The World Bank Strengthening Community Mobilization and Local Council Service Delivery in the Post-Ebola Context (P155339) REPORT NO.: RES31720 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF THE SIERRA LEONE STRENGTHENING COMMUNITY MOBILIZATION AND LOCAL COUNCIL SERVICE DELIVERY IN THE POST-EBOLA CONTEXT APPROVED ON FEBRUARY 6, 2017 TO MINISTRY OF FINANCE SOCIAL PROTECTION & JOBS AFRICA Regional Vice President: Hafez M. H. Ghanem Country Director: Pierre Frank Laporte Regional Director: Amit Dar Practice Manager: Iffath Anwar Sharif Task Team Leader: Randa G. El-Rashidi The World Bank Strengthening Community Mobilization and Local Council Service Delivery in the Post-Ebola Context (P155339) ABBREVIATIONS AND ACRONYMS CMG Community Monitoring Group CSO Civil Society Organization DecSec Decentralization Secretariat FM Financial Management GoSL Government of Sierra Leone JSDF Japan Social Development Fund LC Local Council LGFD Local Government Finance Department MDA Ministries, Departments and Agencies MoF Ministry of Finance PDO Project Development Objective USD United States Dollars BASIC DATA Product Information Project ID Financing Instrument P155339 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 06-Feb-2017 27-Dec-2020 Organizations Borrower Responsible Agency Decentralization Secretariat,Project Fiduciary Ministry of Finance Management Unit,Local Government Finance Department Financing (in USD Million) FIN_SUMM_PUB_TBL The World Bank Strengthening Community Mobilization and Local Council Service Delivery in the Post-Ebola Context (P155339) SUMMARY Total Project Cost 0 Total Financing 0 Financing Gap 0 DETAILS -NewFin3 Project Development Objective (PDO) Original PDO The Project Development Objective is to respond to the post-Ebola Virus Disease (EVD) needs at the local level in Sierra Leone by building community resilience through EVD sensitization efforts and social mobilization activities in the districts most affected by the disease. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing Net TF Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed TF-A4737 23-Jun-2017 23-Jun-2017 23-Jun-2017 27-Dec-2020 2.75 1.78 .97 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING 1. The Strengthening Community Mobilization and Local Council Service Delivery in the Post-Ebola Context Project (P155339) was approved on February 6, 2017, and became effective on June 27, 2017. The grant agreement was signed on June 23, 2017. Disbursement conditions for the Project were met on December 4, 2017, and the Project officially launched on December 8, 2017. The project amount is USD $2.75 million and is funded through the Japan Social Development Fund (JSDF). The overall Project Development Objective (PDO) is to respond to the post-Ebola needs at the local level in Sierra Leone by building community resilience through Ebola sensitization efforts and social mobilization activities in the districts most affected by the disease. This restructuring is in response to a request from the Government of Sierra Leone (GoSL) to restructure the project to expedite implementation 2. Operations manuals and implementation plans are in place for all components. Civil Society Organizations (CSOs) has been recruited under the various components and implementation is underway. The PDO remains relevant and attainable at Mid-Term. The main Project components and indicators are aligned and relevant to the PDO, and the scope and content The World Bank Strengthening Community Mobilization and Local Council Service Delivery in the Post-Ebola Context () of activities and indicator targets/sources remain relevant for the Project, which is expected to produce positive development outcomes for Sierra Leone. All grant covenants are being complied with. FM, Procurement and Safeguards are all rated satisfactory. 3. The most relevant steps accomplished under the Project include: (i) holding a competitive process to engage all CSOs in districts of project implementation; (ii) Joint Implementing Committees were formed, including Chairmen/Mayors, Chief Administrators, Local Councilors, Ministry/Department/Agency (MDA) representatives and religious leaders, who also received training for their specific functions; (iii) launching of community dialogues, health discussions, Ebola memorials and community monitoring of public services in all districts of project implementation; (iv) activation of Community Monitoring Groups (CMGs) in over 50 Wards of Bombali District, Freetown City, Port Loko District and Western Area Rural District, including recruiting of facilitators and volunteers, and meetings conducted with communities; and (v) a two-tier Grievances Redress Mechanism, which is ready at the local and national level. 4. Despite very positive Project progress, implementation has been slower than expected. As of November 30, 2019, the Bank had advanced to the GoSL USD $1.78 million (64.7% of the total project allocation), of which the GoSL disbursed USD $1.35 million (49.1% of total allocation). This is significantly lower than the expected disbursement (disbursement estimate) at Mid-Term, which was USD $2.15 million (78.2% of total allocation). 5. A number of exogenous factors and administrative changes, listed below, slowed down implementation. (a) The Sierra Leone Presidential election held in March and April 2018 resulted in a change of government, with the new government pursuing a different agenda, and seeking to restructure functions and staff from line ministries, including the Ministry of Local Government, were Decentralization Secretariat (DecSec) sits. (b) Parallel to the Presidential election, the people of Sierra Leone voted for new local representatives. The leadership of 3/4 Local Councils (LCs) tasked with implementing the Project changed, requiring additional contacts and training of officials. (c) The new Minister of Local Government and Rural Development terminated the contracts of six out of nine staffs at DecSec, including the Director of the Unit, between the second and third quarters of 2018. A new team was subsequently hired and 12 employees joined DecSec during the first quarter of 2019. 6. The Project necessitates a restructuring in the face of implementation shortcomings, mainly as: (a) disbursement flow has been lower than expected; (b) subcomponent 2.B (Participatory Budgeting) activities have not been fully implemented due to the absence of key staff during the transition period –the focus being on implementing Component 1 (LC social sensitization activities) and Component 2.A (creating social accountability and community monitoring mechanisms for the effective delivery of social services & promoting direct citizen engagement in the monitoring of LC services); and (c) operational costs have been depleted, which is affecting project supervision. 7. This is the first request for a Project restructuring. There are no outstanding project audits and the Project is not subject to suspension of disbursement. The PDO remains achievable. II. DESCRIPTION OF PROPOSED CHANGES 8. Change in implementing agency / institutional arrangements. The Project Management Fiduciary Unit (PFMU) is the recipient of funds and has overall responsibility to ensure prompt and efficient overall coordination, implementation and communication of Project activities and results including being responsible for: (i) fiduciary elements of Project implementation (financial management and procurement); (ii) preparing the Annual Work Plan and Budget and The World Bank Strengthening Community Mobilization and Local Council Service Delivery in the Post-Ebola Context () ensuring its implementation; (iii) consolidating periodic progress reports; (iv) monitoring and evaluating Project activities; (v) liaising with other implementing institutions on issues related to Project implementation; and (vi) coordinating and providing other administrative support to the Decentralization Secretariat (DecSec), as detailed in the Project Operations Manual. DecSec is responsible for managing Component 1 (Local Council Social Sensitization Activities), and 2.A (Community Monitoring and Social Accountability) and 2.B (Local Council Participatory Budgeting Pilot). 9. The GoSL requested that the role of the Local Government Finance Department (LGFD), a unit in the Ministry of Finance (MoF) currently responsible for Component 2.B alongside DecSec, be further clarified. LGFD has been involved in project implementation and has been an active player in all Bank-financed local service delivery operations in Sierra Leone. Their contributions have been instrumental in ensuring proper fiduciary and budgetary compliance in local government interventions nationwide. LGFD was largely unaffected by government changes arising from the 2018 elections, has senior staff with ample experience managing World Bank projects, a decentralized structure, and is used to working alongside LCs. LGFD would provide mentoring to new staff at DecSec on financial management and procurement, speeding up implementation of Participatory Budgeting (Component 2.B), and ensuring Project outcomes as they relate to the Participatory Budgeting subcomponent. As a fully-staffed unit at the MoF, LGFD has high technical and administrative capacity, employing a mixed team of economists, FM, procurement, and civil works experts. It has experience in supervising LC projects, including civil works, which are likely to result from participatory budgeting. Within the scope of intervention described in the Project Paper, LGFD would adopt the following functions: (a) conduct Component 2.B activities along DecSec as co-implementer in financial management and procurement; (b) conduct monitoring visits for Component 2.B and inform the Results Framework (alongside DecSec), ensuring alignment with LC annual work plans and linking project targets to national targets for the respective sector where applicable; (c) participate in Participatory Budgeting processes, guiding implementation and providing backstopping support in the areas of financial management and procurement; (d) help with expediting financial management and procurement processes by informing concept notes prepared with DecSec; and (e) serve as an intermediary vis-à-vis LCs, Ward Committees, MDAs and CSOs in activities related to financial management and procurement. 10. With this arrangement the PFMU, formerly named Integrated Program Administration Unit (IPAU; denomination used in the project Grant Agreement), will continue acting as sole recipient of funds. An FM assessment of the PFMU, formerly known as Integrated Program Administration Unit (IPAU), continues to be responsible for all day-to-day financial management functions of all new World Bank Supported Projects in Sierra Leone, the Strengthening the Capacity of Local Councils to Respond to Ebola Project inclusive. The FM systems have remained the same and continue to ensure that accurate records are kept and requisite reports are produced on time. The PFMU has been continually assessed throughout the project and maintained adequate FM arrangements in place to ensure that Project funds are used for the purposes intended in an efficient and economical manner. The assessment complied with the Financial Management Manual for World Bank-Financial Investment Operations that became effective on March 1, 2010, but was issued on February 4, 2015, as well as the Governance Global Practice Financial Management Assessment and Risk Rating Principles. 11. Reallocation of proceeds by Category. Funds need to be transferred between categories so LGFD can effectively undertake its supervisory role as an implementing agency. It is suggested that USD $20,000 be allocated as LGFD operating costs so the department can purchase the necessary office materials and finance all monitoring visits. The disbursement arrangements for LGFD to access these proceeds will be the same that are currently in place at DecSec and outlined in the JSDF Project Paper: in order to access funds through the PFMU (which manages the designated account for the JSDF), both DecSec and LGFD will prepare a concept note to justify fund transfers in alignment with Project objectives and the Annual Work Plan approved by the PFMU. Advances would be made to the executing agencies by the PFMU as and when necessary. The World Bank Strengthening Community Mobilization and Local Council Service Delivery in the Post-Ebola Context () The advances would only be recorded as expenses when the advances are liquidated, and all supporting documents handed over to PFMU. Project accounts will continue to be maintained on a cash basis, supported with appropriate records and procedures to track commitments and to safeguard project assets. Quarterly unaudited Interim Financial Reports (IFRs) will continue to be produced every quarter. Supporting documentation will be retained by the PFMU for review by the IDA missions and external auditors. 12. It was also agreed that USD $20,000 be assigned as DecSec and PFMU operating costs (each), as operational costs under the Project have been depleted during supervision visits. Total operational costs for the Project would stand at USD $114,000 (4.1% of total allocation), which remains low and well under the 10% total allocation limit established by the JSDF Unit for the projects it finances. This increase in operational costs requires a reallocation of proceeds. The Bank team recommends transferring funds from Categories 1 and 3, to Category 5, as per the table below. Table 1. Suggested reallocation by expenditure category. Current Reallocation Total with Expenditure category % change allocation amount reallocation (1) Consultant services USD 118,500 - USD 10,000 USD 108,500 -8.44% (2) Training and workshops USD 776,500 - USD 776,500 - (3) Goods USD 581,000 - USD 50,000 USD 531,000 -8.61% (4) Subgrants USD 1,220,000 - USD 1,220,000 - (5) Operating costs USD 54,000 USD 60,000 USD 114,000 +111.11% Source: table designed by Bank team (data from PFMU and Bank Project FM Specialist). 13. Reallocation of proceeds by Component. In order to make the reallocation of proceeds by Category, the Project also needs to transfer proceeds between Components. More specifically, the Bank team recommends to transfer USD $30,000 from Component 1 and USD $30,000 from Component 2, to Component 3, for a total of USD$60,000. Table 2. Suggested reallocation by Component. Current Reallocation Total with Component % change allocation amount reallocation (1) LC social sensitization USD 1,000,000 - USD 30,000 USD 970,000 -3.00% activities (2) Creating social mobilization mechanisms that USD 1,600,000 - USD 30,000 USD 1,570,000 - 1.87% improve LC service delivery (3) Project management, monitoring and evaluation, USD 150,000 USD 60,000 USD 210,000 40.00% and knowledge management Source: table designed by Bank team (data from PFMU and Bank Project FM Specialist). 14. Change in disbursement estimates. The slower than expected Project implementation has resulted in slow disbursements. The revised disbursement estimates have been made to better align disbursements for the last three semesters of Project implementation. A new disbursement estimate is presented in the table below (which includes World Bank advances). It is expected that USD 950,000 will be disbursed in 2020, the last year of project implementation. Most of The World Bank Strengthening Community Mobilization and Local Council Service Delivery in the Post-Ebola Context () this (USD 600,000) corresponds to Participatory Budget payment of selected projects, which fall under expenditure category 3 (goods) and Component 2. Table 3. Suggested disbursement estimates. JSDF Disbursement Estimates (in US$ Million) Calendar Year 2017 2018 2019 2020 PAD 0.75 1.0 0.7 0.30 Actual 0 1.1 0.681 - Proposed - - 0.7 0.95 Source: table designed by Bank team III. SUMMARY OF CHANGES Changed Not Changed Implementing Agency ✔ Components and Cost ✔ Reallocation between Disbursement Categories ✔ Disbursement Estimates ✔ Institutional Arrangements ✔ Project's Development Objectives ✔ Results Framework ✔ Loan Closing Date(s) ✔ Cancellations Proposed ✔ Additional Financing Proposed ✔ Disbursements Arrangements ✔ Change in Overall Risk Rating ✔ Safeguard Policies Triggered ✔ EA category ✔ Legal Covenants ✔ Financial Management ✔ Procurement ✔ 1 As of October 31, 2019. The World Bank Strengthening Community Mobilization and Local Council Service Delivery in the Post-Ebola Context () Implementation Schedule ✔ Other Change(s) ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_IA_TABLE IMPLEMENTING AGENCY Implementing Agency Name Type Action Decentralization Secretariat Implementing No Change Agency Local Government Finance Department Implementing New Agency OPS_DETAILEDCHANGES_COMPONENTS_TABLE COMPONENTS Current Current Proposed Proposed Cost Action Component Name Component Name Cost (US$M) (US$M) Local Councils social sensitization Local Councils social 1.00 Revised 0.97 activities. sensitization activities. Creating social mobilization Creating social mobilization mechanisms that improve Local 1.60 Revised mechanisms that improve 1.57 Councils service delivery Local Councils service delivery Project management, monitoring Project management, and evaluation, and knowledge 0.15 Revised monitoring and evaluation, and 0.21 management knowledge management TOTAL 2.75 2.75 OPS_DETAILEDCHANGES_REALLOCATION _TABLE REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Financing % Current Allocation Actuals + Committed Proposed Allocation (Type Total) Current Proposed TF-A4737-001 | Currency: USD iLap Category Sequence No: 1 Current Expenditure Category: Consultant Services 118,500.00 26,314.80 108,500.00 100.00 91.56 The World Bank Strengthening Community Mobilization and Local Council Service Delivery in the Post-Ebola Context () iLap Category Sequence No: 2 Current Expenditure Category: Training and Workshops 776,500.00 452,040.76 776,500.00 100.00 100.00 iLap Category Sequence No: 3 Current Expenditure Category: DISB - GOODS 581,000.00 175,125.71 531,000.00 100.00 91.39 iLap Category Sequence No: 4 Current Expenditure Category: Sub-Grants part I and II 1,220,000.00 410,484.42 1,220,000.00 100.00 100.00 iLap Category Sequence No: 5 Current Expenditure Category: DISB - OPERATING COSTS 54,000.00 52,482.88 114,000.00 100.00 211.11 Total 2,750,000.00 1,116,448.57 2,750,000.00 OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE DISBURSEMENT ESTIMATES Change in Disbursement Estimates Yes Year Current Proposed 2017 750,000.00 0.00 2018 1,000,000.00 1,100,000.00 2019 700,000.00 700,000.00 2020 300,000.00 950,000.00 2021 0.00 0.00