The World Bank NI Public Financial Management Modernization Project (P111795) REPORT NO.: RES35913 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF NI PUBLIC FINANCIAL MANAGEMENT MODERNIZATION PROJECT APPROVED ON DECEMBER 7, 2010 TO REPUBLIC OF NICARAGUA GOVERNANCE LATIN AMERICA AND CARIBBEAN Regional Vice President: Axel van Trotsenburg Country Director: Yaye Seynabou Sakho Senior Global Practice Director: Deborah L. Wetzel Practice Manager/Manager: Robert R. Taliercio Task Team Leader: Alberto Leyton, Leonardo Ramiro Lucchetti The World Bank NI Public Financial Management Modernization Project (P111795) I. BASIC DATA Product Information Project ID Financing Instrument P111795 Investment Project Financing Original EA Category Current EA Category Not Required (C) Not Required (C) Approval Date Current Closing Date 07-Dec-2010 30-Nov-2019 Organizations Borrower Responsible Agency Instituto Nacional de Información de Desarrollo Republic of Nicaragua (INIDE),Ministerio de Finanzas y Crédito Público Project Development Objective (PDO) Original PDO The objective of the Project is to enhance the efficiency and transparency of the Recipient’s public expenditure management andstrengthen the Recipient’s statistics management capacity. Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-55790 08-Dec-2014 15-Dec-2014 25-Feb-2015 30-Nov-2019 25.00 20.06 4.94 IDA-48070 07-Dec-2010 09-Dec-2010 06-May-2011 31-Dec-2017 10.00 10.01 0 TF-14059 27-Feb-2013 14-Mar-2013 14-Mar-2013 19-Aug-2015 3.35 3.35 0 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank NI Public Financial Management Modernization Project (P111795) II. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES Project performance remains Moderately Satisfactory. The Project (Additional Financing) was restructured in October 2018, extending the closing date to November 30, 2019. The PDO remains achievable. The Bank conducted a mission during the week of February 4, 2019, in which the Bank agreed with the Borrower on actions that will be undertaken by the Borrower to achieve the PDO. Project progress and status is summarized below: • Development and Implementation of the Administrative and Financial Management Information System (SIGAF by its Spanish initials). SIGAF's Financial Core subsystems (Treasury, Budget and Accounting) have been deployed in all 23 Central Government Institutions. Furthermore, SIGAF’s administrative subsystems on Procurement, Goods for Consumption and Goods for Use have been implemented in 10 pilot institutions within the Central Government. The Ministry of Finance is currently working with the software provider (the contract is funded by the IDB) to stabilize the Financial Core subsystems and extend the implementation of the administrative subsystems (except for payroll subsystems) in the rest of the Central Government. However, due to the software provider's delays in completing system functionalities and resolving incidences, SIGAF's implementation schedule will need to be extended (the extension still remains within the current Project timeframe). In the last mission, the Bank provided a series of recommendations to the Borrower on completing SIGAF implementation on time. The Bank will continue following up closely on the implementation progress. The Ministry of Finance has also made significant progress on the design and implementation of a Contingent Data Center (CDC) for SIGAF. Several procurement processes were awarded and are now in process of implementation. These include the installation of the facility, the servers and a warehouse system. • Enhancing the government’s Statistics Management Capacity. Nicaragua now has an updated digital cartography system covering the entire country. The Census of Buildings and classification of census segments was also completed in timely manner. The Mobile Capture Devices (tablets) for the national census were procured and tested during the May 2018 pilot census. In addition, several operational modules of the technological platform (SisPro) were also tested and validated during this pilot census. Activities in 2019 under this component, will focus on continuing to develop and refine SisPro’s modules. On February 8, 2019, the Ministry of Finance issued a request to the Bank for reallocation of Loan proceeds between categories of expenditure. The request is based on the updates of the Project's Operations Plan given the extension of the project closing date and the new implementation schedule of SIGAF. The updated Operations Plan includes: (i) reduction of costs in components 1, 2, and 3 due to cancelation of several consultant’s services and savings in the procurement of several goods; and (ii) increase in costs of component 4 (Project management), owing to the extension of project timeframe. On this basis, the borrower proposes to reallocate US$262,112.96 from Category 1 (Goods, Non- Consulting Services, Consultants’ services and Training for Parts 1, 2, 3 and 4) to Category 2 (Operating Costs). The proposed reallocation will bring the total allocation to Category 2 to US$2,152,504.96 or approximately 8.6% of the AF. The proposed reallocation represents a 13.9% increase in the current allocation of Category 2 (Operating Costs), and will reduce the allocation to Category 1 by 1.7%. This reallocation will allow the borrower to continue providing adequate level of operational support and technical assistance for the implementation of the SIGAF. By guaranteeing the continuation of satisfactory project management, the proposed reallocation will ensure that the project remains on track to meet the PDOs. The World Bank NI Public Financial Management Modernization Project (P111795) The project does not have any outstanding audit reports nor are there any audit report unsatisfactory to the Bank. Neither the loan in particular, nor the country in general, is subject to an ongoing suspension of disbursements. III. DETAILED CHANGES REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Current Current Actuals + Proposed Disbursement % Ln/Cr/TF Expenditure Allocation Committed Allocation (Type Total) Category Current Proposed IDA-55790- GO,NCS,CS,TR- 001 Pt 1,2,3&4(excl. 15,541,250.00 10,184,426.63 15,279,137.04 100.00 100.00 Currency: 2aii) USD Operating Costs 1,890,392.00 1,878,316.36 2,152,504.96 100.00 100.00 GO, NCS, CS, TR 7,568,358.00 6,998,868.23 7,568,358.00 100.00 100.00 - Part 5 Total 25,000,000.00 19,061,611.22 25,000,000.00