The World Bank Implementation Status & Results Report Program to Strengthen Governance for Enabling Service Delivery and Public Investment in Kenya (GESDeK) (P161387) Program to Strengthen Governance for Enabling Service Delivery and Public Investment in Kenya (GESDeK) (P161387) AFRICA EAST | Kenya | Governance Global Practice | Requesting Unit: AECE2 | Responsible Unit: EAEG1 IBRD/IDA | Program-for-Results Financing | FY 2018 | Team Leader(s): Onur Erdem, Leonard Mutuku Matheka Seq No: 6 | ARCHIVED on 25-May-2021 | ISR45624 | Created by: Joyce Cheruto Bett on 10-Feb-2021 | Modified by: Joyce Cheruto Bett on 18- May-2021 Program Development Objectives PDO Table Program Development Objective (from Program Appraisal Document) To improve utilization and transparency of resource management in selected service delivery MDAs. Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Moderately Satisfactory Moderately Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Satisfactory Implementation Status and Key Decisions The Government of Kenya, the World Bank, and l’Agence Française de Développement undertook a virtual Mid-Term Review Mission (MTR) between November 30, 2020 and December 11, 2020 to review the progress of the Program to Strengthen Governance for Enabling Service Delivery and Public Investment in Kenya (GESDeK). The MTR (i) reviewed program implementation status and progress toward the achievement of the Disbursement-Linked Indicators (DLIs), (ii) assessed ongoing and emerging challenges and risks limiting implementation progress, and (iii) outlined actions to ensure that the program remains on track. The Government has achieved significant progress in several key Result Areas despite the challenging operating circumstances it has faced since the onset of the COVID-19 health pandemic in March 2020. As of August 2020, 13 DLIs (out of a total of 27) have been achieved, prompting the Bank's disbursement of the USD 21.5 million associated with these DLIs. These achievements have been registered in the following areas: (a) improved prioritization and management of public investments; (b) improved borrowing and cash management practices to enable reliable funding for service delivery and investment projects; (c) consolidation of staff data for better human resource management; (d) the timeliness and quality of financial statements; and (e) the quality of external and internal audit practices. In addition, the Government reported that four more DLIs have been achieved and are pending verification by the Independent Verification Agent prior to the disbursement of funds associated with these DLIs. A total of US$58.6 million has been disbursed since program inception in 2018 representing 38.65% of the total credit. Key achievements to date include:  Establishment of a Public Investment Management (PIM) Unit and the introduction of a PIM Manual to guide the decisions regarding the identification, design, and implementation of public investment projects  Completion of a cash management framework and the design of an automated cash management system to improve the predictability of fund flows regarding government services and projects  Development of a roadmap to introduce an e-Government Procurement system to enhance efficiency, transparency, and value for money in public procurement  Development of a roadmap to introduce a Government Human Resource Information System to facilitate the consolidation of human resource and payroll data  Preparation of financial statements consistent with information from the Integrated Financial Management Information System (IFMIS)  Completion of an Internal Audit Manual to guide internal audit in government agencies in line with international good practice Among the restructuring proposals adopted during the MTR, the following have high-level implications for the country strategic priorities regarding fiscal consolidation, service delivery, and transparency and accountability:  Completion of the public investment project stock-taking exercise to inform the rationalization of the development budget;  Regular preparation and approval of revised cash plans;  Uploading public service payroll data to the HR Management Information System;  Operationalization of the e-Government Procurement portal;  Introduction of an integrated financial reporting system for SOEs; 5/25/2021 Page 1 of 20 The World Bank Implementation Status & Results Report Program to Strengthen Governance for Enabling Service Delivery and Public Investment in Kenya (GESDeK) (P161387)  Expansion of the e-Citizen portal;  Timely preparation of financial audits; and  Operationalization of the citizen budget portal At the end of the MTR, the Government made a commitment to provide the necessary leadership to accomplish the identified priorities and the associated actions to ensure that the program remains on track. Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P161387 IDA-61330 Effective USD 150.00 150.00 0.00 59.38 94.27 39% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P161387 IDA-61330 Effective 07-Sep-2017 28-Sep-2017 15-Jan-2018 31-Dec-2022 31-Dec-2022 DLI Disbursement Achievement Disbursed amount in Disbursement % for DLI ID DLI Type Description Coc DLI Amount Status Coc DLI Loan: IDA61330-001 Prioritized Public Partially 1 Regular EUR 21,950,000.00 4,400,000.00 20 % Investments Achieved Reliable Funding for Partially 2.1 Regular EUR 16,600,000.00 3,055,000.00 18 % Service Delivery an Achieved Improved Revenue 2.2 Regular EUR 7,000,000.00 Not Achieved 0.00 Projections Reliability of Financing and Partially 2.3 Regular EUR 8,755,000.00 1,755,000.00 20 % External Re Achieved Efficient and Transparent 3 Regular EUR 18,455,000.00 Not Achieved 0.00 Procurement Partially 4 Regular Consolidated Staff Data EUR 17,555,000.00 1,755,000.00 10 % Achieved Timely, Quality Assured, Partially 5.1 Regular EUR 7,900,000.00 2,625,000.00 33 % Financial State Achieved Timely, Efficient, Quality Partially 5.2 Regular EUR 15,830,000.00 3,535,000.00 22 % Audit Achieved 6.1 Regular Transparent Institutions EUR 10,530,000.00 Not Achieved 0.00 Strenghened Fiduciary Partially 6.2 Regular EUR 7,025,000.00 1,760,000.00 25 % Assurance and Risk Achieved 5/25/2021 Page 2 of 20 The World Bank Implementation Status & Results Report Program to Strengthen Governance for Enabling Service Delivery and Public Investment in Kenya (GESDeK) (P161387) Program Action Plan Annual budget provisions under the PFMRS & respective implementing entities are matched to the annual estimated Action Description costs for the planned program activities to pre-finance inputs contributing to the achievement of the Disbursements Linked Results (DLRs). Source DLI# Responsibility Timing Timing Value Status Fiduciary Systems PFMR, CFO NT, Recurrent Yearly In Progress Completion Measurement Budget Provisions Annually by June 30 Comments Timely release of exchequer funds commensurate with requests (as reflected in implementing agencies annual work Action Description plans and cash plans) from the implementing agencies to pre-finance inputs to achieve the DLRs. Source DLI# Responsibility Timing Timing Value Status Fiduciary Systems PFMR Recurrent Quarterly In Progress Completion Measurement Exchequer Releases Monthly Comments Design specific reports in line with the expenditure framework to facilitate generation of program expenditures from Action Description IFMIS. Source DLI# Responsibility Timing Timing Value Status ASD, WB, OAG, Technical Recurrent Quarterly In Progress MoPSYG, NT, IFMIS Completion Measurement Design the reports in IFMIS October 31, 2017. Budget execution reports every 12 months Reports yet to be designed in IFMIS to facilitate generation of reports program Comments Prepare institutional annual financial statements for the three implementing agencies with appropriate disclosure Action Description notes outlining the program expenditures in line with the agreed expenditure framework Source DLI# Responsibility Timing Timing Value Status NT (PFMR & Technical PSASB), MoPSYGA Recurrent Yearly In Progress & OAG Completion Measurement Annually not later than September 30, 2017 Disclosure note formats for GESDeK agreed with ASD. PFMR Secretariat adopted the note formats and adopted by Comments PFMR Secretariat, OAG and MoPGA and endorsed by the Public Sector Accounting Standards Board. (PSASB). 5/25/2021 Page 3 of 20 The World Bank Implementation Status & Results Report Program to Strengthen Governance for Enabling Service Delivery and Public Investment in Kenya (GESDeK) (P161387) Action Description The auditor for the OAG has been appointed. Source DLI# Responsibility Timing Timing Value Status Technical NT Recurrent Semi-Annually In Progress Completion Measurement Appointment of the Auditor for the OAG Comments Implementing Agencies Establish and maintain: (i) PFM Standing Committee; (ii) Audit Committees; (iii) Internal Risk Action Description Management Framework including F&C risks; (iv) Risk Registers and Internal Control Framework in line with the PFMAct 2012 and PFM Reg Source DLI# Responsibility Timing Timing Value Status Technical IAD, MOPGA, NT Recurrent Semi-Annually In Progress Completion Measurement Continuously monitored every 6 months Comments Implementing Agencies - compliance with the applicable business standards as per the Regulations Action Description Source DLI# Responsibility Timing Timing Value Status Technical PPD, AG Due Date 31-Jan-2018 In Progress Completion Measurement Continuous Amendments proposed to the existing business standards to enhance efficiency and shorten contracting lead time. Comments Draft amendments to the Act and Regulations not yet approved. Implementing Agencies establish a filing and records management system in accordance with the provisions of the Action Description PPAD Act 2015 and attendant Regulations Source DLI# Responsibility Timing Timing Value Status Technical PPRA Recurrent Yearly In Progress Completion Measurement Continuous Manuals/ templates/standard forms and guidance notes on procurement filing and records management to be Comments prepared consistent with the provisions of the Public Procurement and Asset Disposal (PPAD) Act 2015 and attendant Regulations 5/25/2021 Page 4 of 20 The World Bank Implementation Status & Results Report Program to Strengthen Governance for Enabling Service Delivery and Public Investment in Kenya (GESDeK) (P161387) PPRA shares on a quarterly basis with Implementing Departments the list of firms on the WB, UN, EU and French Action Description Financial Sanctions Lists. Source DLI# Responsibility Timing Timing Value Status Technical WB, PPRA Due Date 30-Jun-2020 Completed Completion Measurement Continuous Comments Debarment and suspended list of firms and individuals not shared with implementing entities Implementation of e-procurement in the three implementing agencies as part of the first phase. Action Description Source DLI# Responsibility Timing Timing Value Status Technical PPRA Recurrent Continuous Not Yet Due Completion Measurement Continuous Implementation of e-procurement to start once UAT for upgraded e-procurement and State Procurement Portal is Comments completed Action Description Establishment of complaints and reporting system at the PFMR Secretariat Source DLI# Responsibility Timing Timing Value Status Technical PFMR, WB Recurrent Continuous In Progress Completion Measurement Within 6 months of effectiveness Comments Framework for PFMR complaints and reporting system set out in the PFMR Strategy POM Implementing agencies publish annual performance against the “resolution of public complaints” and “corruption Action Description prevention indicators” under the Performance Contacting system. Source DLI# Responsibility Timing Timing Value Status PFMR, NT, MoPGA Technical Recurrent Yearly In Progress and OAG Completion Measurement Resolution of Public Complaints NT and State Department of Public Service received their compliance certificates issued by the Ombudsman. Sensitization of implementing agencies on the complaints handling requirements is being carried out. Comments •Establish and maintain risk register for the program Action Description •Reporting on recommendations made to mitigate against risks identified in the risk register 5/25/2021 Page 5 of 20 The World Bank Implementation Status & Results Report Program to Strengthen Governance for Enabling Service Delivery and Public Investment in Kenya (GESDeK) (P161387) Source DLI# Responsibility Timing Timing Value Status Technical PFMR Due Date 31-Dec-2018 In Progress Completion Measurement Risk register updated based on actions completed and emerging MDA risks as they emerge Comments Action Description Managing and mitigating impacts associated with e-waste Source DLI# Responsibility Timing Timing Value Status PFM Reform Technical Recurrent Yearly In Progress Secretariat Implementing the requirements of the 1999 Environmental Management and Coordination Act (EMCA) (as amended Completion Measurement in 2015), Waste Management Regulations, E-waste Management Guidelines and Draft E-Waste regulations Framework (handling e-waste for ICT related e-waste) set out in POM but yet to be put into operation. Comments The framework needs alignment with PPAD Act and regulations Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance Substantial Substantial Substantial Macroeconomic Moderate Moderate Moderate Sector Strategies and Policies Moderate Moderate Moderate Technical Design of Project or Program Substantial Substantial Substantial Institutional Capacity for Implementation and Substantial Substantial Substantial Sustainability Fiduciary Substantial Substantial Substantial Environment and Social Low Low Low Stakeholders Substantial Substantial Substantial Other -- Substantial Substantial Overall Substantial Substantial Substantial Results PDO Indicators by Objectives / Outcomes 5/25/2021 Page 6 of 20 The World Bank Implementation Status & Results Report Program to Strengthen Governance for Enabling Service Delivery and Public Investment in Kenya (GESDeK) (P161387) PDO Indicator 1: Prioritized Public Investments IN00957552 ►Projects with capital allocation above Kes.100m in complance with procedures in PIM Manual (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 30.00 Date 30-Jun-2016 01-Oct-2020 11-Feb-2021 30-Jun-2022 Refer to DLR1d for information on progress. Comments PDO Indicator 2: Reliable Funding for Service Delivery and Investment Projects IN00957558 ►a) Av under-release of priority oper SD budget alloc in % of revised in-year cash plans on 1/4 then (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 8.00 0.00 0.00 8.00 Date 30-Jun-2016 01-Oct-2020 11-Feb-2021 30-Jun-2022 Refer to DLR2.1c for information on progress. Comments IN00957560 ►b) Annual Exchequer releases to GoK capital budget allocations as a % of the approved budget (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 90.70 93.00 93.00 95.00 Date 30-Jun-2016 01-Oct-2020 11-Feb-2021 30-Jun-2022 Refer to DLR2.1d for information on progress. Comments PDO Indicator 3: Efficient and Transparent Procurement IN00957556 ►MDAs using e-Procurement System in compliance with the PPAD Act, 2015 (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 3.00 Date 30-Jun-2016 01-Oct-2020 11-Feb-2021 30-Jun-2022 Refer to DLR3c for information on progress. Comments PDO Indicator 4: Consolidated Staff Data IN00957554 ►MDAs whose payroll data has been uploaded to GHRIS and are up to date (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 20.00 5/25/2021 Page 7 of 20 The World Bank Implementation Status & Results Report Program to Strengthen Governance for Enabling Service Delivery and Public Investment in Kenya (GESDeK) (P161387) Date 30-Jun-2016 01-Oct-2020 11-Feb-2021 30-Jun-2022 Refer to DLR4b for information on progress Comments PDO Indicator 5: Timely and Quality Financial Statements and Audit IN00957555 ►(a) % of MDAs whose financial statement audits have been completed within 3 months after OAG receipt (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 15.00 15.00 50.00 Date 30-Jun-2016 01-Oct-2020 11-Feb-2021 30-Jun-2022 Refer to DLR5.2c for information on progress Comments IN00957559 ►(b) months between receipt of final consolidated FS by OAG and submission of Audited FS to Parliamen (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 10.00 8.00 8.00 3.00 Date 30-Jun-2016 01-Oct-2020 11-Feb-2021 30-Jun-2022 Refer to DLR 5.2d Comments PDO Indicator 6a: Transparent Institutions IN00957553 ►No. of MDAs where info is publicly available online in searchable form on prog. expe & transfers to (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 6.00 Date 30-Jun-2016 01-Oct-2020 11-Feb-2021 30-Jun-2022 Refer to DLR6.1c for information on progress. Comments PDO Indicator 6b: Strengthened Fiduciary Assurance and Risk Management IN00957557 ►Annual and quarterly MDA Internal Audit Reports have been prepared and undergone QA in line with (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 20.00 Date 30-Jun-2016 01-Oct-2020 11-Feb-2021 30-Jun-2022 Refer to DLR6.2c for information on progress. Comments Intermediate Results Indicators by Results Areas 5/25/2021 Page 8 of 20 The World Bank Implementation Status & Results Report Program to Strengthen Governance for Enabling Service Delivery and Public Investment in Kenya (GESDeK) (P161387) Prioritised Public Investments IN00957561 ►IRI 1.1: Dedicated unit established with staff deployed assigned performing NT PIM roles. (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No Yes Yes Yes Date 30-Jun-2016 30-Jan-2020 11-Feb-2021 30-Jun-2022 Refer to DLR1a for information on progress. Comments IN00957567 ►IRI 1.2: Approved PIM manual & user requirements which address key challenges in PIM (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No Yes Yes Yes Date 30-Jun-2016 30-Jan-2020 11-Feb-2021 30-Jun-2022 Refer to DLR1b for information on progress Comments IN00957572 ►IRI 1.3: UAT complete for enhance e-ProMIS automating provision of PIM Manual (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 30-Jun-2016 30-Jan-2020 11-Feb-2021 30-Jun-2022 Refer to DLR1c for information on progress. Comments Reliable Funding for Service Delivery and Public Investments IN00957562 ►IRI 2.1:Guidelines adopted requiring revised MDA cash plans to protect SD & infras budget priorities (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 30-Jun-2016 30-Jan-2020 11-Feb-2021 30-Jun-2022 Refer to DLR2.1b for information on progress. Comments IN00957568 ►IRI 2.2: Annual domestic (tax plus non-tax) revenue collections as a % of the annual budget (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 91.87 91.87 91.87 94.00 Date 30-Jun-2016 30-Jan-2020 11-Feb-2021 30-Jun-2022 Refer to DLR2.2 for information on progress. Comments IN00957573 5/25/2021 Page 9 of 20 The World Bank Implementation Status & Results Report Program to Strengthen Governance for Enabling Service Delivery and Public Investment in Kenya (GESDeK) (P161387) ►IRI 2.3: Ave. underperformance of quartely net domestic borrowing as % revised in-year cash plans (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 70.00 0.00 0.00 25.00 Date 30-Jun-2016 30-Jan-2020 11-Feb-2021 30-Jun-2022 Refer to DLR2.3b for information on progress. Comments IN00957576 ►IRI 2.4:Inyear borrowing plan consistent with delivering cash for MDAs based on CPs using new system (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 30-Jun-2016 30-Jan-2020 11-Feb-2021 30-Jun-2022 Refer to DLR2.3a for information on progress. Comments Efficient and Transparent Procurement IN00957563 ►IRI 3.1: UAT for upgraded e-procurement and SPP complete (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 30-Jun-2016 30-Jan-2020 11-Feb-2021 30-Jun-2022 Refer to DLR3b for information on progress. Comments IN00957569 ►IRI 3.2:Roadmap for e-procurement upgrade including SPP, aligned to PPADA requirements & regulations (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 30-Jun-2016 30-Jan-2020 11-Feb-2021 30-Jun-2022 Refer to DLR3a for information on progress. Comments Consolidated Staff Data IN00957564 ►IRI 4: GHRIS enhanced to handle consolidated HR data from MDAs and interfaces with IFMIS (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 30-Jun-2016 30-Jan-2020 11-Feb-2021 30-Jun-2022 Refer to DLR4b for information on progress. Comments 5/25/2021 Page 10 of 20 The World Bank Implementation Status & Results Report Program to Strengthen Governance for Enabling Service Delivery and Public Investment in Kenya (GESDeK) (P161387) Timely and Quality Financial Statements and Audit IN00957565 ►IRI 5.1: Audit codes that classify risk clusters to enable efficient targeting of audit resource (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No Yes Yes Yes Date 30-Jun-2016 30-Jan-2020 11-Feb-2021 30-Jun-2022 Refer to DLR5.2a for information on progress. Comments IN00957570 ►IRI 5.2: Enhanced audit metholdology and quality assurance framework in place (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No Yes Yes Yes Date 30-Jun-2016 30-Jan-2020 11-Feb-2021 30-Jun-2022 Refer to DLR5.2b for information on progress. Comments IN00957574 ►IRI 5.3: % of MDAs NT has reviewed the quality of Annual FS generated from IFMIS & submitted to OAG (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 10.00 15.00 15.00 50.00 Date 30-Jun-2016 30-Jan-2020 11-Feb-2021 30-Jun-2022 Refer to DLR5.1 for information on progress Comments Strengthened Fiduciary Assurance and Transparency IN00957566 ►IRI 6.1: MDAs can access multi-year itemized & facility level budget & outturn data in IFMIS (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 30-Jun-2016 30-Jan-2020 11-Feb-2021 30-Jun-2022 Refer to DLR6.1c for information on progress. Comments IN00957571 ►IRI 6.2: UAT of online pub interface providing searchable info on progs, projects & transfers to SDU (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 30-Jun-2016 30-Jan-2020 11-Feb-2021 30-Jun-2022 Refer to DLR6.1b for information on progress Comments IN00957575 5/25/2021 Page 11 of 20 The World Bank Implementation Status & Results Report Program to Strengthen Governance for Enabling Service Delivery and Public Investment in Kenya (GESDeK) (P161387) ►IRI 6.3:Updated manuals & QA framework for IA to strengthen assurance & risk management are in place (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 30-Jun-2016 30-Jan-2020 11-Feb-2021 30-Jun-2022 Refer to DLR6.2b for information on progress. Comments IN00957577 ►IRI 6.4: Complete diagnostic study of internal audit (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 30-Jun-2016 30-Jan-2020 11-Feb-2021 30-Jun-2022 Refer to DLR6.2a for information on progress. Comments Disbursement Linked Indicators DLI_IND_TABLE ►DLI 1 DLR 1a: PIM Unit established in NT (Output, 2,500,000.00, 0%) Baseline Actual (Previous) Actual (Current) By end FY 2021/22 Value No Yes Yes Yes Date -- 01-Oct-2020 11-Feb-2021 -- The PIM Unit was established in July 2018. This DLR has been achieved and confirmed by IVA. Associated Comments disbursement is ready for withdrawal. ►DLI 2 DLR 1b: Approved PIM Manual & user requirements for e-ProMIS which addresses key challenges in PIM including prioritization, costing and transparency (Output, 2,500,000.00, 0%) Baseline Actual (Previous) Actual (Current) By end FY 2021/22 Value No Yes Yes Yes Date -- 01-Oct-2020 11-Feb-2021 -- The draft PIM guidelines and user requirements for e- ProMIS were approved in October 2018. The DLI has been achieved and verified. Associated disbursement is ready for withdrawal. Comments ►DLI 3 DLR 1c: UAT complete for enhanced e-ProMIS and IFMIS (Output, 2,500,000.00, 0%) Baseline Actual (Previous) Actual (Current) By end FY 2021/22 Value No No No Yes 5/25/2021 Page 12 of 20 The World Bank Implementation Status & Results Report Program to Strengthen Governance for Enabling Service Delivery and Public Investment in Kenya (GESDeK) (P161387) Date -- 01-Oct-2020 11-Feb-2021 -- A decision has been made to develop a new PIMIS rather than upgrade e-Promise to automate the PIM processes. This DLI regarding User Acceptance Testing (UAT) for the new PIMIS has not been achieved due Comments to delays experienced in the procurement of a system developer. It was agreed during the SPN mission that the procurement process for the system would be launched prior to the MTR. ►DLI 4 DLR 1d: Projects with capital allocations above KES 100 million which are in compliance with procedures in the PIM manual. (Output, 17,500,000.00, 0%) Baseline Actual (Previous) Actual (Current) By end FY 2021/22 Value 0.00 0.00 0.00 30.00 Date -- 01-Oct-2020 11-Feb-2021 -- The regulations for PIM, which would mandate compliance of public investment projects with the newly established standards and guidelines, are still in draft. The finalization and adoption of these regulations are expected to take place in 2021. The adoption of these regulations is a proposed Prior Action in the policy matrix for the ongoing DPO series. Furthermore, the ongoing Public Expenditure Review process revealed gaps in determining the exact composition and status of the active public investment project portfolio. Considering the delays experienced in instituting a regulatory framework mandating compliance, as well as the data gaps regarding the composition of the current public investment project portfolio, this DLR can no longer be achieved. During the supervision mission, the Bank and the Government agreed on a menu of proposed technical interventions and DLIs that could be considered within this Result Area going forward, including: By June 2021:  Stock-take of active public investment projects completed for at least ten service delivery MDAs in the infrastructure, health, and education sectors, including the status of the projects and information Comments on multiyear commitments  PIM methodologies and approaches developed including appraisal manuals, national parameters and commodity-specific conversion factors. By June 2022:  Project baseline completed in at least 20 service delivery MDAs and inventory up to date, including the status of projects and information on multiyear commitments using upgraded PIMIS  Final User Acceptance Testing for Public Investment Management Information System completed  Public Investment Management sector-specific methodologies developed in infrastructure, health, and education for national and county level The final scope of the proposed DLIs and the associated disbursement amounts will be determined during the upcoming MTR. ►DLI 5 DLR 2.1a: UAT of cash management and exchequer systems (Output, 1,500,000.00, 0%) Baseline Actual (Previous) Actual (Current) By end FY 2021/22 Value No Yes Yes Yes Date -- 01-Oct-2020 11-Feb-2021 -- The User Acceptance Test (UAT) of the new cash management and exchequer system was approved by the NT and verified by the IVA. This includes the automation of cash planning, as well as exchequer requisitioning and release. UAT Report in place against original user requirements. Further automation of the exchequer Comments process (including Controller of Budget authorization) has been agreed and is in the process of being rolled out. Associated disbursement for the DLI is ready for withdrawal. ►DLI 6 DLR2.1b Guidelines adopted by NT which require that revised MDA cash plans protect service delivery and infrastructure budget priorities. (Output, 1,500,000.00, 0%) 5/25/2021 Page 13 of 20 The World Bank Implementation Status & Results Report Program to Strengthen Governance for Enabling Service Delivery and Public Investment in Kenya (GESDeK) (P161387) Baseline Actual (Previous) Actual (Current) By end FY 2021/22 Value No No No Yes Date -- 01-Oct-2020 11-Feb-2021 -- The scope and the progress toward the achievement of this DLI is currently being reassessed. The Budget Implementation Circular included a reference to “Category 2”, which replaces Priority Service Delivery Programs (PDSPs) under the proposed cash management framework. Proposals under the proposed Comments framework also include MDA cash limits by category linked to cash available in the aggregate cash plan. However, while the interim definition of "Category 2" and specific guidance regarding the preparation of cash plans within limits have been drafted, this information is yet to be communicated to MDAs. ►DLI 7 DLR 2.1c: Average under-release of priority operational service delivery budget allocations expressed as a percentage of revised in year cash plans on a quarterly then monthly basis. (Outcome, 8,000,000.00, 0%) Baseline Actual (Previous) Actual (Current) By end FY 2021/22 Value 8.00 0.00 0.00 8.00 Date -- 01-Oct-2020 11-Feb-2021 -- This DLI was not achieved in 2018/19. The aggregate cash plan for 2019/20 was prepared and approved by the NT. However, the revised in-year cash plans were not approved by the Cash Management Committee (CMC). Considering the underperformance of this result area, the scope and relevance of this DLI is in the process of being reassessed. The following proposed technical interventions and DLIs were discussed to restructure this Result Area. These will be finalized during the MTR. By June 2021  The IFMIS cash management system strengthened in Hyperion, with (i) MDA cash allocations set using category limits from the aggregate cash plans; (ii) MDA cash plans preparation within cash allocations and consolidated; (iii) exchequer register functionality prepared; (iv) requests within limits are processed on a first in first out basis within the expenditure category limits and v) exchequer reports generated  Eight CMC meetings a year approve (i) an annual (revised) aggregate cash plan with revenue projections, monthly borrowing requirements and exchequer outflows by category; and (ii) projected monthly MDA exchequer allocations, which are uploaded into the system and changes are communicated to MDAs. Comments  Education school transfers, the equitable share and county conditional transfers made in the scheduled month and at least 75% of planned value  At least 75% of 20/21 non-salary exchequer requests made within monthly cash allocations processed within 2nd week of the close of the month in which the request was made. The schedule to be based on revised revenue targets for each By June 2022  12 CMC meetings a year approve (i) an annual (revised) aggregate cash plan with revenue projections, monthly borrowing requirements and exchequer outflows by category; and (ii) projected monthly MDA exchequer allocations, which are uploaded into the system and changes are communicated to MDAs  Education school transfers, the equitable share and county conditional transfers made in the scheduled month and at least 95% of planned value  At least 75% of 21/22 non-salary exchequer requests made within monthly cash allocations processed on a 1st in 1st out basis within 2nd week of the close of the month in which request made via the system ►DLI 8 DLR2.1d: Annual exchequer releases to GoK major capital budget allocations as a % of the approved budget. (Outcome, 8,000,000.00, 0%) Baseline Actual (Previous) Actual (Current) By end FY 2021/22 5/25/2021 Page 14 of 20 The World Bank Implementation Status & Results Report Program to Strengthen Governance for Enabling Service Delivery and Public Investment in Kenya (GESDeK) (P161387) Value 90.70 93.00 93.00 95.00 Date -- 01-Oct-2020 11-Feb-2021 -- The target has been achieved for FY 18/19 and verified by the IVA. Associated disbursement is ready for Comments withdrawal. ►DLI 9 DLR 2.2: Annual domestic (tax plus non-tax) revenue collections as a percentage of the annual budget (Output, 8,000,000.00, 0%) Baseline Actual (Previous) Actual (Current) By end FY 2021/22 Value 91.87 0.00 0.00 94.00 Date -- 01-Oct-2020 11-Feb-2021 -- Revenue collection underperformed in 2018/19 and the DLI was not met. MFAD with support from World Bank has undertaken recalibration of the revenue projection model. Elasticities have been calculated jointly by the Kenya Revenue Authority and NT which can impact on 2020/21 projections. The 2019/20 printed estimates are based on old elasticities, while the 2020/21 revenue projections are consistent with revised elasticities. There also have been legislative and policy initiatives impacting this result area, including (i) amendments to the PFM Act to align the legislative framework, (ii) agreement on a proposal to concurrently submit finance and Comments appropriation bills, and (iii) amendments to income tax administration finalized and submitted to Cabinet. This DLI has not been achieved in three consecutive years (2017/18, 2018/19, and 2019/20) due to significant underperformance in revenue collection. Given the economic disruption created by the COVID-19 pandemic, the achievement of the DLI remains uncertain. The scope and relevance of this DLI will be reassessed during the upcoming MTR. ►DLI 10 DLR 2.3a: In year borrowing plan consistent with delivering cash for MDAs based on a compilation of the cash plans using the new system (Output, 2,000,000.00, 0%) Baseline Actual (Previous) Actual (Current) By end FY 2021/22 Value No Yes Yes Yes Date -- 01-Oct-2020 11-Feb-2021 -- This DLI has been achieved and verified by the IVA. Associated disbursement is ready for withdrawal. An aggregate cash plan for FY1 was approved by the NT before the end of the first month of the FY and included a) the value of the aggregated MDA cash plans and revenue projections by month from the new system; b) the Comments type and quantity of borrowing to be undertaken by month; and c) explanation for any differences between the nationally aggregated revenue and expenditure plans. ►DLI 11 DLR 2.3b: Average under performance of quarterly net domestic borrowing as a percentage of what is planned in revised in year cash plans (Output, 2,000,000.00, 0%) Baseline Actual (Previous) Actual (Current) By end FY 2021/22 Value 70.00 0.00 0.00 25.00 Date -- 01-Oct-2020 11-Feb-2021 -- Comments The DLI was not achieved by June 2019 due to cash plans for the FY not being in place at the time. A Cash Management Framework is in development and includes an aggregate cash planning tool, as well as, the Terms of Reference for a Cash Management Committee and the Technical Team responsible for overseeing cash plans. A mechanism to properly track the achievement of this indicator is in the process of being 5/25/2021 Page 15 of 20 The World Bank Implementation Status & Results Report Program to Strengthen Governance for Enabling Service Delivery and Public Investment in Kenya (GESDeK) (P161387) developed and integrated into cash management tools. Considering the pace of progress in this area, the scope of this DLI is in the process of being reassessed. ►DLI 12 DLR3a: roadmap agreed for upgrading e-procurement system including SPP, aligned to requirements of PPADA and attendant regulations. (Output, 2,000,000.00, 0%) Baseline Actual (Previous) Actual (Current) By end FY 2021/22 Value No No No Yes Date -- 01-Oct-2020 11-Feb-2021 -- The e-GP Strategy and Roadmap virtual stakeholder validation workshop was held in October 2020. The workshop was chaired by the PS NT and attended by representatives from MDAs, counties, and the private sector. The e-GP Technical Team responded to written comments that were received through the stakeholder consultative process, as well as the queries that were raised during the workshop. The Bank team observed no significant issues regarding the proposed system. There were clarifications sought regarding the scope of Comments the system, specifications, interface with existing systems, expansion of the membership to the SC, and most importantly, the roll-out date and whether the system will cover the entire public procurement spectrum. Following the stakeholder workshop, the e-GP Strategy and Roadmap was approved by the NT. Although this DLI has been reportedly achieved, it has not yet been verified by the Independent Verification Agent. Therefore the team is keeping the status of this DLI unchanged for the time being. ►DLI 13 DLR 3b: UAT for upgraded e-procurement system and state procurement portal complete (Output, 4,000,000.00, 0%) Baseline Actual (Previous) Actual (Current) By end FY 2021/22 Value No No No Yes Date -- 01-Oct-2020 11-Feb-2021 -- The review of the business processes, technical specifications, and the Bidding Document for the development and installation of the system have been completed and will be submitted to the Ministry of ICT for their review and concurrence. The NT anticipates that the solicitation of bids for the development and Comments installation of the system will take place in October 2020. The NT expects to have the contract for the development, installation, commissioning and roll-out of the e-GP system awarded by December 2020 as indicated in the 2020/21 Budget Statement. ►DLI 14 DLR3c: Number of MDAs using the e-procurement system in compliance with the PPADA and attendant regulations for the full fiscal year and procurement data disclosed in SPP following OCDS (Outcome, 15,000,000.00, 0%) Baseline Actual (Previous) Actual (Current) By end FY 2021/22 Value 0.00 0.00 0.00 20.00 Date -- 01-Oct-2020 11-Feb-2021 -- The NT has reiterated the government’s commitment to have the contract for the development, installation, commissioning and roll-out of the e-GP system awarded by December 2020 as indicated in the 2020/21 Comments Budget Statement. ►DLI 15 DLR4a: Plan adopted for GHRIS to be enhanced to handle consolidated HR data from MDAs which interfaces with IFMIS (Output, 2,000,000.00, 0%) 5/25/2021 Page 16 of 20 The World Bank Implementation Status & Results Report Program to Strengthen Governance for Enabling Service Delivery and Public Investment in Kenya (GESDeK) (P161387) Baseline Actual (Previous) Actual (Current) By end FY 2021/22 Value No Yes Yes Yes Date -- 01-Oct-2020 11-Feb-2021 -- An agreed plan is in place for a human resource data management system which consolidates individual MDA payrolls developed in GHRIS. The plan includes user requirements, which specify the business processes, information requirements and interfaces between the individual payrolls, as well as, provisions for a Comments consolidated database in GHRIS and IFMIS with a common data structure. The DLI has been achieved and verified. Associated disbursement is ready for withdrawal. ►DLI 16 DLR4b: Number of MDAs whose payroll data has been uploaded to GHRIS and are up to date. (Outcome, 18,000,000.00, 0%) Baseline Actual (Previous) Actual (Current) By end FY 2021/22 Value 0.00 0.00 0.00 20.00 Date -- 01-Oct-2020 11-Feb-2021 -- Delays experienced in the development of the GHRIS plan have resulted in this DLR not being achieved in 2018/19 and 2019/20. Considering the pace of progress in this Result Area, it has been agreed with NT that the following actions would be completed prior to the MTR for this Result Area to continue to receive support under GESDEK: i) the modality of system development agreed in the next (i.e. development of the system in Comments house or a hybrid approach including development in house complemented with third party technical support); ii) data warehouse and GHRIS upgrade hardware procurement underway; and iii) either software development firm procurement underway or in house developers have developed software for a specific business process to demonstrate capability to develop the system in house. ►DLI 17 DLR 5.1: The percentage (%) of MDAs the National Treasury has reviewed the quality of Annual Financial Statements generated from IFMIS and has submitted to the OAG within 4 months. (Output, 8,000,000.00, 0%) Baseline Actual (Previous) Actual (Current) By end FY 2021/22 Value 10.00 30.00 30.00 50.00 Date -- 01-Oct-2020 11-Feb-2021 -- Partially achieved for FY 2018/19 based on reports obtained from IFMIS and verified by IVA. Extracts of financial statements for FY 2017/18 for 26 MDAs have been uploaded on the NT website for public access. Comments Disbursement associated with the DLI ready for withdrawal. ►DLI 18 DLR 5.2a: Approval of audit codes that classify risk clusters to enable efficient targeting of audit resources (Output, 1,000,000.00, 0%) Baseline Actual (Previous) Actual (Current) By end FY 2021/22 Value No Yes Yes Yes Date -- 01-Oct-2020 11-Feb-2021 -- The OAG has issue a new set of audit codes consistent with international standards. The achievement of this DLI has been verified and the associated disbursement is ready for withdrawal. Comments 5/25/2021 Page 17 of 20 The World Bank Implementation Status & Results Report Program to Strengthen Governance for Enabling Service Delivery and Public Investment in Kenya (GESDeK) (P161387) ►DLI 19 DLR 5.2b: Enhanced Audit methodology and Quality Assurance framework approved (Output, 500,000.00, 0%) Baseline Actual (Previous) Actual (Current) By end FY 2021/22 Value No Yes Yes Yes Date -- 01-Oct-2020 11-Feb-2021 -- The OAG has issued a new methodology that includes revised presentation of reports and a quality control and assurance framework, which has been confirmed by AFROSAI as compliant and consistent with Comments international standards. The achievement of this DLI has been verified and the associated funds are available for disbursement. ►DLI 20 DLR5.2c: % of MDAs whose financial statement audits have been completed within 3 months after OAG receipt of final financial statements using an improved methodology, undergone quality assurance. (Output, 8,000,000.00, 0%) Baseline Actual (Previous) Actual (Current) By end FY 2021/22 Value 0.00 15.00 15.00 50.00 Date -- 01-Oct-2020 11-Feb-2021 -- Achieved for FY 2018/19. Quality assurance checklists for 8 MDAs were provided. These checklists and actual verification of by IVA show that these audits were conducted using the new audit methodology, risk clusters Comments applied, and audits were presented in the revised format. Disbursement associated with the achievement of the DLI is ready for withdrawal. ►DLI 21 DLR 5.2d: Months between receipt of consolidated and quality assured financial statements by OAG and submission of the audited financial statements to Parliament (Outcome, 8,500,000.00, 0%) Baseline Actual (Previous) Actual (Current) By end FY 2021/22 Value 10.00 8.00 8.00 3.00 Date -- 01-Oct-2020 11-Feb-2021 -- Achieved for FY 2018/19 and verified by IVA. Disbursement associated with the achievement of the DLI is Comments ready for withdrawal. ►DLI 22 6.1a MDAs can access multi-year itemized and facility level budget and outturn data for all MDAs in searchable form through the budget module in the IFMIS (Output, 1,000,000.00, 0%) Baseline Actual (Previous) Actual (Current) By end FY 2021/22 Value No No No Yes Date -- 01-Oct-2020 11-Feb-2021 -- Information regarding payments of schools have not been obtained. Consultations regarding collecting this information started between the Budget Department and Sector Ministries, but progress has been delayed by the budget process. An analytical repository has been developed to incorporate data and information Comments regarding service facilities, projects, and program performance. BOOST has been updated with the 2018/19 budget and the 2017/18 actuals data. 5/25/2021 Page 18 of 20 The World Bank Implementation Status & Results Report Program to Strengthen Governance for Enabling Service Delivery and Public Investment in Kenya (GESDeK) (P161387) ►DLI 23 6.1b UAT of online public interface which provides information in a searchable form on programs and projects and transfers to service delivery unit (Output, 800,000.00, 0%) Baseline Actual (Previous) Actual (Current) By end FY 2021/22 Value No No No Yes Date -- 01-Oct-2020 11-Feb-2021 -- Mockup of portal prepared and consultations within Budget department ongoing. Considering the pace of progress toward the achievement of this DLI, it has been agreed that the following actions would be completed Comments prior to the MTR for this Result Area to continue receiving support under GESDEK: substantive progress has been made on the procurement of the system developer and health and education data collected. ►DLI 24 DLR 6.1c: Number of MDAs where information is publicly available online in searchable form on a) program expenditure and performance, b) project expenditure and performance and c) transfers to service (Outcome, 10,200,000.00, 0%) Baseline Actual (Previous) Actual (Current) By end FY 2021/22 Value 0.00 0.00 0.00 3.00 Date -- 01-Oct-2020 11-Feb-2021 -- The DLI for 2018/19 cannot be achieved due to Citizen Budget Portal not being ready. Considering the pace of progress toward the achievement of this DLI, it has been agreed that the following action would be completed Comments prior to the MTR for this Result Area to continue receiving support under GESDEK: substantive progress has been made on the procurement of the system developer and health and education data collected. ►DLI 25 6.2a: Complete Diagnostic Study of Internal Audit (Output, 1,000,000.00, 0%) Baseline Actual (Previous) Actual (Current) By end FY 2021/22 Value No Yes Yes Yes Date -- 01-Oct-2020 11-Feb-2021 -- DLI achieved and verified. Associated disbursement is ready for withdrawal. Comments ►DLI 26 6.2b: Updated manuals and QA framework for internal audit to strengthen assurance and risk management are in place (Output, 1,000,000.00, 0%) Baseline Actual (Previous) Actual (Current) By end FY 2021/22 Value No Yes Yes Yes Date -- 01-Oct-2020 11-Feb-2021 -- DLI achieved and verified. Associated disbursement is ready for withdrawal. Manuals developed include National Government Internal Audit Manual and Accepted Government Auditing Standards (dated January Comments 2018); County and National Government Internal Audit Training Manual; and Quality Assurance and Improvement Framework of the Internal Auditing in the Public Sector (dated February 2020). 5/25/2021 Page 19 of 20 The World Bank Implementation Status & Results Report Program to Strengthen Governance for Enabling Service Delivery and Public Investment in Kenya (GESDeK) (P161387) ►DLI 27 6.2c No. MDAs where Annual & quarterly Internal Audit Reports have been prepared and undergone QA in line with enhanced procedures for assurance, risk management and audit follow up. (Outcome, 6,000,000.00, 0%) Baseline Actual (Previous) Actual (Current) By end FY 2021/22 Value 0.00 0.00 0.00 20.00 Date -- 01-Oct-2020 11-Feb-2021 -- Target MDAs have not been identified and compliance not yet defined. Comments 5/25/2021 Page 20 of 20