ICRR 13417 Report Number : ICRR13417 IEG ICR Review Independent Evaluation Group 1. Project Data: Date Posted : 03/24/2011 PROJ ID : P073629 Appraisal Actual Project Name : Cm-community US$M ): Project Costs (US$M): 45.00 45.92 Development Program Support Project Country : Cameroon Loan /Credit (US$M): Loan/ US$M ): 20.00 20.14 Sector Board : SDV Cofinancing (US$M ): US$M): 25.00 25.78 Sector (s): Other social services (35%) Primary education (20%) Health (15%) Central government administration (15%) Roads and highways (15%) Theme (s): Rural services and infrastructure (25% - P) Participation and civic engagement (25% - P) Municipal governance and institution building (24% - P) Indigenous peoples (13% - S) Decentralization (13% - S) L/C Number : C3876 Board Approval Date : 03/18/2004 Partners involved : Government of Closing Date : 12/31/2008 11/30/2009 France, German aid agency (KFW) Evaluator : Panel Reviewer : Group Manager : Group : Hassan Wally Ridley Nelson IEG ICR Review 1 IEGPS1 2. Project Objectives and Components: a. Objectives: According to the Project Appraisal Document (PAD) "the Community Development Program Support Project (PAPNDP) is the first phase of the program. Its objective is to assist the Government of Cameroon in setting up and implementing a decentralized financing mechanism to ensure participatory community development in rural areas . It would (i) establish a system for channeling funds to rural communities to finance prioritized collective infrastructures, (ii) strengthen the capacity of communities and local governments to plan and manage their own development, and (iii) improve the legal and regulatory framework for decentralized rural development . Communities and communes would be engaged in a participatory appraisal of their needs, culminating in the implementation of sub -projects cofinanced by the project . Efforts would be made to clarify procedures and build local governance capacity for communes so that resources and local development responsibilities could be transferred to them . Special efforts will be undertaken for enabling marginalized people (indigenous communities, nomads, women, etc .) to participate in the project." (Project Appraisal Document, pp. 3-4) According to the Development Credit Agreement (DCA) "the objective of the project is to assist the Borrower to design and implement mechanisms that aim to empower Communes and Community Based Organizations so as to give them the means of an effective participation in local development ." IEG will evaluate this project against the objective as stated in the DCA which is more evaluable . Summary of Outcome/impact indicators: 500 sub-projects have been implemented, Local Development Plans of at least 50 % of targeted CBOs within the 38 targeted communes have been approved; Communal Development Plans of at least 75 % of targeted communes have been approved; 50 health centers have been rehabilitated or built; 150 classrooms have been rehabilitated or built; 30 rural roads improvement sub-projects have been completed; 50 water supply infrastructures have been rehabilitated or built; 70% of sub-projects approved for more than six months have been completed; Decentralization legal texts have been prepared; Staff and/or elected authorities of all 38 targeted communes have benefited from training sessions or sensitization campaigns; At least 70% of infrastructures carried out under the sub -projects are maintained and operational; 50% of targeted communes have a rate of tax covering higher than 50% as compared to the baseline. b.Were the project objectives/key associated outcome targets revised during implementation? No c. Components (or Key Conditions in the case of DPLs, as appropriate): ( Appraisal Cost: Component 1. Supporting local development . (Appraisal US$ 10. 10 .00 million, Actual Cost : US$9 Cost : US$10 US$ 9.98 million ). To channel grants to community -based organization (CBOs) with legal status with the aim to cofinance sub -projects proposed by rural communes and CBOs and aimed at addressing their priority needs at the community and communal levels. Beneficiaries are expected to contribute between 5 and 15 % of the costs depending on the project type. The project would provide technical assistance to communities to conduct a participatory assessment of their needs and to prepare a local development plan setting development priorities . Also, the project would provide technical assistance to rural communes to prepare communal planes that focus on intervillage issues and inter communal needs. Communal plans are to be approved by the Provincial Decision Committee (PDC) and the local development plans are to be approved by the Communal Council, both of which aim to ensure that sub -projects are consistent with national standards, technically and financially feasible, and respect social and environmental safeguards. The project would work with the Special Council Support Fund For Mutual Assistance (FEICOM) where the later participates in the project through mobilizing tax revenues as contributions to communes to cofinance sub-projects, contributes to monitoring and implementation of communal sub -projects and cofinances the implementation of communal development plans as a donor . ( Appraisal Cost : US$0 Component 2. Supporting the decentralization process . (Appraisal US$ 0.46 US$ 0.86 million, Actual Cost : US$0 million ). To support the decentralization process by strengthening local governance through : (i) supporting the finalization of the legal regulatory framework for local governance through technical and advisory services including fiscal decentralization, (ii) capacity building for communes through training and provision of equipment to allow adequate financial management and monitoring and evaluation, (iii) support the Ministry of Territorial Administration and Decentralization (MINATD) in its outreach and communication campaigns for administrative and decentralization work through workshops on decentralization, training and cross field visits on local development for communal authorities within Cameroon and in other countries with advanced decentralization programs . ( Appraisal Cost : US$3 Component 3. Capacity building at the local level . (Appraisal US$ 3.53 US$ 3.59 million, Actual Cost : US$3 million ). To empower and strengthen communities to get involved in decision -making and have an active role in local development. The project would support the preparation and implementation of local and communal development plans and subprojects, and provide specific training and outreach campaigns to improve communities' livelihood and reduce poverty. Component 4. Supporting project management and coordination, monitoring and evaluation, and communication . US$ 5.55 million, Actual Cost : US$5 (Appraisal Cost : US$5 US$ 5.70 million ). To provide financing for the National Coordination Unit (NCU) and five Provincial Project Units (PPUs) to support coordination and implementation of project activities . Also, support building a system for monitoring and evaluating the financial and technical implementation of the project as well as a knowledge management system for decision -makers. In addition, support the communication plan through ensuring the circulation of strategic information within the project, and ensuring that technical and financial information is circulated to beneficiaries, development partners and key interest groups, and the public . This is to be achieved through direct communication with beneficiaries, administrative and local authorities, and mass communication. d. Comments on Project Cost, Financing, Borrower Contribution, and Dates: The total project cost was US$ 45.92 million compared to an estimated appraisal cost of US$ 45.0 million. The Government contributed US$5.82 million of counterpart funds. Local communities provided US$2.97 million of cofinancing costs in sub -projects. The Government of France and the German Aid Agency (KFW) provided US$23.14 million and US$2.64 million of cofinancing funds, respectively . The project closed 11 months later than the scheduled appraisal closing date . 3. Relevance of Objectives & Design: Relevance of Objectives . (substantial ). The project is the first of three planned four year phases of the Community Development Program (PNDP). The project objectives were in line with FY 04 CAS which called for strengthening the institutional framework for pro-poor economic management and service delivery . Also, the objectives were in line with the Bank's 2003 Rural Sector Review which highlighted among other things the need for a nation -wide local development program with focus on community support and capacity building . In addition, the objectives of the first phase directly address prevalent problems including weak technical, procurement and financial capacities at the local level, elite influence on channeling investments, and inefficient flow of resources to the local level . The objectives remain relevant and are in line with the FY 10-13 CAS which calls among other strategic themes for improving service delivery through three main areas including local development, where the focus will be on increasing access to basic services through infrastructure upgrading and capacity building for improved local governance . Relevance of Design . (substantial ). The overall project design was appropriate as a first intervention of a three phase program for supporting Cameroon's community development . The project featured support for capacity building and institutional strengthening of local communities, establishing a legal framework for decentralization and establishing local plans for development priorities, all of which are appropriate activities for achieving the stated objectives. Also, the design not only set up a mechanism for transferring funds to local communities, but also emphasized capacity building and establishing a legal and regulatory framework for self sustaining local development. The PAD (p. 19) lists several relevant lessons from previous experience that influenced the project design, for example, the appropriate sequencing of activities where the design attempted to address capacity building at the community level prior to transfer of resources . However, the design underestimated the weak technical capacity which was reflected during implementation in the limited involvement of technical ministries and insufficient quality in sub -projects' preparation (ICR, p. 11). 4. Achievement of Objectives (Efficacy): The overall objective of the project was to assist the Borrower to design and implement mechanisms that aim to empower Communes and Community Based Organizations so as to give them the means of an effective ( substantial ). participation in local development . (substantial The project successfully established a mechanism for channeling resources directly to communes and communities. About US$ 24.0 million were securely transferred into bank accounts of communes and communities. The project contributed to financing a total of 691 sub-projects compared to an end-of phase PAD target of 500 sub-projects. More than 1.6 million people benefitted from infrastructure sub -projects supported by project resources. Achievements include 80 improved rural roads (PAD target: at least 30), rehabilitation of 32 health centers (PAD target: 50), 247 classrooms (PAD target: 150), and 467 water supply infrastructure (PAD target: 150). Supporting evidence that systems were established is that the success of channeling resources to communes in this way encouraged the government to transfer responsibility for selected areas of competence and associated resources of nine ministries to communes (ICR. p. 16). The project strengthened capacity at the communal and community level by providing training that focused on themes such as development planning, participatory monitoring, communal and community management, maintenance of infrastructure financed through the project, and integration of social and environmental safeguards into local development actions (ICR, p. 43). Such training was provided in 161 communes out of 153 (i.e. 105% compared to PAD target of 100%). This was perceived by beneficiaries to have had an impact where according to the results of a 2007 beneficiary survey (ICR, p. 52) 80% of respondents view that the participatory development approach promoted by the project was empowering local communities to play a more prominent role in local development planning and implementation . The project supported the preparation of 2, 996 local development plans (target: 1,150) and 135 communal development plans (target: 115). However, 80% of the communes reported difficulties in implementing their plans due to limited resources, while 26% had a non-functioning monitoring mechanism, 13% suffered from weak ownership and 4% lacked technical expertise to implement development plans (ICR, p. 43). The ICR (p. 44) points out that an overwhelming majority (94%) of communities have not yet developed operational plans based on their development plans . By project completion only 45% of infrastructure sub-projects were operational compared to a PAD target of 70%, but this was largely due to phasing and the fact that a number of projects were not yet fully completed . In a later communication the region explained that by March 2010, 537 sub-projects were completed exceeding the PAD target of 500. An impact assessment study carried out in 2009 reported that in project areas : 77% of municipalities showed increased tax revenue and 68% of beneficiary communes showed improvement in fiscal management (ICR, p. 58); 88% of sub-projects were relevant and all sampled sub -projects were found to be part of a local or communal development plan (ICR, pp. 54, 56); and 79% of municipal leaders indicated that project-supported capacity building activities led to independent control over the management of their development plans (ICR, p. 58). However, the same study (ICR, p. 56) highlighted that sustainability might be a concern for a quarter of sub -projects where only 73% of the management committees were considered as functioning efficiently. The project also strengthened the capacity of local communities to undertake procurement activities through the provision of procurement training for nine out of ten communes . By November 2008, 105 tenders had been awarded. The project helped to improve the legal and regulatory framework for decentralized rural development through providing financing for two studies, the first focused on local taxation and the financial regimes of the decentralized territorial collectives (CTD) which led to the adoption and promulgation of two laws and application decrees on the financial regimes of CTD and local taxes (ICR, p. 17). The second study addressed institutional diagnostics and standard employment types of communes and resulted in a decree on the organizational chart of communes. According to the ICR (p. 17) the project also supported the preparation of other legal texts and financed several other activities aimed at strengthening local governance to provide accountable decentralized authorities the legal authority in addition to human and financial resources needed for local development . With the support of the project a decree on administrative organization of the Republic of Cameroon was issued (Decree No. 2008/376 of November 12, 2008). Rated substantial overall. 5. Efficiency (not applicable to DPLs): The PAD did not estimate an overall project ERR nor provide a cost -benefit analysis citing the demand driven nature of project activities, the nonproductive nature of the sub -projects and the difficulty to quantify economic benefits of capacity-building activities (PAD, p. 50). The ICR provides an ex-post economic and financial analysis focused on one type of productive sub -project (construction of rural markets ) and economic returns of three types of social sub-projects (water supply systems, elementary school buildings and rural roads ). The ICR estimated the average ERR for project-financed sub-projects at 45.6%. Discussions with the project team revealed that the analysis covered 80 out of 237 sub-projects (i.e. about 34%). It pointed out (p. 20) that the cost of social infrastructure financed through the project was lower compared to unit costs of similar construction financed through the Public Investment Budget, the difference amounting to a 30% cost saving for an equipped classroom, 31% for boreholes and 13% for one kilometer of rural road rehabilitation . However, according to the ICR, there was some inaction, limited accountability, increased risk of waste and corruption, and an environment of weak local governance (ICR, p. 25). Such shortcomings were reflected in frequent delays, poor quality of some implemented projects and rent seeking . Discussions with the project team revealed that poor quality issues were observed at an early stage of implementation but were addressed as the project progressed. In a later communication the region shared evidence showing that out of 689 awarded contracts, 18 contracts were recalled, 16 on quality issues and 4 on suspected corruption. The contracts recalled because of suspected corruption represented only 1.9% by value of all contracts financed under the Project . There were also concerns about management problems at community level suggesting risks for sustainability in 27% of the sub-projects. Finally, there was uncertainty regarding the implementation of 33% of the sub-projects given that only their contracts had been signed at project closing (ICR, p. 26). In a later communication the region explained that with the support of the Government, 194 sub-projects were successfully completed putting the total number of completed sub-projects as of March 10, 2010 at 537 exceeding the PAD target of 500. Overall, taking into consideration the additional information provided by the region pertaining to the limited number of contract recalls and the completion of projects after ICR preparation, efficiency is rated substantial . ERR )/Financial Rate of Return (FRR) a. If available, enter the Economic Rate of Return (ERR) FRR ) at appraisal and the re- re -estimated value at evaluation : Rate Available? Point Value Coverage/Scope* Appraisal No ICR estimate Yes 45.6% 41.1% * Refers to percent of total project cost for which ERR/FRR was calculated. 6. Outcome: The project outcome is rated satisfactory . The project objectives and design were relevant and rated substantial (see section 3). Efficacy is overall rated substantial but with some weaknesses . As the first phase of a program the project successfully established a mechanism to channel resources to local communities and strengthened capacity at the local level by providing training in several areas including communal planning and communal and community sub-projects management. Such actions empowered Communes and Community Based Organizations to effectively participate in local development through developing their own local development plans . The project supported sub-projects exceeding the PAD target and also contributed to the improvement of the legal and regulatory framework for decentralization and rural development . For nine ministries there has now been transfer of some areas of resources and competence to communes . Efficiency is rated substantial in light of new information furnished by the region that addressed earlier concerns by IEG (see section 5). a. Outcome Rating : Satisfactory 7. Rationale for Risk to Development Outcome Rating: Risk to development outcome is significant . According to the ICR (p. 41) beneficiary communities have assumed responsibility of ensuring maintenance of sub -projects through infrastructure management committees . About 73% of the management committees were functioning efficiently with only a quarter of the sub -projects having sustainability difficulties due to dysfunctional management committees (ICR, p. 26). However, it is still very early to assume long-term sustainability of sub-projects. Limited technical capacity impeded the implementation of the local development plans calling for more focus on capacity building activities in the follow on operations . In addition, the weak performance of counterpart financing signals possible funding shortages and hence difficulty in sustaining activities beyond project completion . In a later communication the region explained that after IDA credit closed the Government stepped in and funded the project using its own resources, this enabled the completion of a significant number of pending sub -projects. While IEG positively views this step, there are still concerns regarding limited technical capacity and the ability of management committees to assume O&M duties . a. Risk to Development Outcome Rating : Significant 8. Assessment of Bank Performance: Ensuring Quality at Entry . The project design benefitted from lessons learnt from similar community development operations across Africa . The design attempted to ensure community ownership of local development activities and tailored responsibilities assigned to local governments to their level of competence . Also, to gain the support of local communities the design aimed to streamline procedures for local development planning and execution and reduce bureaucracies to ensure the speed of sub -project delivery. However, the design lacked a mechanism to monitor communal development plans (ICR, p. 33). The ICR (p. 10) highlighted the need to develop more standard metrics for the realization of infrastructure projects and to set up a proper incentive framework for a more effective participation of sector ministries in the program . Quality of Supervision . Supervision was proactive and promptly identified emerging problems . Decentralization of the project TTL to Cameroon country office in FY 07 further improved supervision quality . Supervision missions were carried out every six months and included random visits to sub -project sites, technical audits of realized infrastructure, forensic audits of beneficiaries' accounts and independent procurement reviews . Supervision also benefitted from the donor coordination mechanism in Cameroon . This mechanism provided a platform for regular meetings among donors on rural decentralization and enabled a unified voice that was effective in getting the authorities attention to address problems or issues that hindered the performance of the project (ICR, pp. 29, 30). at -Entry :Satisfactory a. Ensuring Quality -at- b. Quality of Supervision :Satisfactory c. Overall Bank Performance :Satisfactory 9. Assessment of Borrower Performance: Government Performance . In general the government was supportive and committed to the project activities . The government supported setting up a financial mechanism through which funds could be channeled to local communities and also put in place the necessary framework for a more effective management of local development. However, the oversight by the line ministries and coordination with technical ministries was limited which impacted the implementation of the sub -projects (ICR, p. 32). The project also suffered from insufficient counterpart funding and delays in counterpart funding at the early stage of implementation . Implementing Agency Performance . In spite of increasing the coverage of the project, the performance of the national and regional coordination units was satisfactory without any increase in staffing (ICR, p. 31). Project staff showed dedication and beneficiaries were found to be satisfied with project achievements . However, there was a shortage of expertise to provide operational content to the strategic element of the communal development plans and weakness in ensuring the technical quality of sub -project proposals (ICR, p. 33). Also, more attention was needed for M&E and management at the regional level . a. Government Performance :Moderately Satisfactory b. Implementing Agency Performance :Moderately Satisfactory c. Overall Borrower Performance :Moderately Satisfactory 10. M&E Design, Implementation, & Utilization: Design . The PAD (Annex 1) listed a set of qualitative and process oriented key performance indicators that adequately covered the progress toward project objectives . Also, M&E design included some quantitative indicators to reflect improvement in basic services and social infrastructure . After MTR two more indicators were added to track geographic coverage of the project activities and the impact on improved basic services (ICR, p. 5). However, the results framework and some key performance indicators could be more precise (ICR, p. 11). Also, the design suffered from lack of a mechanism to monitor communal and community development plans (ICR, p. 33). Implementation and Utilization . The ICR (p. 11) pointed out that the project monitoring, coordination and management system, was adequate and functional . However, at the early stages of implementation data quality was limited and there were weaknesses in the data collection system, the baseline determination and the links between results and expenditure (ICR. p. 11). a. M&E Quality Rating : Modest 11. Other Issues (Safeguards, Fiduciary, Unintended Positive and Negative Impacts): Safeguards . The project environmental category was rated B (Partial Assessment) (PAD, p. 23). An Environmental Assessment (EA) was undertaken and an Environmental Management Plan (EMP) was prepared to highlight significant issues and their treatment (ICR, p. 12). The ICR (p. 12) reported that at the Project Concept Note (PCN) and PAD stage eight safeguard policies were triggered : Environmental Assessment (OP 4.01), Natural Habitats (OP 4.12), Forests (OP 4.36), Pest Management (OP 4.09), Physical Cultural Resources (OP 4.11), Indigenous People (OP 4.10), Involuntary Resettlement OP 4.12), and Project on International Waters (OP 7.5). Compliance with all safeguard measures was rated Moderately Satisfactory according to the ICR (p. 12). The ICR (p. 12) noted that the simplified environmental screening forms were not always properly filled in and in some cases there were delays in implementing mitigation measures. The project supported the development and implementation of an Indigenous People Development Plan (IPDP). The implementation of the plan increased the interest of Pygmie people in agriculture and reduced incidence of conflict with Bantou people who now recognize Pygmie's use rights over some plots (ICR, p. 13). Only two cases of involuntary displacements were recorded during the project implementation and adequate measures were taken to resettle concerned parties back to their initial site (ICR, p.13). There was no formal system in place to register private lands that were donated for sub -projects except for a letter showing that the land had been donated to the community or commune . The ICR (p. 13) reported that communal authorities were advised to launch a process for registering donated lands in cooperation with sector ministries and the ministry in charge of land administration. Fiduciary . Throughout the duration of the project there was only one case of ineligible expenditures and no cases of misprocurement (ICR, p.13). There were shortcomings in budget management and record keeping mainly due to low local capacity and high turnaround among project staff . At the MTR it was difficult to determine the level of committed resources by component due to the lack of systemic budgetary control (ICR. p. 13). In addition, record keeping was not timely and financial reports were often of limited quality with no links between physical realization, procurement and committed resources (ICR, p. 14). The ICR (p. 14) also noted limitations in assessing financial risks . The overall compliance with fiduciary requirements was rated Moderately Satisfactory according to the ICR (p. 13). Unintended Positive and Negative Impacts . The preparation of local development plans contributed to building a development coalition in some communities who sought to finance planned activities by tapping into remittances from the elite and from the community's own resources (ICR. p. 24). Also, the availability of electrical power in rural areas through project supported investments enabled the emergence of new income -generating activities, for example, food processing, carpentry, welding, mechanics and commerce (ICR, pp. 24, 25). On the negative side, the participatory approach adopted by the project created in some cases opportunities for inaction, limited accountability, increased risk of waste and corruption especially in an environment of weak local governance (ICR, p. 25). Such shortcomings were reflected in frequent delays, poor quality of some implemented projects, and rent seeking . 12. 12. Ratings : ICR IEG Review Reason for Disagreement /Comments Outcome : Satisfactory Satisfactory Risk to Development Moderate Significant Concerns over long term sustainability Outcome : of sub-projects and limited technical capacity and possible shortages in future Government funding. Bank Performance : Satisfactory Satisfactory Borrower Performance : Satisfactory Moderately Delays in counterpart funding and Satisfactory limited oversight by line ministries. Quality of ICR : Satisfactory NOTES: NOTES - When insufficient information is provided by the Bank for IEG to arrive at a clear rating, IEG will downgrade the relevant ratings as warranted beginning July 1, 2006. - The "Reason for Disagreement/Comments" column could cross-reference other sections of the ICR Review, as appropriate . 13. Lessons: From the useful lessons in the ICR the following are emphasized : In communities with limited technical capacities and weak control mechanisms, financial decentralization should follow a phased approach, which fully capitalizes on past experience . The first phase of the project successfully tested and implemented a mechanism to channel resources to communes and communities . The success of this approach encouraged the government to transfer areas of competence and associated resources of 9 ministries to the communes with other ministries expected to follow . However, it will be important to closely monitor this process and provide support through adequate capacity building to avoid the deterioration in service quality that could result from overloading the implementation capacity of local communes. A systematic use of simplified guides and procedural manuals is critical for quality assurance and greater fiduciary compliance at the local level . The project in collaboration with various partner groups prepared a number of useful guides and provided a manual for Preparing Local and Communal Development Plans which ensures that such plans were consistent with the new poverty reduction framework document . Sectoral ministries have a critical role to play in ensuring quality control of infrastructure realized through the local development process; situations of conflict of interest need to be avoided . Technical ministries acted as judge and parties, since they worked on project design and also sat on approval committees at communal and provincial levels. As a solution the second phase of the project would restore checks and balances in sub-project design, and in approval and quality control by contracting specialized services from consulting companies. Using in -kind contributions of beneficiaries provides a greater flexibility in financing local development; however this mode of financing is also a source of quality issues and implementation difficulties . In-kind contributions of beneficiaries were difficult to mobilize throughout the implementation of the project . Problems associated with such contributions included : delays in providing materials or labor, and the low quality of materials and labor provided. Alternative mechanisms were explored to make beneficiary contributions more flexible, for example, instead of requiring that beneficiaries make mandatory labor contribution, service providers could be required to use local remunerated labor following a labor intensive public work scheme without being required as part of in -kind contribution. 14. Assessment Recommended? Yes No 15. Comments on Quality of ICR: This is a generally sound ICR. It provides good coverage of project achievements and a candid report on shortcomings. The ICR gives a comprehensive account of the beneficiary assessment and impact evaluation organized as part of the completion process . However, the stakeholder workshop report and results (Annex 6) is brief and an English translation of the Borrower's ICR (Annex 7) would have been helpful. a.Quality of ICR Rating : Satisfactory