The World Bank Implementation Status & Results Report Ethiopia PFM Project (P150922) Ethiopia PFM Project (P150922) AFRICA EAST | Ethiopia | Governance Global Practice | IBRD/IDA | Investment Project Financing | FY 2016 | Seq No: 11 | ARCHIVED on 04-May-2021 | ISR46441 | Implementing Agencies: MOF-ETHIOPIA, Ministry of Finance (MoF) Key Dates Key Project Dates Bank Approval Date: 26-Feb-2016 Effectiveness Date: 18-May-2016 Planned Mid Term Review Date: 27-Jul-2018 Actual Mid-Term Review Date: 13-Jun-2018 Original Closing Date: 07-Apr-2020 Revised Closing Date: 07-Mar-2022 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The PDO is to improve efficiency, transparency and accountability of public expenditure at the federal and regional levels. Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Expenditure Management amd Information Systems Support:(Cost $22.45 M) Strengthening Accountability Institutions:(Cost $9.41 M) Project Management, Monitoring and Evaluation:(Cost $1.14 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Moderately Satisfactory Moderately Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Satisfactory Overall Risk Rating Substantial Substantial Implementation Status and Key Decisions Overall Implementation Performance: Since approval of second extension of the project to March 7, 2022, the overall implementation performance is progressing well. The progress to achieving the PDO is encouraging especially on Component 1 which covers more than 73% of the Project, and on e-Government Procurement (e- GP) system. On component 1- Integrated Financial Management and Information System (IFMIS), which is the building block around which the Bank technical assistance takes place, roll-out using vendor has been completed. The IFMIS is now rolled out to and operational in 170 sites at the Federal level. In addition, the MoF has started a new phase of roll out to remaining federal bodies as per the new IFMIS strategy developed through the support of 5/4/2021 Page 1 of 9 The World Bank Implementation Status & Results Report Ethiopia PFM Project (P150922) the Project. The MoF started rolling out the system to 12 federal level entities and their branches using own force. In addition, the existing Integrated Budget and Expenditure system (IBEX) continues to be in over 1800 sub-national locations across the country. Further, procurement of new server for IBEX for some regions is proceeding, albeit with slow pace. The IFMIS new strategy is finalized and launched. There is moderate progress in implementing the recommendations of the IFMIS effectiveness study. Other positive progress in this component include trainings -both IFMIS related trainings and Institutionalized Trainings (which are being conducted at the Federal level and in regions) which have progressed well. The MoF new website is launched which the support of this project. Consultations with Civil Service Commission are underway to establish a cyber security department/unit. The support on Debt Management and Financial Analysis System 6 (DMFAS 6) being implemented with UNCTAD is also progressing well including integration with IFMIS. Despite these positive developments, however, there are key challenges under this component that need attention. Key one is the issue of MoF’s Primary Data Center (PDC) and servers. The data center is not activated due to electrical and power related issues. Despite various efforts procurement and installation of cabling and back-up power (generator) are not finalized, and hence the servers are not activated and tested. Another important issue is lagging procurements. Although MoF’s new website is launched, the content continues to be lacking important financial information and content management needs sustainable solution. In this respect, MoF’s Public Relation Directorate in coordination with others prepared and shared with the Bank a draft plan/proposal to address challenge for which feedback was provided. It is expected that the implementation of the plan will improve the situation. Discussions are underway with the Government to accelerate actions related to change management, functional challenges, risk review, regulatory underpinnings, and capacity building. The delay in recruitment of IFMIS advisor that is planned to support MoF in implementing these recommendations exacerbated the challenge. Therefore, urgent attention is needed to fast-track the efforts underway to finalize the recruitment international IFMIS advisor. In Component 2 major positive developments and progress in implementation is observed for the Federal Public Procurement Property Administration Agency’s e- GP roll out. Here key achievements include e- GP system development is completed, “Go-Live” date is set for end of the fiscal year (July 7 2021), system testing and system stabilization in good progress, integration/interface engagement activities are completed, draft guidelines completed ready for review and translation, the e GP data center installation is completed and third party audit contract is signed. However, it is important to finalize testing and preparations to realize the Go-Live” date set. In addition, it is critical to improve on outreach/awareness raising or training to the business community. Senior management attention is critical in this respect. On other issues, FPPPA has as yet been unable to provide information on PDO indicator 4 which reads: "Target agencies 12 progressively increase number of contracts awarded within an agreed benchmark of 180 days for works contracts above US$5 million and Goods above US$500,000" as target agencies are not providing these information in the required format of the KPI. This requires urgent action and the FPPPA is working with available data as well as with the target entities to provide this information by mid May 2021. In respect to the Procurement professionalization, an effectiveness study is planned to be conducted and the Bank requests the study be conducted and completed on time as per the scope of the Bank cleared TOR. Another element of Component 2 showing progress is the “Development of Accountancy Profession in Ethiopia" subcomponent managed by the Accounting and Auditing Board of Ethiopia (AABE). After some delay, AABE contracted a consulting firm/twining partner to support AABE in fulfilling its key mandates of reviewing of Financial Reports of reporting entities and Audit reviews of Auditors as well as to support the Professional Accountancy Organization (PAO) planned to be established, and this work is underway. A key issue, however, that is still pending is the legal establishment of the PAO which needs MoF's senior management intervention to realize this. Other planned activities AABE should be fast- tracked including contracts under implementation and new consultant recruitments. Finally, the is no operation under "Capacity building for Oversight Bodies" subcomponent supporting Office of the Federal Auditor General (OFAG). The main activity planned under the OFAG, which is the Audit Quality Improvement review has halted. MoF has taken action to terminate this contract through the system. There has been enhanced oversight, coordination, and follow up to the project. However, project disbursement from the Bank is still at 87%. As per the last submitted IFR of January 7 2021, the budget utilization is quite low which is consistent with the last ISR. This require attention and hence no advance was released. The Bank has requested for revised work program and budget in view of project closing date extension. The Bank team continues to engage with the project team to address these challenges and fast track implementation. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance Moderate High High Macroeconomic Moderate Substantial Substantial Sector Strategies and Policies Moderate Substantial Substantial Technical Design of Project or Program Moderate Moderate Moderate 5/4/2021 Page 2 of 9 The World Bank Implementation Status & Results Report Ethiopia PFM Project (P150922) Institutional Capacity for Implementation and Substantial High High Sustainability Fiduciary Moderate Substantial Substantial Environment and Social Moderate Low Low Stakeholders Moderate Moderate Moderate Other -- -- -- Overall Moderate Substantial Substantial Results PDO Indicators by Objectives / Outcomes Improve efficiency, transparency and accountability of public expenditure at fed and regional levels IN00985284 ►Reduced cash float for the Federal and Regional Governments (in percent of the annual federal budget) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 22.00 15.70 14.79 18.70 Date 30-Dec-2015 30-Oct-2020 28-Apr-2021 07-Apr-2021 The data is collected from 2009 EFY, EFY 2010, EFY 2011 and 2012 EFY Financial statements of the federal government.  For EFY 2009 -Federal the cash amount on June 30, 2009 was birr 30,624,984,427 and the total adjusted budget approved was birr 229,699,500,000. Therefore……30,624,984,427 / 229,699,500,000 X 100 = 13.33 % (2009 EFY)  For EFY 2010-Data of the Federal cash amount on June 30, 2010 shows birr 36,561,338,397.57 and the total adjusted budget approved was birr 360,338,330,217.20. Therefor Comments: 36,561,338,397.57 / 360,338,330,217.20 X 100 = 10.15 % (2010 EFY).  For EFY 2011- Regarding 2011 EFY, Cash amount on June 30,2011 shows birr 63,280,754,534.57 and the total adjusted budget was birr 403,162,030,081.99. Hence, 63280754534.57/403,162,030,081.99 X100=15.7%.  For EFY2012 - cash amount on June 30,2012 shows birr 70,515,099,759.28 and the total adjusted budget is birr 476,900,009,255.31. Therefore 70,515,099,759.28/476,900,009,255.31*100=14.79% IN00985285 ►Timely disclosure of key fiscal/budget documents (Months, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 24.00 11.00 0.00 9.00 Date 30-Dec-2015 30-Oct-2020 22-Apr-2021 07-Apr-2021 MOF provided the following explanations: Timely disclosure of key fiscal /budget documents: PEFA PI-10. This indicator was calculated on the disclosure of key fiscal/budget specified per PEFA PI-10 -only on the Comments: audit financial statement disclosure. In the past this indicator has been relatively achieved. For 2012 EFY audited financial statement posting is delayed as the account is under audit-delayed till April 2021. This is due to COVID-19. It is expected to be posted when the Financial statement audit is 5/4/2021 Page 3 of 9 The World Bank Implementation Status & Results Report Ethiopia PFM Project (P150922) concluded. It is expected that it will be concluded by end May 2021 ( in which case it would be about 10 months against the target of 9 months....but it is yet to be seen). IN00985286 ►Target agencies progressively increase number of contracts awarded within agreed benchmark of 180 days for works contrcts > US$5million & Goods >US$500,000 (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 10.00 74.50 0.00 50.00 Date 30-Dec-2015 28-Jun-2019 28-Apr-2021 07-Apr-2021 MOF provided the following explanations: In 2009 EFY (FY17) out 39 ERA projects 29 of them are awarded with less than 180 days, Ministry of Agriculture awarded one of its projects with 132 days. PPDS awarded out of 19 projects 11 of them are awarded less than 100 days. In general, out of 51 projects 38 of them are awarded less than 180 days. Comments: Therefore, it was calculated as 38/51*100= 74.5 The 2010 and 2011 data will be consolidated based on the data received from the agencies which was not submitted. For 2012 EFY MoF is still waiting for FPPPA response. IN00985287 ►Increase in the percentage of audits conforming to International Standards of Supreme Audit Institutions (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target MOFEC /OFAG MOFEC /OFAG provided provided a progress a progress update on the update on the audits audits (details are in the Value NA (details are in the NA attached AM results attached AM results matrix- annex 1, matrix- annex 1, attachment 1) attachment 1) Date 30-Dec-2015 28-Jun-2019 28-Jun-2019 31-Dec-2020 MOF /OFAG provided a progress update on the audits but no percentages of change in the use of international standards has been provided. AFROSAI-E carried out the audit quality reviews each year but did not present a percentage change in the application of standards to the number of audits produced. Comments: End targets have not been set either. The OFAG selected some indicators and followed up on the progress. IN00985288 ►Direct Beneficiaries, who are recipients of the training provided by the project (disaggregated by Gender) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 47,000.00 72,850.00 74,126.00 84,000.00 Date 30-Dec-2015 30-Oct-2020 28-Apr-2021 07-Apr-2021 Comments: In 2009 EFY(2017) 5250 were trained with 39.35% female participation. In 2010 EFY (2018) overall 7465 trainees were trained at federal and regional level with 33.8% of female participation. Therefore, the cumulative rolling data shows 59,715 were trained. As per the information in up to July 7/2018. In 2011 (9 months) 7,082 trained with 59.4% female participation.so, the cumulative rolling data shows 66,797. In EFY 2012 about 6053 trainees were trained with 45.53% female participation. Therefore, the cumulative rolling data shows 72,850 were trained. In EFY 2013 about 7,329 trained with 49.8% Female participation. Therefore the cumulative rolling data shows 74,126 participants were trained. The following were areas training were delivered so far: 5/4/2021 Page 4 of 9 The World Bank Implementation Status & Results Report Ethiopia PFM Project (P150922)  PFM Institutional Training at Federal and Regional,  Short term training on PFM at regional and Federal Level,  IFMIS and IBEX training,  Professional Training on procurement and Property administration  Woreda council members training  Woreda Ethics officers training  Fraud and corruption complaint handling and resolution, disclosure of asset  Accounting and auditing standards training Intermediate Results Indicators by Components Expenditure Management and Information Systems Support IN00985289 ►Increase in budget execution rate in targeted sectors (Health, Education, Agriculture, and Water) - in percent of budgeted expenditure in sector at the Regional level (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 55.00 56.53 93.24 75.00 Date 30-Dec-2015 30-Oct-2020 22-Apr-2021 07-Apr-2021 MoF reports The targeted agencies budget execution rate for 2009 EFY was 90.45%. The 2009 EFY total adjusted budget the selected sectors was birr 100,497,810,000 and the actual expenditure was birr 90,899,900,000. Therefore the executing rate becomes 90,899.90/100,497.81*100 = 90.45% And in 2010 EFY the performance shows 92.91 % which was calculated as actual expenditure over the sectors approved budget. i.e. (75,153,829,000*100)/80,887,905,000=92.91%. Comments: In 2011 performance shows that 87.37% which is calculated actual expenditure against approved budget (105,525,700/120,779,100*100=87.37%) For EFY 2012- MoF reported a rate of 93.24% i.e. for EFY 2012 actual expenditure against approved budget is 125,561.62/134,658.56*100=93.24% For EFY 2013 (6 months ) performance shows that 39.92% which is actual 6 months expenditure against approved budget for the year ( 69268.35/173536.72*100=39.92) IN00985291 ►Rolling out of the new Chart of Accounts at the Federal Level to facilitate expenditure reporting by PBB (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Only approved budget 170 sites at federal 180 sites at federal Value 100 federal entities disclosed on PBB basis entities are on IFMIS. entities are on IFMIS. Date 30-Dec-2015 30-Oct-2020 22-Apr-2021 07-Apr-2021 MoF Reports: In 2009 EFY Agencies using new COA were 17. As of July/2018 59(fifty nine) Federal public bodies and 8 branch offices use the new chart of accounts for budget administration, cash management, and account reporting and property administration through the implementation of IFMIS system. In 2011 EFY (9 months) including branches 123 sites are using the new IFMIS and hence new COA. Comments: According to MoF, in EFY 2012 up to April 2020, about 170 sites are using the new IFMIS and hence the new COA According to MoF, currently (April 2021) about 180 sites are using the new IFMIS and hence the new COA. Strengthening Accountability Institutions 5/4/2021 Page 5 of 9 The World Bank Implementation Status & Results Report Ethiopia PFM Project (P150922) IN00985290 ►Percent of contracts awarded using competitive procurement methods in targeted agencies. (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 50.00 93.63 86.50 70.00 Date 30-Dec-2015 30-Oct-2020 22-Apr-2021 07-Apr-2021 MoF Reported: This data was reported by FPPA and PPDS has use 89%, ERA 98% and MoANR 98%. The average becomes 95% for EFY 2009 (FY17) from the three but 57% from the 5 agencies (the agencies are stated in the PAD). The two missed agencies will be requested to submit their reports and the result may be updated for the ongoing FY. For FY 2010(2018), the results is going to be revised when the annual report for EFY2010 (2018) is submitted by the agencies. Comments: In 2011 reported by 3 agencies and their average becomes 94.91. However, since the other target entities are not reporting the data and did not submit the data, the average for the all target agencies will become 56.9%. In EFY 2013, MoF reported that for EFY 2012 the following were reported- (PPSD =99.84 + MoE =92.55 + ERA=99.84 + MOA=51.12 + PFSA=89.15)/500 = 86.5%. IN00985292 ►e-GP developed and installed at FPPA and in all E-GP target agencies at Federal level (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 100.00 Date 30-Dec-2015 30-Oct-2020 22-Apr-2021 07-Apr-2021 There is progress in the e-GP implementation Strengthening Accountability Institutions component. Main key include E-GP system development completed, system testing in progress in the pilot entities, integration engagement activities are completed, draft guidelines completed ready for review and translation, data center installation is completed and third party audit contract is signed. The e-GP is expected to be piloted in 6 institutions (that is 100% if target) by the project closing. The roll out to pilot Comments: entities is about 90% completed. So currently although there are no institutions using e-GP, the final target will be achieved by end of project. IN00985293 ►IT and Forensic audits completed by OFAG (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 15.00 Date 30-Dec-2015 30-Oct-2020 22-Apr-2021 07-Apr-2021 Last year 5 IT and Forensic audits were completed by OFAG last year. However all are using their own resources. The TA firm did not conduct training to the OFAG to improve these audits. Currently. The audit Comments: quality TA firm contract is terminated. There is no information from OFAG or MOF on the current year data IN00985294 ►Issuance of national professional accountancy qualification certificate at least at a Technician level (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target 5/4/2021 Page 6 of 9 The World Bank Implementation Status & Results Report Ethiopia PFM Project (P150922) Value 0.00 0.00 0.00 100.00 Date 30-Dec-2015 30-Oct-2020 22-Apr-2021 07-Apr-2021 Not yet due. Progress include:  In 2010 AABE received 171 Applicants who wanted to become authorized Accountant and Auditor. Out of which 167 Applied to become Authorized Accountant and the rest applied to become Authorized Auditor. The board has given firm licenses to 21 Authorized Accountants and 4 Authorized Auditors.  In 2018 AABE has renewed the license of 839 Authorized Accountants and 241 Accounting firms. Meanwhile 136 Authorized Auditors and 15 Auditing firms renewed their license in the same year.  In 2018 AABE renewed 1034 individual competency certificates and 113 firm level certificates of Authorized Accountants  In 2018 AABE renewed 158 individual competencies Certificates and 6 firm level certificates of Comments: Authorized Auditors.  In 2012 EFY AABE renewed the license of Authorized Accountants for 105 individuals new, for 870 individuals renew, for 189 Firm new, for 966 Firm renew Accountants. Meanwhile regarding Authorized Auditors for 38 individuals new, for 111 individuals renew, for 4 Firm new and for 154 firm renewed their license of Authorized Auditors.  In EFY 2013 AABE reported that EFY 2013 in 9 months regarding authorized accountants for 52 new individual, for 20 firm and for individual and firm renewed are 1113 and 779 respectively. Regarding authorized auditors for 7 new individual, for 2 firm and for individual and firm renewed are 169 and 106 respectively. Once PAO is legally established, it is expected to issue National certifications. Thus there is no issuance of Ethiopian Certified Public Accountant or Technician certificates so far. IN00985295 ►Woredas whose Finance and Budget Standing Committee members are trained to undertake audit follow-up (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 10.00 0.00 0.00 85.00 Date 30-Dec-2015 30-Oct-2020 22-Apr-2021 07-Apr-2021 In 2009 EFY (FY17) 25% of the Woredas Budget and Finance Standing Committees (BFSCs) have been trained and in 2010 the execution is underway to reach 75 %. In May 2018 and 2019, 75 % of the Woredas BFSCs have been trained and no current information since Comments: then. No info for EFY 2013 or FY2021- It is our understanding that due to COVID these trainings were affected at IN00985296 ►Woredas posting simplified budget and execution reports to the citizens (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 90.00 93.65 93.65 95.00 Date 30-Dec-2015 30-Oct-2020 22-Apr-2021 07-Apr-2021 Out of 1023 Woredas, 983 of them posted the simplified budget and execution reports for citizens on bill boards according to the regional BoFEDs report. In 2011 EFY out of 1041 woredas 986 woredas are posted budget and execution report for citizens Comments: In 2012 EFY out of 1023 Woredas 958 Woredas are posted budget and execution report for citizens = 958/1023= 93.6%. The same is reported in in EFY 2013- April 2021 5/4/2021 Page 7 of 9 The World Bank Implementation Status & Results Report Ethiopia PFM Project (P150922) Performance-Based Conditions Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P150922 IDA-57660 Effective USD 33.00 33.00 0.00 28.69 4.63 86% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P150922 IDA-57660 Effective 26-Feb-2016 17-Mar-2016 18-May-2016 07-Apr-2020 07-Mar-2022 Cumulative Disbursements PBC Disbursement Achievement Disbursed amount in Disbursement % PBC ID PBC Type Description Coc PBC Amount Status Coc for PBC 5/4/2021 Page 8 of 9 The World Bank Implementation Status & Results Report Ethiopia PFM Project (P150922) Restructuring History Level 2 Approved on 26-Nov-2019 ,Level 2 Approved on 01-Feb-2021 Related Project(s) There are no related projects. 5/4/2021 Page 9 of 9