The World Bank Report No: ISR6689 Implementation Status & Results Ukraine Public Finance Modernization Project (P090389) Public Disclosure Copy Operation Name: Public Finance Modernization Project (P090389) Project Stage: Implementation Seq.No: 9 Status: ARCHIVED Archive Date: 24-Jan-2012 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 24-Jan-2012 Effectiveness Date 23-Oct-2008 Revised Closing Date 30-Jun-2013 Actual Mid Term Review Date 19-Mar-2012 Project Development Objectives Project Development Objective (from Project Appraisal Document) The development 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 Satisfactory Moderately Satisfactory Public Disclosure Copy Progress towards achievement of PDO Overall Implementation Progress (IP) Moderately Unsatisfactory Moderately Satisfactory Overall Risk Rating Substantial Substantial Implementation Status Overview The Ministry of Finance (MoF) requested a level two restructuring for the Ukraine Public Finance Modernization Project (PFMP) on March 6, 2012. This restructuring had already been discussed and mutually agreed with the MoF during the implementation support visit in February 2012, in order to avoid the risk of implementing an obsolete system due to longer than expected International Competitive Bidding (ICB) processes, and considerable legal and institutional changes that took place over the last two years. The mid-term review (MTR) visit was conducted from March 19-23, 2012, to discuss the current status of the project, identify possible improvements in remaining activities and results indicators, and prepare a restructuring paper in response to the MoF's request. Page 1 of 5 The World Bank Report No: ISR6689 Most of the Part 1 activities were completed and the ongoing contracts are expected to be completed in 2012. Remaining Part 1 activities include the training and change management support in parallel to related Part 2 activities. Hence, this restructuring was proposed to redefine Part 2 activities (PFMS implementation). The Bank and the MoF also agreed to annul the two ICB processes and to prepare new bidding documents for the PFMS implementation, based on updated requirements. A new procurement process will be Public Disclosure Copy launched using a single stage combined ICB package with expanded and technically up-to-date specifications. The rebidding process is expected to be completed by the end of 2012. The MoF management and project team members are committed to timely completion of all remaining project activities and PFM reforms until June 2015. 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 2013 State Budget and Fully functional PFMS in use with the public policy priorities . methodologies are not Forecast for MTBF periods during the planning execution conducive for the use of (2014-2015 RR) are based on of 2016 budget. budgets as a policy economic and social instrument. development programs, and national target programs. Date 25-Mar-2008 01-May-2012 30-Jun-2015 Comments Reduction of 20% in time required to get Text Value Decision-making processes Establish the baseline through Minimum of 20% reduction in necessary information for managerial decisions are delayed because a specialized survey in MoF, average time for accessing through the use of an integrated information is fragmented STSU, and SFIU in 2012. information by key decision- managementand information platform. among several systems and makers as measured by Public Disclosure Copy cannot be accessed follow-up survey. efficiently. Date 25-Mar-2008 01-May-2012 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 with international accounting standards and accession requirements. are fully developed and PFMS). alignment with EU accession requirements. approved. Page 2 of 5 The World Bank Report No: ISR6689 Date 25-Mar-2008 01-May-2012 30-Jun-2015 Comments Public Disclosure Copy Intermediate Results Indicators 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 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 01-May-2012 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 01-May-2012 30-Jun-2015 Comments 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 01-May-2012 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 01-May-2012 30-Jun-2015 Comments Public Financial Management System (PFMS) Text Value Current PFM information PFMS rebidding process was PFMS system fully Public Disclosure Copy established and functioning. systems are fragmented. initiated in April 2012, as a operational. New budget result of restructring. codes and unified chart of accounts are used in PFMS. Staff and specialist training completed. Date 25-Mar-2008 01-May-2012 30-Jun-2015 Comments The MoF and the Bank agreed to annul the two ICB processes (ICB-1 and ICB-2) and to prepare new bidding Page 3 of 5 The World Bank Report No: ISR6689 documents for PFMS implementation (ICB-3) based on updated requirements. MoF, STU and KRU staff trained in PFMS Text Value None currently trained. PFMS training and change All staff training completed. Public Disclosure Copy functionality and operations. mgmt program was prepared for all users. Date 25-Mar-2008 01-May-2012 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 defined as a part of operational as a part of ICB-3 documents. integrated PFMS platform for online queries; and timely, comprehensive reporting. Date 25-Mar-2008 01-May-2012 30-Jun-2015 Comments Data on Financial Performance (as of 12-Apr-2012) Financial Agreement(s) Key Dates Project Loan No. 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-2013 P090389 TF-90722 Closed 21-Sep-2007 21-Sep-2007 21-Sep-2007 30-Jun-2008 31-Oct-2008 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 2.82 47.18 6.00 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: ISR6689 Public Disclosure Copy Key Decisions Regarding Implementation The closing date of the project was extended until June 30, 2015, as a part of the project restructuring that was completed in April 2012. The rebidding process for the procurement of integrated Public Financial Management System (PFMS) information and communication technology solutions is expected to be announced in mid 2012. Restructuring History Level two Approved on 26-Apr-2012 Related Projects There are no related projects. Public Disclosure Copy Page 5 of 5