The World Bank Implementation Status & Results Report Public Financial Mgmt Enhancement Project (P152932) Public Financial Mgmt Enhancement Project (P152932) AFRICA | Zimbabwe | Governance Global Practice | Recipient Executed Activities | Investment Project Financing | FY 2016 | Seq No: 6 | ARCHIVED on 03-Dec-2018 | ISR34715 | Implementing Agencies: Ministry of Finance and Econ Devt, Republic of Zimbabwe Key Dates Key Project Dates Bank Approval Date: 24-Mar-2016 Effectiveness Date: 24-Jun-2016 Planned Mid Term Review Date: 29-Jun-2018 Actual Mid-Term Review Date: 13-Apr-2018 Original Closing Date: 30-Jun-2019 Revised Closing Date: 30-Jun-2019 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The Project development objective (PDO) is to improve control, transparency and accountability, and oversight in the use of public resource in Zimbabwe. The Project will contribute to enhancing fiscal discipline, strategic allocation of resources, and service delivery efficiency, through strengthened systems, procedures and targeted capacity-building. Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Financial Management and Accounting (including IFMIS):(Cost $5.30 M) Financial Reporting, Internal Controls and Internal Audit:(Cost $1.34 M) Enhanced Accountability through Strengthening of External Audit:(Cost $1.50 M) Strengthening the Demand Side of Transparency and Accountability:(Cost $0.86 M) PFMEP Management:(Cost $1.00 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 The Public Financial Management Enhancement Project (PFMEP) was approved by the World Bank’s Africa Region Vice President on March 24, 2016 and became effective on June 24, 2016. To allow for successful implementation of the reprioritized activities across all components under the Public Financial Management and Enhancement Project (PFMEP), the Zimbabwe Reconstruction Fund (ZIMREF) Donor Partners have agreed, in principle, to a redesign of 12/3/2018 Page 1 of 10 The World Bank Implementation Status & Results Report Public Financial Mgmt Enhancement Project (P152932) the project components, an adjustment of the cost ceilings, and an amendment of the Results Framework. As a result, project restructuring was prepared and approved by Management on August 1, 2018. The ZIMREF Donor Partners have also agreed, in principle, to grant a no cost extension of the project closing date for six months, from June 30, 2019 to December 31, 2019. Noting that the extension of the project is conditional on the overall extension of ZIMREF, a second restructuring for extending the closing date is expected to be initiated, after the overall ZIMREF extension is completed. An implementation support mission was carried out from October 22 to 30, 2018, which resulted in the below findings and recommendations: As of November 5, 2018, project disbursements stand at US$3.93 million (and US$2.11 million in commitments, including on signed contracts) or 39 percent of the original grant allocation of US$10 million through the ZIMREF Multi-donor Trust Fund (MDTF); while the project was originally appraised at US$20 million, only US$10 million materialized through the signed Grant Agreement; and contrary to initial expectations, no additional funds have been made available subsequently) The project is currently geared to improved disbursements, as several high value procurement packages are reaching signature and commitments are made for which payments will be due over the next few months. The overall progress towards achievement of the Project Development Objective (PDO) and Implementation Progress (IP) are rated Moderately Satisfactory. This is due to earlier delays in implementation, and still ongoing catching up (especially on Component 1 (C1), targeting the Public Financial Management System (PFMS) expansion from central to district level). Furthermore, there are challenges in ensuring that existing systems and the expansions being supported are used effectively; with significant progress expected to materialize in 2019. There is a shared understanding among the project partners that these are core issues that need to be addressed to demonstrate accelerated progress in implementation and impact during the next couple of months. Progress on Activities: A number of activities are on track and actively pursued by stakeholders. The team would especially like to acknowledge the active engagement by the Ministry of Finance and Economic Development (MoFED) management in the project implementation, and the strong collaboration between MoFED and the Ministry of Information and Communication Technology (MoICT). The C1 team has, overall, been active and engaged in a number of challenging activities. The Component 2 (C2) team is encouraged to further define and accelerate its activities, to ensure that key weaknesses in accounting and internal audit are addressed in a timely manner, given their criticality for the Government of Zimbabwe (GoZ) to achieve important Public Financial Management (PFM) goals, as well as being critical for the project’s success. While Component 3 (C3) activities are progressing satisfactorily with all contracts and procurement packages being either at the final stages of finalization or under implementation, the Bank recommended that better synergies are being explored between C2 and C3, in order to benefit from cross-institutional collaboration in carrying out implementation on certain activities, that could potentially lead towards improved internal capacity building, reduced reliance on external consultancies and more efficient use of the project's scarce resources. On Component 4 (C4), consistent with past practice, pre-budget consultations have been conducted by the Parliament with support from the project. It is expected that budgetary submissions will be made to the MoFED in the coming weeks and the Parliament will reconcile the tabled budget documents against its pre-budget submissions to ensure that it is citizen-centric. Achievement of results: Several results indicators are not sufficiently on track but remain achievable subject to reinforced attention by management and technical staff involved. As progress with implementation is being made, it becomes critical to focus on the results framework which was mutually agreed during the restructuring. For 2018, indicators to pay particular attention to are: C1.1 (coverage of statutory funds by the (PFMS); C1.3 (utilization of the six pilot kiosks by the district level Ministries, Departments and Agencies (MDAs)); C2.2 (meetings of internal audit committees); and C2.3 (development of an audit procedures manual). For 2019, the GoZ should fully utilize all of the tools at its disposal, including new ones such as the interfaces and the (BPC) and (BI) module, as well as the training and support provided in order to ensure the timely preparation and reporting of annual Consolidated Revenue Fund (CRF) financial statements, based on PFMS data and reporting tools (PDO level indicator C1). The mission emphasized on the need for regular engagements by all components heads to identify opportunities where there could be joint implementation of activities, where activities are duplicated in two components, and instances where expertise exists within the Government to support implementation of an activity, i.e. involving performance auditing experts in the Office of the Auditor General (OAG) to train internal auditors instead of hiring an external consultant. This would result in sharing of experiences, developing more sustainable national capacity and effective utilization of the project funds (including savings). Change management: The team would like to encourage the GoZ to take the lead on various change management aspects. These are needed to ensure that line Ministries, Departments and Agencies (MDAs) and sub-national government entities are fully aware of the new tools, systems and processes being introduced, encourage these stakeholders to actively participate and to become able to utilize them appropriately. To the extent possible, such efforts are being supported through the project. Public Expenditure and Financial Accountability (PEFA): The 2017 PEFA report will be made publicly disclosable, following the GoZ’s authorization to do so received on November 2, 2018. The task team will coordinate with MoFED the organization of a dissemination event, to tentatively take place in late January/early February 2019, that will also discuss the development of a longer-term PFM strategy for the country. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance High High High 12/3/2018 Page 2 of 10 The World Bank Implementation Status & Results Report Public Financial Mgmt Enhancement Project (P152932) Macroeconomic Substantial Substantial High Sector Strategies and Policies Moderate Moderate Moderate Technical Design of Project or Program Moderate Substantial Substantial Institutional Capacity for Implementation and Sustainability Substantial Substantial Substantial Fiduciary Substantial Substantial Substantial Environment and Social Low Low Low Stakeholders Moderate Moderate Moderate Other -- Low Low Overall Substantial Substantial Substantial Results PDO Indicators by Objectives / Outcomes Improved Financial Management and Accounting IN00605855 ►C1: Timely preparation and reporting of annual Consolidated Revenue Fund (CRF) financial statements based on PFMS data and reporting tools, after end of financial year. (Months, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 9.00 -- 10.00 6.00 Date 22-Nov-2017 -- 05-Nov-2018 30-Jun-2019 Improved Financial Reporting, Internal Controls and Internal Audit IN00609478 ►C2: Coverage of internal audit (as percentage of functional internal audit units within Central Government). (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 100.00 100.00 100.00 100.00 Date 22-Nov-2017 13-Apr-2018 05-Nov-2018 30-Jun-2019 To make it more relevant to the support provided for the internal audit function, this indicator will be Comments: changed to read: ”% of completed internal audit work plan”, with the upcoming project restructuring. Enhanced Accountability through Strengthening of External Audit IN00605910 ►C3: Timely completion and submission of annual audit reports to the Parliament. (Months, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 6.00 6.00 6.00 6.00 Date 22-Nov-2017 13-Apr-2018 05-Nov-2018 30-Jun-2019 12/3/2018 Page 3 of 10 The World Bank Implementation Status & Results Report Public Financial Mgmt Enhancement Project (P152932) Strengthened the Demand Side of Transparency and Accountability IN00609553 ►C4: PAC recommendations implemented by the MoFED (per received Treasury Minutes). (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 90.00 90.00 90.00 90.00 Date 22-Nov-2017 13-Apr-2018 05-Nov-2018 30-Jun-2019 Intermediate Results Indicators by Components Financial Management and Accounting (including IFMIS) IN00609558 ►C1.1: Statutory Funds Accounts collecting revenues are captured in PFMS for financial reporting (share of total flow of 90 statutory funds) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 10.00 Date 22-Nov-2017 13-Apr-2018 05-Nov-2018 30-Jun-2019 41 out of the 90 statutory funds have been entered into the system. Recruitment of a consultant to provide TA to conclude configuration and provide support to go live is now at an advanced stage - contract Comments: negotiation. Five funds have been earmarked to go live by end 2018. IN00609559 ►C1.2: PFMS Grant Management module is configured to capture relevant donor funded projects. (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 2.00 2.00 3.00 10.00 Date 22-Nov-2017 13-Apr-2018 05-Nov-2018 30-Jun-2019 Global Fund (HIV, TB & Malaria Grants), PFMEP and SADC EU Grant are live in the system. Two more UNICEF grants under Ministry of Education are expected to go live in November, as their budgets have Comments: been approved and loaded into the system. IN00605909 ►C1.3: District level entities are using PFMS Kiosks for daily operations (procurement, payments and revenue transactions) and reporting. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target 50% District level The 6 pilot kiosks are entities are using 30 now live on PFMS. PFMS Kiosks for daily These are: Murewa, operations Value 0.00 0.00 Rusape, Chiredzi, (procurement, Kadoma, Esigodini payments and revenue and Gwanda transactions) and reporting. Date 22-Nov-2017 13-Apr-2018 05-Nov-2018 30-Jun-2019 District level MDAs are yet to perform their daily operations on the PFMS as they have not yet undergone Comments: training on use of the system. Effective rollout of the Change Management Plan, which includes creation 12/3/2018 Page 4 of 10 The World Bank Implementation Status & Results Report Public Financial Mgmt Enhancement Project (P152932) of user profiles in the system and PFMS end user training at district level needs to be expedited immediately in the pilot districts. IN00609560 ►C1.4: BPC and BI modules are fully operational and are used to prepare and consolidate budget and monitor the performance providing access to all MDAs through new web portal. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target New BPC and BI modules and web portal are fully Contract with TTCS to Requirements identified Requirements identified operational to the supply and install BPC Value and procurement and procurement process satisfaction of MoFED and BI modules is process initiated. initiated. and key users (health, under implementation. agriculture), and 2020 budget prepared using PFMS. Date 22-Nov-2017 13-Apr-2018 05-Nov-2018 30-Jun-2019 Implementation of the BI, BPC and Web-portal is in progress and now in the realization/configuration phase. BPC is expected to go-live by end of January 2019. The 2019 budget will be uploaded after go-live and will be used for all test runs and for the monitoring of budget implementation. It is expected that Comments: budget preparation for 2020 will be done on the new BPC module. BI is expected to go live on December 1, 2018. IN00609554 ►C1.5: PFMS web portal is being used to upload financial statements of local authorities (28 urban councils + 63 rural district councils) for quarterly consolidation. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target 10% of local Contract with TTCS to authorities using the Requirements identified Requirements identified develop PFMS web PFMS web portal to Value and procurement and procurement process portal is under upload their financial process initiated. initiated. implementation. statements for consolidation. Date 22-Nov-2017 13-Apr-2018 05-Nov-2018 30-Jun-2019 Comments: Co nfig urat ion of the we b port al, whi ch will ser ve for upl oad ing of fina nci 12/3/2018 Page 5 of 10 The World Bank Implementation Status & Results Report Public Financial Mgmt Enhancement Project (P152932) al stat em ent s for sub seq uen t coll atio n, star ted in Au gus t and is still in pro gre ss. The We b Por tal is exp ect ed to go live on De ce mb er 1, 201 8. Financial Reporting, Internal Controls and Internal Audit IN00609555 ►C2.1: PFMS internal audit report issued. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Software is being PFMS internal audit Value No No procured. A local SAP report issued. 12/3/2018 Page 6 of 10 The World Bank Implementation Status & Results Report Public Financial Mgmt Enhancement Project (P152932) training firm will be engaged to train internal auditors. A consultancy firm will assist the internal audit unit on the maiden PFMS audit. Date 22-Nov-2017 13-Apr-2018 05-Nov-2018 30-Jun-2019 Procurement of IDEA has been recently completed and implementation of activities is yet to commence. Comments: IN00609576 ►C2.2: Audit committees’ meetings held bi-annually to review internal audit reports (across the 22 line Ministries). (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 25.00 80.00 Date 22-Nov-2017 13-Apr-2018 05-Nov-2018 30-Jun-2019 25 percent (five) of the committees have sat once and submitted the minutes of their meetings. A circular minute has been issued by the Accountant General to ministries, giving the committees an ultimatum to sit Comments: and provide minutes by end of November 2018. IN00609577 ►C2.3: Revised Accounting Procedures Manual is in place. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Revised Accounting Existing Accounting Existing Accounting Review and updating Procedures Manual is Procedures Manual is Procedures Manual is of Accounting Value available for the use of outdated and requires outdated and requires Procedures Manual in all MDAs (at central review. review. progress. and local level). Date 22-Nov-2017 13-Apr-2018 05-Nov-2018 30-Jun-2019 A concept note to develop the manual will be prepared and submitted to the WB for No Objection by Comments: November 30, 2018. IN00614347 ►C2.4: A limited PEFA assessment on indicator PI 29 (Annual Financial Reports) conducted finding at least initial improvement (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 13-Apr-2018 13-Apr-2018 05-Nov-2018 30-Jun-2019 The indicator will be measured according to the PEFA methodology, and at least two of the three sub- Comments: indicators improve by a half-increment (e.g. from D to D+ or D+ to C) Enhanced Accountability through Strengthening of External Audit IN00609574 ►C3.1: Audit recommendations implemented by MDAs (per the Audit Report on Appropriation Accounts, Finance and Revenue Statements) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 48.00 48.00 48.00 55.00 12/3/2018 Page 7 of 10 The World Bank Implementation Status & Results Report Public Financial Mgmt Enhancement Project (P152932) Date 22-Nov-2017 13-Apr-2018 05-Nov-2018 30-Jun-2019 To be assessed when the Audit reports FY2017 have been tabled before Parliament. Comments: IN00605912 ►C3.2: Performance audit reports presented to Parliament (annually). (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 2.00 2.00 3.00 4.00 Date 23-Nov-2017 13-Apr-2018 05-Nov-2018 30-Jun-2019 Two reports have already been tabled in 2018. One report was submitted for tabling, but Parliament was adjourned before tabling it. Two reports are at OAG management review stage. (Four reports sponsored Comments: under PFMEP will be completed by December 2018 and tabled in 2019.) IN00605908 ►C3.3: Audit quality and checklist procedures in place for outsourced audits to private firms. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Audit quality and checklist procedures are in place and used A consultant was Audit quality and Audit quality and for at least 40% of the recruited to develop Value checklist procedures are checklist procedures are audited financial the audit quality and not in place. not in place. statements by private checklist procedures. sector auditing subjected to quality checks. Date 22-Nov-2017 13-Apr-2018 05-Nov-2018 30-Jun-2019 Development of audit quality and checklist procedures expected to be completed by the end of the year. Comments: Strengthening the Demand Side of Transparency and Accountability IN00609575 ►C4.1: Number of Treasury Minutes received from the MoFED (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 2.00 2.00 1.00 4.00 Date 22-Nov-2017 13-Apr-2018 05-Nov-2018 30-Jun-2019 One Treasury Minute for the Ministry of Justice was issued in in April. Work on five others is in progress. Comments: IN00609581 ►C4.2: Time taken by Parliament to analyze the Government audited financial statements. (Months, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 9.00 9.00 8.00 7.00 Date 22-Nov-2017 13-Apr-2018 05-Nov-2018 30-Jun-2019 PAC concluded analysis of audit reports FY 2016 in March 2018, eight months after the reports were Comments: tabled in Parliament in June 2017. IN00609582 12/3/2018 Page 8 of 10 The World Bank Implementation Status & Results Report Public Financial Mgmt Enhancement Project (P152932) ►C.4.3: Pre-budget and post-budget consultative meetings conducted by the Portfolio Committees (cumulative, supported by the project) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 18.00 18.00 18.00 38.00 Date 22-Nov-2017 13-Apr-2018 05-Nov-2018 30-Jun-2019 Pre-budget consultations scheduled for Q4. The indicator will be slightly revised to specify the 'budget Comments: season', which runs between November and February, capturing the pre and post budget consultations. IN00605905 ►C4.4: Citizens participating in the pre-budget and post-budget consultations conducted by Parliament Committees (cumulative, supported by the project and disaggregated by gender) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target 1380 (of which 32.5% female) (cumulative for 680 (of which 30% 680 (of which 30% 680 (of which 30% meetings held for the Value female). female). female). 2018 and 2019 budgets) Date 22-Nov-2017 13-Apr-2018 05-Nov-2018 30-Jun-2019 Pre-budget consultations scheduled for Q4 2018. The actual number for the budget season 2018 will be Comments: provided at the stage of the next ISR, when the pre and post budget consultations conclude. Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P152932 TF-A1783 Effective USD 10.00 10.00 0.00 4.63 5.37 46% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P152932 TF-A1783 Effective 24-Mar-2016 04-May-2016 24-Jun-2016 30-Jun-2019 30-Jun-2019 Cumulative Disbursements 12/3/2018 Page 9 of 10 The World Bank Implementation Status & Results Report Public Financial Mgmt Enhancement Project (P152932) Restructuring History Level 2 Approved on 01-Aug-2018 Related Project(s) There are no related projects. 12/3/2018 Page 10 of 10