Public Disclosure Copy The World Bank Implementation Status & Results Report Public Sector Modernization Project (P101614) Public Sector Modernization Project (P101614) EUROPE AND CENTRAL ASIA | Kosovo | Public Sector Governance Global Practice | IBRD/IDA | Specific Investment Loan | FY 2010 | Seq No: 8 | ARCHIVED on 15-Jan-2015 | ISR16587 | Implementing Agencies: Key Dates Key Project Dates Board Approval date:04-Feb-2010 Effectiveness Date:17-Jun-2011 Planned Mid Term Review Date:30-Jun-2013 Actual Mid-Term Review Date:30-Oct-2013 Original Closing Date:30-Jun-2013 Revised Closing Date:30-Jun-2016 Project Development Objectives Project Development Objective (from Project Appraisal Document) (a) To strengthen the performance of key budget organizations in budget formulation, budget execution, and public procurement; (b) To establish the foundations for fiscally sustainable payroll management and effective human resource management in the core civil service; and (c) To create conditions for further automation of government work processes and for development of e-government applications. Has the Project Development Objective been changed since Board Approval of the Project Objective? No PHRPDODEL Components Name Component 1: Improving public financial management performance in selected budget organizations:(Cost $3.00 M) Component 2 - Improving payroll administration and laying the foundations for a professional civil service:(Cost $2.05 M) Component 3 - Increasing the security and efficiency of government information systems:(Cost $2.30 M) Component 4 - Project management, including project audit and evaluation:(Cost $0.40 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 1/15/2015 Page 1 of 10 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Public Sector Modernization Project (P101614) Implementation Status and Key Decisions IMPLEMENTATION STATUS OVEVIEW Project implementation has accelerated. The earlier advances have been reflected in the previous ISRs. The current ISR provides an update on the progress toward achievement of the PDO. Progress toward achievement of the PDO remains Moderately Satisfactory. Overall Implementation Progress remains Moderately Satisfactory. In order to fully and satisfactory complete the project the project closing date was extended until June 30, 2016. Component 1 – Improving Public Financial Management Performance in Selected Budget Organizations: progress with implementation remains MS and while significant progress is made on numerous activities, the World Bank Team believes that more time is needed for the two sub-components to be fully completed. Sub-Component 1.a: Capacity building for PFM in line budget organizations continues to progress smoothly and without major delays. The most recent PEFA assessment conducted in 2013 shows good progress on aggregated level indicators. Disaggregated data prepared by consultants indicates that targets have been met for expenditure variance in the Ministry of Heath, but not in the ministry of Agriculture and Education (no data yet available on Justice sector). The expenditure composition variance target was achieved by the Ministries of Health and Agriculture, but not the Ministry of Education. The capital investment expenditure indicator was achieved by the Ministry of Education but not other ministries. The project continues to strengthen skills, procedures and practices within beneficiary ministries as intended. However, delays in replacing key staff (e.g. Education Finance Director) and circumvention of budget process guidelines by some Ministers (Agriculture and Education) continues to undermine the impact of PSMP on budget performance. Elimination of these obstacles would require changed behavior at a senior level in government that is outside the project’s control. Sub-Component 1.b: Public procurement, including e-procurement has recently started showing signs of accelerating progress. The extension of the project closing date has allowed for signing a contract for developing and installation of the e-procurement system. Component 2: Improving Payroll Administration and Laying the Foundation for Professional Civil Service is the most sensitive component that faces additional pressures due to the political stalemate that has followed the general elections of June 2014. As a result, the implementation progress remains MU. Some actions advancing policy agenda supported by this component have been taken, e.g. the job catalogue was prepared by the consulting company, but it is not yet approved by the new Government. The HRMIS is built and tested in the MPA. In November – December 2014 the piloting is expanded to several more public institutions: Ministry of Education, Ministry of Local Government Administration, and Agency for Data Protection, Agency for Administration of Sequestrated or Confiscated Assets, and one municipality. While the salaries were increased across the board before the elections, the situation remains unclear on for the government would cover the cost and therefore, full implementation of the grading system developed under the project becomes becomes even more urgent. Manuals on performance appraisal and personnel planning have been approved by the MPA and relevant training delivered. Little progress is registered regarding amendments in the civil service legislation. Component 3 - Increasing Security and Efficiency of Government Information Systems: Tangible progress that has been made during the previous supervision cycle, notably culminated in the completion of the main activity for Component 3 of the project - inauguration of the National Data Center (NDC) that took place in February 2014. This was a government wide success: functioning NDC will have significant impact on the IT development and service delivery to citizens and businesses. Then the component implementation performance was upgraded from MU to MS. The latter rating remains. The project has achieved savings of about $1 million (based on the current exchange rate). During next supervision cycle the team intends to initiate project restructuring and allocation of savings to support existing and where feasible fund new activities within existing project framework. Disbursements have picked up significantly. Over 2/3 of the project funds of total project funds have been disbursed. 1/15/2015 Page 2 of 10 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Public Sector Modernization Project (P101614) Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance  --  --  Substantial Macroeconomic  --  --  Low Sector Strategies and Policies  --  --  Moderate Technical Design of Project or Program  --  --  Moderate Institutional Capacity for Implementation and Sustainability  --  --  Substantial Fiduciary  --  --  Low Environment and Social  --  --  Low Stakeholders  --  --  Moderate Other  --  --  -- Overall  --  --  Substantial Results Project Development Objective Indicators PHINDPDOTBL  Improved quality of budget formulation and execution in the budget organizationsthat would participate in the proposed project (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target PEFA assessment 2009 indicators: # PI-1: score: C (actual PEFA PI-1 expenditure deviated from PEFA 2013 score B; budget by more than 15% PEFA PI-12 in one of the last three PI-01 = B (iii), (iv) score years); PI-12 = C+ B; # PI-12 (iii, iv): Multi-year PI-12(iii) = C At least 4/5 Value perspective in fiscal -- PI-12 (iv) = D beneficiary planning, expenditure Disaggregated data organizations policy & budgeting # score: provided separately meet at least C PI-12 (iii) score: C; PI-12 Quality indicators 5/7 (iv) score: D; partially met intermediate # Only 3/7 quality outcome indicators of budget indicators submissions met by all 5 beneficiary BOs; no BO 1/15/2015 Page 3 of 10 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Public Sector Modernization Project (P101614) meets 3 quality indicators for budget execution Date 30-Jun-2009 30-Nov-2011 30-Sep-2014 30-Jun-2016 PHINDPDOTBL  Increased bidder participation in public procurement tenders and cost savings achieved through Quick Gains actions and e- procurement modules (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target 8,270 bidders participated in procurement tenders in 2008 (1.7 bidders per contract); No electronic procurement transactions; QG study reports significant price disparities within procurement categories in the same year (2008): # Civil works/ roads: up to 90%; Bidder # Maintenance: 39% participation # Security: 41%; increases by # Buildings rental 64%; 15%. # Food 95%; # Medicines 17-70%; Price disparities # Office supplies 26%; in QG Recently signed e- # Fuel 9.3% in a year/ up procurement procurement contract Value to 31% in a month -- categories do will capture respective not exceed indicators 10% in the No electronic procurement same year. transactions Cost savings of QG study reports at least 5% for significant price disparities each category within procurement achieved. categories in the same year (2008): # Civil works/ roads: up to 90%; # Maintenance: 39% # Security: 41%; # Buildings rental 64%; # Food 95%; # Medicines 17-70%; # Office supplies 26%; # Fuel 9.3% in a year/ up to 31% in a month Date 30-Sep-2009 01-Nov-2013 30-Nov-2014 30-Jun-2016 Comments 1/15/2015 Page 4 of 10 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Public Sector Modernization Project (P101614) The international consultant started the assignment on April 29, 2013. His contract is extended until Dec 2014. After some delays, the local consultant was selected and is working along with international consultant. The CPA has submitted on March 2013 to the MoF for approval a list of ten (10) items for centralized procurement with a recommendation to start two items as part of the centralized procurement. The MoF needs undertake a decision for both the issues in order to unlock and avoid further delays PHINDPDOTBL  Transparent and coherent pay and grading structure introduced in the core civil service supported by improved ICT systems that enable effective fiscal and management controls in payroll administration (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target 100% of permanent civil No grading system in the servants civil service; graded; Wide pay variations among Equal bases civil service bodies; pay for posts of Value PEFA indicator PI-18 -- -- equal grade (effectiveness of payroll and salary step controls) score: D+; across civil No link between HRMIS, service bodies; payroll, and Treasury Improved PEFA PI-18 score (C+ or above) Date 30-Sep-2009 01-Nov-2013 01-Nov-2013 30-Jun-2016 PHINDPDOTBL  Enhanced security and interoperability of government information systems (through centralized data storage and systems maintenance,and interoperability framework) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Data center is operational; Reduced risk of data loss; No adequate, secure data Improved storage and backup facility The National Data access to data for major ICT systems; Center was inaugurated control and Value -- No interoperability in February 2014 and is physical between major ICT fully operational. security; systems New systems developedaccor ding to interoperability framework. Date 30-Sep-2009 01-Nov-2013 01-Nov-2013 31-Dec-2014 Overall Comments 1/15/2015 Page 5 of 10 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Public Sector Modernization Project (P101614) Intermediate Results Indicators PHINDIRITBL  Improved quality of budget and MTEF submissions of beneficiary budget organizations (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Beneficiary BOs comply with 3 out 7 budget Partially met- All 5 beneficiary Value submission quality criteria -- performance differs BOs meet the 7 (see comment for across beneficiaries. quality criteria explanation) Date 30-Sep-2009 01-Nov-2013 30-Sep-2014 30-Jun-2016 PHINDIRITBL  Improved budget execution rates by beneficiary budget organizations (BOs) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target (a) Deviation from original approved budget expenditure by beneficiary BOs does not exceed 10 percent (in aggregate and a. Partially met. Health by BO) for the year. met, Education and (3/5=NO) Agriculture did not. All beneficiary BOs meet the (b) Variance in expenditure b. Partially met. interim composition exceeds Agriculture and Health Value -- outcome overall deviation in primary met. Education did not. indicators for expenditure by no more budget than 5 percentage points c. Partially met. execution for the year. (5=NO) Education met, others did not. (c) Targets (expenditure and milestones) for at least 70 percent of projects in approved budgets are achieved. (5= NO) Date 30-Sep-2009 01-Nov-2013 30-Sep-2014 30-Jun-2016 PHINDIRITBL  Status of public procurement activities is regularly monitored through contract management information system (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target 1/15/2015 Page 6 of 10 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Public Sector Modernization Project (P101614) PPA and PPRC use electronic system to regularly No central capacity exists monitor public Value to monitor procurement -- -- procurement cycle activities by all contracting authorities in Kosovo Date 30-Sep-2009 01-Nov-2013 01-Nov-2013 30-Jun-2016 PHINDIRITBL  HRMIS functions as a civil service registry and online data links between HRMIS-payroll-Treasury systems enable effective fiscal and management controls in payroll administration (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Partially met - HR MIS pilot was completed in the MPA and initiated in five more public institutions: in five more government institutions: HRMIS does not include Ministry of Education, HRMIS rolled grade or salary step data; Ministry of Local out in all civil Value includes only personnel -- Government service data for 3 civil service Administration, and organizations organizations Agency for Data Protection, Agency for Administration of Sequestrated or Confiscated Assets and in one municipality. Date 30-Sep-2009 01-Nov-2013 01-Nov-2013 30-Jun-2016 PHINDIRITBL  Performance appraisal system is introduced and used as a basis for progression along salary steps (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Managers trained (no.); No regular performance Performance appraisal system or Value -- not yet achieved. appraisal mechanism for salary launched in progression pilot organizations Date 30-Sep-2009 01-Nov-2013 01-Nov-2013 30-Jun-2016 1/15/2015 Page 7 of 10 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Public Sector Modernization Project (P101614) PHINDIRITBL  Ministry responsible for public administration has necessary capacity to exercise key human resource management functions for the core civil service (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Department responsible for civil service MPA Department of Civil management Value Service Administration has -- partially met. has staff 25 staff (14 in payroll unit) trained in all core HR functions Date 30-Sep-2009 30-Nov-2011 30-Nov-2014 30-Jun-2016 PHINDIRITBL Civil service training based on training strategy and monitored according to training impact assessment methodology (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Training impact assessment No civil service training methodology strategy. KIPA training developed; covers only basic needs of KIPA training Value all public service. Training -- -- program effectiveness revised; not systematically MPA & KIPA monitored. staff trained in using the methodology Date 30-Sep-2009 30-Nov-2011 30-Nov-2014 30-Jun-2016 PHINDIRITBL  Centralized data management and systems maintenance leads to efficiency gains (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Approx. EUR 0.15 million Cost savings annual spending on from ICT partially met. Data duplicated maintenance, systems center is operationa, but Value plus some EUR 0.4 million -- maintenance of cost savings have not in duplicated equipment 30% (compared been estimated yet. and development of stand- to stand-alone alone systems systems) Date 30-Sep-2009 06-Mar-2013 30-Nov-2014 30-Jun-2016 Overall Comments 1/15/2015 Page 8 of 10 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Public Sector Modernization Project (P101614) Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P101614 IDA-46920 Effective XDR 2.90 2.90 0.00 1.25 1.65 43% P101614 IDA-H5450 Effective XDR 2.30 2.30 0.00 2.17 0.13 94% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P101614 IDA-46920 Effective 04-Feb-2010 10-Mar-2010 17-Jun-2011 30-Jun-2013 30-Jun-2016 P101614 IDA-H5450 Effective 04-Feb-2010 10-Mar-2010 17-Jun-2011 30-Jun-2013 30-Jun-2016 Cumulative Disbursements Restructuring History Level Approved on 23-Jul-2012 ,Level 2 Approved on 03-Sep-2014 ,Level 2 Approved on 02-Dec-2014 1/15/2015 Page 9 of 10 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Public Sector Modernization Project (P101614) Related Project(s) There are no related projects. 1/15/2015 Page 10 of 10 Public Disclosure Copy