REPUBLIC OF TUNISIA: Tunisia Integrated Disaster Resilience Program (P173568) INTEGRATED FIDUCIARY SYSTEMS ASSESSMENT REPORT ___________________________________________________ PROGRAM FOR RESULTS (PforR) ____________________________________________________ Report prepared by the OCTOBER 2020 Table of Contents I. EXECUTIVE SUMMARY ............................................................................................................................. 1 II. DETAILED INTEGRATED FIDUCIARY SYSTEMS ASSESSMENT ............................................................. 4 A. ............................................................................................................ Objective and scope of the IFSA ... 4 B. ............................................... Program Design: Institutional and Implementation Arrangements ... 5 C.................................................................................Review of the PFM cycle including Procurement ... 5 D. ............................................................... Program Governance and Anti-Corruption arrangements ................................................................................................................ Error! Bookmark not defined. E. ............................. Procurement and financial management capacity of implementing agencies 17 F. ........................................................................................................ Detailed IFSA Program Action Plan 21 I. Executive Summary 1. Main conclusion: The Integrated Fiduciary Systems Assessment (IFSA) concluded that the Program’s fiduciary systems meet OP/BP 9.00 requirements and provide reasonable assurance that financing proceeds will be used for intended purposes with the objective of supporting achievement of Program objectives. The overall residual fiduciary risk is rated Substantial. To ensure adequate implementation, the systems will require some capacity and systems strengthening activities as described below. 2. The fiduciary assessment entailed a review of the capacity of the participating entities on their ability to (a) record, control, and manage all Program resources and produce timely, relevant, and reliable information; (b) follow procurement rules and procedures; and (c) ensure adequate implementation arrangements and risk mitigation. IFSA covered the following implementing entities that have no past experiences with PforR financing instrument; considering the Program boundaries and expenditure framework: (I) CGA; (ii) DGBGTH; (iii) DGRE; (iv) DHU; and (v) INM. The fiduciary capacity of the DGASGP hosting the Resilience Unit (RU) in charge of the coordination of the Program has been also assessed. IFSA focused on quality of legal and institutional framework for PFM, procurement, and governance and anticorruption (GAC) applicable to the Program, and the fiduciary capacity of implementing entities for planning and budgeting, budget execution, procurement, internal controls, and external audit. The Program will support: (i) investments for Flood risk reduction comprising mainly -works, consulting services and equipment (56 percent of Program cost), (ii) investments in the modernization of the main NMHS, including equipment, tools and capacity building (16 percent of Program cost), (iii) consulting services for Institutional reforms and capacity building and (iv) Setting up of information systems for DRM/DRF and claim registry. 3. Methodology and data Collection. The fiduciary systems performances were assessed based on (a) the team knowledge of the fiduciary context in Tunisia through the design, supervision and assessment of Bank’s funded projects in Tunisia focusing on projects implemented under the responsibility of the MEFAI, MARHP, MT and MEHAT; (b) the information and data from various analytical works on the country PFM systems such as the 2016 PEFA report and the 2019 MAPS assessment, and (c) the review and analysis of a sample of quantitative and qualitative fiduciary data for the last 2-3 years, available at the level of the implementing agencies, the Court of accounts, the High Instance of Public Procurement (HAICOP) and government information systems, . It is worth noting that the COVID-19 context did not allow in person meetings with key implementing agencies in addition to the challenges faced by the FSA team during data collection. Data collection was possible through email exchanges based on virtual meetings with different concerned partners. 4. The implementing agencies of the Program have acceptable fiduciary capacity and FM & Procurement procedures and systems: The following four (4) out of the six (6) participating Entities (e.g. DGBGTH, DGRE, DHU and DGASGP) execute their respective budgets through the country PFM systems. Despite some opportunities to strengthen country systems for internal and external audit, procurement, and enforcement of anti-corruption mechanisms, overall, the FSA concluded that Tunisia PFM and procurement systems are acceptable to the Bank and meet the requirements for the implementation of a PforR. There is a reliable legal and institutional framework; effective PFM planning and budget system; and internal control system with clear and relevant segregations of duties at each step of the budget execution. Budget execution rates of these 4 implementing entities were above 94% in 2018. Budget execution and internal control systems are computerized and inter-linked with procurement and treasury systems. There is an adequate legal and institutional framework for fraud and anti-corruption in line with international standards. The CGA and INM, two public entities (EPNA) operate through their specific FM and procurement arrangements outside the country PFM systems. FSA revealed that these two Entities have (i) adequate FM and procurement tools in place (e.g. manual of procedures including procurement, accounting software, dedicated procurement units...); (ii) sufficient qualified and experienced staff; (iii) effective internal controls and internal audit functions; (iv) budget execution rates above 70% over the past 3 years and (v) acceptable external audit arrangements. The Program Action Plan details the measures to address capacity challenges. 5. The FSA has identified the following key fiduciary risk and challenges that will be addressed in several ways as described in the next paragraph: (i) the complexity of the institutional arrangements with a multiplicity of actors and sectors (4 lines ministries and 6 agencies) leading to some challenges in the coordination of the Program as well as financial reporting and external auditing, transparency in the allocation and predictability of resources and overall accountability; (ii) the inefficiencies in procurement processes and contracts award combined with the cumbersome and bureaucratic control mechanism in procurement which might slow down the implementation of the activities; and (iii) the lack of familiarity of the implementing agencies with Bank PforR and IPF financing instruments (except the DGACGP which managed a Bank IPF project in 2013-2018) which may lead to some delays in the preparation and submission of Program annual audited financial statements. 6. Mitigation measures. To mitigate the above-mentioned risks, the Program’s design includes a comprehensive and articulated set of remedial fiduciary actions with time-bound in the PAP: (i) the fiduciary systems and tools of the RU in the DGASGP and the implementing agencies will be strengthened through the appointment of dedicated FM and procurement staff to work full-time on the Program’s to address the risk of delays in fiduciary reporting and auditing as well as to speed up procurement process at implementing agency levels; (ii) the adoption by the government of the supported Program and inclusion in the Finance Law the annual plan and budget of the Program every year starting from the first year of the Program implementation period to address the issue of budget predictability and external audit of the Program accounts; (iii) the implementation of a capacity building program in FM and Procurement for the main actors of the Program at the level of the RU and implementing agencies and institutions of controls; (iv) the conduct of bi-annual inspections and internal audit missions covering procurement, financial and technical aspects for each implementing agency of the Program and (v) the deployment of an electronic integrated financial management and procurement tool (Excel file) to facilitate the monitoring of Program fiduciary implementation and performance. The country systems complaint mechanisms will be leveraged to address the risk of fraud and corruption. Summary of disbursement arrangements 7. The PforR-financed results areas are embedded in the budget and expenditure management processes of the country system. For each Implementing Agency, the Public Accountant (comptable public) is in charge of making the payments. Program funds will be entirely reflected in the central Government budget under the following ministries: MEFAI, MEHAT, MT, MARHP. All payments of the Program will be made through the centralized Treasury system of Bank accounts held at the Central Bank of Tunisia. 8. The GoT, through its budget, will transfer the funds to each ministry or agency based on the expenditure framework and activities to be executed by each ministry or agency and thus prefinance the expenditure. The GoT would claim disbursements from the World Bank as the DLIs are achieved. The IVAs will confirm the attainment of DLIs to release funds in accordance with the agreed schedule. The disbursements under the DLIs would be compared with Program expenditures in the last year of the Program. Exclusions. There are no contracts expected with a value exceeding the Operations Procurement Review Committee (OPRC) review thresholds. Detailed Integrated Fiduciary Systems Assessment A. Objective and scope of the IFSA 1. As part of the Program preparation, the Integrated Fiduciary Systems Assessment (IFSA) of the Program was carried out, consistent with Bank Policy and Bank Directive: “Program-for-Results Financing� and in accordance with the World Bank Guidance Notes for “Program-for-Results Financing. 2. The objective of the assessment was to examine whether Program systems provide reasonable assurance that the financing proceeds will be used for their intended purposes, with due attention to the principles of value for money, economy, integrity, fit-for-purpose, efficiency, effectiveness, transparency, fairness, and accountability. 3. Based on the Program boundaries and expenditure framework, the IFSA covered the following ministries and entities mainly (i) Ministry of Economy, Finance and Support to Investment (MEFAI), through the General Directorate of Audit and Monitoring of Large Projects (DGASGP – Direction Générale de l’Audit et du Suivi des Grand Projets) and the General Committee for Insurance (CGA - Comité Général des Assurances), (ii) Ministry of Equipment (MEHAT), through the Direction of Urban Hydraulic (DHU – Direction de l’Hydraulique Urbaine), (iii) Ministry of Transport (MT) through the National Institut for Meteorology (INM – Institut National de Meteorologie) and (iv) the Ministry of Agriculture (MARHP) through the General Directorate for Water Resources (DGRE – Direction Générale des Ressources en Eau) and the General Directorate for Dams and Major Hydraulic Works (DGBGTH – Direction Générale des Barrages et Grands Travaux Hydrauliques). 4. The IFSA was conducted through a methodical review of systems and practices, involving the review of several analytical work and fiduciary tools and reports mainly: (i) Public Expenditure and Financial Accountability (PEFA 2016) Assessment; (ii) the budget organic law N° 2019-15 of February 19, 2019 defining the rules for preparation, presentation and execution of state budget and (iii) The new organic law of the Court of Audit 41-2019 (iv) the public accounting code law n° 73-81 of December 31, 1973 and its subsequent amendments through the budget laws and specific laws; and (v) the audited financial statements and manual of procedures of the INM and CGA, two EPNA. The team also reviewed the past performances of the implementing agencies in procurement and contract management as well as the lessons learned from the implementation of Bank-financed operations in the concerned sectors. Dedicated IFSA missions were conducted between July and December 2020 with the objective to conduct virtual interviews with key stakeholders. Except the DGASGP which managed an IPF in 2013-2018, none of the remaining implementing agencies has recent or past experiences with Bank IPF and PforR financing instruments. B. Program Design: Institutional and Implementation Arrangements 5. The Program will finance approximately 80 percent of the GoT’s supported program expenditures (US$125 million) for the Tunisia Integrated Disaster Resilience Program (Programme sur la Résilience, la Gestion et le Financement des Risques de Catastrophe en Tunisie). The mobilization of government financing represents a major challenge for the implementation of the Program. The total amount needed to finance the entire government program (including areas not supported by the PforR) during 2021–2025 is estimated at US$250 million, while the parts of the government program related to the PforR amount to US$125 million. The World Bank plans to reimburse to the Government a total amount of US$50 million and the Agence Française de Développement (AFD) a total amount of US$50 million, once the DLIs are achieved. AFD will be adopting all Bank procedures with regards to implementation and verification, including DLIs. Those amounts of US$100 million represent the World Bank and the AFD contribution to the overall costs of the Tunisia Integrated Disaster Resilience Program for the period 2021-2025. The gap of US$25 million (20 percent of total program costs supported by the PforR) will be financed by the Government. The additional resources (US$125 million) needed to finance the entire US$250 million will be supported by the government, AFD, UNDB and other donors. Table 1: Summary of the Program Expenditure Framework (US$ million) GoT WB AFD TOTAL Type of Expenditure / Financing Source Flood risk reduction investments 20 21 21 62 NMHS modernization 2 12 12 26 Public financing mechanism including capitalization and 2 14 14 30 operationalization of financial response Setting up DRF information systems and claim registry 1 1 2 Institutional coordination mechanisms, reforms and capacity 0.5 1.25 1.25 3 building Program Management 0.5 0.75 0.75 2 TOTAL 25 50 50 125 6. The Program will finance specific activities to strengthen systems to support delivery of the program objectives and related results. A Coordination Unit within the DGASGP (will become later the Resilience Unit- RU) and as part of the MEFAI will be responsible for the coordination of the implementation of activities across implementing ministries and agencies, monitoring results, and generating performance and financial reports on Program implementation. DGASGP, as the designated coordinator for the PforR, will be the lead agency for the Program and act as the interlocutor with the World Bank on behalf of the GoT. It will ensure that the Program is implemented according to the POM. The RU will be staffed by at least a coordinator, an M&E specialist in charge of strategic planning and overall coordination, an FM Officer a procurement specialist, a flood risks management specialist, a responsible for the Hydromet team and a responsible for financial protection team. They will support the implementation of the PforR in relation to the implementing agencies. As part of its responsibilities for coordinating Program implementation, The RU will be responsible for preparing the Program consolidated Financial Statements and providing relevant information for the independent verification of the results to the Independent Verification Agent (IVA) and to the program auditor. The IVA will be the CGSP (Controle Général des Services Publics). The program auditor will be the Tunisian Court of Accounts (CoC). 7. The implementation arrangements for the Program are embedded within the existing structure of the line ministries involved. The Program will have the following implementing agencies: DGASGP and CGA within the MEFAI; DHU within the MEHAT, INM within the MT, and DGRE and DGBGTH within the MARPH. C. Review of the PFM cycle including Procurement Legal and Institutional PFM and Procurement Framework 8. PFM and Procurement legal and institutional framework is acceptable for the PforR. The latest Public Expenditure and Financial Accountability assessment (PEFA) of 2016 complemented by subsequent assessment such as IMF article IV, 2018 joint IMF/WB PIMA, and 2018 PFM Master Plan concluded that the legal and administrative framework for public financial management offers a level of assurance regarding reliability of information, predictability and control in budget execution and a strong control environment. This framework is in line with international standards, and Tunisia has adopted in 2019, a new budget organic law (ref: 2019-15). Public procurement is governed by the decree No. 2014-1039 of March 13, 2014, amended by decree No. 416 of May 11, 2018. This latter amendment made the use of the electronic procurement system (TUNEPS) mandatory for all public procuring entities, as of September 1st, 2018 (extended to September 1st, 2019, for local governments). The adoption of the procurement decree followed the MAPS I assessment carried out in 2012 with the World Bank and African Development Bank’s support. This decree helped modernized the procurement system and increased transparency with (i) the publication of awards and complaints related decisions in the public procurement web portal; (ii) the introduction of a standstill period, (iii) the reduction of the minimum duration of review processes, etc. It also favored the digitalization of public procurement. The implementation of the new budget Law and procurement Law is on-going. Country PFM and Procurement legal framework will be applied for the PforR Program budgeting, planning, execution, reporting, and internal control. The legal framework for external audit will also be complied with. The two EPNA will follow their own fiduciary procedures which were assessed acceptable to the Bank for the PforR operation. Planning and Budgeting Adequacy and Credibility of Budgets 9. The Organic Budget Law introduced the performance-based budgeting, which uses statements of missions, goals, and objectives to explain how the money is spent. The new budget organic law 2019- 15 adopted in 2019 introduced several improvements which provide higher predictability and control in budget planning and execution and combined with the strong existing public sector internal control framework will increase accountability. All the ministries are committed to comply with this requirement. The budget organic law has introduced a programmatic approach in budget preparation and execution. All expenditures foreseen in the budget are classified in programs and missions. Each program budget is classified in 7 categories (compensations, current expenses, specific interventions, investment, financial operations, financing costs, unexpected and unallocated funds). The new law foresees an implementation plan until 2023 to be fully in place including the revision of the public accounting framework. 10. The overall costs of the supported Program including the portion financed by the World Bank are expected to be integrated into the Medium-Term Fiscal Framework (CBMT – Cadre Budgétaire à Moyen Terme). The annual budgets are prepared based on the CBMT. Planning and budgeting related to this Program will follow the national procedures. Based on the current practices of budget instructions/circulars, the teams of the various implementing entities under the responsibility of the DAF of each participating ministry will prepare the budget of the Program considering the limits of allocations set by the Government and the Program. The total amount allocated to the Program during FY2021 according to the operation document should be reflected in the revised 2021 Finances Law, as it has not been totally included in the 2021 draft Finance law. The requirement to adopt the Government Program supported by the World and the revised 2021 Finance law will be reflected in the Financing Agreement. 11. Procurement profile of the Program. The detailed review of the Program expenditure framework does not reveal potential contract with cost estimate above the OPRC review thresholds. The Program procurement activities include mainly (i) investments for Flood risk reduction in urban areas comprising - works, consulting services and equipment (45 percent of Program cost), (ii) investments in the modernization of the main NMHS, including equipment, tools and capacity building (26 percent of Program cost), (iii) consulting services for Institutional reforms and capacity building and (iv) Setting up of information systems for DRM/DRF and claim registry, acquisition of IT modules for CGA (26 percent of Program cost ). Under the Flood risk reduction pillar (Disaster risk reduction), in average, 10 works contracts are scheduled annually, from year 3 for an average amount of 2 mil USD, as well as the selection of consulting firms for the study for management of flood risk reduction. Under pillar 2 (Disaster preparedness) a total amount of 12 mil USD will be dedicated to the acquisition of meteorological equipment with contract amount ranging between 500 KUSD and 1,0 mil USD; and the remaining to financing advisory services (contracts between 50 KUSD and 500 KUSD). Finally, under pillar 3 (Financial protection), while most of the allocated amount will be dedicated to the coverage of disaster risk, the remaining will finance the following goods and consulting service contracts:(i) acquisition of IT modules dedicated to CaT NAT products, (ii) Establishment of a register of victims (IT platform, etc.) and a claims management and compensation system and (iii) communication campaigns. 12. Procurement Planning. According to Article 8 of the public procurement decree, the public purchaser is required to prepare at the beginning of each year an annual procurement plan in accordance with a standard model and a defined schedule. This requirement applies to the DGASGP, coordinating unit and all the Program implementing agencies. In practice, procurement planning was found as an area that needs improvement as most of the procuring entities experienced delay in its preparation, and there are often gaps between planned and effective dates. These weaknesses in planning, affects the overall procurement performance and the budget execution. It is being addressed in the Program by the incorporation of key fiduciary performance indicators (KPI) which will be monitored at the level of each implementing agency, over Program implementation period. Budget Execution Budget Execution Modalities 13. As per 2016 PEFA, Tunisia’s overall performance for budget execution is satisfactory. The country scored B for PI-1 following the PEFA 2016. More recently, and according to the last Settlement Law (loi de règlement) related to the budget execution of the year 2018 published in august 2020 by the Court of Accounts, the budget execution rate reached 98,64% with a total actual expenditure of 37.4 MTND against forecasted expenditures of 37.9 MTND. The overall budget execution rate for calendar year 2017 was 99% with a total actual expenditure of 34.3 MTND against forecasted expenditures of 34.6 MTND. 14. 2018 budget execution has a satisfactory performance for ministries as well as implementing agencies including the two EPNA involved in the PforR Program. Budget execution rates per ministry were: (a) Ministry of Finance: 98.8 %; (b) Ministry of Agriculture: 90 %; (c) Ministry of Transport: 98.8%; and (d) Ministry of Equipment: 94.2%. A detailed review of the 2017 - 2019 budget execution reports of each participating ministry and SOE confirmed that, overall, the performance of each implementing entity is above 90% except INM as shown the table below: The Table summarizes the budget execution performance by implementing entity. 15. Agency Type of Data 2017 2018 2019 DHU Budget Allocation (in MTND) 69 400 69 451 Budget Execution (in MTND) 69 214 61 821 Budget Execution Rate 100% 89% INM Budget Allocation (in MTND) 11 360 12 923 15 958 Budget Execution (in MTND) 10 755 11 324 16 603 Budget Execution Rate 94,7% 87.6% 104% DGRE / DGBGTH Budget Allocation (in MTND) 181 110 291 330 367 310 Budget Execution (in MTND) 118 560 257 840 104 570 Budget Execution Rate 65% 89% 28% DGASGP Budget Allocation (in MTND) 6 279 6 628 Budget Execution (in MTND) 6 065 6 902 Budget Execution Rate 97% 104% CGA Budget Allocation (in MTND) 6 600 8 925 8 480 Budget Execution (in MTND) 7 627 8 176 7 664 Budget Execution Rate 116% 92% 90% 16. The total budget expected to be executed through the Program by each agency is in line with the capacity of each implementing agency as it is expected to execute 40 MUSD by the MEHAT, 15 MUSD by the INM, 5 MUSD by the MARHP and 40 MUSD through the MEFAI over the total Program execution period of five years period. 17. It should be noted that despite satisfactory budget execution rate, the government is facing challenges in terms of service delivery efficiency and timeliness in addition to some cash-flow constraints increased following the COVID-19 pandemic. 18. Delays in processing transactions. Recent projects financed by the Bank faced some delays in processing transactions. However, the meeting with INM and DHU teams revealed that there are no significant delays in the payments of contractors' invoices in these two public entity sides. 19. Procurement delays. As per data provided in TUNEPS,1 , the average procurement lead time for call for tender (open competitive bidding) in Tunisia is 164 days while the prescribed time limits are between 60 and 120 days. According to the data collected from implementing agencies and TUNEPS for the period from 2017 to 2019, the procurement lead time for DHU and INM which will carry out the most important procurement in the Program, are respectively 66 days and 112 days for NCB. The procurement lead time for DGASGP is of 83 days. The integrated electronic fiduciary monitoring tool proposed in the PAP will help ensure a close follow up of the implementation of procurement activities and measurement of their performance. 20. Electronic procurement. The government made mandatory the use of the electronic procurement system in Tunisia, starting from September 1st, 2018 for all public procuring entities at central level and from September 1st, 2019 for local governments. According to the data available in TUNEPS, in 2019 and 2020, 99% of submission to tenders was done online. However, many public purchasers have reported difficulties in using the tool and HAICOP team in charge of the platform is not always available for training. In some cases, bidders and mostly foreigners experienced accessibility issues. The recent improvements of TUNEPS including for easier accessibility, coupled with the capacity building program proposed in the PAP, which include training on the use of TUNEPS, will help address this weakness. Funds Flow Arrangements for Program Implementation 21. The PforR-financed results areas are embedded in the budget and expenditure management processes of the country system. For each Implementing Agency, the Public Accountant (comptable public) is in charge of making the payment and the Tunisian Public Financial Management system is based on the principle of the separation between those who order payments (ordonnateurs) and those who make the payments and record it in the accounting system (comptables publics). Program funds will be 1 As of 10/15/2020 entirely reflected in the central Government budget under the following ministries: MEFAI, ME, MT, MA. All payments of the Program will be made through the centralized Treasury system of Bank accounts held at the Central Bank of Tunisia. Except for some delays observed recently due to cash constraints related to the COVID-19 pandemic, the procedures for payments of invoices and expenditure within the timeframe is deemed reasonable. The same level of performance was reported by the Agencies interviewed during the assessment. 22. Government’s contribution to the Program. The Government, through its budget execution procedures, will transfer its contribution to the Program through the Treasury Bank Account managed by the public accountant assigned to each implementing agency. 23. Disbursement of DLIs to the Treasury Bank Account. The Government would claim disbursements from the World Bank as the DLIs are achieved. All DLIs will be independently verified by an IVA. The IVA will prepare the Results Verification Report, which will be shared with the RU of the Program and the World Bank. A key use of the Results Verification Report will be to confirm and certify the technical achievement of the results/indicators. If the World Bank finds that the disbursement request meets the terms of the Financing Agreement, the World Bank will disburse the corresponding funds to the Treasury Bank Account. The external audit reports will confirm the total expenditures incurred to achieve these DLIs. 24. The GoT, through its budget, will transfer the funds to each ministry based on the expenditure framework and activities to be executed by each ministry and thus prefinance the expenditure. The GoT would claim disbursements from the World Bank as the DLIs are achieved. IVAs will confirm the attainment of DLIs to release funds in accordance with the agreed schedule. The disbursements under the DLIs would be compared with Program expenditures in the last year of the Program. Accounting and Financial Reporting 25. The budget execution and internal control is computerized. The expenditure chain, which covers the budget execution and control cycles, is fully computerized. The information is extracted from the system ADEB and the program would use the tools INJAZ as the Monitoring and Evaluation tool and SIADE for the monitoring of the external debt. All annual accounts are submitted by the Government to the Court of Auditors and subject to its review, as per the articles 117 of the Tunisian Constitution and the articles 12 and 160 of the Court of Auditor law. Still, there are some delays in the preparation of the Settlement Law (loi de règlement du budget), as the Court of Auditor report for the year 2018 was prepared in August 2020. 2019 settlement Law was not available at appraisal mission in December 2020. Each participating entity of line ministries executes its budget following the public expenditure chain using the existing budget and accounting software to record their transactions. Similarly, the CGA and INM will use their own computerized accounting system. It was agreed that the RU, will extract from the country budget execution and accounting information and the CGA and INM accounting software the data to prepare financial reports. Except the delays as mentioned above, no specific issues were identified in terms of accounting and financial reporting. 26. The Budget Organic Law adopted in 2019 introduced in its articles 27 and 28 the double entry bookkeeping requirement for government books. The international public accounting standards (IPSAS) have not yet been adopted in Tunisia. However, in 2016 the Ministry of Finance established a Public Accounting Standards Setting Board (CNNCP) for the setting and implementation of IPSAS inspired public accounting standards. The new accounting framework would apply by 2022. 27. Annual financial statements for the supported Program, will be prepared by the team of RU. The RU within MEFAI will maintain a separate accounting book using the national financial management information systems respectively ADEB (budgeting), SIADE (treasury) and INJAZ (M&E) combined with use of a customized financial reporting template to elaborate the program’s consolidated financial reporting statements. Procurement processes and procedures. 28. The main procurement methods are (i) call for tender), under which the competition is organized with a view to choosing one or more offers, on the basis of objective criteria established in advance and (ii) Shopping (purchase orders). Competitive Bidding can be open or limited. The use of single source is limited. The data from TUNEPS show that in 2018 and 2019, call for tender represents in number, respectively 53% and 34% of the total procurement conducted in Tunisia. Table 2:: Breakdown on the main procurement methods Year Call for tender Shopping 2018 869 (53%) 742 (46%) 2019 3902 (34%) 7361 (65%) Source : Tunisia, TUNEPS 29. Coordinating and implementing agencies (DGASGP, INM, DHU, CGA) are responsible for the entire procurement process and contracting process, which encompass the following: (i) planning; (ii) preparation of bidding documents; (iii) receipt and evaluation of bids or proposals; (iv) finalization and signing of the contract; (v) monitoring the execution; and (vi) filing and archiving documents. The procurement samples provided by CGA reflects the signature of a total of 5 contracts during the period from 2017 to 2019. CGA confirmed that this the total number of contracts during the period, based on its own manual of procedures for procurement. 30. Procurement of crosscutting activities. Considering the institutional arrangement and the multiplicity of actors involved in the Program implementation, it was agreed that procurement for crosscutting activities, will be handled by a designated lead implementing agency within each pillar of the Program. Therefore, this lead implementing agency will conduct the procurement for works, goods non consulting services and consultant services, in accordance with the provision of article 18 of the Tunisian public procurement decree, related to Framework contracts (“Contrats Généraux�). Once the framework contract is in place, each concerned agency will be able to sign a specific contract, follow up the execution, and process related payments. 31. Based on the performance noted at the level of each one of the implementing agencies, the effective implementation of the procedures remains an area requiring improvement considering for instance the lead time of procurement, the length of exchanges between procuring agencies and controllers. The appointment/ hiring of dedicated procurement staff working on full time within each implementing agencies proposed in the PAP as well as the close monitoring of performance through the KPI will help prevent and anticipate the risk of weak performance. In addition, the pillar 4 of the Program includes technical assistance to support capacity building and institutional strengthening. 32. The procurement system relies on the procurement portal of ONMP and the e-procurement system (TUNEPS) which both improve public access to information, by widely publishing call for tender, making bidding documents available to all potential bidders, and publishing results of tendering processes. On the other hand, the use of the online procurement system (TUNEPS) made mandatory since September 2018 has posed some challenges for all public procurement actors in Tunisia, including the need for upgrading of equipment, training of procurement staff, acquisition of electronic certificates allowing access to TUNEPS. These challenges, which are faced by both purchasers and private sector companies, are exacerbated by the limited capacity of the technical support staff of TUNEPS team to respond to various requests within a reasonable timeframe, and to provide training to the various interested users. 33. The enforcement of the procurement processes and procedures by the controllers (“Commission de controle�) are adequate. These commissions should provide their final decision not later tha 20 open days since the reception of a request from the public purchaser. However, they are often very slow and bureaucratic. In the context of maintenance and recovery investment for disaster risk management, this could be a limiting factor, which will be addressed with the appointment of qualified staff and implementation of a capacity building plan for fiduciary staff, as proposed in the PAP. 34. Contract administration. For each public purchaser, contract administration is a task carried out by several units including: the technical unit for the monitoring the execution contract activities, the procurement unit for the application of contractual provisions and the accounting service for payments. The deployment of the e-procurement system offers an adequate environment to ensure transparency in the contract administration. The analysis of the available data reflects that i) INM, DHU and DGASP have mostly respected the fixed execution deadlines of their contracts (despite some excessive delays in some specific contracts), and ii) the amount of the final amounts of the sample final contracts didn’t exceeded the amounts agreed in the initial ones. Internal Controls and Internal audit Administrative Controls and Internal Audit 35. The institutional framework for control is adequate at the Central Government level. Tunisia Scored A in the PEFA report of 2016 for the indicator PI-24. The General Controller of Expenses (Contrôle Général des Dépenses) under the Prime Minister’s office has to approve ex ante, at the commitment stage, every single expense through the ADEB system. Then the Public Accountant (comptable public) member of the DGCPR (Direction Générale de la Comptabilité Publique et du Recouvrement) has to control the whole process and the justifications before making any payment (contrôle concomitant). 36. Program Implementation Manual to be developed for each pillar. As the program will involve several implementing agencies, from different ministries, a dedicated Program Implementation Manual for each Program Pillar will be developed and should obtain the World Bank no objection prior to any disbursement. 37. According to the PEFA of 2016, the internal audit function was rated D+ in Tunisia. The score is justified by (i) the lack of available data regarding the indicators Coverage of internal audit and the execution of internal audits and diffusion of reports, (ii) the rate of Response to internal audit was estimated at 46%, and (iii) Nature of audits and standards applied which were considered as not in line with international standards. It is noted that the PEFA report identified several control bodies, namely the Contrôle général des finances (CGF), the Contrôle général des services publics (CGSP) and the Contrôle général des domaines de l'Etat (CGDE). The evaluation of the performance of the entities in charge of this function in the participating ministries and the two public entities confirmed the need to strengthen the effectiveness of this function. 38. The program will be subject to internal audit review to be performed by the relevant organization within each implementing agency, and annual internal audit report to be submitted to the World Bank. The internal audit process will be monitored by the Good Governance Unit (Cellule Gouvernance) within each ministry, as established by the governmental decree 2016-1158 dated 12 august 2016. It might require some assistance, from national control bodies such as CGF. 39. Internal control system is adequate but there are challenges that need to be addressed. Each of the implementing agencies of the Program is responsible for its own activities based on the Program’s pillar and the budget allocation. They will operate under the internal control framework for Public finance management (Procurement and Financial management). For procurement, there are several layers of control depending on the category and estimate amount of the contract. The competent ministerial procurement committee (see above) is the first level of control (planning, bidding documents, evaluation and contract award decision) and provide the guidance and clearances as needed. Depending on the threshold, the control will be exercised by HAICOP, which also provides overall technical guidance on public procurement and monitors the compliance of procurement standards and practices. It includes several specialized control units based on the category/nature of procurement: (a) construction, civil work and associated studies; (b) ITC, electronic, electricity and associated studies, (c) Commodities and trading products, and (d) other procurement. The institutional architecture of internal control remains characterized with too many layers of prior controls and back and forth ex ante review and clearance redundant loops, bureaucratic practices delaying the procurement process. This results in an overall time for the procurement process which exceeds by two to three times the minimum mandatory time per decree regulation). To help mitigate the risk poses by the internal control system, which is the lengthy procurement process time, performance indicators measuring procurement lead time are included in the Program Action Plan. 40. Handling of procurement complaints. Chapter 8 of the Public procurement decree (dated March 13, 2014, provides for the handling of complaints in procurement. In the first instance, complaints are submitted to procuring entity itself before an appeal could be addressed to the Contracts Monitoring and Investigation Committee (COSEM) which has the responsibility of complaints handling and dispute settlement. COSEM makes binding decisions, which can be challenged before the administrative court. It can suspend public procurement procedures and impose corrective measures. COSEM is not involved in any way in the award of contracts or in the process leading to decisions on awarding contracts. As part of the existing system, all approved contracts will be published in the National Procurement website (site “Observatoire National des Marchés Publics�). Any aggrieved party could then file a complaint within a period of five days after the contract awards decisions are posted on the website. The PEFA 2016 assessment rated A, the indicator PI-23 related to “Effectiveness of an independent administrative body for investigating procurement complaints�. 41. Statistics on complaints handled by COSEM. The ONMP collects, through its database, complaint related information and publishes aggregated data yearly. The statistics available for 2014 are provided in the table below. The data on complaints are not made accessible directly to the public. Under the Program, a system for monitoring complaints in procurement will be set up and will be managed by the Coordination Unit within the Ministry of Finance. The implementation manuals of the PforR will define the terms of this mechanism for monitoring complaints in procurement, the data of which will be shared periodically in the Program implementation reports. Table 3: The statistics on complaints in public procurement Complaints Complaints non- Complaints out Number of 1. substantiated substantiated of COSEM’s complaints Number % Number % competence 2014 368 131 44% 172 56% 65 Source : ONMP External Audit 42. External Auditing. Independent external audits on an annual basis are an important instrument for ensuring oversight as well as to enforce public sector accountability. In Tunisia the Court of Auditors (Cour des Comptes) has the mandate to carry out the external audit of ministries. However due to internal capacity issues in terms of staffing arrangements and financial ressources, the Cour often found it difficult to conduct the audits on a regular and timely manner. This issue was pointed out in the 2016 PEFA report. The indicator PI 29 and PI 30 as D due to the delays in preparation and submission of audit report to the parliament. In the case of EPNA “SOE� such as INM and,CGA external auditors are private sector companies hired on competitive processes to that effect (Commissaires aux Comptes). As part of the Program design, it has been agreed with the Court of Auditors (Cour des Comptes) that it will carry out annual external audit of the Program within a reasonable time period after the end of the financial year. The external auditing arrangements are adequate. The Court of Account (SAI) have been the external auditor of an ongoing PforR operation “Urban Development and Local Governance Program� (P130637) since 2015. Its performance is deemed satisfactory for the Bank (e.g. audit reports have been accepted by the Bank and reports were submitted on due time). The Court of Accounts is being also supported by an ongoing institutional capacity strengthening through a TF “Moussanada Program� managed by the Bank. To address the concerns raised in the 2016 PEFA report, in addition to the Bank on-going support, adequate resources will be allocated to the SAI to allow the institution to fulfill its mandate over the Program implementation period as external auditor of the Program annual financial statements. D. Program Governance and Anti-Corruption arrangements 43. Fraud and corruption risks associated with the proposed PforR are moderate, and some mitigation measures are included in the PAP. 44. Program governance and anti-corruption arrangements. There is adequate legal, regulatory, and institutional framework in place in Tunisia on fraud and anticorruption. The Article 130 of the country’s Constitution created a dedicated Commission for Good Governance and Anti-Corruption. The National Authority for Fighting Corruption (Instance Nationale de Lutte contre la Corruption) is responsible for investigation of complaints relating to corruption. In addition, the governmental decree n°2016-1158 dated 12 august 2016 introduced the obligation to settle a good governance central unit within each ministry, and a good governance unit within each state-owned enterprise. Also, there is an Anticorruption hot line and a website where any citizen can file complaints/grievances which are both functional. A dedicated portal was just released to file any fraud or corruption potential cases and is accessible through the link https://www.e-people.gov.tn/. However, the assessment revealed that in most of the participating ministries and the two public entities, the good governance units are not effective or have being established recently. 45. The legislative and regulatory framework provides in different regulations and laws the definition of fraud, corruption and anti-competitive practices and their handling. These laws and regulations also provide for the resulting sanctions. Article 173 of the public procurement decree subjects all parties to public procurement to the provisions of the above regulations and laws. . The following entities are the most relevant for the Program (i) the National Instance for the fight against corruption (INLUCC- Instance Nationale de la Lutte Contre la Corruption), (ii) the Supreme Audit Institution (Cour des Comptes); (iii) the Monitoring and Investigation Committee of the High Authority of Public Procurement (COSEM) and (iv) the Suspension and Debarment Committee (Comité d’exclusion, CE). a. The National Instance for the fight against corruption (INLUCC). Created by Decree-Law 2011- 120 of November 14, 2011, this INLUCC replaced the Commission for the Investigation of Corruption and Embezzlement Cases. Its mission include, among others: (i) propose anti- corruption policies, monitor their implementation in collaboration with the parties concerned, (ii) Identify sources of corruption in the public and private sectors, receive requests and reporting on cases of corruption and carrying out essential investigations and transmitting them to the competent authorities including the judiciary, (iii) Collecting information and statistics relating to corruption in order to establish a database that can be used in the execution tasks assigned to it, etc. Statistics published by INLUCC indicate that for the years 2016, 2017 and 2018, up to 650 cases of suspected corruption were transmitted to justice. b. The Supreme Audit Institution (SAI - Cour des Comptes) is one of the most credible institution in the country which investigates and sanctions budget managers and public accountants. 2016 PEFA assessed the institution performance as moderately satisfactory (score D+). The Court of Financial Discipline within the SAI is made up equally of members of the SAI and members of the Administrative Tribunal appointed by the Chief of Government. At the end of December 2011, the court had delivered 356 judgments, including decisions to close cases as well as judgments ruling on appeals for review. Statistics since this date are not available. c. The Monitoring and Investigation Committee of the High Authority of Public Procurement (COSEM). COSEM is responsible for handling complaints in public procurement. It is organically within the same body as the higher commission for control and audit of public procurement, namely HAICOP. COSEM statistics are not made public. d. The Suspension and Debarment Committee (Comité d’exclusion, CE). CE has been established within HAICOP by the decree 2016-498 dated 8 April 2016. As of today, 16 companies are debarred 46. The Bank’s Guidelines on Preventing and Combating Fraud and Corruption in Program-for- Results Financing, dated February 1, 2012 and revised July 10, 2015 (the Anti-Corruption Guidelines) will apply. The Coordination Unit within the Ministry of Finance will collect – with support from relevant national institutions, (INLUCC, Cour des Comptes, HAICOP), and report to the Bank allegations occurring under the Program via the annual progress reports during Program implementation. The reporting format will include the following (i) location, and date of the complaint, (ii) allegation’s description, (iii) description of progress in investigation, and (iv) investigation outcome. The World Bank’s prerogative of administrative inquiry for allegations of fraud and corruption has been clarified to the borrower during the Program preparation. In accordance with the Bank’s Anti-Corruption guidelines for P4R operations, the Program will take steps to ensure that “any person or entity debarred or suspended by the Bank is not awarded a contract under or otherwise allowed to participate in the Program during the period of such debarment or suspension�. During the procurement processes, each of the implementing entities will verify the names of the contractor against the Bank’s database2 of debarred or suspended contractors to ensure that no such contractor is awarded any contract under the Program. To that effect, Procurement officer of each IA will be given access to client connection through which this verification can be done. 47. Actions related to fraud and corruption. The combination of enhanced financial management and procurement systems, improved capacity, increased engagement and demand from citizens, enhanced access to information on local governance and effective channels for grievance redress are complementary actions to address fraud and corruption. They are including in the Program and or Action Plan. 48. Factors that affect governance in the program include (a) important delays in the preparation and submission of audit reports of some of the implementing agencies, and mainly the INM; (b) the lack of updated organigram and manual within some of the implementing agencies, mainly the DHU, and (c) some internal control deficiencies identified in the audit reports of the project P144674, executed under the responsibility of the DGASGP and in the audit reports of the CGA related to budget execution monitoring. 49. To address the governance and fraud and corruption risks, the Program will prioritize effective oversight through increased public accountability, increased monitoring and auditing, and greater disclosure and transparency. The IFSA recommends (a) increasing monitoring and auditing through support to systematic tracking and reporting on sector spending by the sector, to foster efficiency and accountability in the use of resources and prioritize auditing sector accounts; and (b) maintain a monitoring and tracking of all complaints received through national mechanisms. Thus, under the PAP, tailored grievance redressal mechanisms will be implemented to ensure that stakeholders’ concerns are documented and resolved on time. 2 https:// www.worldbank.org/debarr E. Procurement and financial management capacity of implementing agencies Procurement 50. According to the institutional arrangement of the program, each participating implementing agency has its own procurement unit. The Bank has conducted a capacity assessment of the implementing agencies, which includes a data collection and analysis. It is important to highlight the fact that obtaining data was very challenging, due to the responsiveness of the concerned agencies and to the issue of their availability. The data extracted from TUNEPS, though they were partial, were very helpful. 51. Assessment of past performance. The analysis of the data showed there are two categories of implementing agencies in the Program: (i) those with low volume of procurement and small size of contracts such as CGA and INM and (ii) those with medium volume and small to medium size contracts such as DHU. - Comité Géneral des Assurances (CGA). The 2019 internal control report of CGA points out numerous shortcomings, both at the organizational level and in the application of the procurement procedures. Among those shortcomings, for example (i) the absence of an approved organization chart (decree not yet signed), (ii) the absence of an internal audit and operational management control unit; (iii) lack of manual of procedures and job descriptions for staff; (iv) noncompliance in the application of procurement procedures with the CGA public procurement guide (procedure for bids opening, reception and returning of financial guarantees); (v) lack of procurement and contract monitoring tools (dashboard); (vi) issues of filing and archiving of procurement documents, etc. These weaknesses must be addressed to guarantee a smooth and successful implementation of pillar 3 of the Program. For the purpose of past performance assessment, data collected in TUNEPS related to 2018 and 2019 have been reviewed and analyzed. They show that CGA has handled very few procurement activities in 2018 and 2019 (1 NCS contract of 71,934.00 TND in 2018 and 1 Goods contract of 302,000.00 TND in 2019). Based on this very limited number and size of procurement, handling of the acquisition of IT modules, IT platform for victim’s registry, claims management and compensation and selection of consultant for communication campaigns management will be very challenging. Therefore, CGA will need to be supported by the Resilience Unit which is well staffed and includes 2 procurement staff in its team. - Institut National de la Météorologie (INM). It will lead the procurements activities within pillar 2. These include Framework contracts for the crosscutting activities involving also DGRE and DGBGTH, in addition to INM itself. For those framework contracts, INM will develop technical specifications for bidding documents and manage all the bidding process: advertisement, reception and opening of bids, evaluation and award. For bids evaluation, a commission will be constituted with a secretariat constituted by procurements specialists from INM, DGRE and DGBGTH. Besides procurement for crosscutting activities, INM will carry out procurement for its own activities under pillar 2. For the purpose of past performance assessment, collected data, covering 2017, 2018 and 2019 shows that INM manages mainly Goods and non-consulting service contracts with amount ranging from 11,000.00 Euro to 970,000.00 Euro. Suppliers are in most cases foreign companies, due to the specialized nature of equipment procured. According to the data provided by INM itself, the annual investment budget has not exceeded 2.5 mil TND in the last three years (2017, 2018 and 2019), which confirms that the number of contracts is very limited. The workload in procurement for INM is average but for a successful implementation of pillar 2, it needs to be supported by the Resilience unit and external consultants. Data provided by INM reflects also a relatively high rate of unfruitful NCB procedures (100% in 2017, 37,5% in 2018 and 36,3% in 2019). The decrease in this rate was explained by the fact that INM impelemnted a dedicated procurement unit in 2018 that centralized the procuring process in collaboration with the purchasing technical services. - Direction de l’Hydraulique Urbaine (DHU), will be responsible for implementing activities under pillar 1. With an annual investment budget worth to 45 million $US, DHU has its own in-house capacity, with dedicated and experienced team, familiar with managing project related to urban flood (construction or reconstruction, pumping and evacuation of water, …). The number of works and consultant contract, reach 15 to 20 per year. From 2017 to 2019, the data analyzed show that DHU handled all types of contracts except Goods. The amount of works contracts range between 250,000.00 TND and 3.9 mil TND, while average amount of consultant contracts is 30,000.00 TND. There are also few NCS contract with average amount of 100,000.00 TND. The average number of works contracts procured by DHU, is high considering the Tunisian context. This is more accentuated by the fact that the sample reviewed showed a tendency to have several lots (up to 10) in one tender (which means a peak of workload during bids evaluation). Given the number of investment projects planned annually under pillar 1 for the first three years (about 10, each year) and the associated amount (> 20 million $), there is need to strengthen the staff and to have technical support from external consultants (engineering firms), for preparation of technical documents, including for bidding and technical oversight, in order to allow DHU to successfully implement the activities under pillar 1 and reach the targets set under DLI 2 DHU can rely also on the support of DGASGP - through mobilization of one or two procurement specialists. - Financial Management 52. The Public Accountants of the different ministries through their respective implementing agencies (e.g. DGBGTH, DGRE, DHU and DGASGP) will execute their budgets following the public expenditure chain through the budget execution software ADEB. The strengths, weaknesses, and challenges facing the different public accountants of the four ministries and related to the participating agencies are similar to the overall ministries of Tunisia. Specifically, as shown in the budget execution section of the IFSA as well as the review of additional existing documents gathered and meetings hold with the staff of these entities, the overall FM capacity of these directorate and public entities are: 53. DGBGTH: As part of the Ministry of Agriculture, the DGBGTH is governed by the decree number 420 dated 13 February 2001 as amended by the decree number 502 dated 31 May 2018. The ministry of agriculture started the effective implementation of good governance units within the different directorate through several circulars issued in June, September and December 2020. It is noted that DGBGTH has already designated its focal point for good governance. DGBGTH has no previous experience in Bank- financed operations. 54. DGRE: As part of the Ministry of Agriculture, it is governed by the same decrees stated above. It is noted that at the date of the assessment, DGRE did not yet identify its focal point for good governance within the ministry. DGRE implements its budget following the country PFM system with similar challenges as described above. DGRE has no previous experience in Bank-financed operations. 55. DHU: Its organigram was established in 1975 and is outdated. A new version is under preparation. A new version of the organigram of DHU was prepared in 2018 but is pending approval from the presidency of the government. The directorate budget is executed following the country public expenditures chain. Delays in payments of expenditures were noted as those described in the other public entity. DHU has no previous experience in Bank-financed operations. 56. DGASGP: The FM departments of the Resilience Unit (RU) within the DGASGP have previous experience with Bank IPF projects. The overall performance of the FM team assigned to the Bank- financed IPF operations was deemed acceptable. However, and as this is the first PforR operation it handles, a capacity building and training on the specificities of this type of financing is required. In addition, the team should be reinforced by a dedicated Program Financial Management Officer in charge of coordinating with the different ministries and entities involved in the program and to prepare the program Financial Statements (e.g. annual financial statements). Additional accountants should be hired to support the existing FM team of the DGACGP based on the workload challenges faced. It is noted that DGASGP does not handle its own program within the Ministry of Finance, and thus its budget is executed as part of the program “budget services�. Finally, an experienced governance unit director was appointed recently in December 2020. 57. CGA: the entity is a Non-Administrative Public Establishment (EPNA – Etablissement Public à Caractère Non Administratif). The FM team is headed by a Finance Director with significant qualification and experiences. The review of the FM manual as well as an assessment of the accounting software did not raise specific concerns. An internal audit and management control Unit is also in place but its capacity faces some challenges. Only 4 to 5 missions were conducted every year during the past three years combined with the limited scope of audit work, suggest the need to strengthen the capacity of this Unit. The assessment revealed also that the auditors expressed an unqualified (clean) opinion on the 2019 financial statements. The auditors formulated some reservations on the pending transactions showed on the statement of bank accounts reconciliation. The entity has no preious experiences with the Bank. 58. INM: The organigram was prepared in 2006, and needs to be updated to reflect the modification of the legal status of INM from an Administrative Public Establishment (EPA – Etablissement Public à Caractère Administratif) to a Non-Administrative Public Establishment (EPNA – Etablissement Public à Caractère Non Administratif) in 2009.The directorate of financial operations is headed by a Finance Director with acceptable experiences and is composed of the finances and accounting sections. The review of the FM manual as well as an assessment of the accounting software did not raise specific concerns. An internal audit and management control Unit is in place and is headed by a new auditor with limited internal audit experiences. An audit program and an audit chapter were developed in 2020. The overall performance of the unit suggests the need to strengthen the capacity of this Division. The audit reports for 2018 and 2019 accounts were overdue at end of december 2020. 59. To address the risks of delays in processing transactions, preparation of annual financial statements, and payments of invoices, IFSA recommends specific actions for the FM arrangements of the Program. These actions that are detailed in the PAP include: • Allocate the dedicated budgets to the different implementing agencies as defined in the Program Expenditure Framework. • Appoint Focal points in each participating implementing entity to provide all the required information to the Program Financial Management Specialist at the Resilience Unit in terms of commitments and payments. • Staff the RU of the Program with qualified Program Financial Management Officer and provide necessary training on Program for Results specificities. • Develop a dedicated Program Implementation Manual for each pillar of the Program; and • Conduct audit of the annual financial statements of the Program by the Court of Accounts. • Conduct of bi-annual inspections and internal audit missions covering procurement, financial, and technical aspects for each agency of the program. 60. Staff capacity. The assessment of staff capacity in the different implementing agencies, identified some areas of capacity improvement both in procurement and financial management as one of the impediments that could affect the implementation of the Program. Therefore, the PAP includes a capacity building plan to strengthen staff in the various implementing entities. World Bank Implementation Support 61. The World Bank will provide timely support to the implementation of the PforR as well as guidance to the relevant agencies regarding fiduciary issues. The Coordination Unit of the Program (DGASGP) will be created and will be responsible for the implementation of the operation. Supervision of FM and procurement arrangements will be carried out as part of the Program supervision plan, and support will be provided on time to respond to Program needs. 62. The World Bank implementation support team will include procurement and FM specialists who would be tasked with the monitoring of the Program’s integrated fiduciary aspects. The reviews will be conducted jointly as far as possible to monitor the status of implementation of the PAP. The fiduciary team will also review the Program’s financial and procurement reports and their compliance with applicable standards. At least two implementation support missions will be conducted during the first year following the Program effectiveness. The team will also provide hands-on support to other organs such as the CGSP and Court of Accounts supporting the mitigation of fraud and corruption. 63. Implementation support. The operation will be supervised on a risk-based approach considering the alternative options due to COVID-19 Pandemic. Fiduciary support would include: a. Close monitoring of the deployment of the integrated financial management and procurement systems. b. Monitoring implementation progress and working with the implementing agencies to ensure the achievement of Program results. c. Support to the implementing agencies to resolve implementation issues and carry out institutional capacity building. d. Monitoring the performance of fiduciary systems and audit reports, including the implementation of the PAP. e. Monitoring changes in fiduciary risks to the Program and, as relevant, compliance with the fiduciary provisions of the Program. F. Contribution to the Program Action Plan. The Table below details the PAP’s fiduciary actions. Type of action Mitigation Due Completion Entity Risk/Weaknesses Responsible Party (PAP, measures Date/Schedule Measurement TA, DLI. KPI) Planning and Budgeting DGASGP Government Include every year Starting from the CGABE (Comité PAP Program Budget line for in the Finance Law first year of the Général de Budget lines Program the annual plan Program l'Administration du identified in expenditure not and budget of the Budget de l'Etat) the national well identified yet Program /DGASGP of the budget and Program funds allocated every year Budget Execution MEHAT / Financial data not Monitor all One month from MEHAT / MARHP / PAP Extraction MARHP / available program Effectiveness MEFAI / MT from ADEB MEFAI / expenditures under shared with MT ADEB and send the Program monthly situations Financial with the Program Management Financial Specialist Management Specialist within DGASGP (Coordination Unit) Internal Control and Internal Audit Absence of regular Conduct bi-annual Two months General PAP Copy of the internal audit to inspections and following the end Inspectorate of line reports of help improve internal audit of each calendar Ministry / Internal inspections/Int Program missions covering semester starting audit Unit within ernal audit implementation procurement, from the first year each ministry and units and financial, and of Program EPNA in reviews of the technical aspects effectiveness coordination with Program for each CGF if required activities by implementing implementing agency of the agency program submitted within the specified period to the RU and the World Bank Type of action Mitigation Due Completion Entity Risk/Weaknesses Responsible Party (PAP, measures Date/Schedule Measurement TA, DLI. KPI) Procurement and FM Capacity INM, CGA Limited The Resilience Unit Throughout the DGASGP, INM and PAP INM and CGA procurement to provide support entire Program CGA supported by capacity of to CGA and INM in implementation Resilience Unit implementation managing their period (as agencies. procurement needed) activities Develop and DGASGP, DHU, Program DGASGP, implement a Six months INM, CGA, MARHP capacity DHU, capacity building following the building plan INM, plan to strengthen Program implemented CGA, staff including effectiveness MARHP general and throughout inspectorate/intern the entire al audit units Program dedicated staff implementation period (as needed) DGASGP, Absence of Develop an Six months DGASGP PAP Integrated DHU, Fiduciary electronic following the Fiduciary INM, management tool integrated financial Program management CGA, management and effectiveness tool (Excel file) MARHP procurement tool deployed at to facilitate the the level of all monitoring of implementing Program fiduciary agencies. implementation (Excel file). Proposed Key fiduciary performance indicators: A Program fiduciary implementation monitoring tool will be developed (Excel file) and used by all the implementing agencies. This tool will collect data and generate the following key fiduciary indicators that will serve to monitor the performance of each implementing agency and overall, the performance of the Program, and provide the needed adjustments. Procurement Financial management - Number of successful calls for tender - Commitment rate - Average number of bidders who submitted a bid for a tender - Timeliness of the program's annual - Procurement lead time financial statements. - Number of contracts awarded using direct contracts method - Timeliness of the program's audit - Number of contracts commissioned (final reception) reports. - Implementation of audit recommendations