The World Bank Implementation Status & Results Report Modernization of Public Finance Management (P144952) Modernization of Public Finance Management (P144952) EAST ASIA AND PACIFIC | Myanmar | Governance Global Practice | IBRD/IDA | Investment Project Financing | FY 2014 | Seq No: 11 | ARCHIVED on 26-Oct-2020 | ISR43380 | Implementing Agencies: Ministry of Planning and Finance (MOPF), Office of the Auditor General of the Union, Myanma Economic Bank (MEB), Joint Public Accounts Committee Key Dates Key Project Dates Bank Approval Date: 02-Apr-2014 Effectiveness Date: 09-Oct-2014 Planned Mid Term Review Date: 30-Sep-2016 Actual Mid-Term Review Date: 30-Sep-2016 Original Closing Date: 30-Sep-2019 Revised Closing Date: 31-Mar-2021 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The development objective of the project is to support efficient, accountable and responsive delivery of public services through the modernization of Myanmar’s PFM systems and strengthening institutional capacity. Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name A. Improving Revenue Mobilization Through Bringing More Revenues from Natural Resources on Budget and Strengthening Tax Administrati on:(Cost $11.94 M) B. Supporting Responsive Planning and Budget Preparations:(Cost $8.57 M) C. Supporting Effective Budget Execution and Financial Reporting:(Cost $17.38 M) D. Fostering External Oversight and Accountability:(Cost $5.36 M) E. Establishing a Sustainable Institutional Platform and Skills-base for PFM:(Cost $6.75 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Moderately Satisfactory Moderately Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Unsatisfactory Overall Risk Rating Substantial Substantial Implementation Status and Key Decisions The COVID crisis has impacted public finances and public financial management in Myanmar, underscoring the relevance and importance of the current reforms and project. However, COVID has also impacted project implementation, including the procurement of two critical ICT systems for tax administration (ITAS) and treasury payments (CBS). This has impacted negatively the rating for implementation progress to moderately satisfactory. This rating can be upgrade upon completion of these procurement and acquisition of the systems. Despite these delays, the project has also achieved important results highlighted below and met 11 of the 17 revised results indicators. 10/26/2020 Page 1 of 11 The World Bank Implementation Status & Results Report Modernization of Public Finance Management (P144952)  The PFM academy was established in February 2020 and started delivering PFM trainings. Currently, over 300 officials are being trained. As regular classes were temporarily closed on 7th September due to the second wave of the COVID-19 pandemic in Myanmar, the PFM Academy initiated online trainings with support from WB and a virtual knowledge exchange program with other countries' Academies to inform the Myanmar PFM academy institutional strengthening and programs.  Financial reporting and disclosure is being strengthened with the roll out of Treasury's financial reporting system FIRST to 20 GoM agencies. COVID emergency expenditures and financing (incl IMF) have increase the attention to financial reporting and disclosure to which FIRST contribute.  MoPFI decided to initiate gender-informed budgeting and established a dedicated committee in September with nominated staff from MoPFI, MoSWRR, and MoE to prepare a report on gender-informed budgeting for one service sector.  Increased focus on PFM for service delivery. MoPFI has actively participated in an assessment of PFM bottlenecks in health and established a Joint Task Force (JTF) with staff MoE and MoHS to collectively address the bottlenecks identified.  Implementing electronic budget submission for both current and capital budgets and moving to a more sustainable web-based solution. The project initially supported Excel based budget submission. To increase sustainability the WB has developed a Web-based platform is being developed.  Myanmar's public accounting standards are being upgraded and the IPSAS transition roadmap has been adopted.  the Office of the Auditor General has been closely involved in the IPSAS transition roadmap and started adopting disaster response auditing techniques, which can be used for the COVID emergency financing. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance -- Moderate Moderate Macroeconomic -- Moderate Moderate Sector Strategies and Policies -- Moderate Moderate Technical Design of Project or Program -- Moderate Moderate Institutional Capacity for Implementation and -- Substantial Substantial Sustainability Fiduciary -- Moderate Substantial Environment and Social -- Low Low Stakeholders -- Moderate Moderate Other -- Substantial Substantial Overall -- Substantial Substantial Results PDO Indicators by Objectives / Outcomes Increased tax revenue collection IN00890255 ►Increase in Tax collection from Large Taxpayers (Text, Custom) 10/26/2020 Page 2 of 11 The World Bank Implementation Status & Results Report Modernization of Public Finance Management (P144952) Baseline Actual (Previous) Actual (Current) End Target Taxes collected by LTO from large tax payers in Taxes collected by FY 2018/19 stood at LTO from large Baseline: Taxes Taxes collected by 3,102,329 million MMK. taxpayers in FY collected by LTO in FY LTO for FY 2020/21 is Value LTO’s collection target 2019/20 (as of 8th 2015-2016 was estimated at 3,250,000 for FY 2019/20 is Sept 2020) stood at 1,105,670 million MMK. million MMK 3,508,246 with 475,889 3,665,156 million (13.56% of the target) MMK. collected thus far Date 30-Sep-2016 27-Nov-2019 08-Sep-2020 31-Mar-2021 This indicator has been Revised. The initial indicator measuring Tax to GDP ratio goes well beyond the project scope and thus raises attribution questions. As the project is directly supporting the Large Comments: taxpayers office and increased enforcement through the international tax audit advisers, the indicator has thus been focused on its results in terms of increased taxes collected from large taxpayers. Enhanced Fiscal Transparency IN00890261 ►Number of key budget and fiscal documents published on the MoPF website for public access (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The public can access the following 7 documents at https://www.mopfi.gov. Public can access the mm 1. 2019/20FY following 7 documents at Annual budget law 2. www.mopf.gov.mm 1. Budget summary (pre- The end of project Annual budget law 2. budget statement) 3. target for number of Budget summary (pre- Budget Speech 4. key fiscal documents budget statement) 3. Citizens Budgets 5. publicly available has Budget Speech 4. Annual budget report been increased to 9, Value 1 (enacted budget) Citizens Budgets 5. 6. Mid-year budget including a budget Annual budget report 6. report 7. Quarterly dashboard and a Mid-year budget report 7. budget report 8. report on gender Quarterly budget report. 2019/20FY Budget informed budgeting for Budget dashboard not Estimate GFS 9. 1 service sector. operational. Report on 2019/20FY Fiscal gender informed Policy. The budget budgeting not ready. dashboard is not operational. Report on gender-informed budgeting is on progress. Date 01-Apr-2014 27-Nov-2019 08-Sep-2020 31-Mar-2021 The indicator focuses on the disclosure of key budget and fiscal information supported by the project. The publication of a budget dashboard and a report on gender informed budgeting for 1 service sector has Comments: been added as part of the project extension. These two new reports are expected to be included in the expanded citizen budget from 2021 onward. Strengthened Budget Credibility IN00890262 10/26/2020 Page 3 of 11 The World Bank Implementation Status & Results Report Modernization of Public Finance Management (P144952) ►Composition of expenditure out-turn compared to original approved. (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 24.00 8.35 1.32 14.00 Date 01-Apr-2014 27-Nov-2019 31-Dec-2019 31-Mar-2021 A high budget variance is an indicator for PFM weaknesses affecting service delivery. Conversely, the efforts to enhance the credibility of the budget overall, including through enhanced budgeting and reporting is an opportunity to improve budget predictability and execution in key service sectors. Compositional variances between budget estimate and temporary actual of 2017-18 budget was 3.84%. Compositional variances between budget estimate and provisional actual of 2018 mini transition-budget Comments: (April-September) was 8.35% Compositional variances between budget estimate and temporary actual of 2018-19 budget was -1.32%. 2019-2020 compositional variances cannot be calculated as full year actuals for the budget year ending August 31st 2020 are not yet available. IN00890264 ►Improved budget credibility and budget out-turn in key public service sectors (health, education and transport) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 18.00 18.00 11.00 14.00 Date 28-Sep-2018 28-Sep-2018 31-Dec-2019 31-Mar-2021 This indicator measures the variation between allocated budget (adjusted for in year allocations) and actual spending in the ministries of Education, Health & Sports, and Transport and Communication, representing essential services for citizens in general and for the poor and the vulnerable in particular. While this is a medium term reform effort, an initial 10% reduction in budget variance is sought by the end of this extended project. Comments: The average budget credibility and out-turn indicator for key service sectors (health, education, and transport) has been 11% for 2018-2019 FY (compositional variance between budget estimate and temporary actual of MoHS (-25.31%), MoE(-4.03%), and MoTC (-3.52%). It cannot be calculated for 2019- 20FY, as temporary actual data is only available for the first 10 months. Efficient budget preparation process IN00890263 ►Budget preparation process including (i) issuance of ceilings (ii) preparation of medium-term fiscal framework (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No Yes Yes Yes Date 01-Apr-2014 29-Mar-2019 08-Sep-2020 31-Mar-2021 Overall Comments PDO The project has achieved 11 of the 17 revised results indicators reflected in the results framework matrix. Three of the remaining six indicators are on track, including timeliness of submission of Audit Report to Parliament, a publication of PFM Law with input by JPAC, and 70% procurement opportunities and contract awards (above USD 100 000) are publicly available for 5 Union ministries. The remaining three indicators have experienced delays as the result of disruptions caused by the Covid-19 pandemic but have made some progress. These include preparation of Gender Budget statement for one service sector and procurement of ITAS and CBS systems 10/26/2020 Page 4 of 11 The World Bank Implementation Status & Results Report Modernization of Public Finance Management (P144952) Intermediate Results Indicators by Components A. Improving Revenue Mobilization and Strengthening Tax Administration IN00890265 ►Number of large and medium tax-payers completing self-assessment (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 2,825.00 33,993.00 2,300.00 Date 01-Apr-2014 26-Nov-2019 08-Sep-2020 31-Mar-2021 Internal Revenue Department (IRD) extended taxpayers office. Total 33,993 taxpayers (955 from LTO, 1,847 from MTO-1, 4,585 from MTO-2, 16,418 from MTO-3 and 10,188 from MTO-4) under self- Comments: assessment as of September 8, 2020. IN00890270 ►Modernization of tax administration information system (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target MoPF / IRD decided to Delivery of an terminate the supplier’s ITAS Bid Evaluation There is no integrated integrated tax contract, considering the Report is ready to tax information and information system for Value substantial delays and submit internal administration system at testing in IRD shortcoming and to re-bid approval and WB's IRD. headquarters, LTO using limited international authorzation. and MTO. bidding. Date 30-Sep-2015 27-Nov-2019 08-Sep-2020 31-Mar-2021 The tax administration modernization and implementation of the new tax administration law do require a modern and integrated tax administration information system supported by the project. The procurement and delivery of such a system is a key milestone for the project. This intermediary indicator thus aims to Comments: measure the delivery of the integrated tax management system, while implementation is foreseen over a period of 3 years. B. Supporting Responsive Planning and Budget Preparations IN00890266 ►Improving information base for linking budgets to plans- number of departments submitting recurrent and capital budget forms electronically (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 181.00 40.00 Date 01-Apr-2014 27-Nov-2019 08-Sep-2020 31-Mar-2021 Indicator supports implementation of electronic budget submission for both current and capital budget and moving to a more sustainable web-based solution. WB provided technical assistance through workshops on electronic budget submission to all line agencies during the last two fiscal years. Planning Department has already piloted the Electronic Forms started for the 2018 Six Months Plan, 2018-19 FY and 2019-20 Comments: FY. All 181 agencies including 11 SAOs, 135 ministries, and departments, 25 SEEs, 5 outside of State- Funded SEEs, Municipalities, Nay Pyi Taw Council, CBM, Nay Pyi Taw Development Council have submitted recurrent and capital budget forms electronically for the 2019-2020 FY budget. The next step is to upgrade these Excel based submissions to a web-based platform. 10/26/2020 Page 5 of 11 The World Bank Implementation Status & Results Report Modernization of Public Finance Management (P144952) C. Supporting Effective Budget Execution and Financial Reporting IN00890267 ►Timeliness of reconciled budget execution reports (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Treasury Department Treasury Department reconciles budget could submit Monthly execution reports Union Fund Account to monthly, and submits to Value >6 months MOPFI, Cabinet, OAG