The World Bank Report No: ISR8340 Implementation Status & Results Afghanistan Public Financial Management Reform II (P120427) Public Disclosure Copy Operation Name: Public Financial Management Reform II (P120427) Project Stage: Implementation Seq.No: 3 Status: ARCHIVED Archive Date: 24-Dec-2012 Country: Afghanistan Approval FY: 2011 Product Line: Recipient Executed Activities Region: SOUTH ASIA Lending Instrument: Technical Assistance Loan Implementing Agency(ies): Key Dates Board Approval Date 23-Jun-2011 Original Closing Date 31-Dec-2014 Planned Mid Term Review Date Last Archived ISR Date 18-Apr-2012 Effectiveness Date 09-Aug-2011 Revised Closing Date 31-Dec-2014 Actual Mid Term Review Date Project Development Objectives Project Development Objective (from Project Appraisal Document) The proposed PDO is to strengthen public financial management through effective procurement, treasury and audit structures and systems in line with sound financial management standards of monitoring, reporting and control. Has the Project Development Objective been changed since Board Approval of the Project? Yes No Component(s) Component Name Component Cost Reform Management 2.95 Procurement Reform 21.47 Audit Reform and Performance 24.70 Financial Management Reform 23.88 Overall Ratings Public Disclosure Copy Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Moderately Satisfactory Overall Implementation Progress (IP) Satisfactory Moderately Satisfactory Overall Risk Rating Moderate Implementation Status Overview Moderately satisfactory Locations Page 1 of 5 The World Bank Report No: ISR8340 No Location data has been entered Results Public Disclosure Copy Project Development Objective Indicators Indicator Name Core Unit of Measure Baseline Current End Target PEFA Ratings for internal audit (P-21) improve Number Value 2.00 2.00 3.00 to B (3) . Date 01-Sep-2011 30-Nov-2012 31-Dec-2014 Comments Good progress in MOF; 10 line ministries have had revenue operations reviewed. Donors shift 20% of off-budget ODA to on- Percentage Value 0.00 5.00 20.00 budget Date 01-Sep-2011 30-Nov-2012 31-Dec-2014 Comments The figure above is inferred from the increase in donor contributions to ARTF reflected above. PEFA ratings for external audit (P26) improve Number Value 2.00 2.00 3.00 to B (3) Date 01-Sep-2011 30-Nov-2012 31-Dec-2014 Comments No progression on compliance with stds. % of of procurement done by LM using stand- Percentage Value 0.00 20.00 50.00 alone procurment Date 01-Sep-2011 30-Nov-2012 31-Dec-2014 Comments 6 LM are now certified.These 3 MEd, MAIL, MPH, MOLSA, MEW, M Urban, represent 40 % of civilian expenditure. Number of functions carried out by regular Number Value 0.00 12.00 20.00 ministry staff Date 01-Sep-2011 30-Nov-2012 01-Sep-2011 Public Disclosure Copy Comments PPU tashkeel established and recruitment underway. Intermediate Results Indicators Page 2 of 5 The World Bank Report No: ISR8340 Indicator Name Core Unit of Measure Baseline Current End Target No of Procurement units of LMs and provincial Number Value 7.00 13.00 61.00 offices restructured Date 01-Sep-2011 30-Nov-2012 31-Dec-2014 Public Disclosure Copy Comments In line with plan; 13 done and 8 more for SY 1391. No of staff completing procurement training Number Value 0.00 1013.00 1800.00 and accredited. Date 01-Sep-2011 30-Nov-2012 31-Dec-2014 Comments In line with plan; new arrangements for Kabul required. No of HR staff trained Number Value 0.00 90.00 75.00 Date 01-Sep-2011 30-Nov-2012 31-Dec-2014 Comments good progress on HR training. LM PFM assessment Text Value 2 assessments underway 14 14 assessments completed Date 01-Sep-2011 30-Nov-2012 31-Dec-2014 Comments in line with plan; completed. Internal audit - no of audits evaluated as done Text Value 4 10 LM audit done to std 34 to acceptable std Date 01-Sep-2011 30-Nov-2012 31-Dec-2014 Comments MOF audit are done to std. LM audits now face restrictions re change in Art 61. External audit - no done to ISA Text Value Just WB grant audits grants audit 50% done on All WB grant audits and 9 time; regulatory audits Date 01-Sep-2011 30-Nov-2012 31-Dec-2014 Comments grant audits all expected by Dec 31. Other work by CAO not done to std. Public Disclosure Copy Timeliness, quality of in-year execution reports Text Value 30 days from month end 45 14 days Date 01-Sep-2011 30-Nov-2012 31-Dec-2014 Comments Treasury continues to improve timeliness but maintenance of Web site was not kept up so publishing was late. Freebalance V 7 implemented Text Value not implemented Assessment is agreed implemented for all sites Date 01-Sep-2011 30-Nov-2012 22-Mar-2013 Page 3 of 5 The World Bank Report No: ISR8340 Comments Treasury agree to run test script to determine if FB 7 will support provincial on-line operations. Public Disclosure Copy Legal Framework for Accounting Profession is Text Value no legal or oversight Unit establlished in MOF, Legal framework agreed and established framework TORs for consultants agreed training underway Date 01-Sep-2011 30-Nov-2012 31-Dec-2014 Comments Unit is now working to establish National Steering Committee. Timeliness and quality of audited statements to Text Value Sept 22 just budget execution SY 1390 Audit Report to Sept 22 budget execution and Parliament Parliament on time but not to IPSAS compliant Financials std. Date 01-Sep-2011 30-Nov-2012 31-Dec-2014 Comments Report to Parliament sent on time but not done to any acceptable std. Disaster recovery plan and testing Text Value no plan in place Cold site established. plan in place and tested Date 01-Sep-2011 30-Nov-2012 31-Dec-2014 Comments Plan still not developed but cold site established. Internal Audit - no of staff trained Number Value 112.00 120.00 360.00 Date 01-Sep-2011 30-Nov-2012 31-Dec-2014 Comments All staff participating in on- going training. Data on Financial Performance (as of 28-Nov-2012) Financial Agreement(s) Key Dates Project Ln/Cr/Tf Status Approval Date Signing Date Effectiveness Date Original Closing Date Revised Closing Date Public Disclosure Copy P120427 TF-10024 Effective 09-Aug-2011 09-Aug-2011 09-Aug-2011 31-Dec-2014 31-Dec-2014 Disbursements (in Millions) Project Ln/Cr/Tf Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P120427 TF-10024 Effective USD 73.00 73.00 0.00 15.89 57.11 22.00 Disbursement Graph Page 4 of 5 The World Bank Report No: ISR8340 Public Disclosure Copy Key Decisions Regarding Implementation Extension of Closing Date. US $13 million of funding of the project proposal was approved May 27, 2012. The related activities are the line ministry audit support (SAO) and the Professional Accounting Association support (MOF) and these are now a year behind schedule. It is therefore necessary to extend the project closing date to December 31, 2015. Internal Audit. Progress in internal audit coverage has been affected by the continuing dual legal responsibilities for internal audit by MOF under the Public Finance and Expenditure Management Law and by the SAO under the Control and Audit Law. To ensure progress on the PDO and the PFM Roadmap, IA of MOF will redirect resources under the component to build independent capacity in five key line ministries. External Audit. Progress toward improving the providing assurance on government's use of funds is not satisfactory and will require enactment of the new Audit Law as well as great improvement by the SAO because the Qatia audit report for SY1389 is not in accordance with ISSAI standards. LM Support TA must be sourced. Restructuring History There has been no restructuring to date. Public Disclosure Copy Related Projects There are no related projects. Page 5 of 5