The World Bank t NY V (202) 473-1000 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT W *0433 Cable Address: INTBAFRAD INTERNATIONAL DEVELOPMENT ASSOCIATION D -0U Cable Address: INDEVAS June 18, 2013 Mr. Claudiu Doltu Secretary of State Ministry of Public Finance Bucharest, Romania Social Assistance System Modernization Project (Loan No. 8056-RO) Amendment to the Loan Agreement Dear Mr. Secretary of State: We refer to the Loan Agreement between Romania (the Borrower) and the International Bank for Reconstruction and Development (the Bank) (the Loan Agreement) for the above- referenced Project, dated July 8, 2011. We also refer to your letter dated June 11, 2013 requesting certain amendments to the Loan Agreement. We hereby propose to amend the Loan Agreement as follows: 1. The table of Disbursement Linked Indicators in Part B.2(a) of Section III of the Schedule 2 to the Loan is modified as provided for in the Attachment to this letter. 2. The Closing Date in Part B.3 of Section III of the Schedule 2 to the Loan Agreement is modified to read as follows (modifications are shown in italics): "3. The Closing Date shall be August 31, 2016." All other provisions of the Loan Agreement, except as amended through this Amendment Letter, shall remain in full force and effect. Please confirm your agreement with the foregoing, on behalf of Romania, by signing, dating and returning to us the enclosed copy of this letter. This Amendment Letter will become effective upon receipt of the countersigned copy of the letter. Sincerely, Mamta Murthi Regional Director Central Europe and the Baltic Countries Europe and Central Asia Mr. Claudiu Doltu -2- June 18, 2013 AGREED: ROMANIA By ' Authorized Representative Claudiu Doltu Secretary of State Title Date June 20, 2013 Attachment: cc: H.E. Daniel Chitoiu Vice Prime Minister Minister of Public Finance Bucharest, Romania H.E. Mariana Cdmpeanu Minister of Labor, Family, Social Protection and Elderly Ministry of Labor, Family, Social Protection and Elderly Bucharest, Romania Mr. Codrin Scutaru Secretary of State Ministry of Labor, Family, Social Protection and Elderly Bucharest, Romania Ms. Lacramioara Corches General Director Ministry of Labor, Family, Social Protection and Elderly Bucharest, Romania Ms. Boni Florinela Cucu General Director Ministry of Public Finance Bucharest, Romania Ms. Carmen Ghita Head of Office Ministry of Public Finance Bucharest, Romania Mr. Frank Heemskerk Executive Director, World Bank Mr. Claudiu Doltu -3- June 18, 2013 ATTACHMENT Table of Disbursement Linked Indicators Disbursement-linked indicator (DLI) Withdrawal ceiling (expressed in EUR) 1) Adopted Action Plan for the Social Assistance 25,000,000 Strategy is disseminated by the MoLFSP 2) Three monthly monitoring reports of the 4 25,000,000 programs under EEP (Family Allowance, Child Raising Benefits, GMI and State Child Allowance) are produced by NASB 3) Three monthly performance management reports 25,000,000 for Low-income Households Programs are produced by NASB and used at the management level in the MoLFSP and NASB 4) At least 90% of the Family Allowance 25,000,000 beneficiaries are paid, through NASB, for two consecutive months according to harmonized means-testing procedures and lower eligibility threshold 5) At least 90% of Child Raising Benefits 25,000,000 beneficiaries entering the program since January 1", 2011 are paid, trough NASB, for two consecutive months, using a lower replacement income of 75% 6) At least 90% of beneficiaries of the new 25,000,000 consolidated program for Low-income Households Programs are paid through NASB for two consecutive months 7) Share of social assistance funds going to the first 25,000,000 poorest quintile increased to 45% from 37.7% at baseline (in 2009), as measured by the Household Budget Survey 8) Enacted harmonized means testing procedures for 25,000,000 the GMI, Family Allowance, and Heating Benefits are disseminated 9) Enacted harmonized disability medical assessment 25,000,000 criteria are disseminated 10) At least 90% of individuals who are certified for 25,000,000 disability benefits according to the new harmonized disability system are paid through NASB 11) At least 90% of the new applications for Low- 25,000,000 income Households and Family Policy Programs in the preceding two months comply with one- application and one-point of service operational guidelines Mr. Claudiu Doltu -4- June 18, 2013 12) Administrative costs and client participation costs 25,000,000 for means-tested programs are reduced by 15% from baseline value 13) At least one thematic inspection campaign is 25,000,000 carried out for each of the following programs: GMI, Disability Benefits, Family Allowance, Heating Benefits, and Child Raising Benefits 14) Remedial action plan is adopted by NASB to 25,000,000 address the recommendations of: (i) an independent evaluation of the completeness and accuracy of the SAFIR information; and (ii) a feasibility study of SAFIR data crosscheck with other databases 15) At least 90% of GMI beneficiaries are paid 25,000,000 through NASB for two consecutive months 16) A central registry with a national database of 25,000,000 disabled persons is in place 17) Sanctions policy provisions, investigative powers 25,000,000 and the referrals system for the Social Inspection are revised and in place 18) NASB to undertake data matching, covering at 50,000,000 least a period of 3 months, between SAFIR records relating to CRB, GMI, FA and SCA programs, and relevant identity and income information derived from databases managed by National Public Pension House, National Employment Agency, ANAF and Registrul National de Evidenta a Populatiei, and lists of detected irregularities per program are sent to Social Inspection for verification and proposing remedial actions (output) 19) Risk-based investigation to detect error and fraud 25,000,000 is used by the Social Inspection for Low-income Households Programs, Child Raising and Disability Benefits Distribution:: Romania DL, ECSHD Sector Staff, ECAVP Managers, loa-eca, FINCR-ECA, Tesliuc, Williams, Florescu (ECSH3), Laurente (ECSHD), Gusescu (ECCRO)