The World Bank Report No: ISR10257 Implementation Status & Results Ukraine Public Finance Modernization Project (P090389) Public Disclosure Copy Operation Name: Public Finance Modernization Project (P090389) Project Stage: Implementation Seq.No: 11 Status: ARCHIVED Archive Date: 17-May-2013 Country: Ukraine Approval FY: 2008 Product Line: IBRD/IDA Region: EUROPE AND CENTRAL ASIA Lending Instrument: Specific Investment Loan Implementing Agency(ies): Key Dates Board Approval Date 08-Jan-2008 Original Closing Date 30-Jun-2013 Planned Mid Term Review Date 19-Mar-2012 Last Archived ISR Date 04-Mar-2013 Effectiveness Date 23-Oct-2008 Revised Closing Date 30-Jun-2015 Actual Mid Term Review Date 19-Mar-2012 Project Development Objectives Project Development Objective (from Project Appraisal Document) The objective of the Project is to strengthen public financial management by improving operational efficiency and transparency. Has the Project Development Objective been changed since Board Approval of the Project? Yes No Component(s) Component Name Component Cost Strengthening Institutional Capacity and Operational Effectiveness 2.58 Development of an Integrated Public Financial Management System 61.20 Project Management 1.22 Overall Ratings Previous Rating Current Rating Moderately Unsatisfactory Moderately Unsatisfactory Public Disclosure Copy Progress towards achievement of PDO Overall Implementation Progress (IP) Moderately Unsatisfactory Moderately Unsatisfactory Overall Risk Rating Substantial Substantial Implementation Status Overview The World Bank team visited Kiev during the week of February 25, 2013, to monitor the developments, review results indicators, and clarify the next steps after the cancellation of ICB-3 process. The Ministry of Finance (MoF) management indicated that they are committed to the completion of remaining activities and wanted to continue with the project. The MoF’s request was accepted by the Bank based on the Minister’s personal commitment and subject to the implementation of several key actions. The MoF and the Bank teams identified mutually agreed conditions to improve the procurement strategy, and agreed on a timetable for key actions that should be completed before the closing date. It was decided to amend the Loan Agreement (LA) for the inclusion of new covenants linked with the Public Financial Management System (PFMS) implementation (Part 2.c in Schedule 1 of the LA) through a restructuring process. The agreement to amend the LA was made and reflected in the aide-mémoire of March 12, 2013, between the MoF and the Bank. Based on these, Page 1 of 5 The World Bank Report No: ISR10257 the restructuring process was initiated in late March, and the LA amendment was signed on April 5, 2013. The MoF is in the process of launching a new ICB process for the development of PFMS solutions. Public Disclosure Copy Locations Country First Administrative Division Location Planned Actual Ukraine Not Entered Ukraine Ukraine Kiev Oblast Kyyivs'ka Oblast' ✔ Results Project Development Objective Indicators Indicator Name Core Unit of Measure Baseline Current End Target Increased strategic alignment of the budget Text Value Existing budget formulation 2103 State Budget and MTBF Fully functional PFMS in use with the public policy priorities . methodologies are not forecasts were approved. during the planning execution conducive for the use of of 2016 budget. budgets as a policy instrument. Date 25-Mar-2008 19-Apr-2013 30-Jun-2015 Comments Reduction of 20% in time required to get Text Value Decision-making processes Annual measurements Minimum of 20% reduction in necessary information for managerial decisions are delayed because conducted through a survey. average time for accessing through the use of an integrated information is fragmented Results expected from the information by key decision- managementand information platform. among several systems and MoF in May 2013. makers as measured by cannot be accessed follow-up survey. efficiently. Date 25-Mar-2008 19-Apr-2013 30-Jun-2015 Comments Increased transparency and reliability of public Text Value Public Sector accounting is National accounting National accounting sector financial reporting through compliance not compliant with ISA or EU standards for public sector standards are in use (via new Public Disclosure Copy with international accounting standards and accession requirements. are fully developed and PFMS). alignment with EU accession requirements. approved. Date 25-Mar-2008 19-Apr-2013 30-Jun-2015 Comments Intermediate Results Indicators Page 2 of 5 The World Bank Report No: ISR10257 Indicator Name Core Unit of Measure Baseline Current End Target The local budgets are based on program-target Text Value Program budgeting at local The PTM is introduced in Budget preparation for all 692 method (PTM) and all relevant budgetary budget level is optional (pilot some local authorities (up to local budgets is based on Public Disclosure Copy program passports are managed with the new impl). 346 local budgets; about PTM, supported by PFMS PFMS. 10,000 budget programs). (about 20,000 prog). Date 23-Mar-2012 19-Apr-2013 30-Jun-2015 Comments Budget data and policy assumptions published Text Value Summary proposed budget State budget execution State budget execution in greater detail. and budget execution performance is published on performance is published in published on the Internet. the MoF web site (monthly). detail from PFMS database (monthly). Date 25-Mar-2008 19-Apr-2013 30-Jun-2015 Comments Information on state and local budget revenues and expenditures + intergov transfers are published monthly on Treasury and MoF web sites. Budget execution: Improving the system of Text Value Accounting and financial The development and PFMS is operational based on PFM by means of modernizing accounting reports not unified in public approval of all 19 nat’l new national accounting and system in public administration sector. administration sector, not accounting standards for reporting standards. aligned with the IAS. public sector. Date 25-Mar-2008 19-Apr-2013 30-Jun-2015 Comments MoF, STSU and SFIU staff, and spending units Text Value MoF staff are not familiar with + 4 workshops for SUs (500 + 14 workshops for SUs (SUs) are trained on new legislation & process new PFM legislation. participants). (1,700 participants) changes. + Training of 400 staff + Training of 1,400 staff. Date 23-Mar-2012 19-Apr-2013 30-Jun-2015 Comments Public Financial Management System (PFMS) Text Value Current PFM information Another bidding process PFMS system fully Public Disclosure Copy established and functioning. systems are fragmented. (ICB-4) will be launced in Aug operational. New budget 2013. codes and unified chart of accounts are used in PFMS. Staff and specialist training completed. Date 25-Mar-2008 19-Apr-2013 30-Jun-2015 Comments Page 3 of 5 The World Bank Report No: ISR10257 MoF, STU and KRU staff trained in PFMS Text Value None currently trained. PFMS training and change All staff training completed. functionality and operations. mgmt program was prepared for all users. Public Disclosure Copy Date 25-Mar-2008 19-Apr-2013 30-Jun-2015 Comments Timely and comprehensive fiscal management Text Value Currently financial reports are Data warehouse reporting Data warehouse is fully reports produced. fragmented. standards are being revised. operational as a part of integrated PFMS platform for online queries; and timely, comprehensive reporting. Date 25-Mar-2008 19-Apr-2013 30-Jun-2015 Comments Data on Financial Performance (as of 27-Feb-2013) Financial Agreement(s) Key Dates Project Ln/Cr/Tf Status Approval Date Signing Date Effectiveness Date Original Closing Date Revised Closing Date P090389 IBRD-48820 Effective 08-Jan-2008 25-Mar-2008 23-Oct-2008 30-Jun-2013 30-Jun-2015 P090389 TF-90722 Closed 21-Sep-2007 21-Sep-2007 21-Sep-2007 30-Jun-2008 31-Oct-2008 Disbursements (in Millions) Project Ln/Cr/Tf Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P090389 IBRD-48820 Effective USD 50.00 50.00 0.00 3.55 46.45 7.00 P090389 TF-90722 Closed USD 0.25 0.22 0.01 0.23 0.00 105.00 Disbursement Graph Public Disclosure Copy Page 4 of 5 The World Bank Report No: ISR10257 Public Disclosure Copy Key Decisions Regarding Implementation The Bank and the Borrower agreed to amend the Loan Agreement (LA) for the inclusion of several key covenants and dates. Any delays and failure of the Borrower to comply with the new covenants and meet these target dates will jeopardize the Project. Restructuring History Level two Approved on 26-Apr-2012, Level two Approved on 04-Apr-2013 Related Projects There are no related projects. Public Disclosure Copy Page 5 of 5