Public Disclosure Copy The World Bank Implementation Status & Results Report Somalia PFM Capacity Strengthening Project (P146006) Somalia PFM Capacity Strengthening Project (P146006) AFRICA | Somalia | Governance Global Practice | Recipient Executed Activities | Investment Project Financing | FY 2014 | Seq No: 2 | ARCHIVED on 19-Nov-2015 | ISR20865 | Implementing Agencies: Key Dates Key Project Dates Bank Approval Date:04-Dec-2013 Effectiveness Date:17-Jan-2014 Original Closing Date:31-Mar-2016 Revised Closing Date:31-Mar-2016 Project Development Objectives Project Development Objective (from Project Appraisal Document) The Project Development Objective (PDO) is “to establish systems for more transparent and accountable management and use of public funds in Somalia”. Has the Project Development Objective been changed since Board Approval of the Project Objective? No PHRPDODEL Components Name Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO  Satisfactory  Moderately Satisfactory Overall Implementation Progress (IP)  Satisfactory  Moderately Satisfactory Implementation Status and Key Decisions PFM Education and Training The draft scheme of service for the PFM cadre should be discussed with the NCSC with the aim of adopting a policy for PFM transactions to be handled by suitably qualified staff. Direct payment to vendors / Purchasing Module We are pleased to note that the Purchasing Module will be piloted in 11 MDAs starting with Training-of-Trainers to have a cohort of Super Users to provide hands-on training and continuous support to the MDAs. The step-wise approach will gradually improve transparency and accountable in 2/19/2016 Page 1 of 9 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Somalia PFM Capacity Strengthening Project (P146006) procurement practices. There is need to comply with the Appropriation Act and Ministerial Orders/Treasury Circulars for direct payment from the TSA to end-beneficiary accounts. The SMFIS now has functionality to disaggregate the Payment Instruction by the licensed financial institutions and this should be mandatory for the selected MDAs for the Purchase Module. Employee pay management Employees with missing designation or position pose a risk of paying salary at the wrong grade and allowance. NCSC to ensure that all employees in the SFMIS are assigned their correct designation or position and specify any approved rule for allowance. Publication of financial reports We note with serious concerns that the requirements in the Appropriation Act and the project indicator to publish in-year budget utilization reports is not being done. The website issue should be speedily resolved in order to start establishing a good fiscal transparency track record. 2/19/2016 Page 2 of 9 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Somalia PFM Capacity Strengthening Project (P146006) Risks Overall Risk Rating 2/19/2016 Page 3 of 9 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Somalia PFM Capacity Strengthening Project (P146006) Risk Category Rating at Approval Previous Rating Current Rating Overall  High  --  High Results Project Development Objective Indicators PHINDPDOTBL Time taken to publish Annual Financial Statements (Months, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 12.00 -- 4.00 3.00 Date 31-Dec-2013 -- 30-Apr-2015 31-Mar-2016 Comments Annual Financial Statements for 2013 and 2014 were submitted for audit on 28 of March 2013, and 30 of April 2014 respectively PHINDPDOTBL % decrease in difference between budgeted and actual aggregate expenditure (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 70.00 -- 30.00 10.00 Date 31-Dec-2012 -- 31-Dec-2014 31-Mar-2016 Comments FY2013 Total approved budget US$143,923,934.00 Total actual expenditure US$117,440,076.62 Variance is 18% FY2014 Total approved budget US$216,230,044 Total actual expenditure US$151,104,709 Variance is 30% Overall Comments Intermediate Results Indicators 2/19/2016 Page 4 of 9 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Somalia PFM Capacity Strengthening Project (P146006) PHINDIRITBL Annual Work Plan on track (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 25.00 75.00 90.00 Date 31-Dec-2013 30-Sep-2014 22-Sep-2015 31-Mar-2016 Comments The Prime Minister and Minister of Finance needs to be regularly briefed about implementation progress and challenges to address information gaps amongst key stakeholders. PHINDIRITBL Comprehensive Operating Procedures Manual (COPM) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Appropration Act 2014 Appropration Act 2014 specifies key specifies key provisions provisions to to strengthen the control Comprehensive strengthen the control environment and Operating Inadequate guidelines on environment and Value reporting requirements. Procedures PFM business processes reporting requirements. No evidence of issue of Manual No evidence of issue of specific Ministerial (COPM) specific Ministerial Orders / Treasury Orders / Treasury Circulars. Circulars. Date 31-Dec-2013 30-Sep-2014 22-Sep-2015 31-Mar-2016 PHINDIRITBL Number of PFM accredited staff (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 28.00 50.00 Date 31-Dec-2013 30-Sep-2014 22-Sep-2015 31-Mar-2016 Comments In combination with the passes achieved in the November 2014 examination session, 28 students will be receiving their CIPFA IPFM certificates and eligible to start the diploma stage. The professional stage is not achievable during the life of this project but will ensure seamless transition to the second project (P151492). 2/19/2016 Page 5 of 9 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Somalia PFM Capacity Strengthening Project (P146006) PHINDIRITBL Timeliness of bank reconciliation (Days, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 90.00 30.00 30.00 7.00 Date 31-Dec-2013 30-Sep-2014 22-Sep-2015 31-Mar-2016 Comments Central Bank of Somali (CBS) provides Ministry of Finance (MoF) with monthly bank statements. Bank auto-reconciliation functionality has been introduced in the SFMIS. Un-reconciled items prior to April ‘go-live’ need to be resolved and monthly reconciliation completed on time. PHINDIRITBL Multi-dimensional chart of accounts produced and used for planning, budget execution, accounting and reporting (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Upgraded the Standard Upgraded the Standard Chart of Accounts Chart of Accounts (SCoA) from two (SCoA) from two segments (organization segments (organization Function and economic) to a and economic) to a Organization and (program) Value multi-dimensional multi-dimensional economic segments only segment structure including (i) structure including (i) implemented organization; (ii) fund; organization; (ii) fund; (iii) programs/projects; (iii) programs/projects; (iv) economic; and (v) (iv) economic; and (v) geographic locations geographic locations Date 31-Dec-2013 30-Sep-2014 30-Sep-2014 31-Mar-2016 Comments Upgraded the Standard Chart of Accounts (SCoA) from two segments (organization and economic) to a multi-dimensional structure including (i) organization; (ii) fund; (iii) programs/projects; (iv) economic; and (v) geographic locations. The new fund and program segments are being piloted with the WB-funded projects using country systems and this allows linkage to the ERP. The organization segment has also been mapped to allow for production of reports by Classification of Functions of Government (COFOG) and Peace and State Building Goals (PSG). The economic segment is used to produce IMF-GFS reports. Appropriation is done at a high level to allow for managerial flexibility during budget execution and transactions are recorded at the lowest full coding block (FCB) to provide very useful reports for management decision making. 2016 budget should disaggregate the payroll budget by the 18 districts of the Federal Government. 2/19/2016 Page 6 of 9 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Somalia PFM Capacity Strengthening Project (P146006) PHINDIRITBL % value of central government budget executed through SFMIS (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 100.00 100.00 100.00 Date 31-Dec-2013 30-Sep-2014 22-Sep-2015 31-Jan-2016 Comments The budget execution and payment process is well documented in the SFMIS Conceptual Design and User Guide and includes step-by- step flow charts. The SFMIS went live in April 2015 with real-time end-to-end process flow with approval hierarchy and in-built audit trails and drill-down functionality. The end-user devices and connectivity provided by DANIDA was used to deploy the web-based system as follows: Category A: Has been provided with online connectivity to the SFMIS from their respective sites during the first phase of the implementation. This phase covers the following institutions; Ministry of Finance (Accountant General, Budget, Revenue, Payroll, Administration Departments; and External Assistants Fiduciary Section); Auditor General's Department; Central Bank of Somalia; Mogadishu airport and Mogadishu seaport; Ministry of Industry and Commerce; and National Civil Service Commission (NCSC). Category B: the rest of the entities are currently required to process their transactions through a data centre (Kiosk) that has been set up at the Ministry of Finance. Preparations for the online access to the system at their respective sights are now underway and it is envisaged that this will be achieved with support from the second project (P151492). The Central Bank of Somalia is also using the SFMIS receipting and payment module according to their laid down hierarchy of approvals and other controls relating to the operation of Treasury Single Account (TSA). All transactions for the approved budget including civil service payroll are processed through the SFMIS. An online Help Desk has been established to provide end-user support as per the Service Level Agreements. https://somaliapfm.freshdesk.com/support/home PHINDIRITBL Treasury Single Account (TSA) (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value N Y Y Y Date 31-Dec-2013 30-Sep-2014 22-Sep-2015 31-Mar-2016 Comments A Treasury Single Account (TSA) is in place at the Central Bank through which reported revenue collections are lodged. There is a high risk in the current payment process of transferring funds (advance) to MDA sub-bank accounts from where cash withdrawals are made to MDA officials outside the control of AGD. Also, this prevents the MoF to have a comprehensive consolidated cash balance position. Despite the Ministerial Decree on use of TSA and the requirements of section 3.3 (3) and (5) of the Appropriation Act 2015; the 13 percent compliance rate is unacceptable. Building on the improved payment control using the bar-coded Payment Instruction, functionality for CBS to generate instructions for direct deposit to beneficiary bank accounts is now available. CBS and the licensed financial institutions are designing the settlement modalities. 2/19/2016 Page 7 of 9 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Somalia PFM Capacity Strengthening Project (P146006) PHINDIRITBL Transparency, comprehensiveness and competition in the legal and regulatory framework (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The MoF website is The MoF website is used to post used to post procurement procurement Low public access to opportunities for the opportunities for the Simplified complete, reliable and project but not for the project but not for the procurement Value timely procurement main government main government processed opportunities and award budget. Awards were budget. Awards were adopted information not posted on the not posted on the website but this will be website but this will be done going forward. done going forward. Date 31-Dec-2013 -- 22-Sep-2015 31-Mar-2016 PHINDIRITBL Time taken to publish quarterly unaudited reports (Days, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 90.00 30.00 30.00 7.00 Date 31-Dec-2013 30-Sep-2014 22-Sep-2015 31-Mar-2016 Comments The 2015 Appropriation Act section 3.8(2) requires that: “Monthly and quarterly budget performance reports are to be published on the MoF website within deadlines to be specified in Ministerial Decree or Treasury Circular”. MoF is processing transactions in real-time through the SFMIS and producing in-year budget performance reports by the various chart of account dimensions. However, the MoF website suffered from security breach and has been down for a good part of this year. MoF should resolve the website and re-start posting periodic budget performance reports to fulfil its legal obligation of transparency of public finance information. Overall Comments Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P146006 TF-16181 Effective USD 4.50 4.50 0.00 3.59 0.91 80% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P146006 TF-16181 Effective 12-Dec-2013 12-Dec-2013 17-Jan-2014 31-Mar-2016 31-Mar-2016 2/19/2016 Page 8 of 9 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Somalia PFM Capacity Strengthening Project (P146006) Cumulative Disbursements Restructuring History There has been no restructuring to date. Related Project(s) There are no related projects. 2/19/2016 Page 9 of 9 Public Disclosure Copy