The World Bank Report No: ISR6167 Implementation Status & Results Timor-Leste Planning and Financial Management Capacity Building Program (P092484) Public Disclosure Copy Operation Name: Planning and Financial Management Capacity Building Project Stage: Implementation Seq.No: 7 Status: ARCHIVED Archive Date: 23-May-2011 Program (P092484) Country: Timor-Leste Approval FY: 2006 Product Line: IBRD/IDA Region: EAST ASIA AND PACIFIC Lending Instrument: Technical Assistance Loan Implementing Agency(ies): Ministry of Planning and Finance Key Dates Board Approval Date 21-Mar-2006 Original Closing Date 10-Jul-2011 Planned Mid Term Review Date Last Archived ISR Date 23-May-2011 Effectiveness Date 15-Nov-2006 Revised Closing Date 30-Nov-2012 Actual Mid Term Review Date 04-Jun-2010 Project Development Objectives Project Development Objective (from Project Appraisal Document) Capacity in the Ministry of Finance strengthened for prudent, effective and accountable planning and management of public finances to promote growth and poverty reduction. Has the Project Development Objective been changed since Board Approval of the Project? Yes No Component(s) Component Name Component Cost Strengthening Capacity in the General Directorate of State Finances 7.40 Strengthening Capacity in the General Directorate of Revenue and Customs 3.50 Strengthening Capacity in the General Directorate of Policy Analysis and Research 2.94 Strengthening Capacity in the General Directorate of Corporate Services 6.03 Professional Development Program 2.80 Public Disclosure Copy Program Implementation 2.40 Overall Ratings Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Satisfactory Satisfactory Overall Risk Rating Low Implementation Status Overview Page 1 of 6 The World Bank Report No: ISR6167 Overall progress on program implementation is satisfactory. The program continues to provide essential support consisting primarily of technical assistance and analytical inputs across the macro, revenue, expenditure and corporate directorates of the Ministry of Finance. A significant achievement against the Project Development Objective was the launch in March 2012 of the Ministry of Finance Strategic Plan 2011-2030, which includes an Institutional Development and Capacity Building Plan directorate by directorate. In State Finances, there has been significant progress in the preparation of the entire state budget by civil servants; publication of a Citizens Budget; implementation of Financial Management Public Disclosure Copy Information Systems upgrades; introduction of the Transparency Portals; strengthened control of state assets; improved governance of Autonomous Public Agencies; increased support to line ministries; and completion of cash flow and bank reconciliations. In Revenue and Customs, there has been progress in stabilizing core tax administration functions; improving the level of compliance; introducing petroleum tax audits; conducting capital gains tax assessments; and strengthening customs clearance and post-clearance audit. In Policy Analysis and Research there have been improvements in data sources for macro modeling and analysis; continuing work on the Medium Term Fiscal Framework; the first publication of national accounts (2004 - 2010); economic growth auditing based on the national accounts; analysis of sources of growth; publication of the Business Activity Survey, Timor-Leste in Figures, and the Census; and amendments to the Petroleum Fund Law. Corporate Services are now implementing the Strategic Plan;conducting a workforce mapping exercise; and upgrading IT systems. Program management by the Ministry of Finance has improved substantially over the past twelve months, particularly in resource planning, recruitment of consultants, and reporting. Locations Country First Administrative Division Location Planned Actual Timor-Leste Distrito Dili Dili Timor-Leste Not Entered Democratic Republic of Timor-Leste Results Project Development Objective Indicators Indicator Name Core Unit of Measure Baseline Current End Target Institutional Development and Capacity Text Value IDCBP implemented in part In March 2012, the Minister of Part implementation and M&E Building Plan implemented and ongoing needs through MOF reorganization Finance approved the of IDCBP. identified. and merit-based appointment Strategic Plan, which includes process. the IDCBP. Corporate Agreed it will be finalised as Services has overal part of Strategic Plan process responsibility for to December 2010. implementation. Date 03-Jun-2010 19-Mar-2012 30-Nov-2012 Public Disclosure Copy Comments Intermediate Results Indicators Page 2 of 6 The World Bank Report No: ISR6167 Indicator Name Core Unit of Measure Baseline Current End Target Budget with medium-term outlook submitted to Text Value 2010 Budget submitted on Budget submitted to Continued timely submission Parliament on time. time as per Budget and Parliament according to of quality budget, and Public Disclosure Copy Financial Management Law. Budget Circular 2011. improved medium-term fiscal Strengthen quality of forward forecasts. estimates. Date 03-Jun-2010 19-Mar-2012 30-Nov-2012 Comments Fiscal discipline maintained through reduction Text Value Reduction in non-oil deficit Non-oil fiscal deficit for 2011 Reduction in non-oil deficit to in the non-oil deficit as a % of GDP. (<100% of non-oil GDP) projected at $1095.6, or 103 <80% of non-oil GDP. following moderation in per cent of non-oil GDP. spending growth for 2009 and 2010 State Budgets. Date 03-Jun-2010 19-Mar-2012 30-Nov-2012 Comments Aggregate revenue and expenditure outturn # Text Value Revenue outturn is over 90% 2011 data N/A as of Mar 2012 Aggregate revenue and 80% of budget in the last two years in 2009, compared to around expenditure outturn at least 75% in 2008. Expenditure 85% of budget in last two outturn in 2009 is close to years. 90%. Date 03-Jun-2010 19-Mar-2012 30-Nov-2012 Comments # Quarterly publication of budget Text Value Reports have been submitted Unadjusted budget execution Continued full functionality of execution reports within two months of the end on time to Parliament. information continues to be Transparency Portal. of the quarter. available on Transparency Portal. Budget execution report for fourth quarter 2011 not available as of March 2012. Date 03-Jun-2010 19-Mar-2012 30-Nov-2012 Comments Public Disclosure Copy Daily reconciliation of government bank Text Value Full reconciliation of accounts Reconciliation of government Government accounts up to accounts using FMIS. 2005-09 ($850mn in receipts bank accounts ongoing. date and reconciled in FMIS. and $800mn in payments). Date 03-Jun-2010 19-Mar-2012 30-Nov-2012 Comments Page 3 of 6 The World Bank Report No: ISR6167 Timely publication of audited annual financial Text Value Annual Audited Accounts for Audited annual financial Publication of annual audited accounts. 2008 are published as accounts tabled in Parliament financial accounts within 30 required though with some with Budget in 2011. days after its presentation to delay because of change in the Prime Minister. Public Disclosure Copy auditors Date 03-Jun-2010 19-Mar-2012 30-Nov-2012 Comments Improving results from public perception Text Value In 2010, first survey by Asia In 2011, Asia Foundation Improving results from public surveys, for each Directorate, of efficiency, Foundation shows a poor conducts second survey of perception surveys, for each effectiveness, ethics and integrity public perception of Customs, public perceptions of Customs Directorate, of efficiency, slightly better for Revenue and Revenue. Limited effectiveness, ethics and improvements. integrity Date 03-Jun-2010 19-Mar-2012 30-Nov-2012 Comments Increasing domestic tax collections as a % of Text Value In 2009, domestic tax was 9% In 2011, domestic revenue Increasing domestic tax non-oil GDP of non-oil GDP, an increase was 10.4 per cent of non-oil collections as a % of non-oil from 8% in 2007 GDP. GDP Date 03-Jun-2010 19-Mar-2012 30-Nov-2012 Comments National accounts published by the Statistics Text Value Source data for national National Account 2004-2010 Source data for national Directorate and three staff trained as national accounts being established, published January 2012. Two accounts established; national accounts specialists by July 2011 and efforts under way to national staff trained. accounts published; and three appoint staff. SD have set staff trained. April 2011 to publish national accounts and GDP estimates Date 03-Jun-2010 19-Mar-2012 30-Nov-2012 Comments Statistics Work Plan agreed by MoF and other Text Value Key elements of SWP being Statistics publications on track Completion of initial targets stakeholders, with implementation plan agreed implemented (HIES, BAS and including Household Income within the SWP. and funding secured by end-2010 APS). Additional funding and Expenditure Survey, secured from other donors. Business Activity Survey Public Disclosure Copy Date 03-Jun-2010 19-Mar-2012 30-Nov-2012 Comments Macroeconomic framework sets annual budget Text Value A macro framework has Macroeconomic framework National staff able to update ceilings starting in 2009, with four staff able to started to set the annual sets annual budget envelope and interpret macro model update and interpret the framework byJuly budget ceilings. The model is as part of 'Yellow Road' and framework. 2011 gradually being updated and process. One national staff refined. At this stage it seems and one national consultant unlikely that four staff will be able to interpret the framework. Page 4 of 6 The World Bank Report No: ISR6167 able to update and interpret Date the framework by July 2011 03-Jun-2010 19-Mar-2012 30-Nov-2012 Comments Public Disclosure Copy Completion of merit-based appointments Text Value Appointment of Grades A-B As of June 2011, 45.3% of More than 75% of positions across MOF and more than 75% are qualified completed. Performance Grade B, 66.2% of Grade C , occupied by qualified staff. staff. management system being 68.6% of Grade D, and 56.2% developed. of Grade E positions rated as occupied by qualified staff. Date 03-Jun-2010 19-Mar-2012 30-Nov-2012 Comments Establishment and staffing of Internal Audit Unit Text Value No progress to date. Head of Unit, Internal Audit in Establishment and staffing of Corporate Services now Internal Audit Unit. appointed. Internal Audit adviser now appointed to State Finances. Date 03-Jun-2010 03-May-2011 30-Nov-2012 Comments Establishment and staffing of Legal Unit Text Value Limited progress to date -- Legal Unit established, one Establishment and staffing of difficulty in finding suitably international, two national Legal Unit. qualified staff. The Program consultants. has provided important in-line function. Date 03-Jun-2010 19-Mar-2012 30-Nov-2012 Comments Improved project supervision rating on Text Value Improvements in all aspects Program management Satisfactory ratings across all implementation progress, procurement and of program implementation continued to strengthen program implementation financial management though more work needed on through 2011-2012 with indicators. FM, M&E, and reporting improved resource planning, consultant recruitment, and reporting. Date 03-Jun-2010 19-Mar-2012 30-Nov-2012 Public Disclosure Copy Comments Data on Financial Performance (as of 03-Feb-2012) Financial Agreement(s) Key Dates Project Loan No. Status Approval Date Signing Date Effectiveness Date Closing Date P092484 IDA-H2100 Effective 21-Mar-2006 18-May-2006 15-Nov-2006 30-Nov-2012 P092484 TF-93959 Effective 18-Mar-2009 18-Mar-2009 18-Mar-2009 30-Nov-2012 Page 5 of 6 The World Bank Report No: ISR6167 Disbursements (in Millions) Project Loan No. Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P092484 IDA-H2100 Effective USD 7.00 7.00 0.00 7.31 0.13 104.00 P092484 TF-93959 Effective USD 9.50 9.50 0.00 15.90 8.10 167.00 Public Disclosure Copy Disbursement Graph Key Decisions Regarding Implementation Following the February 2012 financial management and procurement supervision missions, the key decision was that performance in both areas was satisfactory and no further action required. Restructuring History Public Disclosure Copy Level one Approved on 19-Feb-2010, Level two Approved on 25-May-2011 Related Projects There are no related projects. Page 6 of 6