The World Bank Report No: ISR5759 Implementation Status & Results Ukraine Public Finance Modernization Project (P090389) Public Disclosure Copy Operation Name: Public Finance Modernization Project (P090389) Project Stage: Implementation Seq.No: 8 Status: ARCHIVED Archive Date: 05-Jul-2011 Country: Ukraine Approval FY: 2008 Product Line: IBRD/IDA Region: EUROPE AND CENTRAL ASIA Lending Instrument: Specific Investment Loan Implementing Agency(ies): Ministry of Finance 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 05-Jul-2011 Effectiveness Date 23-Oct-2008 Revised Closing Date 30-Jun-2013 Actual Mid Term Review Date Project Development Objectives Project Development Objective (from Project Appraisal Document) The development objective of the proposed Project is to strengthen public financial management in terms of 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 Satisfactory Moderately Satisfactory 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 Ministry of Finance project team has completed the mutually agreed Country Portfolio Performance Review (CPPR) actions in 2011, except the two major International Competitive Bidding (ICB) packages (announced in mid 2010) for the development of integrated Public Financial Management System (PFMS) solutions under the second component. Remaining activities under the first component (advisory support for strengthening the PFM capacity) are expected to be completed until mid 2012. Project management practices were improved by the MoF officials since the last visit in June 2011, and the evaluation of two major ICB packages were completed as planned. However, due to clarifications requested by the Bank team and communication with the bidders on these, the selection of suppliers in two major ICB packages is expected to be completed in early Page 1 of 5 The World Bank Report No: ISR5759 2012. The mid-term review of the project is currently scheduled in mid March 2012. It is expected that the improved performance of the MoF project team will be maintained in the future, and an upgrade in performance rating will be possible in the next report. Locations Public Disclosure Copy Country First Administrative Division Location Planned Actual 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 Fully functional PFMS in use with the public policy priorities . methodologies are not during the execution of 2012 conducive for the use of budget. budgets as a policy instrument. Date 25-Mar-2008 28-Dec-2011 28-Jun-2013 Comments 2012 budget law approved by Verkhovna Rada on Dec 22, 2011. Reduction of 20% in time required to get Text Value Decision-making processes Minimum of 20% reduction in necessary information for managerial decisions are delayed because average time for accessing through the use of an integrated information is information by key decision- managementand information platform. fragmentedamong several makers as measured by systems and cannot be follow-up survey. accessed efficiently. Date 25-Mar-2008 28-Dec-2011 28-Jun-2013 Comments Initial measurements were completed in 2011. Additional measurements are expected in 2012. Public Disclosure Copy Increased transparency and reliability of public Text Value Public Sector accounting is Certification of compliance sector financial reporting through compliance not compliant with ISA or EU with international accounting with international accounting standards and accession requirements. standards. alignment with EU accession requirements. Date 25-Mar-2008 28-Dec-2011 28-Jun-2013 Comments Revised plan (2010) for the introduction of changes in national accounting standards is being implemented. Intermediate Results Indicators Page 2 of 5 The World Bank Report No: ISR5759 Indicator Name Core Unit of Measure Baseline Current End Target The MTBF and budget plans are prepared Text Value Implementation of MTBF New MTBF in use. using a realistic macro-fiscal framework. documents in budget process Public Disclosure Copy in progress. Date 25-Mar-2008 28-Dec-2011 01-Jan-2013 Comments Related Component 1 activity (QCBS-1) was completed in October 2011. Budget data and policy assumptions published Text Value Summary proposed budget Detailed budget reports in greater detail. and budget execution published regularly on the published on the Internet. web portal. Date 25-Mar-2008 28-Dec-2011 28-Jun-2013 Comments Improvement of budget execution reporting will be possible after the implementation of integrated PFMS in 2013. Budget execution: Improving the system of Text Value Accounting and financial 2012 budget executed PFM by means of modernizing accounting reports not unified in public through PFMS using new system in public administration sector. administration sector, not budget classification and aligned with the IAS. unified chart of accounts. Date 25-Mar-2008 28-Dec-2011 01-Jan-2013 Comments Related activities were combined under QCBS-7. Contract was signed in May 2011, and is expected to be completed in Feb 2012. Internal financial control system is in line with Text Value Current system is not in line Gradual implementation of the international standards. with international standards. adopted documents. Date 25-Mar-2008 28-Dec-2011 28-Jun-2013 Comments Related Component 1 activity Public Disclosure Copy (CQS-3) was completed in Nov 2010. Public Financial Management System (PFMS) Text Value Current PFM information PFMS system fully established and functioning. systems are fragmented. operational. New budget codes and unified chart of accounts are used in PFMS. Staff and specialist training completed. Date 25-Mar-2008 28-Dec-2011 28-Jun-2013 Page 3 of 5 The World Bank Report No: ISR5759 Indicator Name Core Unit of Measure Baseline Current End Target Comments ICB-1 was announced on June 15, 2010. ICB-2 was Public Disclosure Copy published on July 30, 2010. Both bid evaluation reports were completed and reviewedin 2011. Contract signatures are expected in early 2012. MoF, STU and KRU staff trained in PFMS Text Value None currently trained. All staff training completed. functionality and operations. Date 25-Mar-2008 28-Dec-2011 28-Jun-2013 Comments CQS-4 contract was signed. The first group of training activities were completed in July 2011. Remaining activities will be organized in 2012. Internal business processes improved. Text Value Some outline procedures Improved automated business defined. processes in use. Date 25-Mar-2008 28-Dec-2011 28-Jun-2013 Comments Improvements in PFM practices are expected to be visible after the implementation of integrated PFMS starting from Jan 2013. Timely and comprehensive fiscal management Text Value Currently financial reports are Timely fiscal reports produced reports produced. fragmented. during 2012 budget execution. Date 25-Mar-2008 15-Jun-2011 28-Jun-2013 Comments Improvement of existing treasury system assisted in improvement of reporting. Public Disclosure Copy New PFMS solution is expected to improve budget performance reporting starting from 2013. Data on Financial Performance (as of 12-Dec-2011) Financial Agreement(s) Key Dates Project Loan No. Status Approval Date Signing Date Effectiveness Date Closing Date Page 4 of 5 The World Bank Report No: ISR5759 Project Loan No. Status Approval Date Signing Date Effectiveness Date Closing Date P090389 IBRD-48820 Effective 08-Jan-2008 25-Mar-2008 23-Oct-2008 30-Jun-2013 P090389 TF-90722 Closed 21-Sep-2007 21-Sep-2007 21-Sep-2007 31-Oct-2008 Public Disclosure Copy Disbursements (in Millions) Project Loan No. Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P090389 IBRD-48820 Effective USD 50.00 50.00 0.00 2.59 47.41 5.00 P090389 TF-90722 Closed USD 0.25 0.24 0.01 0.23 0.00 99.00 Disbursement Graph Key Decisions Regarding Implementation Public Disclosure Copy The implementation of integrated Public Financial Management System (PFMS) information and communication technology solutions is expected to be initiated in early 2012, and completed in 2013. Restructuring History There has been no restructuring to date. Related Projects There are no related projects. Page 5 of 5