALG has rolled out a financial reporting system (EPICOR). Though there are many challenges and issues to be addressed, these systems all aim to improve the M&E of PHC and facilitate availability of integrated technical and financial reports from LGA. 86. Deficiencies in the existing M&E systems are well documented and the program is supporting efforts to address them. First, PHC facilities still focus more on data collection and reporting than on utilization for decision making. Second, incompleteness of data entry in certain LGAs is a concern. Third, LGAs have limited capacity to check data quality, conduct analysis and provide feedback to lower levels. Fourth, there is a need to coordinate various systems at the local levels such as PlanRep, EPICOR, and HRHIS to promote the integration between program monitoring and performance appraisal. Finally, the civil registration and vital statistics system (CRVS) is poorly functioning and few births and deaths are registered. In order to address these inefficiencies, several steps are being undertaken under the program, as follows: 27 • The MOHSW has introduced a district health profile template for use by LGAs. This is produced quarterly and annually to stimulate data use at all LGA levels. • The MOHSW produces a RMNCAH scorecard on a quarterly basis using DHIS2 data to track progress on key maternal and child health service delivery indicators which is shared with the highest levels of Government. • MOHSW is developing a data quality audit mechanism to improve the completeness and quality of DHIS2 data. Also, through the RBF program, the MOHSW has introduced quarterly data verification at facility level by CHMT. • A full time district M&E officer will now replace the part time HMIS focal person at the LGA. • The process of harmonization of PlanRep and EPICOR is ongoing. The National Sample Vital Registration and Verbal Autopsy is being rolled out by Ifakara Health Institute, the National Institute for Medical Research, and MOHSW. • A data repository at national level with district data is being developed to include data from DHIS2, HRHIS and TIIS. Program economic evaluation 87. The Program supports improvements in quality of primary care services with the focus on maternal, neonatal and child health. There is considerable amount of literature that points to the efficacy of primary care services. Primary care services are associated with improved control of routine illnesses that have serious consequences if left untreated. Availability of such services close to where the population reside improves patient satisfaction. Longitudinal care offered by primary care services reduces use of ancillary and laboratory services, leads to shorter lengths of stay at hospitals and improves patient compliance. 88. While primary care services are largely associated with reducing burden of disease and at a low cost, there are welfare benefits that accrue to a household as a result of prevention of severe disease. Severe disease can limit the ability of patients and care givers to work and lead to consumption of household assets in purchasing of care. Through prevention and early treatment, accessible primary care services can thus reduce consequences of ill-health for households, reduce absenteeism, and enhance children’s performance at school. 89. The economic analysis for the Program compared the costs of the Program with the measurable benefits that arise from the implementation of the Program. Economic benefits of the Program are analyzed in terms of infant and maternal deaths averted as well as improved productivity and cost savings from lower future health care costs. It should be noted that this is an underestimate of the actual economic impact of the Program. Other benefits not quantified here include: poverty alleviation, psychological benefits of a healthy population and efficiency among current and future workers. 90. In Tanzania, approximately half of infant deaths are among children in the neonatal age group (first month of life). Among neonates, sepsis and respiratory distress are the leading causes of death and adequate care at birth or immediately after birth can significantly reduce mortality. Among post-neonates, malaria, pneumonia, dehydration due to diarrhea and underlying under nutrition are the leading causes of death. The Program supports strengthening of the PHC delivery system particularly maternal and child health and nutrition services nationwide. 28 91. The economic analysis assumes that use of services will improve primarily due to improvements in quality of care (less drug stock outs, access to qualified health personnel) and the presence of more motivated staff that perform better as a result of the performance incentives and other interventions supported by the program. In the economic analysis, the number of infant and maternal deaths that would be averted was simulated based on the following assumptions: (i) infant deaths, especially neonatal deaths, would be averted as institutional deliveries increase; (ii) improved care reduces the risk of acute respiratory infection (ARI) and malaria among post-neonates; (iii) as mothers receive PMTCT, the risk of HIV/AIDs among children is reduced; (iv) increase in coverage of quality antenatal care and institutional delivery followed by postnatal care would deter maternal deaths. Maternal and neonatal morbidity would also be reduced as women seek care and comply with the protocols (e.g. iron and folic acid supplementation for prevention of anemia and birth defects respectively). Subsequently, less women need to go for additional health care, resulting in savings in the cost of treatment and travel. Women’s productivity too improves as their health status improves. 92. As a result of the program, it is expected that as many as 1 million infant deaths and 84,000 maternal deaths will be averted over the period 2015-2035. While the analysis focuses on infant and maternal deaths, many of these interventions would also reduce infant and maternal distress and morbidity. Consequently, total health benefits, as measured by a composite measure such as disability-adjusted life years would be significantly greater. 93. The Program reaches a positive net present value (NPV) by 2029; the net benefits accruing to the country are maximized thereafter. The internal rate of return (IRR) is positive but reaches the discount rate level by 2030 making the Program an acceptable investment. 94. A comprehensive economic analysis for the operation is outlined in Annex 4. Technical risks 95. By and large, the program design by the GOT is technically sound and risk of non- implementation of program activities is low given the fact that detailed implementation plans with time-bound actions, good division of labor, clear accountability and M&E mechanisms have been developed for all work streams under BRN in Health. Some of the BRN in Health activities are already under implementation such as the “Star Rating” initiative. Although the limited capacity of program implementers remains a concern, the program’s annual capacity building plans are expected to help address this issue. 96. In summary, any residual risks related to technical design, implementation and M&E will be mitigated through the use of DLIs, program’s annual capacity building as well as technical assistance to be financed through parallel financing from development partners. These are summarized in Table 5. 29 Table 5: Technical Assessment: Key Risks and Mitigation Strategies Risks Mitigation Technical Design Insufficient financing for the Program - TA for HSSP IV costing and budgetary framework - TA for development of Health Financing Strategy - DLI 1 minimum condition on share of health in GOT’s recurrent expenditures New approaches (e.g. “Star Rating” - Careful pilots with assessments to improve accreditation, RBF) being implemented on a the design significant scale in Tanzania for the first time - Impact evaluation of selected activities (e.g. RBF) to generate the evidence base for policy making - GOT’s own mechanisms for adaptive implementation such as periodic BRN in Health check-ins; mid-term review of the HBF for fine-tuning as needed High intensity of RBF activity - Gradual roll-out Program’s imbalance between focus on - Thorough analysis and stakeholder processes and actual results consultations to strike a balance between (i) key service delivery results and (ii) key bottlenecks in processes which need to be tackled to deliver such key service delivery results Risk of non-implementation of certain Program activities Non-implementation due to poor planning - Detailed implementation plans developed, with specific time-bound actions - DLI 1 minimum condition on improving planning at the council level Non-implementation due to lack of - Accountability mechanisms for each level of accountability implementers - Higher levels are also held accountable for results at the lower levels - DLIs to stimulate performance at every single level: national, regional, LGAs and PHC facilities Non-implementation due to lack of capacity - Detailed annual capacity building plans under the Program for all levels - DLI criteria related to the development and implementation of such plans - TA provided by development partners though parallel financing Risks related to M&E HMIS does not produce quality data on a - TA for DHIS-2 timely manner - GOT’s plan on Data Quality Audit (DQA) by RHMTs for LGAs under the Program - DLI criterion related to (i) quality of HMIS data (ii) DQA 30 Lack of information on denominators in - Civil registration and vital statistics (CRVS) routine health statistics initiative - Incentives for CHW and PHC facilities under RBF to fulfill their respective roles in CRVS B. Fiduciary 97. A fiduciary systems assessment (FSA), which involves the assessment of governance and anti-corruption mechanisms, procurement and financial management systems for the Program was carried out in January 2015 in line with Operational Policy/Bank Procedure (OP/BP) 9.00, Program-for-Results Financing. 14 This assessment covered institutional and implementation arrangements, fiduciary management capacity and implementation performance, and also considered how existing systems handle the risks of fraud and corruption. The fiduciary systems’ analysis was carried out at the LGAs and ministries, departments and agencies (MDA). The BRN in Health Lab report identifies some challenges such as incomplete reporting by the HMIS, insufficient data analysis capacity, under funding of the health sector, procurement bottlenecks, supply chain challenges, corruption and favoritism in health facilities, poor adherence to guidelines, erosion of MSD working capital and weak inventory control among others. These will be addressed under BRN by streamlining and improving the supply chain process, ensuring governance accountability at all levels, issuing performance targets and contracts, fiscal decentralization by devolution, strengthening financial management of medical store department (MSD), improving governance and accountability, use of ICT platforms, reducing pilferages, supporting funding for medicines, social accountability and implementation of health facility accreditation. The FSA concluded that the legal and regulatory framework for the program’s fiduciary systems is comprehensive and in line with international principles and standards for public procurement and financial management, but there are no fiduciary systems in place at the facility level as they are not currently managing any financial and procurement activities. 98. Financial management risks for the program have been assessed along different dimensions. Key risks include timely transfer of funds from the Treasury to the LGAs and health facilities, late submission of reports, weak audit committees at the LGAs, challenges of the Epicor system, chart of accounts not able to track funds by individual source as well as lack of FM systems and staff at the health facilities. Other risks include weak accounting and internal audit staff skills especially at the LGAs in order to produce quality reports, accounts and conduct quality audits. The following measures would need to be implemented to address shortcomings: (i) strengthening audit committees in order to monitor how audit issues are being addressed; (ii) addressing the challenges faced by the Epicor system by revising the chart of accounts such that it can track funding from Development Partners; (iii) ensuring that discrepancies between funds transferred from treasury to LGAs and health facilities are eliminated through putting in place transparency measures such as displaying amounts transferred at both LGA and health facility levels; (iv) addressing the challenge of delays in receiving financial reports from the health facilities and 14 The assessment covered the MOHSW, PMO-RALG, MSD, a sample of regional administrations, LGAs and PHC facilities. It also took into consideration the BRN healthcare NKRA Lab report; CAG’s Report for LGAs and Central Government for FY13; Tanzania Public Expenditure and Financial Accountability (PEFA) reports for 2006, 2010 and 2013; Annual Performance Evaluation Report of the Public Procurement Regulatory Authority (PPRA); the Procurement and Value for Money Audit reports of selected LGAs and specific assessments done on MoHSW, PMORALG and MSD. 31 LGAs through appointment of accounting technicians and capacity building of the persons involved both at health facilities and councils. Furthermore, there will be need to strengthen auditing arrangements for health facilities, as it will be a challenge for CAG to audit them given the large number of health facilities involved in the program. This will be mitigated by contracting out the audit to private external audit firms acceptable to IDA. 99. Procurement risks were also identified and mitigation measures suggested as part of the assessment. There are legally established Tender Boards (TB) and project management units (PMUs) to manage the procurement functions, but in some LGAs, the TBs, have fewer members than required. Here PMUs operate as committees with only a few permanent staff while others are co-opted from other departments as needed. Procurement risks identified during the assessment include (i) inadequate staffing in LGAs; (ii) inadequate knowledge of - PPA 2011 and its regulations; planning, bidding documents and request for proposals preparation; and, evaluation of bids/proposals; (iii) inefficiencies in managing procurement processes; (iv) delays in vetting contracts above Tsh 50 million by the Attorney General; (v) weak record keeping and management systems; and, (vi) weak contract management. The following mitigation measures need to be considered both before as well as during program implementation to address the risks: (i) recruit/appoint qualified and experienced staff to fill the gap; (ii) conduct tailored trainings on PPA 2011 and its regulations to PMUs and internal audit units; (iii) establish sound records management systems in all LGAs and participating MDAs; (iv) ensure procurements are processed on a timely basis and that responsible unit play their respective roles as stipulated by PPA; (v) ensure that LGAs abide with all procedures for processing quotations including publications of contracts awards as per the PPA; (vi) review and uplift vetting thresholds; and, (viii) conduct tailor made training on contract management. 100. Fraud and Corruption (F&C) risks have been identified and embedded as part of the broader fiduciary risks and mitigation measures. In addition, the F&C assessment involved a review of the complaint handling mechanisms in the sector and how it could be strengthened to be used in the program for results. The GOT has committed to implementing the program within the Bank’s Anti-Corruption Guidelines. 101. Overall, the FSA concludes that the fiduciary risk is substantial, but despite some weakness that have been identified and for which mitigation measures have been proposed, the Program fiduciary systems provide reasonable assurance that the financing proceeds under the Program will be used for intended purposes. C. Environmental and Social Effects 102. For environmental and social management, the PforR employs a risk management approach, in which process requirements are adapted to the program context. The Environmental and Social Management System Assessment (ESSA) has been undertaken by the Bank to ensure consistency with six core principles outlined in the World Bank’s Operational Policy 9.00 - Program-for-Results Financing. 103. The ESSA process includes extensive stakeholder consultations and disclosure of the ESSA Report following the guidelines of the World Bank’s Access to Information Policy. The ESSA consultation process is embedded in the program consultation process. 32 104. The program focuses on improving service delivery and strengthening systems and will also finance civil works related to upgrading and improving infrastructural conditions and utility services of the health facilities. Program activities are not expected to have significantly adverse environmental footprint, if construction activities and healthcare facility operations are well managed. Impacts are also expected to be moderate since the infrastructure rehabilitation and construction works will be confined to existing PHC premises. The program provides an opportunity to improve due diligence measures related to management of construction related issues, good practices for asbestos management, improved healthcare waste management and incinerator operations, and enhancement of sanitation and water supply systems for monitoring and enforcement. Additionally, its programmatic approach to the health sector provides a significant opportunity to improve systemic implementation of environmental practices related to improving infection control practices and health systems functioning and operations at PHC facilities. These will be instituted through targeted resource allocations, including manpower, equipment and funds, updated technical guidelines, focused skills training and capacity building on technical and operational issues as part of the RBF and BRN in Health interventions. 105. The program will also focus on enhancing existing mechanisms for grievance redress and dispute resolution, inclusive and participatory consultations and feedback for social accountability, along with increasing awareness on environmental health issues and better coordination among various ministries, agencies and donor partners on environmental and social aspects. 106. The ESSA identifies strengths, gaps and opportunities in Tanzania’s environmental and social management system with respect to addressing the environmental and social risks associated with the program. The analysis identifies the following main areas for action in order to ensure that the Program interventions are aligned with the core principles 1, 3 and 5 of OP/BP 9.00 applicable to the Program: health care waste management and social accountability. These could be further defined during implementation, as required. Key measures to strengthen system performance for environmental and social management are summarized in Annex 6 and selected actions will be included in the Program Action Plan. 107. Key beneficiaries of the program are women of reproductive age and children under the ages of five; key program indicators will be monitored by gender. The BRN in health, supported by the program, prioritizes regions with highest burden of maternal, neonatal, and child mortality. In addition, it aims to target and expand coverage of selected evidence-based interventions in RMNCAH that will have the greatest impact on lives saved through strong district level support in decision-making and implementation. 108. Widespread shortages of qualified health workers, especially in rural and poor districts, result in the delivery low quality of primary care services to those most in need. Redistribution of skilled personnel especially at the dispensary level with a focus on regions with critical shortages as planned under BRN HRH work stream and supported by the program is expected to further reduce inequities at the LGA level. The program also supports and incentivizes the new community health worker strategy bringing services closer to the population and promotes efficiency and health worker performance management through incentives, contracts and recognition, and provides opportunities for hiring of skilled HRH through PPP/private sector engagement. 33 109. Grievance Redress. Communities and individuals who believe that they are adversely affected as a result of a Bank supported PforR operation, as defined by the applicable policy and procedures, may submit complaints to the existing program grievance redress mechanism or the World Bank Group’s Grievance Redress Service (GRS). The GRS ensures that complaints received are promptly reviewed in order to address pertinent concerns. Affected communities and individuals may submit their complaint to the World Bank independent Inspection Panel which determines whether harm occurred, or could occur, as a result of WB non-compliance with its policies and procedures. Complaints may be submitted at any time after concerns have been brought directly to the World Bank's attention, and Bank Management has been given an opportunity to respond. For information on how to submit complaints to the World Bank’s corporate Grievance Redress Service (GRS), please visit http://www.worldbank.org/GRS. For information on how to submit complaints to the World Bank Inspection Panel, please visit www.inspectionpanel.org. D. Integrated Risk Assessment Summary 1. Integrated Risk Assessment Summary Risk Rating Technical Moderate Fiduciary Substantial Environmental and Social Moderate Disbursement Linked Indicator Moderate Overall Risk Substantial 2. Risk Rating Explanation 110. Based on the integrated risk assessment carried out during preparation, the overall risk of the program is considered substantial for the following reasons: • Key elements of the program are associated with the current government. A new administration may not have the same level of commitment to it. • Weak overall institutional capacity in the sector, particularly at the LGAs where the program will be implemented. This is particularly true given the responsibilities deriving from increased autonomy of health facilities in implementing service delivery improvements. Additionally, the regional level (RAS, RHMT) capacity to oversee, support and monitor LGAs to ensure compliance with national policies and service standards is limited. • Concerns regarding the timely availability of resources to attain the DLIs, including the technical assistance required to support program implementation. • Overall weak fiduciary arrangements, including frail control environment, insufficient staffing, poor contract management, record keeping and management system, and inadequate knowledge of the PPA 2011 and its Regulations. • Insufficient institutional and technical capacity to handle environmental and social issues, including weak inter-institutional and coordination among various agencies, and inadequate formalized mechanism to address social and environmental issues. 34 111. Mitigation measures include: (i) mainstreaming the operation within existing institutional arrangements for fund flows and service delivery; (ii) implementing the Program’s annual capacity building plan; and (iii) mobilizing technical assistance to fill any remaining gaps through parallel financing from development partners. E. Program Action Plan 112. See detailed program action plan in Annex 8. 35 Annex 1: Detailed Program Description A. Overview 1. Tanzania’s Fourth Health Sector Strategic Plan 2015-2020 (HSSP IV) is the strategic and operational framework for health sector development over the next five years. PHC is a cornerstone of HSSP IV with a key initiative called Big Results Now in Health aimed at improving maternal, neonatal and child health. 2. The program development objective is to improve the quality of primary health care (PHC) nationwide, with a focus on maternal, neonatal and child health. The program will support the Government’s PHC as defined in HSSP IV (especially BRN in Health) by disbursing funds against the achievement of a subset of its key results in PHC, especially maternal, neonatal and child health. B. Government’s Program 3. Health sector development in Tanzania is guided by HSSP IV which forms a robust reform agenda for the coming years with the following objectives: (i) improve quality of care; (ii) revitalize PHC, including community-based services; and, (iii) increase affordability of health services. 4. In the structure of the Tanzanian health system, a basic package of essential PHC services is delivered at the district level and below by district hospitals, health centers, dispensaries and community based health services under the management of council health management teams (CHMT). Community-based health services bring health promotion and prevention to Figure 3. The Healthcare Delivery System in Tanzania the people in their communities. Dispensaries provide preventive and curative outpatient services, while health centres can also admit patients, and sometimes provide some surgical services. 36 District hospitals provide services which include curative and basic surgical services to referred patients from the lower levels. 5. In the context of HSSP IV, PHC will be revitalized by: (i) strengthening facility-based PHC services through initiatives to improve performance, HRH and commodities; (ii) establishing a new formal cadre of community based health workers to provide community-based health services; (iii) fostering the link between facility-based and community-based services to create a continuum of care; and (iv) improving LGA’s health management services provided by the CHMT. 6. Efforts to strengthen PHC in Tanzania in HSSP IV will be operationalized by an initiative called Big Results Now in Health. The 2015-2018 Big Results Now in Health program has been developed as part of Tanzania’s Development Vision 2025. It aims to accelerate the reduction of maternal and neonatal mortality through improving performance, governance and accountability in primary health care (PHC). It has four key result areas as follows: • Performance Management: This result area aims to improve health facility and health workers’ performance. Interventions include: (i) a stepwise accreditation scheme for all PHC facilities in the country (aka “Star Rating” initiative) which involves nation- wide assessment and a subsequent elaboration of facility improvement actions (including incentives) to help facilities improve their performances and star ratings, (ii) implementation of the decentralization by devolution policy by empowering health facilities to plan, budget and manage revenue in line with the health cost sharing guidelines that will increase health facility autonomy for improving quality of service delivery, (iii) setting and monitoring performance targets and contracts for personnel, and, (iv) mechanisms for social accountability monitoring. • Human Resources for Health: This result area aims to improve the distribution of skilled PHC workers in nine regions with critical shortages in human resources for health (i.e. less than national averages). Interventions include: (i) increasing PHC employment permits for such regions, (ii) engaging the private sector to provide skilled HRH for public health facilities through public private partnerships (PPPs), (iii) redistributing health care workers within regions, and, (iv) optimizing the pool of new recruits through “bonding” policy or compulsory attachments. • Health Commodities: This result area aims to improve the availability of essential medicines in PHC facilities. Interventions tackle key issues along the health commodities supply chain and include: (i) introducing new governance and accountability mechanisms, (ii) developing new finance and business model for MSD, (iii) engaging private sector in procurement and distribution, (iv) implementing quality improvement initiatives for inventory management, and, (v) use of innovative information and communication technology (ICT) to report stock-outs. • Maternal and Neonatal Child Health: This result area aims to improve the coverage and quality of MNCH along the continuum of care in five regions that are poorly performing on maternal and neonatal mortality indicators. Interventions include: (i) ensuring dispensaries and health centers meet basic emergency obstetric and neonatal care (BEmONC) requirements, (ii) expanding comprehensive emergency obstetric and neonatal care (CEmONC) to selected hospitals and health centers, (iii) strengthening the corresponding satellite blood banks which serve facilities with CEmONC, and, (iv) 37 extending MNCH services to communities through the use of community health workers and awareness campaigns. 7. As a GFF front-runner country, the Government of Tanzania is developing a RMNACH investment case in line with its existing strategies and policies; namely BRN in Health, the Sharpened One Plan II and HSSP IV which were developed in a consultative and evidence-based manner. With a long term vision for RMNACH, this Investment Case identifies priorities for scaling up investments to accelerate the achievements of RMNACH goals. It is also built on the CRVS Strategy and the Health Financing Strategy 15 . As part of its development, extensive consultations with development partners, civil society and private sector have been conducted. This program supports the operationalization of this investment case as a critical step towards the realization of the GFF vision to end preventable maternal, newborn, child and adolescent deaths in Tanzania. 8. A core objective of the GFF is to support countries to harmonize RMNCAH financing and to move towards sustainability by harnessing domestic resources. In the case of Tanzania, the draft Health Financing Strategy encompasses several key strategies to realize the above vision, namely: (i) creating fiscal space through efficiencies; (ii) better defining functions of key actors in the sector including purchasers and providers of health services; and (iii) improving value for money with a pay-for-quality element in the planned capitation payment for PHC. The proposed program supports the government to operationalize such strategies and includes targets for improvements in (i) domestic financing for health; (ii) capacity of institutions involved in purchasing and provision; and (iii) value for money through the introduction and scale-up of performance-based financing at various levels. 9. Under HSSP IV, the Results-based Financing approach (RBF) will be introduced in at least 7 regions by 2019. Selection of regions for the first phase were based on socio-economic conditions and poor health maternal and child health outcomes. The focus will be on PHC facilities that will be paid based on the verified number of services provided and their quality. As a pre- condition to enroll in RBF, each facility will at least need to be rated with 1 star based on the BRN star-rating tool. Dispensaries and health centers with 1 star which do not rate 100% performance in the areas of equipment and infrastructure will be provided with a small readiness fund to make minor improvements. Facilities will be included as they are brought up to standard by the CHMT. 10. Dispensaries and health centers will enter into agreements with the RBF purchaser (the NHIF) in order to receive RBF payments based on the provision of under-utilized services (such as institutional deliveries, timely ante-natal and post-natal care visits as well as prevention of mother-to-child transmission of HIV) which are known to have an impact on RMNCAH outcomes. RBF payments for these services will be adjusted depending on the quality of care. Quality of care will be measured based on conditions to provide quality care (e.g. availability of essential supplies and equipment, water, infection control); patient care as registered on patient cards (e.g. partograph and neonatal care); system strengthening activities (such as number of new members enrolled in the Community Health Fund (CHF), a pre-payment scheme for rural populations); availability of quarterly technical and financial reports for RBF implementation); management and governance 15 These two strategies are in an advanced stage of finalization and their endorsements by the Parliament are expected soon. 38 (e.g. Health Facility Governing Committee (HFGC) meetings held); and patient satisfaction. In district hospitals the RBF payment will be exclusively based on improving the quality of care. These RBF indicators are based on immediate needs and will change over time as the needs change. At the dispensaries and health centers, the number of services provided will be reported utilizing the existing health management information system (HMIS) which already reports on these services. Indicators linked to civil registration will be included as soon as they have been included in the HMIS system, as planned in the near future. 11. Based on the independent impact evaluation of the Pwani pilot (conducted between 2011 and 2013), promising results with significant positive effects on a range of incentivized services also highlighted the importance of including system strengthening measures, regional and council health management teams will also be paid based on their performance. Their RBF payment will be linked to relevant indicators (such as availability of tracer medicines in health facilities, supervision provided and star rating of health facilities linked to enrollment in to RBF). The Medical Stores Department (MSD) and their strategic business units (SBUs) will furthermore be paid based on their performance linked to indicators such as timely delivery of medicines to PHC facilities and ensuring appropriate expiry dates of the medicines. It was furthermore recognized that community health workers (CHWs) play an important role in the prevention and timely uptake of services, CHWs will therefore be paid based on their performance linked to three relevant RBF indicators (household visits, escorting of pregnant women to deliver at a health facility and the reporting of maternal and perinatal deaths which occurred outside the institutions). Lastly, learning from Pwani highlighted the importance of focusing significantly on improving the quality of care through RBF in the health facilities which will be pivotal to improve maternal and neonatal health outcomes. 12. RBF payments will be made to health facilities after verification by a team identified by RAS which consists of representatives of RHMT, the Regional NHIF office and civil society organizations (CSOs) to ensure transparency and prevent possible conflicts of interest. Following such verification, RBF payments will be made by the Ministry of Finance (MOF) directly into the bank accounts of the relevant providers based on their performance. In line with the fiscal decentralization, the providers of health and management services will be able to decide how to allocate the resources with at least 75% of the RBF payment to be invested in those activities (e.g. outreach or purchasing essential equipment) that will further improve performance and maximum 25% allocated to incentives for staff depending on their level of responsibility and attendance at work. Once a year, the Controller Auditor General Office (CAG) or the Internal Auditor General (IAG) will counter-verify the results on a sample basis (25%) and penalize the verification team if deemed necessary16. 13. Governance and financial management is crucial, highlighting the importance of, for example, HFGC meetings at HF level as well as supervision and oversight by management at LGA level. The Prime Minister’s Office - Regional Authority for Local Government (PMO-RALG) is also vital role as RBF facilitator to ensure local government authorities function effectively and by providing assistance, guidance and supervision to health facilities, councils and regional 16 The RBF scheme thus has two mechanisms: (i) internal verification to trigger payments and (ii) counter- verification to trigger penalties if over-reporting is found. It should be noted that these two mechanisms are different from the verification mechanism for the DLIs. 39 secretariats. Technical assistance of the different institutions involved in RBF is furthermore vital. The upcoming public sector systems strengthening activity (PS3) of USAID will be beneficial as it will be implemented in 3 out of the seven RBF regions 17 and aims to strengthen the public system with a particular focus on strengthening the capacity of local government on matters such as planning, budgeting, financial management and the use of data for planning and monitoring. Furthermore, an assessment will be undertaken to identify additional activities and technical assistance needs of the institutions involved in the RBF implementation with a corresponding DLI. RBF is a national policy of the GoT and it is recognized that the speed of RBF roll out depends on availability of implementation capacity, human and financial resources. 14. The RBF payment is based on an additional amount of funding needed to improve performance at the different levels of the health systems - it is not based on the actual cost of delivering the service. A rapid assessment of health facility expenditures and staff motivation (including questions on proposed activities to improve performance and aspirational salary as reported by a sample of staff) was used to inform RBF needed incentive amounts - including both staff and non-staff incentives. The average per capita amount needed for RBF payments, verification and capacity building has been estimated at US$3.10 per capita/year. This excludes the RBF payments to the MSDs and an additional US$1.60 per capita for initial investment in equipment and infrastructure. It also assumes that ongoing support continues and RBF is additional. 15. RBF has been included in the health financing strategy of Tanzania; supporting a shift from input-based to more output-based financing. Existing resources for PHC (block grants, development partner financing and GoT sources) are envisioned to be reformulated using a resource allocation formula which combines per capita financing with RBF payments. Such an approach makes RBF sustainable and ensures a more predictable way of financing, with increased transparency/accountability and provider autonomy while linking results to financing. 16. In summary, PHC in HSSP IV (including BRN in Health) is the Government’s program. C. Scope of the Program and Typology of Program Activities 17. Time-wise and activity-wise, the five-year program to be supported by the PforR operation is the government’s five-year program, namely the entire PHC component in HSSP IV (including BRN in Health). The rationale for this choice of program boundaries includes: (i) the close linkages of many PHC activities/initiatives under HSSP IV; (ii) the levels of World Bank’s past engagement and added value; and (iii) the need to maintain a reasonable ratio of IDA financing vs. program’s total cost. The program is based on the government program and there is thus no ambiguity over its boundaries. 18. The total cost of the program is US$2.62 billion or 55 percent of the GOT’s health sector budget over the next five years. Figure 1 presents a results chain of the program, its activities and their linkages to program objectives. More information on program activities are also discussed in Annex 4 (Technical Assessment). 17 Shinyanga, Mara and Kigoma 40 Table 6: The Government’s Program Supported by the PforR Operation The GOT’s program Objective Strengthen PHC quality Expenditure - Marginal cost for BRN in Health categories including Facility Based Incentives (RBF) - Salaries for PHC (Personnel emoluments) - Non-Salary operating cost for PHC - Capital investment in PHC - Procurement of drugs and medical supplies for PHC Geographic scope Nation-wide Implementation 2015-2020 period Cost in US$ 2.62 billion Table 7: Program Expenditure Requirements in US$ Planned Expenditures in US$ PHC Initiatives Total Percent 2015/16 2016/17 2017/18 2018/19 2019/20 Personnel Emoluments 237,771,583 264,424,761 274,295,978 284,937,436 296,237,362 1,357,667,120 50.8% Non-salary recurrent OC (block grant) 37,141,442 39,447,427 41,782,912 44,269,303 46,917,025 209,558,110 7.8% other non-salary recurrent (HBF) 55,000,000 55,000,000 55,000,000 55,000,000 55,000,000 275,000,000 10.3% Medicines 106,630,991 109,772,467 112,904,418 116,178,647 119,547,827 565,034,350 21.2% Infrastructure 2,241,776 2,313,858 2,381,779 2,452,393 2,525,820 11,915,626 0.4% BRN in Health Human Resources in 2,337,389 3,238,142 2,927,303 Health 8,502,834 0.3% Performance Management Accreditation, Social Accountability and Fiscal 5,710,588 4,117,600 4,778,342 Decentralization 14,606,530 0.5% Facility Based Incentives 3,500,000 20,000,000 25,000,000 25,000,000 25,000,000 (RBF) 98,500,000 3.7% Health Commodities 8,027,370 4,118,244 4,749,209 16,894,823 0.6% MNCH 29,039,743 17,199,695 16,159,495 62,398,933 2.3% 487,400,882 519,632,195 539,979,436 527,837,779 545,228,035 2,620,078,326 100.0% Source: Budget data projections and BRN in Health costing data. 41 Table 8: Estimated Program expenditures by Administrative Units, US$ Projected Allocations for 2015/16 to 2018/19 Total Administrat ive levels share 2015/16 2016/17 2017/18 2018/19 2019/20 US$ LGAs 90% 488,160,794 467,668,975 16,199,383 475,054,001 486,205,231 1,933,288,384 Regions 3% 16,272,026 15,588,966 12,797,122 15,835,133 16,206,841 76,700,089 PMO- 1% 5,424,009 4,345,665 5,399,794 5,278,378 5,402,280 RALG 25,850,126 MOHSW 6% 32,544,053 112,987,302 32,398,766 31,670,267 32,413,682 242,014,070 Total, US$ 100% millions 487,400,882 519,632,195 539,979,436 527,837,779 545,228,035 2,620,078,326 19. Funding for the program under this operation includes (i) US$200 million in IDA credit, (ii) US$40 million in GFF grant, (iii) US$20 million in ANIS MDTF grant and (iv) a US$40 million in grant from USAID 18 through a single-donor Trust Fund arrangement. The total amount of the operation is therefore US$300 million, representing 11.5% of the total program cost. Other development partners will contribute US$290 million (or 11.1%) through parallel financing. The GOT will finance the remaining balance of US$2,030 million or 77.5% of the Program cost. Table 9: Program Financing Source Amount (US$ million) % of total IDA 200 7.6% GFF (co-financing) 40 1.5% ANIS MDTF (co-financing) 20 0.8% USAID TF (co-financing) 40 1.5% Sub-Total 300 11.5% Other development partners 290 11.1% (parallel financing) Government 2,030 77.5% Total Program Cost 2,620 100.0% D. Institutional Arrangements for the Program 20. The Program’s implementation will be based on the current institutional arrangements for the delivery of primary health care services i.e., the government program. In Tanzania, the MOHSW and the PMORALG are jointly responsible for ensuring achievement and verification of HSSP IV results and the specific outcomes of the BRN in Health implemented at the local level. Procurement and financial management under the program will be carried out by MOHSW and PMORALG for program activities for which they are respectively responsible. MOHSW and its subordinated agencies will be responsible for the program’s compliance with environmental requirements. Both MOHSW and PMORALG have a role in addressing social aspects of the program. 18 The USAID wingle donor TF is estimated at US$40 million. 42 21. The MOHSW, as the steward of the health system, is responsible for health policies, strategies, regulations, coordination and oversight for the sector and the Program. It leads the development of health sector strategic plans and the medium term expenditure framework for the sector on a rolling basis. The MTEF is the key document used in determining health sector budget allocations. The MOHSW provides oversight over autonomous and semi-autonomous national institutions responsible for key health sector functions such as the Medical Store Department (MSD), Tanzania Drug Authority (TFDA) and National Health Insurance Fund (NHIF) that are responsible for health commodities supply chain, food and medicine regulation and pre-paid health financing schemes. 22. PMORALG is responsible for coordinating, providing administrative support and allocating resources for the delivery of primary health services. PMORALG facilitates LGA to provide quality health services and manages the critical interfaces with MOF, MOHSW, DPs and LGAs. PMORALG monitors the support provided to local government authorities by regional secretariats (RS). PMORALG is also responsible for providing advice, information and capacity building to RS and LGAs policies, approaches, systems and planning methodologies. 23. As part of “Decentralisation by Devolution”, local government authorities (LGAs) are responsible for delivering PHC as well as other public services. Funds for development and recurrent expenses are transferred from the Treasury to the LGAs, and from the LGAs to the health facilities. One of LGA’s roles is to ensure proper accounting at the facility level. The Council Health Management Team (CHMT) manages district healthcare services and plays an important role in planning and decision-making at the LGA level. It reports to the District Council. The CCHP is the main document used by the council to negotiate funding with PMORALG and MOHSW. It will include health facility plans approved by Health Facility Governing Committees (HFGCs). The CHMT ensures that CCHP planning is inclusive, bringing on board all relevant actors in healthcare in the LGA. The CHMT helps build capacity and support Council Health Services Boards (CHSBs) and Health Facility Governing Committees (HFGCs) so that they are empowered to provide oversight over the activities of PHC facilities services and hold facilities accountable for results as well as for the use of resources. 24. At the regional level, the Regional Health Management Team (RHMT) works under the regional administration to supervise CHMT. It provides technical support to LGAs for the implementation of the Program, identify capacity building needs and monitor, supervise, and evaluate health services and conduct data quality audits. Both CHMT and RHMT are under PMORALG. 25. In line with Tanzania’s decentralized health service delivery system, health facilities (public, faith-based and private) at the local government level deliver primary health care services. They will implement the program including the 22 BRN healthcare initiatives and the facility based incentive scheme i.e., the RBF in 7 regions in the first phase to improve quality of health services. Therefore, they play an important role in helping the Program to achieve its objectives. 26. The BRN in Health implementation focuses on PHC strengthening and therefore will be mainstreamed through MOHSW, PMORALG and LGA structures as described above. The PS- MOHSW along with the Permanent Secretary (PS) of PMORALG are members of the Health BRN’s National Key Results Area (NKRA) Steering Committee. The MOHSW has established a 43 Ministerial Delivery Unit (MDU) for coordinating and monitoring the implementation of activities in the BRN in Health initiative. The MDU will ensure effective coordination and linkage between work streams supported by various Departments, sections, units and agencies. 27. The President’s Delivery Bureau (PDB) oversees BRN in Health through collaboration with Prime Minister’s Office, MOHSW and PMORALG. In the program delivery system, PDB is responsible for (i) problem solving and solution generation through providing feedback, advice and recommendations; (ii) facilitating the development of performance contracts of Ministers for MOHSW and PMORALG for purposes of accountability for results; and, (iii) reporting on progress/actions on BRN in Health implementation plans to the Transformation Delivery Council (TDC). 28. The implementation and institutional arrangements of the RBF (Figure 4) too has been mainstreamed into current government structures and are as follows: • The regulatory role of developing policies, guiding documents and tools for RBF as well as providing clinical and technical oversight and supervision for RBF implementation will be the responsibility of the Ministry of Health and Social Welfare (MOHSW). In its department of Policy and Planning, a national RBF team has been established which oversees the implementation and roll out of RBF on a day-to-day basis. • The National Health Insurance Fund (NHIF) as the largest public health insurer in Tanzania will carry out the role of purchaser. The NHIF will enter into agreements with providers of health and/or management services, of a specified quality. • The providers of primary health care services consist of public health facilities (with at least 1 star rating) as well as select private health facilities (with 1 star or more) in those areas where service gaps exist or with whom service agreements are already in place for select services. Council and Regional Health Management Teams as well as Medical Stores Department (MSD) and their strategic business units (SBUs) will furthermore be paid based on their performance. • To ensure the RBF payment will be based on accurate results, verification will be carried out prior to payment by a Regional Administrative Secretariat (RAS) identified team. This verification team will consist of RHMT members and include members of the regional NHIF office as well as civil society organizations to ensure transparency and prevent possible conflicts of interest. Once a year the Controller Auditor General Office will counter-verify the verified results on a sample basis and penalize the verification team if deemed necessary. • The RBF payment will be made on a quarterly basis by the Ministry of Finance, as the so-called fund holder, directly into the relevant providers’ bank account. • The Prime Minister’s Office - Regional Authority for Local Government (PMO-RALG) will play a vital role as facilitator to ensure local government authorities function effectively and by providing assistance, guidance and supervision to health facilities, councils and regional secretariats. 44 Figure 4: Institutional Arrangements for RBF Regulator: MOHSW Facilitator: PMORALG Purchaser: Counter NHIF Providers: Verifier: CAG/IAG * Public HFs & select private HFs there Verifier: where service gaps or RAS identified service agreements for team Fund-holder: select services exist * RHMT, CHMT MOF * MSD and SBUs 45 Annex 2: Results Framework Program Development Objective: to improve quality of primary health care (PHC) nationwide with a focus on maternal, neonatal and child health (MNCH) services Target Values Data Responsibility Unit of Core BRN Indicators Baseline Yr. 1 Yr. 2 Yr. 3 Yr. 4 Yr. 5 Frequency Source/Methodolog for Data DLI Measure y Collection PDO Level Results Indicators PDO Indicator 1: % 0 10 15 25 35 50 Annual Administrative LGA PHC facilities with 3- data by the Star ratings and above facility accreditation program PDO Indicator 2: % 41.2 45 49 53 57 60 Annual Health LGA Pregnant women Management attending four or more Information ante-natal care (ANC) System (HMIS) visits PDO Indicator 3: % 42.52 45 49 53 57 60 Annual HMIS LGA ANC attendees receiving at least 2 doses of intermittent preventive treatment (IPT2) for malaria PDO Indicator 4: % 44.72 48 51 54 57 60 Annual HMIS LGA Institutional deliveries PDO Indicator 5: % 51.00 53 55 57 61 65 Annual HMIS LGA Proportion of children 12-59 months receiving at least one dose of Vitamin A supplementation during the previous year 46 Intermediate Results Area 1: Health financing, public financial management Intermediate Results % 8.5 8.75 9.0 9.2.5 9.5 9.75 Annual Administrative MOF Indicator 1: data by MOF Share of health in total government budget Intermediate Results % 80 82 84 86 88 90 Annual Administrative MOF Indicator 2: during data by CAG Councils with program unqualified opinion in period the annual external audit report Intermediate Results Area 2: Performance Management Intermediate Results % (cycle 20/0 30/0 50/20 0/30 0/50 Annual Administrative MOHSW Indicator 4: 1 -0/ during data by the Completion of “Star cycle 2 program facility rating" assessment of -0) period accreditation PHC facilities as per program the two-year cycle Intermediate Results % 0 75 80 85 90 95 Annual Administrative MOF Indicator 5: during data by RBF RBF facilities receiving program program timely RBF payment period on the basis of verified results every quarter Intermediate Results % 86.3 88 91 94 97 100 Annual Administrative LGA Indicator 6: during data from CCHP LGAs with functional program report Council Health Service period Boards Intermediate Results Area 3: Human Resource for Health (HRH) Intermediate Results % 32 30 40 40 30 30 Annual Administrative POPSM, Indicator 7: during data by BRN MOHSW & Annual employment program program PMORALG permits for PHC given period to the 9 critical regions Intermediate Results % 91 93 95 97 99 100 Annual Human LGA Indicator 8: during Resources for Health 47 Dispensaries with program information skilled HRH period system (HRHIS) Intermediate Results Area 4: Supply chain management Intermediate Results % 30.6 35 40 45 50 55 Annual Logistics LGA Indicator 9: during Management Health facilities with program Information continuous availability period System of 10 tracer medicines in the past year Intermediate Results Area 5: RMNCAH continuum Intermediate Results Number 79 91 104 104 104 104 Annual CCHP report and LGA Indicator 10: during HMIS Health facilities with program CEmOC period Intermediate Results Area 6: M&E, supervision, and capacity building Intermediate Results % 89.5 91 92 93 94 95 Annual HMIS MOHSW Indicator 11: during Completeness of program quarterly HMIS data period entered in DHIS by LGA (by the end of month after quarter ends) Intermediate Results % 0 50 60 70 80 90 Annual Administrative PMORALG Indicator 12: during data by MOHSW RHMT’s required program and PMORALG biannual data quality period audits (DQA) for LGAs that meets national DQA standards Intermediate Results % 0 50 60 70 80 90 Annual Administrative PMORALG Indicator 13: during data by MOHSW RHMT’s required program and PMORALG annual supportive period supervision visits for LGAs that meets national supervision standards 48 Intermediate Results % N/A 90 90 90 90 90 Annual Administrative MOHSW & Indicator 14: during data by MOHSW PMORALG Completion of annual program and PMORALG capacity building period activities compared to agreed annual plans 49 Annex 3: Disbursement Linked Indicators, Disbursement Arrangements and Verification Protocols Table 10: Disbursement Linked Indicator Matrix Total Indicative timeline for DLI achievement financing Share in total allocated DLI Year or Year or financing amount Year or Year or Year or to DLI Baseline Period 4 Period 5 (in percentage) Period 1 Period 2 Period 3 (US$ million) DLI 1: Recipient has completed 20 6.7% 0% X X all foundational activities Allocated amount (US$ million): 10 10 Definition/description of achievement: This DLI consists of a set of 6 results related to preparation for capacity building, data quality improvement, fiscal decentralization, facility accreditation and MNCH readiness in five BRN regions to ensure a robust system-level framework for the Program. See Appendix 1 for details. DLI 2: Recipient has achieved all 75 25% N/A X X X X X of the Program annual results in institutional strengthening at all levels Allocated amount (US$ million): 15 15 15 15 15 Definition/description of achievement: This DLI consists of 6 program annual results in institutional strengthening corresponding to specific sector bottlenecks: planning, budgeting, financial management, human resources for health and information on quality of care. All 6 conditions must be met each year. See Appendix 1 for details DLI 3: PHC facilities have 100 33.3% 0% X X X X X improved maternal, neonatal and child health services delivery and quality as per verified results and received payments on that basis each quarter Allocated amount (US$ million): 5 20 25 25 25 Definition/description of achievement: PHC facilities have completed the implementation of their quarterly RBF business plans. Internal verification has been carried out to verify the achievement of each PHC facility against an extensive list of facility level performance indicators. Facilities have received their incentive payments within 28 working days after the verification of results. See Appendix 1 for details. DLI 4: LGAs have improved 82 27.3% 0% X X X X annual maternal, neonatal and child health service delivery and quality as measured by the LGA balance score card. 50 Allocated amount (US$ million): 20.5 20.5 20.5 20.5 Definition/description of achievement: This DLI is assessed for each LGA using a LGA Balance Score Card which has 12 criteria related to MNCH service and systems performance (each with a different weight). See Appendix 1 for details. DLI 5: Regions have improved 2.4 0.8% 0% X X X X annual performance in supporting PHC services as measured by a Regional Balance Score Card Allocated amount (US$ million): 0.6 0.6 0.6 0.6 Definition/description of achievement: This DLI is assessed by a Regional Balance Score Card with 2 criteria (each with a different weight) related to supportive supervision and data quality. See Appendix 1 for details. DLI 6: MOHSW and PMORALG 5.6 1.9% 0% X X X X have improved PHC service performance as measured by the National Balance Score Card Allocated amount (US$ million): 1.4 1.4 1.4 1.4 Definition/description of achievement: This DLI is assessed annually by a National Balance Score Card with 4 criteria (each with different weight) related to (i) performance of LGAs (ii) performance of regions (iii) their support for lower levels and (iv) public finance management. See Appendix 1 for details. DLI 7: Completion of annual 15 5% 0% X X X X capacity building activities at all levels Allocated amount (US$ million): 3.75 3.75 3.75 3.75 Definition/description of achievement: This DLI is assessed annually by the implementation rate of the annual Capacity Building Plan. This rate will be defined in accordance to a methodology set forth in the Program Operations Manual. Disbursement amount is $37,500 per 1 percent of Capacity Building Plan Implementation Rate. Total Financing Allocated 300* 100% 30 68.75 67.25 67.25 66.75 *This includes the USAID TF (estimated at US$40 million) as well as financing from GFF and ANIS MDTF 51 Table 11: DLI Verification Protocol No. Disbursement Linked Scalability of Protocol to evaluate achievement of the DLI and data/result verification* Indicator Disbursements Data collection Data verification Data source Verification procedures (Yes/No) entity entity 1 Recipient has completed all Yes Government’s MoHSW & IAG Review of deliverables foundational activities routine PMO-RALG (See Appendix 2 for more information details) systems and reports 2 Recipient has achieved all No Government’s MoHSW & IAG Review of deliverables Program annual results in routine PMO-RALG (See Appendix 2 for more institutional strengthening information details) systems and reports 3 PHC facilities have improved Yes IFMIS and PMO-RALG IAG/CAG Review of quarterly RBF Maternal, Neonatal and Child RBF performance and payment Health service delivery and administrative report quality as per verified results data (See Appendix 2 for more and received payments on that details) basis each quarter 4 LGAs have improved annual Yes DHIS 2 and MoHSW & IAG Annual review of relevant data Maternal, Neonatal and Child other routine PMO-RALG from DHIS2 as well as other Health service delivery and information routine information system quality as measured by the systems which are used to calculate LGA Balance Score Card BSC Annual verification field visit to spot check a random sample of 10% LGA, and 10% of facilities in each chosen LGA. Review will use standardized DQA tools 52 No. Disbursement Linked Scalability of Protocol to evaluate achievement of the DLI and data/result verification* Indicator Disbursements Data collection Data verification Data source Verification procedures (Yes/No) entity entity Review the calculation of LGA performance scores (See Appendix 2 for more details) 5 Regions have improved annual Yes DHIS 2 and MoHSW & IAG Review of biannual DQA performance in supporting other routine PMO-RALG reports PHC as measured by Regional information Review of quarterly RHMT Balance Score Card systems supervision reports Review the calculation of regional performance scores (See Appendix 2 for more details) 6 MOHSW and PMO-RALG Yes Routine MoHSW & IAG Review relevant data from have improved performance in information PMO-RALG routine information systems to supporting PHC as measured systems generate MoHSW and PMO- by the National Balance Score RALG performance scores Card Review the calculation of MoHSW and PMO-RALG performance scores (See Appendix 2 for more details) 7 Completion of annual Yes Routine MoHSW and IAG Annual review of capacity institutional strengthening information PMO-RALG building report activities at all levels systems (See Appendix 2 for more details) * Data will be submitted by MOHSW and PMO-RALG and checked by IAG (quarterly, bi-annual, or annual depending on the types of indicators). By October 31 each year, the GOT will submit the data for the prior FY data (July 1 – June 30) to IAG. Verification is to be completed by January 15 of the following year. 53 Table 12: Bank Disbursement No. DLI Bank Of which Deadline for Minimum DLI value Maximum DLI Determination of Financing financing Financing available DLI to be achieved to value(s) expected to Amount to be disbursed allocated to for Achievement trigger be achieved for Bank against achieved and verified the DLI disbursements of disbursements DLI values Prior (US$ Advances Bank Financing purpose results million) 19 1 Recipient has 20 0 5 December There are six results. 100% Formula: Disbursement completed all 31, 2016 Five results are amount is US$2 million for foundational activities valued at US$2 each of the five results and million while the US$10 million for sixth sixth result is valued result. at US$10 million. There are three activities within the sixth result with the following formulas: • US$2 million for completion of BEmONC and CEmONC assessment; • US$0.5 million for each health center meeting CEmONC standards, with total amount not exceeding US$ 4 million; and • US$57,143 for each 1% of health centers meeting BEmONC 19 This includes the USAID TF (estimated at US$40 million) as well as financing from GFF and ANIS MDTFs. 54 standards, with total amount not exceeding US$ 4 million 2 Recipient has 75 0 0 February 15 All of the program N/A Formula: achieved all of the every year annual results have Year 1: US$15 million Program annual to be met to trigger results in institutional disbursement (all-or- Year 2 onward: US$15 strengthening nothing) million plus the undisbursed amount from the previous years, with the total annual disbursement not exceeding US$20 M 3 PHC facilities have 100 0 25 30 days after No minimum 100% Formula: Quarterly improved MNCH (includes the end of threshold disbursement amount = (Sum service delivery and USAID TF each quarter of actual RBF payments in quality as per verified amount) the past quarter) * 1.15 results and received payments on that basis each quarter 4 LGAs have improved 82 0 0 Every year, Annual average LGA 100% Formula: annual MNCH service for Years 2, BSC achievement is Every year, disbursement delivery and quality as 3, 4 and 5 at least 30% only takes place when annual measured by the LGA average LGA BSC Balance Score Card achievement is at least 30%. Annual disbursement would be as follows: Year 2: US$341,667 for every 1 percentage point of achievement between 1% and 60%, US$387,500 for every 1 percentage point of achievement between 61% and 100% with total 55 disbursement not exceeding US$36 M in Year 2 Year 3: US$292,857 for every 1 percentage point of achievement between 1% and 70%, US$516,667 for every 1 percentage point of achievement between 71% and 100%, with total disbursement not exceeding US$36 M in Year 3 Year 4: US$256,250 for every 1 percentage point of achievement between 1% and 80%, US$775,000 for every 1 percentage point of achievement between 81% and 100%, with total disbursement not exceeding US$36 M in Year 4 Year 5: US$227,778 for every 1 percentage point of achievement between 1% and 90%, US$1,550,000 for every 1 percentage point of achievement between 91% and 100%, with total disbursement not exceeding US$36 M in Year 5 Allocation to each LGA will then be a function of its 56 performance score and a government equity formula 20 5 Regions have 2.4 0 0 Every year, No minimum 100% Formula: improved annual for Years 2, threshold performance in 3, 4 and 5 First, performance score for supporting PHC as the past FY will be generated measured by Regional for each region, using the Balance Score Card Regional BSC (expressed as %) Second, weighted average (by population) of regional scores in the past FY will be calculated Each year disbursement would be as follows: Year 2: US$10,000 for every 1 percentage point, with total disbursement not exceeding US$0.6 M in Year 2 Year 3: US$8,571 for every 1 percentage point, with total disbursement not exceeding US$0.6M in Year 3 Year 4: US$7,500 for every 1 percentage point, with total disbursement not exceeding US$0.6 M in Year 4 20 The government’s equity-based formula for the allocation of funds to LGAs will be the same as the one used for the Health Basket Fund and includes weighting by population, poverty, LGA BSC score and geographical constraints (to adjust for distances). 57 Year 5: US$6,667 for every 1 percentage point, with total disbursement not exceeding US$0.6 M in Year 5 Allocation to each region will be a function of its performance score and population 6 MOHSW and PMO- 5.6 0 0 Every year, No minimum 100% First, performance score for RALG have improved for Years 2, threshold the past FY will be generated PHC performance as 3, 4 and 5 for MOHSW and PMO- measured by the RALG, using the National National Balance BSC (expressed as %) Score Card Each year disbursement for MOHSW would be as follows: Year 2: US$23,333 for every 1 percentage point, with total disbursement not exceeding US$1.4 M in Year 2 Year 3: US$20,000 for every 1 percentage point, with total disbursement not exceeding US$1.4 M in Year 3 Year 4: US$17,500 for every 1 percentage point, with total disbursement not exceeding US$1.4 M in Year 4 58 Year 5: US$15,556 for every 1 percentage point, with total disbursement not exceeding US$1.4 M in Year 5 Each year disbursement for PMO-RALG would be as follows: Year 2: US$3,333 for every 1 percentage point, with total disbursement not exceeding US$0.2 M in Year 2 Year 3: US$2,857 for every 1 percentage point, with total disbursement not exceeding US$0.2 M in Year 3 Year 4: US$2,500 for every 1 percentage point, with total disbursement not exceeding US$0.2 M in Year 4 Year 5: US$2,222 for every 1 percentage point, with total disbursement not exceeding US$0.2 M in Year 5 7 Completion of annual 15 0 3.75 June 30 No minimum 100% Each year the rate of institutional every year threshold implementation of the annual strengthening (for capacity building plan is activities at all levels completion calculated. This rate will be of activities defined in accordance to a the previous methodology set forth in the year) program operations manual. 59 DLI allocation is US$37,500 per one percentage point of Capacity Building Plan implementation rate per year. Disbursement is once a year, when verified results are available TOTAL 300 0 33.75 60 Appendix 1 to Annex 3: Methodology for Determining Each DLI Value DLI 1: Recipient has completed all foundational activities This DLI has six results. The first five are of equal value of US$2 million while the sixth one is valued at US$10 million (Table 13). For results 1, 2, 3, 4, 5 and 6(a), disbursement is made on an all-or-nothing basis. For result 6(b) and 6(c), disbursement formulas are: • US$0.5 million for each health center meeting CEmONC standards, with total amount not exceeding US$4 million; and • US$57,143 for each 1 percentage point of health centers meeting BEmONC standards, with total amount not exceeding US$4 million For the DLI as a whole, disbursement can be considered to be on a sliding scale, given the facts that (i) non-achievement of a result does not prevent disbursement for the others and (ii) results 6(b) and 6(c) are scalable. Table 13: DLI 1 – “Recipient has completed all foundational activities” Result Value 1. A 5-year capacity building plan for the program has been elaborated 2 million 2. Data quality audit tools prepared 2 million 3. Financial Instructions for health facility accounts prepared and disseminated to 2 million all LGAs 4. Verified baseline data (for 2014) and targets for performance indicators 2 million 5. List of operational health facilities and GPS locations prepared 2 million 6. RMNCAH-specific foundational activities 10 million a. Completion of BeMONC and CeMONC assessment in the five BRN RMNCAH regions (US$2 million) b. Eight selected health centers in the five BRN RMNCAH regions meeting CEMONC standards, (US$4 million) and, c. At least 70 percent of health centers in the five BRN RMNCAH regions meeting BeMONC standards (US$4 million). DLI 2: Recipients have achieved all of the program annual results in institutional strengthening at all levels (national, regional, LGA and facilities) This DLI has 6 results corresponding to program annual results in institutional strengthening which GOT needs to meet (Table 14). Annual disbursement takes place when all 6 results have been met. Disbursement amount is as follows: Year 1: US$15 million Year 2 onward: US$15 million plus the undisbursed amount from the previous years, with the total annual disbursement not exceeding US$20 million. 61 Table 14: DLI 2 – “Recipients have achieved all of the Program annual results in institutional strengthening at all levels” (national, regional, LGA and facilities) Results 1. Share of health in total government budget 2. Percentage of council whose annual comprehensive Council Health Plan (CCHP) passes the first round of assessment 3. Action Plans of Audits of PMORALG and MOHSW received within 2 months of the official release of the Controller and Auditor General (CAG) report 4. Percentage of PHC facilities with bank accounts opened according to guidelines from Ministry of Finance (MoF)/CAG (BRNH indicator) 5. Share of total annual employment permits for PHC given to the 9 critical regions (BRNH indicator) 6. Percentage of completion of “Star rating" assessment of PHC facilities (BRNH indicator) DLI 3: PHC facilities have improved maternal, neonatal and child health service delivery and quality as per verified results and received payments on that basis each quarter The RBF scheme provided incentives for each PHC facility on the basis of quantity and quality of services as follows: Step 1. For quantity of care, there is a list of specific services, each has a different unit cost. Every quarter, through internal verification of results, quantity payment (A) for each facility in the scheme is calculated on the basis of number of services the facility provided and unit costs. Step 2. For quality of care, a quality of care assessment is carried out for each facility in the scheme each quarter. The result is expressed in percentage (B) Step 3. Final quarterly performance-based payment for each facility = A*B Quarterly disbursement amount for DLI 3 = sum of actual RBF incentive payments in the past quarter X 1.15 (The 1.15 coefficient takes into account the cost of administration and verification of the RBF scheme) DLI 4: LGAs have improved annual maternal, neonatal and child health service delivery and quality as measured by the LGA Balance Score Card DLI 4 represents annual performance in MNCH service delivery at the LGA level. Such performance is assessed annually for each LGA, using a LGA Balance Score Card (BSC). The BSC has 12 criteria , the majority of them being the GOT’s own indicators (either from BRN in Health or RMNCAH scorecard which quarterly monitors LGA level performance on maternal and child health indicators and reports to the President’s office). The 12 criteria, broadly speaking, can 62 be categorized in two groups: (i) six criteria related to “maternal, neonatal and child health service delivery outputs” and (ii) six criteria related to “improving conditions for quality of care” Table 15: DLI 4 – “LGAs have improved annual MNCH service delivery and quality as measured by the LGA Balance Score Card” Weights, Baseline and Annual Targets for Each Performance Criterion in the BSC Results Score National Y1 Y2 Y3 Y4 Y5 Baseline Maternal, Neonatal and Child Health Service Delivery Outputs (6 Criteria, Subtotal Score: 50) 1. Percentage of pregnant women 10 42.1% 45% 49% 53% 57% 60% attending four or more antenatal care visits (ANC4) 2. Percentage of ANC attendees 7 42.5% 45% 49% 53% 57% 60% receiving at least 2 doses of intermittent preventive treatment (IPT2) for malaria 3. Percentage of ANC attendees 5 50.2% 53% 56% 59% 62% 65% receiving adequate quantity of iron and folic acid tablets until next ANC visit 4. Percentage of institutional 13 44.7% 48% 51% 54% 57% 60% deliveries 5. Percentage of women of 10 37.3% 38% 39% 40% 41% 42% reproductive age using modern family planning methods 6. Children 12-59 months 5 51.0% 53% 55% 57% 61% 65% receiving at least one dose of Vitamin A supplementation during the past year Improving Conditions for Quality of Care (6 Criteria, Subtotal Score: 50) 7. Percent of PHC facilities with 15 7.0% 10% 15% 25% 35% 50% “3 stars” rating or higher 8. Percent of dispensaries with 10 91.0% 93% 95% 97% 99% 100% skilled HRH 9. Percentage of PHC facilities 10 30.6% 35% 40% 45% 50% 55% with continuous availability of 10 tracer medicines in the past year 10. Percentage of LGAs with 5 86.3% 88% 91% 94% 97% 100% functional Council Health Service Boards 11. Percentage of completeness of 5 89.5% 91% 92% 93% 94% 95% quarterly DHIS 2 entry by LGA (by Day 30 after the end of each quarter) 12. Percentage of LGAs with 5 80.0% 85% 90% 95% 100% 100% unqualified opinion in the external audit report TOTAL 100 63 • Each of the 12 criteria in the LGA BSC has a different scores (depending on the level of importance of the criterion and effort needed to achieve the result) • The total score for the 12 criteria in the LGA BSC is 100. • For each criterion, a national baseline is established in order to help set national targets for Year 2, 3, 4 and 5, using recommended methodologies. 21 • A baseline is also established for each criterion for each LGA. The score for each criterion is then prorated between LGA baseline and the national target. Thus in terms of performance, a LGA is assessed against its own baseline and given a prorated score accordingly • The level of performance of this year will serve as baseline for the next year) • If an LGA exceeds the target for a certain criterion, additional pro-rated score will be given. This is to allow an implementer to make up for other criteria in the BSC which it may underperform. All the pro-rated scores will then be added up to get the total score for each LGA. However, there is a cap of 100 for the maximum score a LGA can earn in a year.. • Below is an example of how a pro-rated score is calculated according to the level of the achievement of a criterion in the LGA BSC.  For criterion No.1 in the BSC (percentage of pregnant women attending four or more antenatal care visits or ANC 4), the assigned score is 10.  On the basis of the national baseline value for this criterion (42%) the national target for year 1 is set at 45%.  As an illustration, for a certain LGA, its own baseline for the criterion is 35%. The prorated score for every one percentage point increase in ANC 4 for that particular LGA is then 10/(45-35)=1  If the LGA achieves a result of 43% for this criterion, its pro-rated score would be: (43-35)*1=8  If the LGA achieves a result of 46% for this criterion, its pro-rated score would be: (46-33)*1= 11 • For LGAs which outperform the national target in one year and then stay the same the following year in a criterion, its score for that criterion will be calculated by comparing their performances against the national target in the previous year (instead of against their own performances in the previous year) • After the annual BSC score has been generated for each LGA, the aggregate LGA BSC score for that year will be calculated as the national average (weighed by population) of LGA scores. This LGA BSC score will then be used to calculate DLI 4 disbursement amount as per formula in Annex 3. Every year, disbursement only takes place when annual average LGA BSC achievement is at least 30%. 21 Arur, Aneesa; Mohammed-Roberts, Rianna; Bos, Eduard. 2011. Setting Targets in Health, Nutrition and Population projects. World Bank, Washington, DC. © World Bank. https://openknowledge.worldbank.org/handle/10986/13587 64 Annual disbursement amount for DLI 4 would be calculated as follows: Year 2: US$341,667 for every 1 percentage point of achievement between 1% and 60%, US$ 387,500 for every 1 percentage point of achievement between 61% and 100% with total disbursement not exceeding US$36 M in Year 2 Year 3: US$292,857 for every 1 percentage point of achievement between 1% and 70%, US$ 516,667 for every 1 percentage point of achievement between 71% and 100%, with total disbursement not exceeding US$36 M in Year 3 Year 4: US$256,250 for every 1 percentage point of achievement between 1% and 80%, US$ 775,000 for every 1 percentage point of achievement between 81% and 100%, with total disbursement not exceeding US$36 M in Year 4 Year 5: US$227,778 for every 1 percentage point of achievement between 1% and 90%, US$1,550,000 for every 1 percentage point of achievement between 91% and 100%, with total disbursement not exceeding US$36 M in Year 5 Once disbursement has been made for DLI4, Government will divide the funds among LGAs taking into account (i) individual LGA BSC scores (ii) government’s equity formula. The equity based formula for the allocation of funds to LGAs will be the same as the one used for the Health Basket Fund and includes weighting by population, poverty, LGA BSC score and geographical constraints (to adjust for distances). DLI 5: Regions have improved annual performance in supporting PHC as measured by Regional Balance Score Card DLI 5 represents annual performance in supporting PHC services at regional level. Such performance is assessed annually for each region, using a Regional Balance Score Card (BSC). The BSC has 2 criteria related to supportive supervision and data quality audit by RHMT for LGA. Each criterion has a different weight (according to level of importance and difficulty). Disbursement for this DLI is made annually and on a sliding scale basis. Table 16: DLI 5 – “Regions have improved annual performance in supporting PHC as measured by Regional Balance Score Card” Results Score How the scores are calculated in the BSC 1. RHMT’s required biannual data 40 0.4 score for every 1% of biannual data quality audits quality audits (DQA) for LGAs that (DQA) for LGAs that meets national DQA standards meets national DQA standards 2. RHMT’s required annual 60 0.6 score for every 1% of required annual supportive supportive supervision visits for supervision visits for LGAs that meets national LGAs that meets national supervision standards supervision standards TOTAL 100 65 First of all, performance score for the past FY will be generated for each region, using the regional BSC (expressed as %). On this basis, weighted average (by population) of regional scores in the past FY will be calculated. Annual disbursement amount for DLI 5 would be calculated as follows: Year 2: US$10,000 for every 1 percentage point, with total disbursement not exceeding US$0.6 M in Year 2 Year 3: US$8,571 for every 1 percentage point, with total disbursement not exceeding US$0.6M in Year 3 Year 4: US$7,500 for every 1 percentage point, with total disbursement not exceeding US$0.6 M in Year 4 Year 5: US$6,667 for every 1 percentage point, with total disbursement not exceeding US$0.6 M in Year 5 Allocation to each region will be a function of its performance score and population. DLI 6. MOHSW and PMO-RALG have improved PHC service performance as measured by the National Balance Score Card DLI 6 represents annual performance by MOHSW and PMO-RALG in support of PHC services at the local level. Their performance will be assessed annually a National Balance Score Card with four criteria. With this BSC, national implementers will thus be held accountable for the performance in PHC service delivery at the lower levels. Each criteria is given a different weight according to its level of importance and difficulty. Disbursement for this DLI will be made annually and on a sliding scale basis. Table 17: DLI 6 – “Program implementers have achieved annual PHC results at the national level” Results Score How the scores are calculated in the BSC MOHSW PMO- RALG 1. Average and variance of 30 50 MOHSW receives 0.3 score for every LGA performance scores composite national LGA score (derived from DLI 4) PMO-RLAG receives 0.5 score for every Formula: Composite composite national LGA score national LGA score = Population-weighted average LGA score * (1 – 1 Standard Deviation) 66 2. Average of regional 40 30 MOHSW receives 0.4 score for every average performance scores (derived regional score from DLI 5) PMO-RLAG receives 0.3 score for every average national LGA score 3. Percentage of 20 20 Each ministry receives 0.2 score for every one unsupported expenditures in percent of supported expenditure MOHSW/PMO-RALG in their annual audits 4. Percentage of LGA’s 10 0 MOH receives 0.1 score for every one percent of receiving CHF matching LGA’s receiving CHF matching funds funds TOTAL 100 100 Performance scores for the past FY will be generated for MOHSW and PMO-RALG, using the National BSC (expressed as %) as defined in Table 17. Annual disbursement amount for MOHSW will be calculated as follows: Year 2: US$20,000 for every 1 percentage point, with total disbursement not exceeding US$1.2 M in Year 2 Year 3: US$17,143 for every 1 percentage point, with total disbursement not exceeding US$1.2 M in Year 3 Year 4: US$15,000 for every 1 percentage point, with total disbursement not exceeding US$1.2 M in Year 4 Year 5: US$13,333 for every 1 percentage point, with total disbursement not exceeding US$1.2 M in Year 5 Annual disbursement amount for PMO-RALG will be calculated as follows: Year 2: US$3,333 for every 1 percentage point, with total disbursement not exceeding US$0.2 M in Year 2 Year 3: US$2,857 for every 1 percentage point, with total disbursement not exceeding US$0.2 M in Year 3 Year 4: US$2,500 for every 1 percentage point, with total disbursement not exceeding US$0.2 M in Year 4 Year 5: US$2,222 for every 1 percentage point, with total disbursement not exceeding US$0.2 M in Year 5 67 DLI 7. Completion of annual capacity building activities at all levels Under the foundation activities in DLI 1, the GOT will prepare a 5-year capacity building plan related to PHC at all levels. The plan will be reviewed and agreed each year between the GOT and IDA. This DLI represents the percentage of activities completed in the agreed plan in the previous fiscal year. Disbursement for this DLI will be made annually and on a sliding scale basis. Each year the rate of implementation of the annual capacity building plan will calculated. This rate will be defined in accordance to a methodology set forth in the program operations manual. Annual DLI 7 amount = US$37,500 per one percentage point of capacity building plan implementation rate 68 Appendix 2 to Annex 3 Independent Verification of Program Results Scope of Work for IAG A. Overview 1. The Internal Auditor General (IAG) and has been designated as the independent verification agency by the GOT in this PforR operation. Using GOT’s procurement procedures, IAG can contract other eligible entities to help with verification provided that such entities are independent from the program implementers to avoid any conflict of interests. In such a case, IAG is still ultimately responsible for the verification and needs to sign off on the verification reports. B. Objective 2. IAG will carry out independent verification of results related to the disbursement linked indicators which are reported in the government’s performance assessment to ensure its quality, independence, accuracy, and robustness. C. Scope of Work Overview 22 No. DLIs and Protocol to evaluate achievement of the DLI and data/result verification* Corresponding Results Data collection Data source Verification procedure entity 1. Recipient has completed all foundational activities 1.1. A 5-year capacity Plan MoHSW & - Five-year capacity building plan building plan for the PMO-RALG acceptable to the World Bank Program has been elaborated 1.2. Data Quality Audit Tools and MoHSW & - Final data quality audit (DQA) tools and (DQA) tools field testing PMO-RALG field-testing report acceptable to the World prepared and field report Bank tested 1.3. Financial Manual and PMO-RALG, - Final FM manual for health facility Management (FM) dissemination accounts acceptable to the World Bank manual for health report - Dissemination report acceptable to the facility accounts World Bank prepared and disseminated to all LGAs 22 It should be noted that counter-verifications in the RBF scheme is separate from verifications for the DLIs. The TORs for counter-verifications in the RBF scheme will be elaborated in the POM. 69 No. DLIs and Protocol to evaluate achievement of the DLI and data/result verification* Corresponding Results Data collection Data source Verification procedure entity 1.4. Verified baseline HMIS, MoHSW & - Independent verification agency conducts data (for 2014) and medical PMO-RALG verification of baseline data for all LGAs, targets for records and using protocols acceptable to the World performance registries Bank indicators 1.5. List of health Health facility MoHSW & - List of health facilities with GPS facilities and GPS mapping PMO-RALG coordinates acceptable to the World Bank locations prepared survey 1.6. 6. (a) Completion of Spot check MoHSW & - BeMONC and CeMONC assessment BeMONC and PMO-RALG report of the five BRN RMNCAH regions CeMONC assessment in the - Proof of 8 health facilities which in the five BRN assessment failed to meet CEmONC RMNCAH regions standards now up to CEmONC standards (b) Eight selected health centers in the - Proof of 70% of health centers in the five five BRN BRN RMNCAH regions meeting RMNCAH regions BEmONC standards meeting CEMONC standards, and, (c) At least 70 percent of health centers in the five BRN RMNCAH regions meeting BeMONC standards 2 Recipient has achieved all of the program annual minimum conditions in institutional strengthening at all levels (national, regional, LGA and facilities) 2.1 Percentage of health Admin data MoF - Annual Budget Book approved by the in government (IFMIS) Parliament budget 2.2 Percentage of CCHPs PMORALG - Annual review of CCHPs and RAS admin councils whose Admin data data and records annual CCHPs pass in the first round of assessment 2.3 Percentage of "Star Facility MoHSW & - Review of annual facility accreditation Rating" assessment accreditation PMO-RALG assessment report of PHC facilities assessment completed report 70 No. DLIs and Protocol to evaluate achievement of the DLI and data/result verification* Corresponding Results Data collection Data source Verification procedure entity 2.4 Percentage of annual Admin data/ MoHSW - Annual review of employment permits employment permits HRHIS for HRH in PHC given to the nine critical regions 2.5 Action Plans of Audit action MoHSW & - Annual review of action plans Audits of recipients plans PMO-RALG of HBF received within 2 months of official release of the CAG report 2.6 Percentage of PHC IFMIS MoHSW & - Review of list of facilities bank accounts facilities with bank PMO-RALG maintained by the Accountant General accounts opened according to guidelines from MOF/Accountant General 3. PHC facilities have improved Maternal, Neonatal and Child Health service delivery and quality as per verified results and received payments on that basis each quarter Percentage of PHC Admin Data/ NHIF - Quarterly review of RBF verification and facilities in the RBF IFMIS payment reports scheme receiving quarterly performance-based incentives within 21 days after results have been verified 4 LGAs have improved annual maternal, neonatal and child health service delivery and quality as measured by the LGA Balance Score Card 4.1 Percentage of HMIS MoHSW - Annual review of HMIS pregnant women - Annual verification field visit to spot attending four or check a random sample of 10% LGA, and more antenatal care 10% of facilities in each chosen LGA. visits (ANC4) Review will use standardized DQA tools 4.2 Percentage of ANC attendees receiving at least 2 doses of intermittent preventive treatment (IPT2) for malaria 71 No. DLIs and Protocol to evaluate achievement of the DLI and data/result verification* Corresponding Results Data collection Data source Verification procedure entity 4.3 Percentage of ANC attendees receiving adequate quantity of iron and folate tablets until next ANC visit 4.4 Percentage of institutional deliveries 4.5 Percentage of women of reproductive age using modern family planning methods 4.6 Children 12-59 months receiving at least one dose of vitamin A supplementation during the previous twelve months 4.7 Percent of PHC Facility MoHSW & - Annual review of facility accreditation facilities with “3 accreditation PMO-RALG assessment report star” rating or higher assessment - Spot check for a random sample of PHC report facilities as part of annual verification field visit (described for DLIs 4.1-4.6) 4.8 Percent of HRHIS MoHSW & - Annual review of HRHIS dispensaries with PMO-RALG - Spot check for a random sample of PHC skilled HRH facilities as part of annual verification field visit (described for DLIs 4.1-4.6) 4.9 Percentage of PHC LMIS MoHSW & - Annual review of LMIS facilities with PMO-RALG - Spot check for a random sample of PHC continuous facilities as part of annual verification field availability of 10 visit (described for DLI 4 criteria 4-6) tracer medicines in the past year 4.10 Percentage of LGAs Admin data PMO-RALG - Annual review of admin data with functional - Spot check for a random sample of LGA Council Health facilities as part of annual verification field Service Boards visit 72 No. DLIs and Protocol to evaluate achievement of the DLI and data/result verification* Corresponding Results Data collection Data source Verification procedure entity 4.11 Percentage of HMIS MoHSW - Annual review of HMIS completeness of - Spot check for a random sample of LGA quarterly DHIS 2 facilities as part of annual verification field entry by LGA (by visit Day 30 after the end of each quarter) 4.12 Percentage of LGAs Audit reports PMO-RALG - Annual review of all external audit reports with unqualified opinion in the external audit report 5 Regions have improved annual performance in supporting PHC services as measured by Regional Balance Score Card 5.1 RHMT’s required Admin data MoHSW & - Review of biannual DQA reports biannual data quality PMORALG audits (DQA) for LGAs that meets national DQA standards 5.2 RHMT’s required RHMT MoHSW & - Review of quarterly RHMT supervision quarterly supportive supervision PMORALG reports supervision visits for reports LGAs that meets national supervision standards 6 MOHSW and PMO-RALG have improved annual PHC service performance as measured by the National Balance Score Card 6.1 Average of LGA Admin data MoHSW & - Annual review LGA performance data performance scores PMORALG 6.2 Variance in LGA Admin data MoHSW & - Annual review LGA performance data performance scores PMORALG 6.3 Percentage of IFMIS and MoHSW & - Annual review of IFMIS and audit reports unsupported Audit PMORALG expenditure in MoHSW/ PMORALG audits 6.4 Percentage of LGAs IFMIS MoHSW & - Annual review of IFMIS receiving CHF PMORALG matching grants 73 No. DLIs and Protocol to evaluate achievement of the DLI and data/result verification* Corresponding Results Data collection Data source Verification procedure entity 7 Completion of annual capacity building activities at all levels Completion of Capacity MoHSW & - Annual review of capacity building report annual capacity building PMORALG building activities as report per agreed annual plans 74 Annex 4: Technical Assessment Summary A. Strategic Relevance and Technical Soundness of the Proposed Program A.1 Strategic relevance 1. Over the last 10 years, in Tanzania, progress has been made in reducing death rates in younger age groups and improving coverage of selected high impact interventions. Tanzania has also made significant strides in improving immunization coverage and surpassing the Millennium Development Goal for reducing child mortality. Between 1999 and 2010, infant mortality fell from 99 per 1,000 live births to 51 per 1,000 live births respectively, while under-5 mortality declined from 147 to 81 per 1,000 live births (Tanzania Demographic Health Survey (TDHS), 2010). A 2008 Lancet article on child survival gains in Tanzania 23 attributed a large proportion of these improvements to investments in health systems and scaling up specific interventions through a decentralized approach. These include an increased proportion of children under five years of age sleeping under bed nets (from 36.3 percent in 2007/8 to 72.6 percent in 2009/10), increased vaccination coverage, vitamin A supplementation, and improved functioning of Integrated Management of Childhood Illness (IMCI) at the facility and community levels. 2. However, progress in reduction of maternal mortality and neonatal mortality has been slow. Maternal mortality ratio remains high at 410 per 100,000 live births (UN Estimates 2013) against a backdrop of low facility deliveries and family planning coverage. Neonatal mortality rate is 21 per 1,000 live births according to 2013 United Nations estimates. There is also a persistently high level of stunting (42 percent among children under five years of age), affecting over 3 million children. Overall, communicable, maternal, neonatal, and nutritional causes remain the major burden of mortality and illness for the population (Table 18). Table 18: Top Causes of Life Years Lost (YLLs) in Tanzania Rank and disorder 2010 # YLLS in thousand dollars (% of total) 1. HIV/AIDS 4,503 (20.6%) 2. Malaria 3,068 (13.9%) 3. Lower respiratory infections 2,000 (9.2%) 4. Diarrheal diseases 930 (4.3%) 5. Neonatal encephalopathy 851 (3.9%) 6. Preterm birth complications 812 (3.7%) 7. Protein-energy malnutrition 676 (3.1%) 8. Neonatal sepsis 636 (2.9%) 9. Syphilis 615 (2.8%) 10. Road injury 512 (2.3%) 11. Tuberculosis 501 (2.3%) 12. Maternal disorders 491 (2.3%) Source: Institute for Health Metrics and Evaluation 2013. 23 Masanja, H., et al, Child Survival Gains in Tanzania: Analysis of Data from Demographic and Health Surveys, The Lancet, 2008; 371: 1276–83. 75 3. Without effectively improving the health of the nation, Tanzania will not be able to materialize the aspirations of the Tanzanian Development Vision 2025 and reduce health-related economic costs. Currently, US$431 million is being spent on treatment every year; an estimated GDP loss of US$272.6 million occurs annually due to the common diseases affecting the working population alone. Such numbers are expected to rise. 4. In this context, there is a consensus that health is important to economic development and poverty reduction in Tanzania. It has been identified as a priority in (i) the Government’s Tanzania Development Vision 2025 (launched in 1999), (ii) the National Strategy for Growth and Poverty Reduction 2010-2015 (MKUKUTA II); and (iii) the World Bank’s Country Assistance Strategy 2012-2015. Table 19: Tanzania’s Health Outcomes and Health Expenditures Sub- Tanzania1 Saharan Africa2 Outcome Indicators 2005 2010 2013 Under 5 mortality rate per 1,000 live births 112 453 92.4 Infant mortality rate per 1,000 live births 68 51 61 Maternal mortality ratio per 100,000 live births 578 4323 510 Total fertility rate (children per woman) 5.7 5.23 5.1 Stunting (Height for Age <-2SD, %) 38 42 37 Underweight (Weight for Age <-2SD, %) 22 16 21 Wasting (Weight for Height <-2SD, %) 3 5 9 Service Coverage Indicators Skilled birth attendance (% of pregnant women) 47 51 50 Contraceptive prevalence rate (% of women 20 27 24 ages 15-49 years) Full immunization coverage (% of children aged 71 75 12-23 months) Children who slept under an ITN last night (% 16 64 35.2 of under-5 children) Women who slept under an ITN last night (% of 16 57 pregnant women) Health Financing Indicators3,4 Total expenditure on health per capita 11.9 41.3 96.2 Total public expenditure on health per capita 5.9 16.3 Share of health in the government budget 10.3 8.7 1Data of MMR, TFR, nutritional and service coverage indicators are for years 2005 and 2010. 2Nutrition indicators are for Sub-Saharan African developing countries’ average only, while others are for the whole regional average. 3 2012 census data. 4All health financing indicators listed under “2010” indicate latest year data. 5All per capita expenditure data are in the unit of current US$ (i.e. at exchange rate rather than purchasing power parity). Source: DHS, Census 2012, World Development Indicators and WHO data. 76 A.2 Technical soundness The Program’s focus on quality of PHC in general and RMNCAH in particular is appropriate 5. A large share of health challenges in Tanzania, including RMNCAH, can be effectively prevented and managed at the PHC level, using a well-known package of evidence-based cost- effective interventions. 24 In Tanzania, access to health care has sharply improved in recent year with more people being within 2 hours of a health facility. Moreover, 3 out of 4 (74.9 percent) facilities offer services for women to give birth which is a critical need in a high fertility environment. 6. However, the challenge is the quality of PHC in general and RMNCAH in particular. For example, the quality of basic and comprehensive obstetric care is low. According to the 2012 Service Availability and Readiness Assessment (SARA), only 32.3 percent of dispensaries and 50 percent of health centers had the capacity to provide BEmNOC services. Among all hospitals, around 73 percent met CEmNOC service standards. As the result, the RMNCAH continuum is weak in Tanzania. More than half of health workers are either absent or late during work hours. According to SDI (2014), although on average 14.3 percent of health providers in surveyed facilities were absent from the facility, absence was more prevalent in Dar es Salaam where only1 out of 5 (20.7 percent) were in fact found in the facility. Moreover, doctors especially those in urban areas are the most likely to be absent and their absence is more likely to not have been approved. There is limited adherence to good clinical practices. A review of clinicians’ ability to manage maternal and neonatal complications under the SDI 2014 showed that providers surveyed adhered to only 30.4 percent of the clinical guidelines for managing maternal and newborn complications. There was no significant difference between the performance of public and private (for and not-for-profit) providers. Doctors are again more likely to adhere more closely although they would follow only about 35.7 percent of guidelines. Further, essential drugs are frequently out of stock, and facilities are in poor conditions. 7. Poor quality of PHC results in low utilization despite relatively good access. For instance, studies show that community perceptions of the quality of the local health system influence women's decisions to deliver in a clinic. Improving quality of PHC services and communicating this to communities therefore will assist efforts to increase facility delivery in Tanzania. 25 Key bottlenecks to quality of PHC and RMNCAH have been clearly identified under the Program 8. Under the overall BRN initiative by the Office of the President, the BRN in Health was developed through an intensive six-week “health lab” process (22 Sep – 31 Oct 2014). It involved 138 representatives from 65 agencies representing key stakeholders in the sector (including academia, government officials, development partners, CSOs, private sector representatives and others). A total of 32,000 person hours was devoted to the development of BRN. The BRN process identified the following bottlenecks to quality of PHC in Tanzania on the supply side. 24 The World Health Report 2008 “Primary Health Care: Now More Than Ever’ World Health Organization 25 Kruk ME, Rockers PC, Mbaruku G, Paczkowski MM, and Galea S. Community and health system factors associated with facility delivery in rural Tanzania: a multilevel analysis. Health Policy. 2010 Oct;97(2-3):209-16. 77 9. First, the limited number of human resource for health (HRH) is a major constraint to PHC service delivery. Nation-wide, there are 554 dispensaries without skilled health workers; of which 135 (25%) are in the 9 regions with critical HRH shortage (HMIS 2014). Instead, they are staffed by medical attendants who are not qualified to manage patients by themselves. The national average ratio of clinicians and nurses per 10,000 population is low at 7.74 (compared to 22.8 as per WHO recommendations). HRH is unevenly distributed across regions, districts and health facilities: 74% of doctors are found in urban settings, resulting in a doctor to population ratio 17 times higher in urban than rural areas. Kilimanjaro, Dar es Salaam and Mwanza have 75% of all skilled HRH (HRH Profile 2014). The current HRH planning process relies on LGAs to identify their HRH needs and then submit them to POPSM for approval. The process often does not take into account the existing distribution of skilled HRH workforce in the country. 10. Second, decentralization in the health sector has not fully materialized, hindering the operations of facilities. Health facilities have limited financial autonomy to utilize their own funds. Most PHC facilities do not even have a bank account. Funding for PHC is channeled to LGAs which unfortunately represent a major bottleneck preventing resources to reach lower levels. Without adequate resources, PHC facilities at the frontline do not have the basic inputs to ensure structural quality of care. 11. Third, there is a poor accountability for results at all levels, including between (i) central government and local government authorities (LGA), (ii) LGA and facilities, (iii) facilities and communities. More than half of health workers are either absent or late during work hours. There is no systematic effort to monitor quality of care, provide accreditation or conduct continuous quality improvement in PHC. 12. Fourth, poor supply chain management leads to frequent stock-outs of essential drugs and medical supplies in PHC facilities. Less than 50% of health facilities have updated stock cards. The working capital of the Medial Store Department (MSD) has been depleted due to the growth of debt. MSD’s capacity to deliver medicines is limited to around 65% of health facilities. The remaining 35% needs to be provided by the private sector. 13. Fifth, the RMNCAH continuum is weak. While there are various Development Partners funding community health worker (CHW) interventions in various parts of the country, CHWs have not been formalized as part of the existing health care structure. Outreach services have not been fully established to enable women and their families to receive selected RMNCAH services in their communities. Average readiness score for EmONC was found to be 53% for facilities (SARA 2012). Blood transfusion services are located at urban centers, far away from health facilities that conduct CEmONC services; access to blood is a concern because of this. The Program design has clear causal links between the challenges, interventions and expected results 14. On the basis of the identified challenges, under BRN in health, the country has developed interventions which correspond to each bottleneck under Program. Table 20 represents a summary of key BRN interventions for each bottleneck and the results. Figure 5 explains the conceptual framework of BRN in health. RBF is seen as an activity within the BRN work stream “Performance Management” to help incentivize facilities to improve. 78 Program interventions are technically sound 15. The BRN in Health supports evidence-based, cost-effective interventions. Accreditation has been shown to improve quality of care in both OECD and LMIC countries (although the number of evaluations for LMIC is fewer). The same applies to quality improvement plans for health facilities. Fiscal decentralization contributes to provide greater managerial autonomy, which in turns facilitates service delivery. Social accountability is universally accepted as a mechanism to hold providers accountable for results as per the WDR 2004 conceptual framework. HRH represents a critical input for quality of care and, in fact, a dimension of structural quality. For maternal and neonatal care, access to quality BEmONC and CEmONC is essential. Table 20: Summary of Key BRN Interventions Corresponding to Each PHC Bottleneck Human Resources for Health Performance Management for Facilities Health Commodities RMNCAH Continuum Source: BRN in Health, PDB 2015 79 Figure 5: Conceptual framework of BRN Source: BRN in Health, PDB 2015 16. Given the nutrition challenges, the program incorporates nutrition specific and sensitive interventions in the health sector to address under-nutrition including stunting. 26 High impact nutrition specific interventions in the program include (i) growth monitoring/promotion among children under-five, (ii) vitamin A supplementation for children between 6 and 59 months (to support growth and help combat infections among children), (iii) iron and folic acid (IFA) supplementation for pregnant women (to reduce the risk of low birth weight, maternal anemia and iron deficiency); (iv) home visit to provide nutrition/health education by Community Health Workers (CHW) during the first 1,000 days of life (from pregnancy to two years of age). Appropriate incentives are built into the program at the CHW, facilities, LGA and national levels to stimulate performances related to such indicators. 17. The government of the Republic of Tanzania is intending to take urgent measures 27 to improve the civil registration and vital statistics (CRVS) system. The 2012 census revealed that birth registration coverage in Tanzania is at 15% (among the lowest in Africa and in the world) and a similar situation exists for death registration, while cause-of-death documentation 28 is also far from satisfactory. As a first step, a comprehensive assessment 29 of the CRVS was undertaken to identify underlying bottlenecks. A strategic plan 30 has also been drafted by Registration 26 Nutrition is a multi-sectoral issue. While the health sector certainly has a role, interventions by many other sectors is required, including education, social protection, agriculture, water and sanitation, etc. 27 In line with the framework of the Commission for Information and Accountability of Women’s and Children’s Health (COIA) and the ministerial declaration of the second conference of African Ministers Responsible for Civil Registration. 28 Although this was not assessed by the census. 29 A draft document is to be released soon. 30 Not yet publicly shared. 80 Insolvency and Trusteeship Agency (RITA) – the agency responsible for CRVS- and the National Bureau for Statistics (NBS) with involvement of MOHSW and PMO-RALG and other relevant stakeholders. The strategy intends to mainstream CRVS in Tanzania with a specific focus on the role of the health sector given its close connection with birth and deaths. UNICEF has already been supporting a pilot with registration at the health facility level and is planning to scale this up to 10 new regions (with 2 regions added per year). The Canadian Department of Foreign Affairs Trade and Development (DFATD) is currently the main donor providing assistance to improving CRVS in Tanzania through supporting a variety of agencies such as the NBS 31 and RITA 32 as well as through WHO 33 to support the development and implementation of the abovementioned CRVS assessment and strategy. 18. There is an emerging global body of evidence on the effectiveness of facility-level performance based incentive schemes such as the RBF in improving coverage and quantity of health services. The RBF also benefits from a wealth of practical RBF experiences generated by other projects supported by HRITF in many Sub Saharan African countries. The list of payment indicators in the RBF scheme balances pay-for-quantity vs. pay-for-quality to incentivize the delivery of a set of cost-effective interventions with inputs supported by BRN in health. 19. Under the program, the RBF activity will include incentives for community health workers (CHWs) and traditional birth attendants (TBAs) to escort pregnant women to deliver in the health facility as well as to report any non-institutional maternal and perinatal death within 24 hours to the facility. In line with the upcoming national CRVS strategy, health facilities will register any births and deaths (including cause of deaths) as part of the RBF program, in line with the upcoming national CRVS strategy. Performance indicators for health facilities will be developed to incentivized CRVS-related activities at the facility level. 20. In summary, from the technical point of view, the proposed program has many of the critical building blocks required for delivering results. These include: • Strong political commitment (including the Office of the President) to PHC and RMNCAH; • The focus on the key challenges faced by PHC in Tanzania; • The incorporation of BRN in Health in HSSP IV and inclusion of RBF as a provider payment mechanism in the draft health care financing strategy; • Technical soundness and alignment with international evidence and best practices; and, • Clearly defined interventions, which are supported by relevant country and international experiences. 31 For more information on support for NBS, please see: http://www.acdi- cida.gc.ca/CIDAWEB/cpo.nsf/vLUWebProjEn/EAE2AAC1CA21D0958525771100372058?OpenDocument and http://www.acdi-cida.gc.ca/CIDAWEB/cpo.nsf/vLUWebProjEn/31233EB567EAC1C585257BAE00359A76?OpenDocument 32 Support for RITA is through UNICEF for the implementation of the Birth Registrations Strategy 33 For more information on support for CRVS Country Assessment and Strategy through WHO, please see: http://www.acdi- cida.gc.ca/CIDAWEB/cpo.nsf/vLUWebProjEn/F9B386E2EC337E2285257CE100380967?OpenDocument and http://www.acdi- cida.gc.ca/CIDAWEB/cpo.nsf/vLUWebProjEn/CA0101FA9A04446A85257CE100384693?OpenDocument 81 B. Expenditure framework 21. In Tanzania, at the national level, documents such as the Tanzania Development Vision (TDV) 2025, MKUKUTA II, FYDPI and currently the BRN initiative outline key policy priorities and targets. At a sectoral level, Health Sector Strategic Plan IV, as well as National Key Results Areas (NKRAs) of the BRN present policy priority objectives and targets to be achieved over a certain period of time. Aligning financial resources through the budgets and actual spending with the policy priorities at all levels is among the critical inputs for effective implementation and achievement of intended results. 22. Tanzania has a well-established structure of planning and budgeting, both at the central and decentralized levels. In addition, there is an annual Public Expenditure Review (PER) process that helps fiscal policy formulation and management. Under the PER process, a rapid budget analysis (RBA) is conducted each year to assess the consistency of the approved budget and actual public expenditures and the government policy priority objectives. As such, a comprehensive review of the expenditure framework of the government’s program on primary health care can be derived from the budget analysis of the BRN in health, national health accounts (NHA) for several years, annual PERs conducted by the MOHSW, RBA for 2014/15 and 2013/14 and reports of the CAG for the sector. 23. The medium term financial prospects of Tanzania appear to be sound with stable GDP growth. The Tanzanian economy is projected to achieve a rate of growth of approximately 7 percent in the medium term. The main drivers of growth, construction, communication and transport sectors are accompanied by an increase in public investment, including through the implementation of the BRN initiative. Domestic demand for communications, financial services, retail trade and construction is expected to remain sustained through technological changes and the rapid urbanization process. The rate of inflation is expected to remain steady at approximately 5 percent. The estimated fiscal deficit for 2014/15 is 3.7 percent with this figure declining to approximately 3 percent in future years. At these levels, the value of public debt will stabilize at the equivalent of 31 percent of GDP. 24. The share of 2014/15 budget allocated to priority sectors defined by MUKUTA II (which includes health) is around two-third of public resources, which is about five percent lower than in 2013/14. This decline is principally explained by the increase in the debt-service payment, which is anticipated to absorb close to 10 percent of total expenditures. The resulting limited fiscal space, due to the rapid growth in the level of public debt in recent years, constraints the Government’s commitment to finance fully the programs identified BRN initiative. 82 25. Health is a priority sector under the Big Results for Now (BRN) program starting 2015/16. However recognizing Figure 6: Total Health the constraints in fully financing the BRN initiatives in Expenditure by Financing 2014/15, the BRN in Health preparation process focused 100% largely on reducing inefficiencies and wastage in the sector 5% 3% 4% 90% than raising additional resources. As such, additional 80% 27% resources identified for BRN in Health over the 3 year period 40% 44% 48% 70% was US$100 million, significantly lower than that planned in 60% other BRN areas. 50% 42% 40% 25% 32% 26. Overall, Tanzania spends a significant share of GDP 27% 30% on health (7 percent). However, 48 percent of health spending 20% is from external financing (70 percent of which is off-budget) 25% 28% 26% 10% 21% while household out of pocket spending is 27 percent and 0% declining. Public sector share of total health spending is low 2002/03 2005/06 2009/10 2011/12 at about 21 percent while share of other private spending Public HH Donors Other (private firms) is marginal at 4 percent. 27. The share of health in the budget has been declining over the years and fell to 8.1 percent in 2014/15, down from 9.3 percent in 2013/14, despite increased local funding into the health sector. The per capita health budget in 2014/15 is around Tsh. 31,132, which is equivalent to a 14 percent decline in real terms compared to 2013/14, and only one-third of the target recommended by the WHO (US$54 per capita or TSh 91,800). A reversal in this trend is expected in the near future with local contribution to the sector continuing to increase and inclusion of Health in the Big Results Now (BRN) initiative. Through the support for the BRN initiative, the government is committed to increasing resources for primary health care. The government is also aiming to allocate about 80 percent of the resources under the BRN in Health initiative through PMORALG to LGAs. 28. While public spending in health appears to be Figure 7: Total Health Spending allocated efficiently along broad categories, there is still room by Provider, 2002/03 – 2011/12 for improvements in efficiency and reduced wastage. According to the 2011/12 NHA figures (Figure 7), hospitals 100% 5% 6% 13% receive about 29 percent of health funding, primary health 90% 31% 33% care about 28 percent, preventive health about 17 percent 80% 24% 13% while 13 percent is spent on administration. 70% 12% 5% 17% 60% 29. Resource flows for PHC are however fragmented 23% 27% 50% 16% through various MDAs, and LGAs are still fairly dependent 28% 40% on the central level for key inputs. In Tanzania, there are 30% 18% 18% three budget line items: personnel emoluments (PE), other charges (OC) and development. All non-salary recurrent 20% 39% 29% spending is within the OC. Fund flows to LGAs from 10% 23% 22% domestic resources are transferred directly from MOFEA as 0% 2002/03 2005/06 2009/10 2011/12 (i) PE block grants and (ii) recurrent health block grants Others Health Administration Providers of Preventive Service (LGA level OC). The rest are controlled by the central pool HC/DISP/CLINICS Hospitals and includes: (i) part of OC allocations through external 83 financing via MOHSW sent to LGAs (HBF) and (ii) medicines allocations which are transferred as goods instead of cash from MSD to LGAs. LGAs are therefore very reliant on the central level for key inputs that affect primary care service delivery. LGAs also receive own-sources revenues through user fees and other contributions such as CHF but given low enrollment in CHF program and high level of exemptions, these are a small share. 30. While increasingly the amount of resources Figure 8: Per capita LGA block allocated to LGAs for primary care provision, there is grant budget trends limited flexibility at the health facility level in its use. 12,000 LGAs are legal entities and are responsible for the delivery 10,000 of primary health care (district hospitals, health centers, 8,000 dispensaries, public health, and community health programs). In 2014/15, about 45 percent of the health 6,000 recurrent budget was allocated to LGAs through MOFEA 4,000 via block grants. On a per capita basis, the block grant 2,000 budget has increased from Tsh 8,099 in 2013-14 to Tsh 9,546 in 2014-15 due mainly to growth in the public - 2010-11 2011-12 2012-13 2013-14 2014-15 expenditure budget. The other costs budget has been Per capita OC Per capita PE relatively flat during the same time period (Figure 8). Therefore, LGAs are highly dependent on other sources of Total per capita financing OC in health, including from central government, from external financing, and from own sources, and from internally generated revenues. Figure 9: LGA level per capita Health 31. Geographic inequality in Health Block Grant (OC Block Grant Spending FY2014-15, as a and PE) distribution amongst LGAs remains substantial multiplier of average per capita spending and continues to widen. Equity between LGAs has been sorted in descending order traditionally assessed by plotting the ratio of per capita 4.00 funding an LGA receives over the average across all 3.50 LGAs. In Figure 5, LGAs plotted on the left receive the 3.00 highest allocations, while those on the right receive the 2.50 lowest. Due to incomplete budget or population data for 2.00 some districts, a total of 152 districts are assessed. 1.50 1.00 32. Figure 9 speaks strongly to the persistence of 0.50 highly unequal health block grant (OC and PE) distribution - amongst LGAs. Excluding Kibaha which has an unusually 100 109 118 127 136 145 1 10 19 28 37 46 55 64 73 82 91 high per capita budget of Tsh 52,655, the top five districts - Mwanga, Mafia, Kibaha and Kisarawe, and Siha average about 31,000 Tsh per Capita (3.25 times the national average); while the bottom five –Nzega, Itilima, Kyerva, Uvinza, and Bariadi average about 3035 Tsh per capita (0.32 times the national average). On a population basis, those in the privileged top 10 percent of the population get twice the national average; while the least privileged 10 percent get 40 percent of the national average. While comparison with previous year’s RBA is analysis is far from perfect given the incorporation of new districts and new population figures, increasing standard deviation in per capita health block grant spending at the LGA level (from 0.65 in 2013- 14 to 0.68 in 2014-15) suggests that inequality in resource distribution might be widening amongst 84 LGAs. For 2014-15, the variation is significantly lower in the OC than in PE (standard deviation of 0.60 and 0.72 respectively). 33. Given the huge variation in OC among LGAs, this program advocates for the government to adopt a formula that favors underserviced areas using a combination of population, poverty and health outputs similar to that of the HBF. Currently. MOFEA uses a population based formula to allocate OC to LGAs. The health basket fund (HBF) uses an equity based formula for the allocation of HBF resources to LGAs. The HBF criteria include: population (70 percent of weight), poverty (10 percent), health outputs (10 percent) and geographical constraints (10 percent). 34. Further, personnel distribution and retention has been a challenge in the country, especially for lower level health facilities, and for rural areas, resulting in lack of availability of qualified personnel at facilities. Through the BRN initiative, special attention is being provided for a more equitable distribution of skilled personnel from the public sector, especially for dispensaries and health centers. Additionally, through the public-private partnership, service level agreements are being signed with nongovernment organizations to provide quality PHC services in rural and underserved areas. Other measures planned include, settlement allowances for staff retention, incentives through the results-based financing mechanism to motivate staff for better performance at dispensary and health centers. Emphasis is also on preventive and early care (incentives in RBF to support ANC visit within the first 12 weeks). Community workers are also being incentivized to create the appropriate and timely referrals to health facilities. 35. New directives under the BRN in Health suggest greater fiscal decentralization to health facilities. While PE is directly allocated to staff bank accounts by MOFEA, decentralized OC budgets are allocated to the providers (health facilities) through the LGAs. LGAs however use their own discretion in allocating OC to health facilities and funds are not always for direct facility use. This hinder innovative solutions to solve local problems and ability of facilities to implement facility improvement plans. BRN in Health aims to strengthen fiscal decentralization through empowering facilities to plan and manage funds. LGAs would be required to transfer part of the resources (OC, HBF, council own source funds) directly to health facility bank accounts for facility level use. 36. Budget execution rate in the health sector in 2013/14 performed relatively well compared to other sectors, even though arrears have grown substantially. Overall, the health sector budget execution rate in 2013/14 declined to around 86 percent, down from 89 percent in 2012/13. However, the recurrent budget performed far better than the development budget, at 91 percent compared to 80 percent. With regards to the development budget, both foreign and local budget were under executed in 2013/14. Nevertheless, the execution of the locally funded component of the health budget was lower than the foreign funded component. Moreover, there is a buildup of arrears with Medical Stores Department (MSD), estimated to be around US$50-60 million by the end of 2013/14. Recognizing this, the Health Commodities work stream of the BRN focuses on improving governance, accountability, and sense of ownership of health commodities supply chain while strengthening management of MSD working capital for sustainable availability of medicines and medical supplies. 85 C. Program’s results framework and monitoring 37. The DLIs have been chosen to address the bottlenecks along the results chain that require incentivizing, with both ambition (“stretch”) and feasibility (“realism”) taken into account. All PDO and the intermediate results indicators were selected as DLI because of their ability to measure and incentivize key intended changes in the health sector. 38. A set of specific, measurable and relevant indicators was agreed with the GOT to monitor the program. As part of the M&E harmonization agenda under SWAP, the vast majority of Program indicators are extracted from the Government’s M&E framework (e.g. HSSP IV and BRN in Health indicators). This aims to increase the Government’s ownership in Program results and reduce fragmentations in M&E. As discussed in the M&E section above, Program results will be monitored through the routine health management information system or administrative data systems of MOHSW and PMO-RALG. This is a deliberate choice to (i) align Program’s monitoring methodology with that of the government; (ii) reduce the country’s reliance on surveys to generate data; (iii) maximize the use of routine information platforms; and (iv) help further strengthen the country’s information systems. 39. The cornerstone of PHC information system is the District Health Information System 2 (DHIS 2). Tanzania completed its country wide rollout of DHIS 2 in 2013 after deploying a revised health management information system tool national wide. Data from all PHC facilities in the country are now entered monthly in the National Data Warehouse through internet connections. 40. As part of monitoring progress towards the PDO, the Bank team will conduct regular implementation support missions based on the detailed implementation support plan (Annex 9), whose focus would be on timely implementation of the agreed program action plan (Annex 8), provision of necessary technical support, conduct of fiduciary reviews, and monitoring adherence to verification protocols, where appropriate. D. Governance structure and institutional arrangements 41. An adequate governance structure and coordination arrangements are in place to implement the program. Coordination mechanisms for the MOHSW and PMORALG to collaborate with each other as well as to coordinate with country stakeholders and external development partners are well established. A Steering Committee will be established between the key implementing agencies that will meet biannually. 42. In addition, as part of BRN, there are various mechanisms put in place by the GoT to ensure the program’s success results by holding various actors accountable for results at all levels along the hierarchy, from front-line providers to the office of the President. First, in BRN, there will be governance and delivery structures at different levels (e.g. Ministerial Delivery Unit, NKRA Steering Committee). Second, the proposed restructuring of the HBF will help foster the accountability of LGAs as discussed above. Third, RBF will introduce performance-based contracts with PHC facilities to hold them accountable for service delivery. Fourth, various social accountability mechanisms will be used in both BRN and RBF (e.g. Health Facility Committees, use of CSO for verification of results). Last but not least, very high level of country ownership in these two initiatives is a major enabling factor for future program results. 86 E. Economic analysis of the Program 43. The Program supports strengthening of the primary health care delivery system particularly maternal and neonatal child health services nationwide. Primary Health Care in Tanzania is provided at the community level (households and communities) and in health facilities (dispensaries, health centres and the district hospital). While a range of services are provided at the PHC level, services targeted towards women of reproductive age and children constitute the largest share. These include integrated management of childhood illnesses (IMCI), malaria, tuberculosis, HIV prevention and control, sexually transmitted infections (STIs), reproductive maternal and child health (RMCH) and prevention of mother to child transmission (PMTCT). Over the period 2009 to 2014, the number of health facilities and the number of health workers deployed have increased, but per capita utilisation of health services did not increase significantly primarily due to low perceived quality of care. 44. Quality improvement of primary health care is therefore a major focus of HSSP IV, propelled by the BRN in Health activities. The development of a certification and accreditation system for facilities will underscore this. Quality is also expected to improve through adequate supply of medicines and health products. Performance management systems (including provision of incentives for improved PHC quality especially at the local government and facility level) will further enhance quality as well as accountability of health workers. 45. This economic analysis covers (i) the rationale for public investment, (ii) the summary of costs and benefits and (iii) risk-sensitivity analysis. 46. Rationale for public investment. Government intervention in the health sector at the primary care level is strongly justified in Tanzania on the ground of improving equity, as well as positive externalities and public goods. The poor are highly dependent on the public sector for services, especially in the rural areas where choices are limited. However, quality of care in PHC facilities is low. Public subsidy is thus called for to improve quality of PHC care where there is poor access to services. Improved quality of care also means improved technical efficiency which should help reduce overall costs in the medium to long-term. The BRN in Health and the program, with an emphasis on increased resources to primary care encourages domestic funding to focus on areas where there is a clear role for government. Further under the health facility based incentives, facilities are incentivized for providing services to the extreme poor as identified by the conditional cash transfer (CCT under PSSN) program thus directly targeting those most in need. Additionally, as geographic inequality in health block grant distribution amongst LGAs remains substantial and continues to widen, the program emphasizes the allocation of resources in a more equitable manner including the promoting the use an equity formula for distribution of resources to LGAs. 47. The program supports strengthening fiscal decentralization to the level of the health facilities to foster innovation and cost-effective local solutions. Decentralization of service delivery in Tanzania is still incomplete with local governments still reliant on central levels for key inputs (medicines, part of operating cost funding etc.). The introduction of bank accounts at the facility level with clear financial management guidelines supported and incentivized by the program brings resources closer to where services are delivered and helps foster local solutions to shortages in health personnel and medicines. 87 Summary of Benefits and Costs 48. There is considerable amount of literature that points to the efficacy of primary care services. Primary care services is associated with improved control of routine illnesses that have serious consequences if left untreated. Availability of such services close to where the population reside improves patient satisfaction. Longitudinal care offered by primary care services reduces use of ancillary and laboratory services, leads to shorter lengths of stay at hospitals and improves patient compliance. 49. While primary care services are largely associated with reducing burden of disease and at a low cost, there are welfare benefits that accrue to a household as a result of prevention of severe disease. Severe disease can limit the ability of patients and care givers to work and lead to consumption of household assets in purchasing of care. Through prevention and early treatment, accessible primary care services can thus reduce consequences of ill-health for households, reduce absenteeism, and enhance children’s performance at school. 50. This section compares the costs of the Table 21: Tanzania, Demographic and Health program with the measurable benefits that arise Indicators (2004-5 and 2010) from the implementation of the program. 2004-5 2010 Economic benefits of the program are analyzed Total Population, in terms of infant and maternal deaths averted as millions 33,710,000 43,190,000 well as reduced productivity loss and illness cost Women of reproductive age loss. It should be noted that this is an - Share of pop. 23 24 underestimate of the actual economic impact of - Number 7,753,300 10,365,600 the program. Other benefits not quantified here Maternal mortality ratio include: poverty alleviation, psychological (MMR) 578 454 benefits of a healthy population, etc. No. of maternal deaths 8,261 7,620 Crude Birth Rate (CBR) 42.4 38.86 Infant mortality rate 51. The economic analysis simulates the (IMR) 68 51 number of infant and maternal deaths that would Neonatal mortality rate be averted as a result of the program over the (NNMR) 32 26 No. of infant deaths 97,193 85,597 No. of neonatal deaths 45,738 43,637 No. of new births 1,429,304 1,678,363 % of births delivered by professionals 46.3 50.6 % of births delivered at facilities 47.1 50.2 No of births by professionals 661,768 849,252 No of births at facilities 673,202 842,538 Source: Demographic and Health Survey, 2004-5 and 2010 88 period 2015-2035. It also assumes that use of services will improve primarily due to improvements in quality of care (less drug stock outs, access to qualified health personnel) and with the presence of more motivated staff that perform better as a result of the results-based financing and other interventions supported by the program. 52. The baseline information on morbidity profiles and use of services used in the analysis is from the Demographic Health Surveys (2005, Table 22: Causes of Death for Infants, 2010) (Table 21). The baseline for the causes of 2010 infant deaths in Tanzania is from the WHO database (2010) (Table 22). Percentage of infant deaths 53. Approximately half of infant deaths are Causes of Death among children in the neonatal age group (first 2005 (%) 2010 (%) month of life). Among neonates, sepsis and Neonatal period 47% 50% Neonatal tetanus 3% respiratory distress are the leading causes of death Severe infection 29% 19% and adequate care at birth or immediately after Birth asphyxia 27% 29% birth can significantly reduce mortality. Among Diarrhea, dehydration 3% 1% post-neonates, malaria, pneumonia, and dehydration due to diarrhea are the leading causes Congenital malformation 7% 7% of death. preterm births 23% 35% Others 8% 9% Assumptions Post-neonatal period 53% 50% HIV/AIDS 12% 9% 54. The analysis assumes that the program will Diarrhea, dehydration 23% 13% avert infant and maternal deaths as institutional Measles 1% 1% deliveries as well as quality of antenatal care Malaria 31% 17% increases. Additionally, reduction in morbidity Pneumonia 29% 20% and increased use of appropriate health services Injuries 3% 8% Others 32% further reduces mortality among infants. The analysis is run for three different sub-groups: (a) Source: WHO, 2006, 2012. neonates, (b) post-neonates, and (c) pregnant women. (Table 23) 55. Between 2005 and 2010, the annual increase in institutional deliveries was 1%. To calculate neonatal deaths averted, the model assumes that with improved quality of care, institutional deliveries will increase by about 5% per year during the program period (2015-2020). Following which, as a result of improved quality of care, institutional delivery will increase by 2% per annum. The model starts with 52% institutional delivery in 2015 and reaches 88% institutional delivery by 2034. 56. Further it is assumed that the risk of a neonatal death varies by place of delivery. For instance, in 2014, based on trend data using the Demographic Health Survey, the risk of a neonatal death at a health facility is 0.003. In comparison, the risk of a neonatal death at home is 0.04. As the quality of health services improves, the risk of a neonatal death at a health facility reduces (from 0.003 in 2015 to 0.001 in 2020). In addition, services quality improvements will further result in an increase in the share of institutional delivery thus having an exponential effect on the 89 number of neonatal deaths averted. Further as quality of antenatal care improves, the risk of a neonatal death further reduces. 57. For post-neonates, the intervention focuses on improved coverage and quality of care for malaria, pneumonia, diarrhea/dehydration and HIV. 58. A similar simulation was conducted to estimate the number of maternal deaths averted as a result of the program. Here, it is assumed that maternal deaths would be averted as more and more women receive quality antenatal care, deliver at health facilities or are assisted by skilled attendants and receive quality postnatal care within 48 hours of delivery. Maternal morbidity would also reduce as women seek treatment and comply with the treatment protocols (e.g. iron supplementation for anemia). Subsequently, less women would need additional care, resulting in savings in the cost of treatment and travel. Women’s productivity too would improve as their health status improves. 59. In 2014, based on trends from DHS data, the risk of a maternal death when delivering at a health facility is at 0.001 and when delivering at home is at 0.007 respectively. It is further assumed, that as a consequence of improved quality of health care, the risk of a maternal death at health facility and when the delivery is attended by a skilled attendant reduces during the program intervention period. 90 Table 23: Assumptions Used for the Simulations 2010- Intervention Assumptions 2012 2015 2016 2017 2018 2019 2020 2034 Remarks baseline 2005-2010 2015-2020 2021-2035 Neonates % birth delivered at health 51% 52% 55% 57% 60% 63% 66% 88% annual increase annual increase annual increase by 2% facilities by 1% by 5% % births delivered at home 49% 48% 45% 43% 40% 37% 34% 12% Risk of dying if delivered by 0.003 0.003 0.002 0.002 0.002 0.002 0.002 0.002 risk of dying reduced risk of no change in risk after skilled birth attendant went from dying due to intervention period 0.014 to 0.008 improved quality of care Risk of dying if delivered at home 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 Share of causes of death for post-neonates: Measles no change in 1% 1% 1% 1% 1% 1% 1% 1% share Pneumonia 20% 20% 18% 16% 13% 11% 10% 2% 5% reduction 50% reduction 10% reduction post pre intervention during intervention period period intervention period Malaria 17% 17% 15% 13% 11% 9% 8% 2% 5% reduction 50% reduction 10% reduction post pre intervention during intervention period period intervention period Diarrhea 13% 13% 11% 10% 9% 8% 7% 2% 5% reduction 50% reduction 10% reduction post pre intervention during intervention period period intervention period HIV 9% 9% 8% 8% 7% 7% 6% 1% 5% reduction 50% reduction 10% reduction post pre intervention during intervention period period intervention period Other causes 5% reductions 2% reduction post during intervention period intervention period Maternal health Risk of dying if delivered at 0.001 0.001 0.0009 0.0008 0.0007 0.0006 0.0005 0.0005 risk of dying reduced risk of no change in risk after health facilities went from dying due to intervention period 0.0011 to improved quality 0.0003 of care Risk of dying if delivered at home 0.0073 0.0073 0.0073 0.0073 0.0073 0.0073 0.0073 0.0073 91 Figure 10: Infant Mortality Rate Projection, 2000 to 2034 60. The simulation shows several benefits. As shown in Figure 10, infant mortality rate reduces over time from 120 37 per 1,000 live births in 2015 to 14 infant deaths per 1,000 live births by 100 2034. 80 61. Table 24 provides the results of the simulation model of the number 60 of infant and neonatal deaths averted during the program period. Here we 40 assume that 40% of the program cost is allocated for improvements in child 20 health. It is also estimated that the cost of year of life gained (YLG) is US$6, 0 and the cost per disability adjusted life 2000 2005 2010 2015 2020 2025 2030 2034 years (DALY) is US$10 during the infant mortality rate postneonatal mortality rate program intervention period. neonatal mortality rate 62. Maternal mortality ratio too Source: Bank staff calculations. Note: actuals are for 2000-2010. reduces over time from 410 maternal Projections are for 2015 to 2034. deaths per 100,000 live births in 2015 to 135 maternal deaths per 100,000 live births by 2034 (Figure 11). Table 24: Results of the economic analysis for averted infant and neonatal death (2015- 2020) Interventio Number Year n Averted infant deaths of Years of YLG DALY DALY Neonata Post- Infant life childbirth l neonatal lives gained sum sum attended Saved (NPV) (NPV) (NPV) (NPV) baselin 2014 e 51% total total project project project project project 2015 52% 1034 0 1034 60,063 33,570 1,231,36 2016 55% 4164 15997 21196 8 688,230 2,684,97 1,500,67 2017 57% 6482 18539 46217 1 1 4,442,51 2,482,99 2018 60% 9044 21209 76470 8 0 6,505,80 12,245,80 3,636,19 2019 63% 11868 23648 111985 4 7 2 6,844,366 8,745,54 18,771,86 4,888,01 10,491,88 2020 66% 14149 24404 150538 7 9 8 0 92 Figure 11: Maternal mortality ratio projections, 1990-2034 MMR 700 600 578 500 529 trend given actual 454 400 410 300 279 trend given intervention 232 200 180 trend given MDG targets 133 135 100 0 1993 1996 2006 2010 2014 2020 2025 2030 2034 MMR Year MDG Source: Bank staff calculations. Note: Actuals are for 1990 to 2014. Projections are for 2020 to 2034. 63. Table 25 presents the costs and the measurable economic benefits that arise from the implementation of the program. It shows savings incurred due to death or morbidity averted. In 2011/12, the per capita health spending in Tanzania was US$45 (NHA). Assuming 3% inflation, per capita health spending in future years is calculated. For women’s health, it is assumed that US$100 is saved in health spending due to each case of mortality and morbidity averted. Further, reductions in ill-health would reduce absenteeism and this result in productivity gains as earning potential increases. GDP per capita is used as a proxy for earnings potential, while inflation is assumed to be 3% per year. A five percent discount rate is assumed while estimating future costs and benefits. 64. By 2034, it is expected that as many as 1 million infant and neonatal deaths are averted, as are 84,000 maternal deaths. While the analysis focuses on infant and maternal deaths, many of these interventions would also reduce infant and maternal distress and morbidity. Consequently, total health benefits, as measured by a composite measure such as disability-adjusted life years would be significantly greater. 65. The program reaches a positive net present value (NPV) by 2029 (or in its 14th year after program effectiveness). The net benefits accruing to the country are maximized thereafter. We find that the internal rate of return (IRR) is positive but reaches the discount rate level by 2030 (or at 15 years from program effectiveness) making the program an acceptable investment. 93 Table 25: Net Present Value and Internal Rate of Return (2015-2035) Averted for child Averted for mother Program Productivity Illness Productivity Illness Total Discount Discounted incremental cost Program Net Discount Discounted NPV IRR Loss, $ Cost, $ Loss. $ Cost, $ Benefits $ rate r=5% Benefits (MNCH) $ Benefits $ Rate 5% Net Benefits $ $ Year 0 1 - 1 - 2014 46,524 121,767 3,971 172,262 1.05 164,059 49,000,000 (48,827,738) 1.05 (46,502,608) (46,502,608) 2015 1,011,892 448,989 14,642 1,475,523 1.10 1,338,343 48,000,000 (46,524,477) 1.10 (42,199,072) (88,701,680) 2016 2,272,601 836,429 27,276 3,136,307 1.16 2,709,260 64,000,000 (60,863,693) 1.16 (52,576,346) (141,278,026) 2017 3,873,023 1,292,436 42,147 5,207,606 1.22 4,284,310 39,000,000 (33,792,394) 1.22 (27,801,086) (169,079,112) 2018 5,841,967 1,826,442 59,561 7,727,970 1.28 6,055,067 60,000,000 (52,272,030) 1.28 (40,956,503) (210,035,615) 2019 8,088,767 2,314,036 75,462 10,478,265 1.34 7,819,043 10,478,265 1.34 7,819,043 (202,216,572) 2020 10,650,865 2,618,105 85,378 13,354,348 1.41 9,490,686 13,354,348 1.41 9,490,686 (192,725,886) 2021 13,553,919 2,952,940 96,297 16,603,157 1.48 11,237,670 16,603,157 1.48 11,237,670 (181,488,216) 2022 16,825,778 3,321,325 108,310 20,255,413 1.55 13,056,820 20,255,413 1.55 13,056,820 (168,431,396) 2023 20,496,807 3,726,452 121,522 24,344,781 1.63 14,945,584 24,344,781 1.63 14,945,584 (153,485,812) 2024 933,092 24,442,891 3,983,808 129,914 29,489,706 1.71 17,242,020 29,489,706 1.71 17,242,020 (136,243,792) (0) 2025 19,703,415 28,836,706 4,450,781 145,143 53,136,044 1.80 29,588,138 53,136,044 1.80 29,588,138 (106,655,654) -10% 2026 44,251,758 33,715,199 4,963,085 161,849 83,091,892 1.89 44,065,404 83,091,892 1.89 44,065,404 (62,590,250) -4% 2027 75,414,947 39,118,429 5,524,779 180,166 120,238,322 1.98 60,728,523 120,238,322 1.98 60,728,523 (1,861,727) 0% 2028 113,753,926 45,244,739 6,140,035 200,230 165,338,931 2.08 79,530,853 165,338,931 2.08 79,530,853 77,669,126 3% 2029 157,503,300 51,634,738 6,552,356 213,676 215,904,070 2.18 98,908,142 215,904,070 2.18 98,908,142 176,577,268 6% 2030 207,392,104 58,666,143 7,260,737 236,777 273,555,761 2.29 119,351,472 273,555,761 2.29 119,351,472 295,928,740 8% 2031 263,919,947 66,391,327 8,034,860 262,022 338,608,156 2.41 140,698,683 338,608,156 2.41 140,698,683 436,627,423 10% 2032 327,629,116 74,866,698 8,880,106 289,586 411,665,506 2.53 162,910,020 411,665,506 2.53 162,910,020 599,537,443 11% 2033 399,110,853 84,153,058 9,802,351 319,661 493,385,922 2.65 185,951,965 493,385,922 2.65 185,951,965 785,489,408 12% 2034 475,948,441 93,991,121 10,348,334 337,466 580,625,362 2.79 208,411,040 580,625,362 2.79 208,411,040 993,900,448 13% 2035 94 Risk-sensitivity analysis 66. The above simulation has taken three scenarios: (a) scenario 1 - status quo, (b) scenario 2 - reduced mortality rates as a result of increased institutional delivery by an annual increment of 5% reaching 66% institutional delivery by 2020, and (c) scenario 3 - reduced mortality rates as a result of increased institutional delivery by an increment of 10% reaching 80% institutional delivery by 2020. The sections above show the results of scenario 2 as compared to scenario 1. When the model is re-run for scenario 3, we find a positive NPV by 2028 (13th year), and IRR is positive and reaches the discount rate by 2029 (14th year). 67. A sensitivity analysis was conducted using variable discount rates of 5% and 12%, and variable institutional deliveries by 2020 of 66% and 80%. The results are shown in Table 26. Table 26: Sensitivity Analysis Net Present Value, $ Institutional delivery by 2020 Discount rate of 5% 66% 80% Positive NPV 77,669,126 43,395,116 (year) 2029 2028 Positive NPV and IRR above discount rate of 5% 176,577,268 136,913,336 (year) 2030 2029 Discount rate of 12% Positive NPV 29,084,054 24,679,887 (year) 2031 2030 Positive NPV and IRR above discount rate of 12% -- --- (year) beyond 2035 beyond 2035 Technical risks 68. The program designed by the GOT is technically sound and the risk of non-implementation of program activities is low given the fact that detailed implementation plans with time-bound actions, good division of labor, clear accountability and M&E mechanisms have been developed for all work streams under BRN in Health. Some of the BRN in Health activities are already under implementation such as the “Star Rating” initiative. Although the limited capacity of program implementers remains a concern, the program’s annual capacity building plans are expected to help address this issue. 69. In summary, any residual risks related to technical design, implementation and M&E will be mitigated through the use of DLIs, Program’s annual capacity building as well as TA to be financed through parallel financing from development partners. These are summarized in Table 27. 95 Table 27: Technical Assessment: Key Risks and Mitigation Strategies Risks Mitigation Technical Design Insufficient financing for the program - TA for HSSP IV costing and budgetary framework - TA for development of Health Financing Strategy - DLI 1 minimum condition on share of health in GOT’s recurrent expenditures New approaches (e.g. “Star Rating” - Careful pilots with assessments to improve the accreditation, RBF) being implemented on a design significant scale in Tanzania for the first time - Impact evaluation of selected activities (e.g. RBF) to generate the evidence base for policy making - GOT’s own mechanisms for adaptive implementation such as periodic BRN in Health check-ins; mid-term review of the HBF for fine- tuning as needed High intensity of RBF activity - Gradual roll-out Program’s imbalance between focus on - Thorough analysis and stakeholder consultations processes and actual results to strike a balance between (i) key service delivery results and (ii) key bottlenecks in processes which need to be tackled to deliver such key service delivery results Risk of non-implementation of certain Program activities Non-implementation due to poor planning - Detailed implementation plans developed, with specific time-bound actions - DLI 1 minimum condition to improve planning at the council level Non-implementation due to lack of - Accountability mechanisms for each level of accountability implementers - Higher levels are also held accountable for results at the lower levels - DLIs to stimulate performance at every single level: national, regional, LGAs and PHC facilities Non-implementation due to lack of capacity - Detailed annual capacity building plans under the Program for all level - DLI criterion related to the development and implementation of such plans - TA provided by development partners though parallel financing Risks related to M&E HMIS does not produce quality data on a - TA for DHIS-2 timely manner - GOT’s plan on Data Quality Audit (DQA) by RHMTs for LGAs under the Program - DLI criterion related to (i) quality of HMIS data (ii) DQA Lack of information on denominators in - CRVS initiative routine health statistics - Incentives for CHW and PHC facilities under RBF to fulfill their respective roles in CRVS 96 Annex 5: Summary Fiduciary Systems Assessment 1. A fiduciary systems assessment (FSA), which involves the assessment of governance and anti-corruption mechanisms, procurement and financial management systems was carried out at the M)HSW, PMORALG, MSD, a sample of 8 regional administrations, 22 local government authorities (LGAs) and 38 health facilities in line with Operational Policy/Bank Procedure (OP/BP) 9.00, Program-for-Results Financing. Teams visited these sampled areas to collect this data. The assessment takes into consideration the BRN healthcare NKRA Lab report; Controller and Auditor General’s Report for LGAs and Central Government for FY13; Tanzania PEFA reports for 2006, 2010 and 2013; Annual Performance Evaluation Report of the Public Procurement Regulatory Authority (PPRA); the Procurement and Value for Money Audit reports of selected LGAs and specific assessments done on MOHSW, PMORALG and MSD. 2. The FSA covers institutional and implementation arrangements, fiduciary management capacity and implementation performance. The legal and regulatory framework for this Program’s fiduciary systems was found to be comprehensive and in line with international principles and standards for public procurement and financial management. At the facility level, PHC facilities are not currently managing any financial and procurement activities. In that regard fiduciary systems’ analysis was carried out at the LGAs and MDAs. The assessment also considered how existing systems handle the risks of fraud and corruption. A. Institutional Framework and Implementation Arrangements Legal Framework for Public Financial Management 3. The 1977 Constitution of the United Republic of Tanzania underpins the legal framework for Public Financial Management (PFM), and there are various laws that relate to PFM. The table below provides PFM-related laws that will be applicable to the program. Table 28: PFM related legislation in Tanzania Area Description Budget preparation, execution, reporting & • Public Finance Act 2001, amended 2004 & 2010. accounting. • Public Procurement Act, 2011 • Budget Act 2015 Decentralization Local Government Finance Act 1982. External Audit Public Audit Act 2011 Legislative Oversight The Constitution and the Standing Orders of the National Assembly. Source: Government of Tanzania 2013 PEFA Report. Financial Management 4. The Government of Tanzania has undertaken a number of Public Financial Management (PFM) reforms and is now in its fourth PFM Reform Program which commenced on July 1, 2012. 97 However, the Public Expenditure and Financial Accountability (PEFA) 34 Performance Indicators for Tanzania for 2006, 2010, and 2013 show mixed results as shown in Figure 12 below. Figure 12: Tanzania Average PEFA Scores for 2006, 2010, and 2013 Average scores (A=4 & D=1) 3.5 3 2.5 2 1.5 1 0.5 0 Credibility comprehen Policy- Predictabil Accountin External Donor of the siveness Based ity and g Scrutiny Practices budget and Budgeting control in Recording and Audit (D: 1-3) (PI: 1-4) transparen (PI: 11-12) budget and (PI: 26-28) cy (PI: 5- Execution Reporting 10) (PI: 13-21) (PI: 22-25) 2006 3.25 2.67 3 2 2.5 1.67 2 2010 2.5 2.33 2 2.3 1.75 2 2.67 2013 2 2.5 2.5 2.4 2 2 3 5. These findings show improvements in predictability and control in budget execution since 2006 although much more remains to be done in relation to the effectiveness of internal controls for non-salary expenditures (PI 35 20). There are also improvements since 2010 in policy based budgeting and accounting, recording and reporting although the timeliness and regularity of accounts reconciliations (PI 22) needs to improve. External scrutiny and audit has not improved since 2010. There are concerns about the credibility of the budget whose performance has been declining since 2006 mainly because of the composition of expenditure out-turn compared to original approved budget (PI 2) arising out of cash rationing due to resource uncertainty, commitment controls being bypassed and insufficient access to excess liquidity in GoT bank accounts held in commercial banks. As a result expenditure arrears have accumulated and they are paid out of budgets in the following years at the expense of planned service delivery. 6. The Legal and Regulatory Framework for this program’s procurement will be governed by the new Public Procurement Act of 2011 (PPA 2011) and attendant Regulations 2013. Procurements at the Ministry of Health and Social Welfare (MoHSW), the Prime Minister Office Regional Administration and Local Governments (PMO-RALG), Medical Stores Department (MSD) and Local Government Authorities (LGAs) will follow the Public Procurement Act No.7 of 2011 and the associated Regulations of December 2013 as well as Regulations for Local 34 PEFA is a global partnership of bilateral and multilateral donors including the World Bank formed to assess the condition of countries’ public expenditure, procurement, and financial accountability systems and to develop a Practical sequence of reform and capacity-building actions (http://www.pefa.org/). 35 PI stands for Performance Indicator. 98 Government Authorities (Establishment and Proceeding of Tender Boards) of 2007. Under the PPA 2011, the procurement functions remain decentralized to procuring entities while the Public Procurement Regulatory Authority (PPRA) continues to provide oversight functions. The PPA 2011 has strengthened some of the mandate of PPRA including the power to cancel procurement proceedings after conducting an investigation and being reasonably satisfied that there is a breach of the Act and its Regulations. 7. The PPA 2011 has enhanced the definition of fraud and corruption in broader terms by including definitions of coercive practices, collusive practices and obstruction that was missing in the PPA 2004. Furthermore, the PPA 2011 vests powers in the PPRA to blacklist and debar a bidder who has been debarred by international organizations, such as the World Bank, in cases related or unrelated to fraud and corruption for such period as is debarred by the international organization plus a further period of 10 years (for fraud and corruption cases) or five years (for non-fraud and corruption cases). 8. For the implementation of the Act, a set of regulations have been issued; the Public Procurement Regulations, 2013; Government Notice No. 446 of December 20, 2013. These are supplemented by the local government authorities’ (Establishment and Proceeding of the Tender Boards) Government Notice No.177 of 2007 for procurements under the local government authorities. In line with the issued regulations, various documents have been revised as working tools to be in line with PPA 2011; including standard bidding documents (Procurement of Works, Procurement of Goods and Procurement of Non-consulting Services), Standard Request for Proposals, Guidelines on the Tenders Evaluation (Works, Goods and Non-consulting Services), Guidelines on the Technical & Financial Proposals Evaluation and Report Preparation, Guidelines for Preparing Responsive Proposal, Guidelines for Preparing Responsive Bids and Procedural Forms. All these documents are accessible on the PPRA’s website free of charge. 9. Procurement of medicines and medical supplies under PPA 2011 and its Regulations. The Regulations made under the PPA 2011 have provisions dealing with procurement of medicines and medical supplies, including maintaining a list of catalogue items to be published on a yearly basis in the Tenders Portal and Journal managed by PPRA. The MSD is mandated to arrange for procurement of catalogue items. MSD may through framework agreements, source catalogue items by placing call-off orders; such framework agreements, should be of no more than three years. Under this arrangement, the procuring entities are required to place orders to MSD for any item included in the price catalogue within one working day of reaching the buffer stock. In the event that the catalogue items requested are not available, MSD is required within one working day of receipt of the request to issue a non-availability (out of stock) notice to the procuring entities so that they can opt for another appropriate procurement method. 10. Procurement arrangements of medicines and medical supplies at the facility levels: In principle, no procurement of medicine and medical supplies is undertaken at the facility level. MSD is charged with responsibility of procuring medicines and medical suppliers and distributing directly to government hospitals including accredited private referral hospitals/facility, district hospitals, health centers and dispensaries. LGAs undertake procurement of medicines and medical supplies only when they receive the non-availability notice from MSD and procure using the funds allocated in their budget. In this case, after receiving such notice, facilities channel their requirements to DMO who consolidates all requirements including district hospitals’ requirements 99 prior to forwarding the same to the District Executive Director (DED) for sanction and subsequent submission to PMU for processing. PMUs are responsible for managing all procurement of medicines and medical supplies. During the assessment, it was noted that medicines and medical supplies are procured from private vendors through competitive quotations as a default method from the pre-qualified suppliers by LGAs. B. Program Fiduciary Performance Financial Management Risk Consideration i. Planning and Budgeting Overall FM objective - the program budget is realistic, is prepared with due regard to government policy, and is implemented in an orderly and predictable manner. 11. The planning and budget preparation processes are considered reasonably participatory and adequate for the program. The main shortcoming established during the assessment is the (very) late availability of budget ceilings from the MoF contrary to requirements of the budget guidelines. Furthermore it was noted that facilities have inadequate knowledge on planning, budgeting, monitoring and reporting. The CCHP Guidelines do not include revenue budget, and therefore facilities are not required to prepare revenue budgets. Staff and members of facility governing committees therefore will require capacity building in planning, budget preparation, monitoring and reporting, including the use of the Planning and Reporting tool (PlanRep). In addition, the PlanRep structure will need to be adapted to recognize primary health facilities as budgeting entities. ii. Accounting and Financial Reporting Overall FM objective - adequate program records are maintained, and financial reports produced and disseminated for decision-making, management, and program reporting. 12. The accounting policies and procedures for both central and local government (Local Government Accounting Manual) are robust but there is the need to enhance the skills of staff, especially at LGAs on how to utilize them effectively whilst producing accounts. The Epicor accounting software produces financial statements but at local government level it needs its chart of accounts to be revised as it cannot show which Development Partner is funding the program. In addition, the connectivity of the Epicor system needs to be improved as it creates inefficiency in producing accounts. There is also a need to activate the asset management module of the system in order to record assets on the system and compute depreciation. The PlanRep tool is used for planning and budgeting at the LGAs but once the budget is complete, the tool cannot automatically upload the budget to Epicor. This is manually done and subject to errors. In order to address the matter, the installation of an integrator for the two systems is currently being worked on. Finally, the reporting module for Epicor needs to be enhanced in order to produce useful reports for management to take action. 13. Given that this will be a large and complex program covering the whole country, there is a risk that there will be delays in submission of accurate financial reports given that there could be communication challenges between the Health Facilities and the LGAs. There will be a need to 100 train staff in order to enhance their skills in planning and reporting. Also, PMO-RALG and MOHSW should jointly develop (i) appropriate standardized reporting templates to capture FM data required for program monitoring and (ii) an annual action plan. 14. LGAs do not have adequate capacity in terms of staff numbers, skills and working tools, e.g. computers and vehicles for effective discharge of their duties given that they will have to visit health facilities to conduct supervision. Staff technical skills in accounting should be strengthened and working tools provided to address this issue. In accordance with the recent Establishment Order, employment of accounting technicians has commenced. These technicians will provide first line FM support to health facilities and bridge the existing supervision gap between council headquarter and facilities. These technicians will need to be equipped for movement around facilities under their jurisdiction, preferably by paying them a monthly tax-free transport allowance. iii. Treasury Management and Funds Flow Overall FM objective - adequate and timely funds are available to finance program implementation. 15. No designated or special accounts will be needed for this operation. Funds will flow from IDA and World Bank-managed trust funds into three separate government-owned holding accounts for (i) HBF, (ii) RBF, and (iii) central support respectively. All of them are at the BOT and denominated in United States Dollars. From there funds will be transferred to the consolidated fund sub-account for the program denominated in local currency also at the BoT. MoHSW, PMO- RALG, LGAs and health facilities will be paid through the Exchequer Issue Notification and transfers from the consolidated fund sub-account for the program will be made directly to their bank accounts mainly held by commercial banks. Payments will then be made from these accounts. The details of the holding accounts for HBF, RBF and central support as well as the consolidated fund sub-account at BoT and their signatories should be submitted to the Bank between the signing of the Credit and its effectiveness. The opening of bank accounts at MoHSW, PMO-RALG, LGAs and HFs should be in line with the existing government guidelines as issued by the Accountant General. The chart of accounts in Epicor will need to be expanded to incorporate individual facility bank accounts in order to capture funds transfers as revenue and payments as expenditure. This will make it easier for audit verification of program funded transactions. 16. The FM assessment revealed instances of delays in release of funds from Treasury to LGAs. On average funds take at least 30 days to reach the LGAs as opposed to the standard 14 days. There is need to adhere to specific disbursement timelines for all actors and implementing institutions within which action(s) must be taken or actual disbursement must take place provided funds are available for program implementation and disbursement conditions fulfilled. There is concern regarding the unpredictable nature of releases by the Ministry of Finance (MoF). Without reasonable predictability, it is difficult to plan. MoF needs to ensure regularity in funds releases by committing to transfer funds on a quarterly basis. PMO-RALG should monitor this and ensure prompt transfer of own source funds to health facilities by LGAs. 101 Figure 13: Funds Flow Diagram for the Program GOT IDA HBF DPs USAID TF ANIS TF GFF GOT US$ GOT US$ Holding Account at BOT GOT US$ Holding For Central Support Holding Account at BOT (Capacity Building & Support to Account at BOT For RBF National RMNCAH Program) For HBF Project Sub-account(s) in the Consolidated Fund Account at BOT Commercial Bank appointed by ACCGEN PMO-RALG MOHSW Lump sum to a Commercial Bank; Development Development Account Bank transfers to RAS, DED & Account health facilities’ bank accounts iv. Internal Controls (including Internal Audit) Overall FM element objective - There are satisfactory arrangements to monitor, evaluate, and validate program results and to exercise control over and stewardship of program funds. 17. The basis for internal control procedures in LGAs is: the Local Authority Accounting Manual (LAAM) of 2009 and the Local Authority Financial Memorandum (LAFM) of 2010. The two documents set out detailed processes to be followed and documentation necessary for comprehensive accounting system, segregation of duties, approval hierarchies and filing of documents. However, in view of regular observations made and audit issues raised by the Controller and Auditor General in annual reports, recommended procedures are not always adhered to. The figure below presents an evaluation of internal control systems and good governance issues at LGAs for the year 2012/2013. 102 Figure 14: Analysis of Internal Control Weaknesses at LGAs Absence of documented fraud prevention 67 strategy/ plan Inefficient performance of epicor and/ or Lawson 78 Absence of risk management & assessment 57 Inadequate performance of audit committees 91 Inadequate performance of IAUs 104 ICT environment review & accounting systems 106 0 20 40 60 80 100 120 Source: Controller and Auditor General External Audit Report on Local Government Authorities FY 2012/2013. 18. The government has taken a number of initiatives to address non-compliance and strengthen oversight to ensure that audit findings are addressed timely and adequately by ministries and LGAs. Steps taken include creation of an internal audit unit in each ministry and LGA and the appointment of the Internal Auditor General with five assistants, including an Assistant Internal Auditor General responsible for LGAs; and strengthening of the three parliamentary oversight committees which include: the Public Accounts Committee (PAC), the Local Authorities Accounts Committee (LAAC), and the PMO-RALG Audit Committee have also been strengthened in terms of training and providing adequate funds for PAC to carry out its duties. However, despite having internal audit units, a number of challenges remain; they include internal auditors not having access to Epicor 9.05 and therefore not able to audit the system. 19. A review of internal audit units at the LGA level revealed they were under-resourced in terms number of staff, skills and working tools. Very few internal auditors had professional qualifications and, in all visited councils, internal audit was regarded as an accounting discipline hence the need to sensitize LGAs about the role of internal audit. Furthermore, council audit committees were noted to be generally weak and ineffective. PMO-RALG needs to review the composition and structure of audit committee at LGAs to enhance independence and quality of membership. 103 v. External Audit Overall FM objective - adequate independent audit and verification arrangements are in place and take account of the country context and the nature and overall risk assessment of the program. 20. The Public Audit Act No. 11 of 2008 grants the Controller and Auditor General (CAG) sole responsibility for statutory audit of all MDAs and LGAs 36 . CAG discharges this responsibility either directly or through private auditors contracted as agents. Outsourcing of the audits partly solves the challenge of staff constraints at the CAG office. The CAG has regularly carried out external audits on time and issued reports within nine months of the year end, as stipulated under the law. The program will need to budget for the audit of health facilities using private audit firms. As noted in the PEFA indicators, there are delays in the scrutiny of CAG’s reports by relevant parliamentary committees that need to be improved on. Audit terms of reference should be agreed on an annual basis between CAG, MoHSW, PMO-RALG, LGAs and IDA to ensure there is an agreeable scope coverage given the risk of the program. Should there be need to conduct other forms of audit, e.g. forensic and value for money audits, these will be done by CAG that has departments handling these types of audit. C. Procurement Risk Considerations 21. Main areas of significant risk to the program are: inadequate staffing in LGAs specifically in the procurement and internal audit unit; staff have inadequate knowledge of PPA 2011 and its regulations, planning, bidding documents & request for proposals preparation and evaluation of bids/proposals; and inefficiencies in managing procurement processes, delays in vetting contracts above TZS 50 million by the AG; weak records filing and management system and weak contract management. These risks will need to be addressed, monitored and evaluated throughout the program. 22. Procurement Planning. The PPA and its regulations require all procuring entities to prepare annual procurement plans linked with annual work plan and budget. It is also mandatory for procuring entities to advertise the Annual Procurement Plans in the form of general procurement notice in the newspapers and submit a copy to PPRA for publishing in its website and for monitoring purpose. Based on the data gathered from LGAs visited, the average volume of procurement per LGA is about Tsh 10 billion or US$5 million per annum covering all sectors including health. This volume is translated into about 100 packages for goods, works and non- consultant services per year with most of the packages not exceeding the value of US$500,000.00. During the assessment, it was noted that planning of procurement of medicines and medical supplies commence at the district hospitals, health centers and dispensaries level whereby each hospital, health center and dispensary identify their needs. The aggregation of medicines and medical supplies to be procured for the financial year is done at the district level and included in the LGAs’ procurement plans ready for submission to the responsible ministry for final compilation before tabling to the budgetary parliament. The Bank’s assessment found that most of the plans are not comprehensively prepared, user requirements are included in the APP with no 36 Audit at LGAs is governed by the Local Government Finances Act No.9 of 1982 (revised 2000) which stipulates that accounts of every LGA shall be audited by the National Audit Office (NAO) 104 aggregation, mixing of the templates for works/goods and consultancy services, some of the APP include non-procurable items. 23. Procurement Markets and Practices. PPRA is registering suppliers and service providers doing business with the public sector and post the same to its website. By September 2013, only 324 suppliers and service providers had been registered since the system for registration was introduced; only 10 (3%) of these are suppliers of medicines and medical supplies and equipment. It was observed that LGAs are using shortlisted suppliers pre-qualified through NCB. However, there are legal requirements that pharmaceuticals have to be registered with the Tanzania Food and Drugs Authority (TDFA). Most of the pharmaceutical products in the country are imported by MSD and the law requires that any person dealing with importation of the products must be registered by TFDA. 24. Procurement Processes and Procedures. The PPA and its associated regulations require procuring entities wishing to commence competitive tendering to provide all eligible bidders with timely and adequate notification of the procuring entity’s requirements and an equal opportunity to tender for the required goods, works or services. The regulations spell out the contents of invitation to tender and it is mandatory that invitations to tender be made in writing. The format of advertisement used to publish the advertisement is issued by PPRA and it contains adequate information to the prospective bidders to make decision to participate. It is mandatory that the solicitation documents be issued immediately after first publication of the tender notice to all bidders who respond to the tender notice. Under PPA 2011, it is mandatory for procuring entities to prepare a tender notice for national and international tenders and submit the same to PPRA for publication in the Journal and Tenders Portal. 25. Bidding Documents used are those developed by PPRA including: (i) standard bidding documents for the procurement of goods, works, and non-consulting services as well as standard request for quotations; (ii) request for proposal for selection and employment of consultants; and (iii) guidelines for evaluation of bids and proposals. The PPRA has revised all standard bidding documents, guidelines and working tools to align them with the provision of PPA 2011 and its regulations. The standard bidding documents issued by PPRA have been reviewed and found to be acceptable to the Bank with some exception on NCB procedures. However, the challenge has been to customize the bidding documents to suit the requirements of a particular procurement. Generally all the LGAs are using these bidding documents. As for the specifications for medicines and medical supplies, LGAs rely on the specifications and catalogue issued by MSD. In terms of specifications especially for works contracts, LGAs rely very much on the specification issued by the Ministry of Works with minor modifications depending on the circumstance. 26. Bids evaluations are carried out by an evaluation committee constituted according to the PPA and it Regulations. Evaluation committee comprises members from the user departments, technical staff and sometimes from outside the LGAs where expertise is lacking internally. Generally, evaluations follow the evaluation/qualification criteria specified in the bidding documents. However, the following weaknesses were noted in the reviewed sample; post- qualification criteria are used in the preliminary stage; bids are rejected for being below engineer’s estimate (works tenders); attachments such as a copy of advertisement and minutes of bids opening are not attached. 105 27. Distribution of medicines and medical supplies, storage and inventory management. Procurement of bulk medicines and medical supplies is done by MSD headquarter through nine strategic zonal centers. The inspection and quality assurance of deliveries from suppliers is carried out at MSD laboratories. The zonal stores have the responsibility of delivering medicines and medical supplies to the respective hospitals, health centers and dispensaries in accordance with the schedule agreed between the end users and MSD. The assessment revealed that MSD is not issuing non-availability notice within one day as provided in the PPA 2011 and its Regulations 2013. Hospitals, health centers and dispensaries normally receive non-availability notice when medicines are delivered as the notice is contained in the delivery notes which indicate items that are out of stock. 28. The inspection of the delivered medicines and medical supplies at the level of district hospitals is done by the Therapeutic Committee while at the health centers and dispensaries it is done by the Health Facility Governing Committee. Generally, there is no robust quality assurance system at the facilities level for the medicines supplied by private vendors apart from visual inspection and quantity verification. The main challenge noted by the assessment team was inadequate space/room for safe and proper storage of medicines. The assessment team observed lack of internal and external control mechanisms for inventory management. There was no evidence to attest whether stock-takings at the facility level were done regularly. 29. Inefficiency within User Departments, PMUs and Tender Boards. Significant delays have been noted in processing procurement. Timelines indicated in the procurement plans are not followed and procurement processes are not initiated on time due to delays in preparing specifications, statement of requirement or terms of reference. Critical areas with inefficiencies included processing of requirements from user departments, preparing tender documents, delays in appointing evaluation committees, reviewing tender evaluation reports and preparing contract documents. The main reasons for inefficiencies within PMUs include: excessive ad hoc procurement due to poor planning; inadequate staff in PMUs; inadequate knowledge and experience in procurement matters for some of the PMUs staff; lack of experienced technical staff within PMUs (inappropriate staff composition); inappropriate PMUs structure; and weak procurement records management systems. The main reasons for inefficiencies within Tender Boards include: inadequate knowledge of PPA and its regulations, and absence of members to form a quorum for the meetings of the tender board. Inefficiencies of these organs lead to bids being awarded after expiration of bids validity period and delays in service delivery and implementation of projects. 30. Transparency is among the fundamental pillars of public procurement and disclosure of information is one of the elements of transparency. On average in about 40% of the tenders awarded, unsuccessful bidders were not informed on the award decisions and publications of awards were not published on LGA’s notice board or availed to PPRA. The law requires PPRA to publish contracts awarded in its Journal and Tender Portal, the names of those who have been awarded the contracts, contract amount, the date when the awards were made, contracts period and final contracts amount. For PPRA to fulfill this requirement procuring entities are required to notify PPRA on the awarded contracts for further publishing. However, from PPRA’s audit reports the compliance on the publication of contract awards still a problem. 106 31. Framework Agreements for Common Use Items and Services (CUIS) under GPSA. Most of the goods/services in the LGAs are procured through Common Used Items Systems (CUIS) under Framework Agreements introduced by the Government. The Government in February 2011 established the Government Procurement Services Agency (GPSA) to be responsible for overseeing the implementation of the CUIS throughout the country. According to PPRA’s performance report FY 2012/13, there is a decline in the use of the system. Some of the challenges for implementing the system are; lack of adequate knowledge by some suppliers and service providers to prepare bidding documents which leads to submission of non-responsive bids; some procuring entities do not use the system, especially LGAs which still advertise tenders for CUIS; inadequate enforcement measures for those who do not use the system as well as service providers failing to execute call off orders at contractual prices, demanding a price increase within the validity of signed contract; while some service providers were reluctant to give their prices because they are not sensitized enough to understand advantages of the system. 32. Controls and Integrity. Procurement oversight at PMO-RALG, MoHSW, MSD and LGAs is done by Internal Auditors, PPRA and Controller and Auditor General (CAG). Internal Auditors in LGAs prepare quarterly audit reports which do not cover procurement issues adequately. According to PPA 2011, the Internal Auditor is required to state in his/her report whether the Act and Regulations have been complied with; and the Accounting Officer of the procuring entity after receiving the report is required to submit such report to PPRA within 14 days. Upon receiving the report, PPRA may, if it considers necessary, require the Accounting Officer to submit a detailed report on any procurement implemented in violation of the Act and Regulations for review and necessary action. It was observed that this provision is not being complied with by procuring entities as most of them are unaware of the requirement. It was noted that most of the Internal Auditors are not conversant with provisions of the PPA and its Regulations and most of the units are understaffed. 33. Audits. Procurement audits carried out by PPRA evaluate the compliance level and detect corruption using the 13 performance indicators and Red Flags Checklist. Results of procurement audits and VFM are published in local newspapers and PPRA’s website. Accounting Officers of non-performing procuring entities are summoned by PPRA’s Board of Directors to discuss the findings and corrective measures to improve compliance in their entities. 34. Procurement Capacity. In all LGAs visited there were procurement officers although the number of staff is inadequate to match procurement volumes. Currently, experience of procurement officers vary significantly from one LGA to another as there are LGAs with officers with experience and others with junior officers with no adequate experience. Due to lack of adequate number of staff in most of the LGAs, PMU members are drawn from different user departments to form ad-hoc committees to handle procurement issues, contrary to the requirement of the PPA. Generally, the assessment revealed that there is inadequate knowledge in the application of provisions of the newly enacted PPA 2011 and its regulations. 35. Records Keeping. The PPA and its regulations prescribe procurement records that should be maintained and archived by a procuring entity; these include procurement proceedings and decisions taken and the reasons for those decisions. The records range from planning to contract closure and to be kept for five years after contract closure. Generally, records in the LGAs are scattered, incomplete, with no proper filing and management system. PMUs are maintaining and 107 archiving records of tendering process while account departments are maintaining payments records, and user departments are maintaining and archiving contract management records with consequent difficulties to trace records of particular tender in one file. There is inadequate space for PMU staff and documents storage. D. Fraud and Corruption Analysis 36. The Prevention and Combat of Corruption Bureau (PCCB) was established under the Prevention and Combating of Corruption Act. No. 11 of 2007 (PCCA 11/2007) and came into force on July 1, 2007. The overall performance of the PCCB in terms of allegations and cases handled is reflected in the table below. As the table below shows, the government’s convictions rates are low in most corruption cases, compared to the number of cases investigated as compared to corruption cases in other countries. In Kenya, the Ethics and Anti-Corruption Commission prosecuted 222 cases and obtained a conviction in 172 cases in 2014. Further, it is clear that the courts are still dealing with a big backlog of cases from previous years, than the number of current year’s cases. Table 29: Analysis of Allegations Received and Cases Investigated Year Allegations Cases Admin New Total cases Convictions % of Assets received Investigated actions cases prosecuted convictions recovered taken in compared to court cases (in Tsh investigated billion) 2011 4,765 819 30 193 709 52 6% 4.6 2012 5084 1178 27 288 723 47 4% 9.7 2013 5,456 1,100 19 343 894 89 8% 4.2 2014* 2,765 391 6 166 837 87 *January to June 2015 Source: PCCB Head office, September 2014 37. Over the past six years, the major international indices have shown that the governance environment in Tanzania has weakened. The Worldwide Governance Indicators (WGI) show a declining trend between 2007 and 2012 for four out of six governance indicators. With the exception of political stability and absence of violence, and regulatory quality the other indicators including government effectiveness, voice and accountability, rule of law and corruption have been declining. Recent statistics (2014) released by The Global Corruption Barometer, World Wide Economic Forum (Executive Opinion Survey), World Governance Indicators and Ibrahim Index on Africa Governance, all show a further decline in relation to control of corruption. Transparency International, on the other hand, shows there is a slight improvement in the county’s ranking of corruption from 35.5 in 2013 to 38.9 in 2014. Overall, there is a weak political will to fight grand corruption and, in most cases, corruption in service delivery is widespread and attempts to mitigate it have not been successful. 108 Figure 15: Declining Trend in Governance 2007-2012 60 Control of Corruption: Percentile Rank 50 40 Government Effectiveness: Percentile Rank 30 Political Stability and Absence of 20 Violence/Terrorism: Percentile Rank 10 Regulatory Quality: Percentile Rank 0 [2006] [2007] [2008] [2009] [2010] [2011] [2012] Source: Worldwide Governance Indicators (2014) i. Fraud and Corruption Risks 38. Based on the fiduciary risks identified in this FSA, and assuming that most of expenditures and procurement will take place at MoHSW, PMO-RALG, and LGA level, the main corresponding fraud and corruption (F&C) risks for this operation are the following: (i) collusion and fraud during procurement; and (ii) misappropriation of funds. The main risks are related to: FM: (a) weak internal controls at LGA level (low levels of training, access to Epicor, working tools and budget to carry out their responsibilities and weak oversight by facility board); (b) lack of adequate levels of staff at LGA level; and (c) inadequate information on budgets and expenditures available to facility managers. For procurement, risks include: (a) splitting of tenders, (b) delays in bid evaluations, including adjudication of evaluation reports and awards recommendations; (c) weaknesses in publication of contract awards; (d) poor record keeping; and (e) weak contract management. Evidence provided in this FSA on procurement controls and integrity seems inconclusive, so it is difficult at this point to ascertain the implications for F&C. F&C risks at LGA level related to FM and Procurement should be considered “high”, especially considering the program is nationwide. Risks related to MoHSW and PMORALG are considered substantial. 39. Based on the current information, overall F&C risks appear as “high” in particular in a weak environment in terms of control of fraud and corruption. Mitigation measures for lowering these risks, as well, as the risks of detection of fraud and corruption are detailed below to include (a) strengthening the facility boards/committees oversight of service delivery, and (b)strengthening the complaints and handling mechanism. ii. Facility Boards/Committees 40. Each health facility is governed by a board or committee that is responsible for providing oversight of the health services provided. The functionality of this board/committee is often poor with meetings that are supposed to be held quarterly rarely taking place and records not kept or 109 shared with the district management. The members of the board/committee are also poorly informed about their role. Strengthening the functioning of facility boards/committees is essential in improving accountability for service delivery at the facility level. In addition, the boards/committees need adequate information on budgets, staffing and other service delivery inputs to be able to carry out their oversight role effectively. This will help to ensure that the facilities performance is reported to the community representatives, District management is able to track the facilities performance and hence make supervisory visits more meaningful. Overall, well-functioning facility boards/committees should be able to raise concerns on the quality of services to management and to ensure they are addressed. iii. Complaint Handling Mechanisms 41. The public sector in Tanzania has regulations that mandate different organizations including service delivery facilities at different levels, to handle complaints. However, these mandates are not always followed in practice. Visits conducted as part of the fiduciary assessments to LGAs and health facilities revealed that there are constraints to effective implementation of these mechanisms at the facility level, including knowledge of the system functionality, conflict of interest in handling of suggestion boxes, shortage of staff dedicated to handle complaints and absence of complaints register. At the Ministry of Health and Social Welfare headquarters, PMO-RALG headquarters and at the local government authorities however, the complaints handling mechanism (CHM) are functional, but at this level, they have no significant impact on health services complaints which arise at the hospitals, health centers and dispensaries. Few of the health facilities have a functioning CHM. 42. For the purpose of this PforR, the existing CHM mechanisms will be strengthened. The objective should be to strengthen the oversight committees at the level of the health center and hospitals to ensure that they provide appropriate oversight of the health service including ensuring a functioning CHM is in place. All complaints will be reported to the Council Health Management Team. For F&C complaints, the Council Health Management Team will send them directly to PCCB, which is independent and well resourced. Complaints unrelated to F&C will be sent to the Council Health Management Team which should be tasked with reporting them to the PMO- RALG, following the existing bureaucratic channels. In addition, as part of the programs information, education and communication campaign, the program will inform potential users of the CHM the essential features of the system and how to access it. There is a separate complaint handling mechanism for procurement. On complaints purely related to procurement, the Committee would forward it to the procuring entity with an instruction to respond to the complainant with a copy to the Committee and the Chairperson of the Health Facility Board. Bidders not happy with the response from the procuring entity will appeal directly to the Public Procurement Appeals Authority (PPAA) who will listen to each party and make a determination. The party which will not be satisfied with the determination of the PPAA may seek a Judicial Review. One point the public raises is the absence of mechanism to know if a complaint is addressed at all, other than corruption cases that go to court. Flow Chart 2 depicts the summary of how a procurement complaint should be handled for the procurements at Health Facilities level. 110 Flow Chart 1: Complaint Handling Mechanisms for SPHCR Community, citizens and users/patients Facility Head Facility Suggestion Box Facility Committee/ Board District Health LGA PCCB Management Team Regional PCCB Regional Health Management PCCB Team Police PS MoHSW PS PMO-RALG Auditor 111 Flow Chart 2: Review of Procurement Complaints as per PPA 2011 and its Regulations 2013 (Two-tier System) 1st Level 2rd Level Accounting Officer of the Public Procurement Appeal Procuring Entity- Authority [PPAA] A Complaint should to be submitted All complaints that not settled amicably, within 28 days from the date the decision not made within 14 days or bidder became aware of contracts have entered into force should circumstances. be submitted to PPAA within 14 days. Yes If corruption related, Yes Corruption share with PCCB for Corruption Related? investigation1 Related? No No PPAA within 45 days is Accounting Officer within 14 days required to issue a written after receipt of the complaint or decision stating the reasons dispute will deliver a written for the decision and the decision. remedies grated. Where Accounting Officer does not The decision of PPAA is final A copy of decision of AO issue decision within 14 days or unless Judicial Review and PPAA submit to PPRA bidder dissatisfied with the commence for review of within 14 days after decision, the bidder may submit a decisions made by bodies or issuing of decision complaint dispute to PPAA. failure of those bodies to make a decision within prescribed time limit. 112 iv. Alignment with Anti-Corruption Guidelines for PforR Operations 1. Sharing of Debarment list of firms and individuals 43. The Government of Tanzania commits to use the Bank’s debarment list to ensure that persons or entities debarred or suspended by the Bank are not awarded a contract under the Program during the period of such debarment or suspension. Companies and individuals debarred by the Bank will be posted and updated regularly on the MOHSW (www.moe.go.tz) and the PMO- RALG websites (www.pmoralg.go.tz), and advertised publicly by MOHSW. Both entities would take responsibility in ensuring that their websites are updated regularly with information on the list of debarred firms and individuals and share this information with all procuring entities in the Program, instructing them to comply by appending the debarment list to the annual transfer of grant notification which will be made public - and go to all health facilities in the program. 44. In addition, the government also agreed that they would include some disclosure measures in bidding documents for works, goods and services to be financed under the program, including insisting that the firms and/or individuals declare they have not been debarred or suspended and/or have any links with a debarred entity or individual. 2. Sharing information on fraud and corruption allegations 45. In line with the ACGs, the government (through MOHSW) will share with the Bank all information on fraud and corruption allegations, investigations and actions taken on the Program, including on procurement as needed. The Bank has been informed that under Tanzania's legal system, the primary agency for investigating corruption is the Prevention and Combating of Corruption Bureau (PCCB). Where PCCB investigations reveal that a given case is primarily one of fraud rather than corruption, the PCCB refers it to the police for further investigation and prosecution. In this context, fraud and corruption allegations made in respect of program funds will be referred by the beneficiaries to the district offices of the PCCB. The PCCB gets monthly reports from the regional offices on fraud and corruption and other relevant activities, but in the case of this program, the PCCB would compile and share information on fraud and corruption annually to MOHSW who will share with the Bank. The details of this reporting would include the types of allegations and the status of actions taken. A template for recording and sharing the information with the Bank has been provided to the PCCB. 3. Investigations of fraud and corruption allegations 46. The GOT has advised that (i) the Prevention and Combating of Corruption Act permits the PCCB to cooperate and collaborate with the Bank in the fight against corruption, and permits the PCCB and the Bank to undertake joint investigations of sanctionable practices if and when the parties so agree; (ii) the Bank may also undertake its own investigations of F&C allegations under the Program. In this context, the investigation of F&C allegations under the Program will be handled through three possible modalities, depending on circumstances: (i) the PCCB will undertake its own independent corruption investigations arising from allegations reported to it as detailed above; (ii) the PCCB and INT will undertake joint corruption investigations. The initiation, scope and operational procedures will be decided on a case-by-case basis by PCCB and INT; and (iii) INT will undertake its own F&C investigations. To this extent, program participation agreements to be entered into between MOHSW and PMO-RALG will ensure that both entities 113 and INT are able to acquire all records and documentation that they may reasonably request from the program implementation units regarding the use of program funding. E. Fiduciary Risk and Mitigation Measures Fiduciary Risk Description Mitigation Measures Due Date Responsibility Appoint Sector Technical and MoHSW and Program Steering Committees to PMORALG Coordination due to the provide oversight in ensuring large number of entities smooth program coordination at involved. all levels. Establish a Program Coordination Unit that includes Completed Ensuring funds are used members from PMO-RALG for purposes intended will Program Level which will be responsible of be a challenge. providing overall supervision. Within 12 months Weak fiduciary capacity Provide targeted capacity of project in all fiduciary aspects building to all fiduciary staff at implementation highlighted below all levels. Financial Management Risk Earmark SPHCR funds using Within 12 months MoHSW, MoF accounting codes at the of project and PMO- Unfunded budgets Consolidated Fund using a sub- implementation. RALG Absence of reliable cash- account for the project under flows affecting MoHSW. implementation of planned activities Prepare reliable cash flow Quarterly. Planning and budgets. PlanRep may not Budgeting automatically upload the budget to Epicor requiring The acquisition and installation Within 12 months it to be manually done of an integrator to link the of project which is subject to errors PlanReP and Epicor for implementation and delays. automatic uploading of budgets onto Epicor is currently in progress. Funds not being used for Put in place FM systems and Within 12 months MoHSW, purpose intended guidelines at HCF level. of project PMO-RALG The Establishment Order to implementation and MoF employ accounting technicians who will be responsible for FM at the facility level has already Accounting and being issued. These technicians Financial will need to also be trained. Reporting The chart of accounts Revise the chart of accounts. may not show which Development Partner is funding the program when funds are sent to the LGA hence not able to prepare accountability 114 Fiduciary Risk Description Mitigation Measures Due Date Responsibility for a Development Partner’s funding. Poor connectivity Strengthen the connectivity in between the LGAs and Epicor in order to efficiently use the central servers. the system. Failure to record assets at Activate the asset management all levels. module. Epicor 9.05 not able to Enhance financial reporting generate annual financial module for Epicor in order to statement and produce useful reports for management reports. management to take action. Delays in submission of Train staff who consistently various financial reports. send reports late to enhance their Annually skills as well as closely monitor them at both health facility and LGA levels to ensure timely financial reports are received. Absence of book- The hiring of accounting Within 12 months keeping skills at HCF is technicians to assist HCFs on of project going to impact an-ongoing basis to supplement implementation maintenance of reliable limited capacity of LGAs has financial records. already commenced. Not all HCFs will have Bank accounts are opened by all Before funds are MoF, bank accounts HCFs before funds are disbursed to HCFs MoHSW, disbursed. PMO-RALG, Delays in release of Monitor the budget approval Annually LGAs & HCFs funds from MoF to process and endorsement by the ministries, LGAs and Parliament now tabled in April HCFs. to June each year. Irregular release of funds Request GoT commitment to by the Ministry of ensure release of funds to Treasury Finance to LGAs and Program on a quarterly basis. Management HCFs. and Funds Flow Delayed release of funds LGAs & HCFs to display from LGAs to HCFs. amounts transferred to them on their notice boards and their websites. Funds may not be used Carry out value for money Midterm and six efficiently and audits months prior to effectively to achieve the the end of purposes for which program intended 115 Fiduciary Risk Description Mitigation Measures Due Date Responsibility Non-compliance with Skills of audit committees and Within 12 months MoHSW, internal control systems internal auditors will be of project PMO-RALG, at both central and local enhanced to effectively monitor implementation MoF and government levels. compliance of the internal LGAs. control systems and report on a quarterly basis. Weak internal audit Strengthen internal audit units Within 12 Internal function in terms of through training and capacity months of project Controls skills, equipment, lack of building. Facilitate internal audit implementation (including access to Epicor system units with resources both and annually Internal Audit) and budget to monitor financial and otherwise. thereafter the internal controls put in place. Production of quarterly audit reports. Grant internal auditor’s access to Epicor as well as acquisition of internal audit software. Failure to audit a CAG to contract private audit CAG, reasonable sample of firms to conduct audits on his MoHSW, HCFs given the large behalf. PMO-RALG. number of HCFs supported under the Program. Delayed submission of Early appointment of auditors Before end of FY reports and agreeing of ToRs. External Audit Carrying out of interim audits. Slow scrutiny of CAGs Enhance technical skills of PAC audit reports by the PAC and LAAC in order for them to and LAAC which affects improve on their efficiency in the accountability following up issues raised by process. CAG’s audit reports. Procurement Risks Procurement Inadequate staffing in Recruit/appoint qualified and Within 12 months PMO-RALG & Capacity and LGA procurement and experienced staff to fill the gap of project PPRA internal audit internal audit units as in the two units and conduct implementation function well as existing staff tailored trainings on PPA 2011 have inadequate and its Regulations and contract knowledge of PPA 2011 management to PMUs and and its Regulations internal audit units Records keeping Weak records Establish sound records Within six months PMO- management system. management system in all LGAs of project RALG/LGAs and participating MDAs. implementation Procurement Inefficiencies in Ensure procurements are Throughout PMO-RALG, Efficiency processing and managing processed as per the timelines in project LGAs procurement activities. the procurement plans implementation Transparency in Lack of transparency in Ensure LGAs abides with all Throughout PMO-RALG, procurement processing competitive procedures for processing project LGAs and process quotations and quotations including implementation PPRA 116 Fiduciary Risk Description Mitigation Measures Due Date Responsibility publications of contract publications of contracts awards awards. as per the PPA. Delays arising The Attorney General Review the existing threshold Within 12 months PMO-RALG, from vetting of has no capacity to vet all with a view to raise vetting of the project AG and PPRA contracts before contracts above TZS 50 thresholds. implementation signature million within 21 days prescribed under PPA. Weak Contract Inadequate knowledge Conduct trainings tailored to Within one year of PMO-RALG, Management and skills in contract address the weakness to in the project LGAs managements. contract management. implementation and annually thereafter Delays in issuing Delays in issuing stock- Establish the system that will Within one year of MSD and out stock notice out notice to the facilities ensure out stock notices are project MoHSW to the facilitiesby MSD in order for issued within one day as implementation by MSD LGAs to commence prescribed in the PPA 2011 and procurement process of its Regulations. missing medicines and medical supplies in a timely manner Fraud and Corruption Risks Publish Clients Service Within one year of MoHSW, Charters; strengthen government project PMO-RALG, websites to publish timely implementation LGAs and reports, budget, including and annually Health A lack of citizen, media quarterly disbursement and thereafter Facilities and suppliers pressure to execution reports; LGAs and Transparency eliminate collusive Health Facilities to publish practices due to lack of budgets and expenditures in information. public places. CHMT to provide budget and expenditure data to health facilities to enable them to improve performance. Implement mechanisms or Within one year MoHSW and partnerships with civil society of project PMO-RALG organizations to enable citizen implementation Weak use of feedback to log complaints or register and annually and complaints handling Participation comments and receive responses thereafter mechanisms by from central government/Ensure stakeholders. information on SPHCR is easily available to citizens to enable monitoring and feedback. Strengthen CHMT and Health Within one year MoHSW, Facilities service boards; review of project PMO-RALG, complaints register and ensure implementation LGAs and Weak response from complaints are attended and and annually Health central government and feedback taken is adequately thereafter Facilities LGAs to citizen documented, responded to and Accountability complaints and to poor posted to MoHSW & PMO- performance on RALG website twice annually. assessment reports. Nominate Complaint Desk Officers at health facility level and for CHMT dedicated exclusively to health concerns. 117 F. Overall Fiduciary Risk Rating 47. Based on the above risk analysis, overall fiduciary risk rating is substantial. 118 Annex 6: Summary Environmental and Social Systems Assessment 1. The World Bank’s Program for Results (PforR) operation - Strengthening Primary Health Care for Results – is supporting the Government of Tanzania’s primary health care (PHC) program (2015/16 – 2018/19). The program innovatively links the disbursement of funds directly to the delivery of defined results and builds on increased reliance on borrower safeguard and oversight systems. In terms of environmental and social management, PforR employs a risk management approach, in which process requirements are adapted to the Program context. For each proposed PforR operation, the Bank assesses—at the program level—the borrower’s authority and organizational capacity to achieve environmental and social objectives against the range of environmental and social impacts that may be associated with the program. This Environmental and Social Management System Assessment (ESSA) examines Tanzania’s existing legal, regulatory, and institutional framework for environmental and social management systems, defines measures to strengthen the system, and integrates those measures into the overall Program. The ESSA has been undertaken to ensure consistency with six core principles outlined in the World Bank’s Operational Policy 9.00 - Program-for-Results Financing. The ESSA is intended to strengthen the regulatory authority or organizational capacity to effectively manage the program environmental and social risks and promote sustainable development while enhancing performance of the program in managing environmental and social effects. 2. The ESSA process included extensive stakeholder consultations and disclosure of the ESSA Report following the guidelines of the World Bank’s Access to Information Policy. The ESSA consultation process is embedded in the program consultation process. 3. The program focuses on improving service delivery and strengthening systems and will also finance civil works related to upgrading and improving infrastructural conditions and utility services of existing primary health care facilities. Program activities are not expected to have significantly adverse environmental footprint, if construction activities and healthcare facility operations are well managed. Impacts are also expected to be moderate since the infrastructure rehabilitation and construction works will be confined to existing PHC premises. The program provides an opportunity to improve due diligence measures related to management of construction related issues, good practices for asbestos management, improved healthcare waste management and incinerator operations, enhancement of sanitation and water supply systems for monitoring and enforcement. Additionally, its programmatic approach to the health sector provides a significant opportunity to improve systemic implementation of environmental practices related to improving infection control practices and health systems functioning and operations at PHC facilities. The program will also focus on enhancing the existing mechanisms for grievance redress and dispute resolution, participatory consultations and feedback for social accountability, along with increasing awareness of environmental health issues and better coordination among various ministries, agencies and donor partners on environmental and social aspects. These will be instituted through targeted resource allocations, including manpower, equipment and funds, updated technical guidelines, focused skills training and capacity building on technical and operational issues as part of the BRN in health interventions. 4. The ESSA analysis presents identifies strengths, gaps and opportunities in Tanzania’s environmental and social management system with respect to addressing the environmental and social risks associated with the program. The analysis identifies the following main areas for 119 action in order to ensure that the program interventions are aligned with the Core Principles 1, 3 and 5 of OP/BP 9.00 applicable to the program: Health Care Waste Management and Social Accountability. These could be further defined during the consultation process and during implementation, as required. The gaps identified through the ESSA and subsequent actions to fill those gaps directly contribute to the program’s anticipated results to enhance institutional structures in health. 5. The ESSA identifies the key measures to be taken for improved environmental and social due diligence in the program. These measures are linked closely with the Disbursement-linked Indicators (DLIs) for the PforR operation, specifically: DLI 3 (which represents performance of maternal, neonatal and child health service delivery at primary health care facility level), DLI 4 (which represents annual performance in Maternal, Neonatal and Child Health service delivery at the local government authorities’ level) and DLI 7 (Completion of annual capacity building activities at all levels). The key measures are defined in Table 30 below. Table 30: Measures to Strengthen System Performance for Environmental and Social Management Objective Strengths and Weaknesses Measures Strengths: While the program does not have a significant environmental footprint, or land acquisition implications, Adequate national regulatory framework and its programmatic approach to the health sector provides an technical guidelines for environmental and social opportunity to improve systemic implementation of due diligence with respect to the program. environmental and social practices related to the functioning and operations of primary health care (PHC) centers. Existence of environmental and social practices The ESSA will follow the measures defined in the existing and procedures under existing World Bank Environmental and Social Management Framework funded health program. (ESMF) prepared as part of the World Bank-financed East Africa Regional Health Systems Strengthening Project Weaknesses: (aka East Africa Public Health Network Project), Healthcare Waste Management Plans prepared under Weak implementation of health waste earlier World Bank financed projects and procedures as set Defining the System management practices due to financial, human out in the Healthcare Waste Management Policy for Environmental and resources and other capacity constraints. Guidelines, National Standards and Procedures for Social Management Limited awareness of environmental health risks Healthcare Waste Management, and the Healthcare associated with poor quality of water, inadequate Waste Management Monitoring Plan, in order to sanitation, etc. prepare the program operational manual. The program supported by the Bank involves civil The ESMF has been assessed and found to be compliant works related to upgrade and rehabilitation of with OP/BP 9.00 principles but needs more focus on existing primary health centers. Some guidelines implementation procedures and institutional mechanisms. exist but there are gaps related to categorization The process for enhancing existing mechanisms for of risks, screening, and monitoring as compared grievance redress and complaint handling, and to Core Principles of OP/BP 9.00. The inclusive and participatory consultations and feedback requirements for management and use of asbestos for social accountability also needs improvement. need enhancement. The program will require increased coordination among various ministries, agencies and development partners on environmental and social aspects to further support implementation. The process and criteria for monitoring, 120 Participatory Planning, implementation and enforcement and reporting on environmental and monitoring is weak due to capacity related social measures will be part of overall program reporting constraints including incentives. and data management. Not all health facilities in the country have fully For improved implementation, enforcement and constituted governing committees and where they monitoring, procedures defined in the ESMF, HCWM exist they are not fully functional to able to apply and Community Engagement plans will be included in social accountability mechanisms that include the Comprehensive Council Health Plans (CCHP). grievance redress. The above requirements, processes and systems will Application of the social accountability (SAc) also be included in the program operations manual. mechanisms and other participatory tools are isolated and performance on key aspects is Monitoring and supervision of the ESSA dismal. implementation will be part of the World Bank supervision. There is low awareness of Council vs Health facility committees’ roles and responsibilities including their expected collaboration. Strengths: The ESSA defines the need for improved and updated technical guidance for better waste management (health Technical guidelines and standards for Health care and construction), occupational safety and hygiene Care Waste Management exist. practices, enhanced transparency and information sharing, grievance redress, and community participation. The ESMF identifies construction related impacts and includes well-defined mitigation measures to Follow up on the implementation of the HCWM and be implemented during construction. community engagement plans will be a part of World Bank supervision. Guidelines for the constitution of Health Facility Governing Committees (HFGC) with stakeholders’ representation exist. Guidelines and training program for social accountability mechanisms that include grievance mechanisms exist. Technical Guidance and Implementation Weaknesses: Capacity HCWG guidelines and standards have not been systematically implemented. Weak intersectoral coordination around environmental and social issues. Functionality of the HFGCs is limited due to capacity constraints. Social Accountability (SAc) efforts have limited coverage. Implementation of SAc guidelines is limited due to capacity constraints. Participatory Planning, implementation and monitoring is weak. 121 Weaknesses: The ESSA identifies capacity building and training actions for improved implementation including infection control, The Healthcare Waste Management program is waste management, how to administer social severely under-resourced (manpower and accountability mechanisms and grievances redress and funds) which prevents it from providing will be built into the program’s capacity building plan. satisfactory oversight. There is limited capacity and awareness of environmental health risks associated with poor Capacity building for environmental and social actions Addressing Capacity quality of water, inadequate sanitation and will be included in the capacity building plan which Constraints hygiene, which prevents adequate attention be will be developed early in year 1 of program paid to these issues. implementation, as part of the “Foundational Activities” (DLI 1), and included in the operations Training on roles and responsibilities of councils manual. is provided only to the committees and not to the community they serve. The existing training program has limited coverage due to financial constraints. Progress made on capacity building for purposes of implementing the HCWM and community engagement plans will be provided by the verification of DLI 7 and will be part of Bank supervision support. Strengths: Accountability and Transparency of institutions are essential to ensure that the benefits of the program reach There are processes at the local level for handling all beneficiary groups (service users and providers). The general grievances and disputes. ESSA suggests actions to enhancing existing mechanisms for improved HCWM, complaint handling, and The Big Results Now has a scoreboard publicly inclusive and participatory consultations and feedback accessible, and results are reported to President’s for social accountability along with improved focus on Office. gender and vulnerable groups. The program will also require: integration of actions with the Government Weaknesses: Open Data Partnership and other information disclosure aspects the program to avail more information Public disclosure of documents for those to the public; and increased coordination led by MoHSW programs activities requiring a full among various ministries, agencies and donor partners on Environmental and Social Impact Analysis is a Improved systems for environmental and social aspects to further support government requirement. But the actual process Information Disclosure implementation; and information sharing through publicly of public review and comments can be onerous and Stakeholder available mechanisms. The measures to improve and public hearings are at National Environment Consultation information disclosure and stakeholder consultations Management Council’s discretion during the will be included in the program operations manual. ESIA review and approval process. Under the Environment Management Act, there is a procedure related to grievances with respect to During supervision the Bank will monitor information decisions about granting the Environmental available in the public domain on implementation of Impact Assessment certificate. There is no HCWM and community engagement activities and requirement that the government program their contribution to improved health care services. Environmental and Social Management Plans Information on the progress will be availed to the Bank (ESMP) include a mechanism for handling through the SWAp reporting requirements and grievances, though ESMPs in Development schedule. Partner-funded programs do tend to include them. It has been difficult to assess if local grievance mechanisms function well in practice to resolve 122 grievances tied to environmental and social impacts. Performance of health facilities on social accountability that includes resolving grievances yet to be made public using a wide array of channels easily accessible to the citizens (website, papers and radio). 123 Annex 7: Integrated Risk Assessment 1. PROGRAM RISKS 2.1 Technical Risk Rating: Moderate Description: Risk Management: Project preparation would identify all required technical assistance and work with • Overall weak institutional capacity in the public sector, government to incorporate into the budget framework. Mobilize other financiers/donors to ensure particularly at LGAs (CHMTs), particularly in the context complementary financing for technical assistance. of increased autonomy of health facilities in implementing service delivery improvements. Resp: Government and Stage: Preparation and Due Date : Continuous Status: Ongoing Bank Implementation • Insufficient and delayed resources to finance required Risk Management: Bank mobilized other financiers/donors to ensure complementary financing for technical assistance to support program implementation. technical assistance. Resp: Government and Stage: Preparation and Due Date : Continuous Status: Ongoing Bank Implementation • Moderate capacity of the Regional level (RAS, RHMT) to Risk Management: PMORALG has established a Health Services Working Group at the central level oversee, support and monitor LGAs to ensure adherence that will soon be upgraded to a ministerial department. This will increase technical capacity for to national policies and quality of health services. PMORALG to interpret sector policies and support capacity building and supervision of regional teams and LGAs At the regional level, PMORALG plans to restructure the Regional Health Management Team to create two team – a smaller management team and a larger technical team. The technical team will have all technical experts needed at the regional level to provide technical support and ensure provision of quality health services in all LGA. PMORALG at Regional level will create multidisciplinary teams from public, NGO, faith based and private entities that will undertake verification of results at health facility level reported through the routine HMIS. The verification will be used for payment of RBF incentives to health facilities and Health basket fund performance grants to LGA. Stage: Preparation and Resp: Government Due Date : Continuous Status: Ongoing Implementation 2.2 Fiduciary Risk Rating: Substantial Description: Risk Management: Program will support capacity building of fiduciary staff covering areas where Financial Management (FM) deficiencies were identified (reporting, PPA 2011 and its Regulations, contract management, etc.). 124 • Weak FM arrangements at the lower level and absence of Resp: Government and fiduciary systems and guidelines at the hospitals, Stage: Implementation Due Date : Continuous Status: Ongoing Bank dispensaries and health centers. • FM systems in the HCFs, once put in place, will be manual and not be connected to the Integrated Financial Risk Management: Sound records management system to be implemented in all LGAs and participating Management Information System. MDAs. • Delayed release of funds as well as weak internal control environment as a result of weak internal audit function. Resp: Government Stage: Implementation Due Date : Continuous Status: Ongoing Procurement • Inadequate staffing in LGAs. • Inadequate knowledge of PPA 2011 and its Regulations, Risk Management: POM to detail FM reporting formats, and timelines and responsible parties for each planning, bidding documents & request for proposals stage of the procurement cycle preparation and evaluation of bids/proposals. • Weak contract management, record keeping and management system. Stage: Preparation and Resp: Government Due Date : Continuous Status: Ongoing • Inefficient management of procurement processes, Implementation including delays in vetting contracts above TZS Risk Management: Qualified and experience staff/consultants will be recruited to support Program, 50,000,000 by the Attorney General, and in awarding including Account Technicians to support HCFs. contracts pending finance committee decision. • Risks of receiving frivolous complaints during cool-off period of 14 days as there is no monetary value attached to Resp: Government Stage: Implementation Due Date : Continuous Status: Ongoing ensure only genuine complaints are lodged; 2.3 Environmental and Social Risk Rating: Moderate Description: Risk Management: Program includes resources (manpower and financial) for implementation of environmental and social due diligence measures. • Insufficient institutional and technical capacity in BRNH Resp: Government and to handle environmental and social management issues. Stage: Implementation Due Date: Continuous Status: Ongoing Bank • Weak inter-institutional and coordination between the various related agencies. Risk Management: Program includes activities for capacity building on environment and social • Annual Performance Audit does not include the management as well as incentives for health care waste management (under the RBF) and social requirement or the technical expertise to assess accountability, as detailed in the operational manual and monitored as part of the Results Framework and performance of the ESSA. Monitoring of the project. • Lack of formalized and effective complaint mechanism to address social and environmental issues. Resp: Government Stage: Implementation Due Date: Continuous Status: Ongoing • Mixed formal Social Accountability mechanisms at various levels. 2.4 Disbursement linked indicator risks Rating: Moderate 125 Description: Government will either not allocate required Risk Management: Operation design includes specific DLIs to encourage adequate and timely resources to attain DLIs or delay the release of funds. allocation of budget. Resp: Government Stage: Preparation and Due Date: Continuous Status: Ongoing and Bank Implementation Description: Poorly defined or improperly measured DLIs Risk Management: may lead to problems with their reporting and data inaccuracy. • Careful choice of DLIs to ensure that they are measurable and verifiable Development of detailed and clear protocols for the measurement of DLIs as part of POM Resp: Government Stage: Preparation and Due Date: Continuous Status: Ongoing and DPs Implementation 2.5 Other Risks (Optional) Rating: Moderate Description: Incoming administration (November 2015) Risk Management: BRN includes on-going broad based consultation at all levels to generate support may feel less ownership toward Program. for the program. Stage: Preparation and Resp: Government Due Date: Continuous Status: Ongoing Implementation Description: There is an inherent risk of over-reporting of Risk Management: Detailed protocols to monitor and verify performance indicators would be agreed results as achievement of the results trigger disbursements. upon during preparation. Independent third party will be used for the measurement or audits of selected DLI where appropriate Resp: Government and Stage: Preparation and Due Date: Continuous Status: Ongoing Bank Implementation OVERALL RISK RATING Substantial 126 Annex 8: Program Action Plan Action Description DLI Covenant Due Date Responsible Completion Party Measurement Technical Appoint Internal Auditor Within 3 months MOHSW - Verification entity General as the from MOF formally appointed independent verification Effectiveness - TOR acceptable to the entity Date World Bank Submit the basic Each basic MOHSW, - Each report is formally reporting requirements reporting PMORALG adopted by due date, for the sector as per the requirement has with comments by HBF requirement its specific due stakeholders taken into day as per the account HBF schedule Environmental and Social Implement the ESSA As per SWAp MOHSW CCHP Plan and through the following: reporting Implementation i) Inclusion of HCWM in requirements and summary reports the CCHP schedule ii) Monitoring and Reporting on the implementation of the HCWM activities in the CCHP Fiduciary Review the existing First year of MOHSW, Formal procurement vetting implementation PMO- recommendations on the mechanisms with a view RALG and procurement vetting to reducing backlog MOF process jointly sent by MOF, PMO-RALG and MOF to AG Operationalize the MSD First 12 months MoHSW, System in place and system that issues out of of MSD stock out notices are stock notices to facilities implementation issues in 1 day. within one day as prescribed in the 2013 Public Procurement Regulation Act (Section 140) and the 2013 Public Procurement sub- Regulations (Subsections 1 to 6) 127 Conduct annual Y (i) procurement MoHSW, Procurement and VFM independent procurement audits-After year PMORALG audit reports. audits of the program as 1 of well as value for money implementation (VFM) audits by PPRA and thereafter and CAG. annually, and (ii) VFM audit Midterm and end of program 128 Annex 9: Implementation Support Plan 1. The proposed implementation plan is consistent with the Program-for-Results operational guidelines. Program implementation rests under the responsibility of MOHSW and PMORALG, with targeted and continuous implementation support and technical advice from the World Bank and development partners. The Bank’s implementation support will broadly consist of: • Capacity building activities to strengthen the national and local levels’ ability to implement the program, covering the technical, fiduciary, and social and environmental dimensions. • Provision of technical advice and implementation support geared to the attainment of the program’s Development Objectives (PDO). • On-going monitoring of implementation progress, including regularly reviewing key outcome and intermediate indicators, and identification of bottlenecks. • Review and verification of DLI protocols, complemented by random technical audits. • Monitoring risks and identification of corresponding mitigation measures. • Impact evaluation activities. • Close coordination with other donors and development partners to leverage resources, ensure coordination of efforts, and avoid duplication. 6. Further, implementation support will include the provision of capacity strengthening in procurement, financial management and governance and anti-corruption. An annual fiduciary review will be conducted for the program supported by mainly the Internal Audit Department and PPRA. Adequate budget will need to be allocated for this review. This review will be supplemented by on-site visits done by the Bank’s fiduciary staff at least twice a year. Reliance will also be placed on the annual audit reports produced by the Controller and Auditor General. In addition, desk reviews will be done for audit, financial, procurement and any other reports received during the financial year. In-depth reviews may also be commissioned by the Bank whenever deemed necessary. Main focus of Implementation Support (template) Time Focus Skills Needed Resource Estimate Partner Role First twelve Institutional Technical, 3 implementation months capacity fiduciary, support visits by enhancement at the environment, technical specialists national to and social focused on capacity strengthen country building, technical systems. assistance and monitoring. Technical advice to support Program 2 implementation implementation. support visit by fiduciary specialists 129 focused on capacity building. 1 implementation support visit by environment and social specialists focused on capacity building and reviewing/strengthening effectiveness of redress mechanism. 12-24 months Institutional Technical 2 implementation capacity (including support visits by enhancement at the M&E), technical and fiduciary local levels to fiduciary, specialists focused strengthen environment, fiduciary support and implementation and social implementation capacity. support. Implementation 1 implementation monitoring. support visit by social and environmental Technical advice to specialists focused on support program strengthening local implementation. capacity and implementation support. Implementation Implementation Technical 1 implementation Mid-term progress review and (including support visit including identification of M&E), technical, fiduciary, necessary mid- fiduciary, social, environment, course adjustments. environment, M&E and operational social, and specialists. operational 24-48 months Implementation Technical monitoring and (including evaluation. M&E), and fiduciary Technical advice to support program implementation. 130 Task Team Skills Mix Requirements for Implementation Support (template) Skills Needed Number of Staff Weeks Number of Trips Comments Project Management 10 2 HQ based (TTL) RBF Specialist 4 2 HQ based Technical Specialists 16 3 International/Country based M&E Specialist 4 1 International FM Specialist 4 2 Region-based Procurement Specialist 4 1 Region-based Environmental 2 1 HQ-based Specialist Social Specialist 2 1 Country-based Administrative Support 6 0 Country-based 131