The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) Maldives: PFM Systems Strengthening Project (P145317) SOUTH ASIA | Maldives | Governance Global Practice | IBRD/IDA | Investment Project Financing | FY 2014 | Seq No: 9 | ARCHIVED on 14-Feb-2020 | ISR39856 | Implementing Agencies: Ministry of Finance and Treasury, Ministry of Finance and Treasury Key Dates Key Project Dates Bank Approval Date: 26-Jun-2014 Effectiveness Date: 02-Oct-2014 Planned Mid Term Review Date: 16-Apr-2017 Actual Mid-Term Review Date: 10-Apr-2017 Original Closing Date: 31-Jul-2019 Revised Closing Date: 31-Jul-2022 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The proposed project development objectives (PDO) are to enhance budget credibility, transparency, and financial reporting of central government finances. Has the Project Development Objective been changed since Board Approval of the Project Objective? Yes Board Approved Revised Project Development Objective (If project is formally restructured) The PDO (project development objectives) for the proposed AF is to enhance budget credibility, transparency, and financial reporting of public sector finances. The PDO remains relevant and the likelihood of achieving it remains high in view of the project’s implementation progress, disbursement performance, and results achieved to date. Components Table Name Policy-based fiscal strategy and budget credibility:(Cost $2.73 M) Controlled budget execution:(Cost $6.08 M) Accounting, reporting and internal audit:(Cost $1.70 M) External scrutiny and audit:(Cost $0.42 M) Project and Change Management:(Cost $1.07 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Satisfactory Overall Risk Rating High High Implementation Status and Key Decisions 1. Progress towards achievement of Development Objective continues to be “Satisfactory”. Implementation progress (IP) is still “Moderately Satisfactory” as most of the PDO indicators and intermediate indicators are either met or partially met as implementation of the technical assistance 2/14/2020 Page 1 of 9 The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) component activities is mostly at the early stage of preparation of terms of reference which has led to the current low disbursement rate. We are pleased to note that the Household Income and Expenditure Survey (HIES) has started and that preliminary statistics as well as the labor force survey are expected to be available in December 2020. 2. The project faces implementation delays in the technical assistance component as most of the activities are at the early stages of preparation of terms of reference. Achievement of the following indicators are crucial to further improve project implementation: (i) capacity building on procurement through the implementation of a new Procurement curricula; (ii) budget execution reports (BERs) subjected to audit by internal auditors; (iii) timely publication of audit report on the annual financial statements, and (iv) inclusion of Citizen Participatory Audit (CPA) techniques in performance audit. The project team and the mission agreed on priority actions to accelerate project implementation with a focus on the achievement of the targets in the Results Matrix and the Disbursement Linked Indicators (DLIs). 3. The mission reiterated the need for more frequent steering committee meetings, at least every quarter to provide strategic guidance to the project and monitor implementation progress based on a traffic light system. The governance and implementation structure can be further strengthened by establishing specific inter-departmental technical task teams to handle cross-cutting reform activities, such as on Public Investment and Asset Management, and on fiscal risks/ guarantees to SOEs. With regards to technical task teams related to financial accounts area, an Accrual Accounts Committee has been formulated and is meeting weekly since November 2019. Development of a matrix on donor PFM engagement will be useful to benefit from synergies and avoid overlaps. 4. Key sustainability issue: There is a need to assign government counterpart staff to each of the Public Finance Development Service (PFDS) with monitoring mechanism for skills transfer. An exit strategy is also needed to build in-house capacity for government staff who can be part of the National Pay Commission (NPC) new job families/professions to perform the SAP and other critical public finance functions. It will also be useful for Ministry of Finance to develop a medium to long-term Information Systems Master Plan/Blueprint to take account of the functional requirements of the various central PFM institutions, line departments and local governments. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance -- High High Macroeconomic -- High High Sector Strategies and Policies -- Moderate Moderate Technical Design of Project or Program -- Moderate Moderate Institutional Capacity for Implementation and -- High High Sustainability Fiduciary -- Moderate Moderate Environment and Social -- Low Low Stakeholders -- Substantial Substantial Other -- -- -- Overall -- High High Results PDO Indicators by Objectives / Outcomes To enhance budget credibility, transparency, and financial reporting of public sector finances 2/14/2020 Page 2 of 9 The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) IN00781635 ►Deviation between aggregate expenditure out turn and the original approved budget (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 18.74 6.15 6.40 5.00 Date 31-Dec-2013 20-Aug-2019 13-Nov-2019 31-Jul-2022 IN00781636 ►Public Access to Key Fiscal Information (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target BERs are being regularly produced from the system and used for Information on the Documents not made economic decision following are available to the public: making. MoF has disclosed: (1) Year-end state commenced publishing (a) Annual budget Public disclosure of financial statements of expenditure reports at an documentation, (b) In- the following key fiscal the Republic of Maldives; aggregate level. Basic year budget execution information: (a) Annual (2) In-year budget contract award reports, (c) Year-end budget documentation, execution reports; Value data for contracts financial statements, (b) In-year budget (3) Contracts awarded. awarded above USD (d) tenders above USD execution reports, (c) 100,000 have been 100 000 Year-end financial Budget documents and published in MoF website statements, (d) tenders resources available to above USD 100 000. primary service units are available in public domain. Date 28-Feb-2014 20-Aug-2019 14-Nov-2019 31-Jul-2022 IN00781637 ►Comprehensiveness of debt data recording and reporting (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value Annual statement of debt Achieved. Partially Achieved. Domestic and foreign covering domestic and debt records are external debt is BERs with commitment Domestic and foreign complete, includes prepared, but there are information, the annual debt records are payable amount gaps and reconciliation financial statements with complete in the CS- updated and problems. payables as well a DRMS and updated reconciled quarterly. regular system generated monthly. Explicitly Comprehensive reports on payables are guaranteed contingent management and sufficient to meet the liability records are statistical reports requirement of recording updated and (covering debt service, payables. reconciled quarterly. stock and operations) However, the are produced at least Commonwealth budgetary central annually. Secretariat Debt government debt Recording and records are not Management System has reconciled quarterly. been upgraded and tested for capturing the To synchronize with public debt stock debt service payments (external, domestic, that are done semi- grants, Islamic domestic annually, the plan is to debt instruments and start doing semi- 2/14/2020 Page 3 of 9 The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) external and domestic annual reconciliation of guarantees). Data budgetary central entered thus far have government debt been reconciled for records in 2020. accuracy. A practice of a quarterly reconciliation of debt records have commenced. Date 28-Feb-2014 20-Aug-2019 14-Nov-2019 31-Jul-2022 IN00781638 ►SOE financial reporting and disclosure (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 50.00 70.00 100.00 100.00 Date 05-Mar-2018 20-Aug-2019 14-Nov-2019 31-Jul-2022 Intermediate Results Indicators by Components Accounting, reporting and internal audit IN00781643 ►Timely preparation of annual financial statements (AFS) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target MoF staff and other AGA's have been trained on preparation of AFS according to IPSAS. Pre- briefing provided to AGA's on SAP module prior to rolling out. BI rollout has been completed up to 75%. Work has initiated on AFS 2018 was functional upgrades and submitted within four System-generated AFS not accepted by design has been months on April 2019. AFS submitted to audit Value audit as complete and developed, but changes However, the AFS is within 4 months from ready for audit. have not been made live not yet directly system- year end. to external users. generated. MoF has provided comments to the Audited 2016 FS and sent to the Audit Office. The Audit Office is expected to revise the statements as per these comments, following which, it can be published. 2/14/2020 Page 4 of 9 The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) Date 28-Feb-2014 20-Aug-2019 14-Nov-2019 31-Jul-2022 Policy-based fiscal strategy and budget credibility IN00781639 ►Increased capacity on debt and cash management (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target RMDMD staff have received basic training on the CS-DRMS modules. However, they still require additional training on this, to improve and understand the system better. Trainings include: • Specialized trainings on loan analysis. • On-the-job training to analyze the loans and sovereign guarantee requests that came in • Database on current outstanding guaranteed debt. The database on • current Credible DMS does not Debt management outstanding guaranteed exist. Medium-term Debt strategy produced debt has not been Strategy (MTDS) 2020 Value completed as there were – 2022 produced and problems published. in entering it to the system. However, Guarantee guideline have been prepared and approved. • Identifying reporting needs and preparing required reports. • Development of first quarterly debt bulletin • Data analysis and reporting, editing, version management, the use of graphics and data visualization issues etc. Cash flow committee formed with representatives from MIRA and MMA. Monthly meetings are being held on first Tuesday of every month. MOFT internal 2/14/2020 Page 5 of 9 The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) cash flow committee meetings are being held weekly. Cash flow forecasts are followed and adjustments are made when and if required. Updated cash flows are shared with MMA on daily basis. More training is required on the implementation side. Date 28-Feb-2014 20-Aug-2019 14-Nov-2019 31-Jul-2022 IN00781644 ►Increased capacity on macro fiscal planning (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Staff were trained on the MTFF model theory and on how to update it in the future. MTEF model was used to update the fiscal strategy for 2018-2020 and for initial revenue forecasts. MTEF model was used to update the fiscal strategy for 2018- 2020 and for initial revenue forecasts. The i) MTFF produced and MTEF and Financial used to prepare Fiscal Programing and Policy Strategy Paper that 0% of staff trained on (FPP) were updated in was sent to parliament Production of a Macro macro fiscal planning. Q1 2019. The updates and used for the fiscal forecasting tool were not complete at the preparation of 2020 to inform the annual Value No credible MTFF and end of Q1, as most budget. budget framework for assessing macroeconomic ii) Final Macro fiscal investment projects forecasts were being forecasting tool exists exists. revised the end of the and was used for quarter. MTFF A brief training on financial programming and macroeconomic linkages were carried out. MTFF model creates a table similar to the budget table, and hence it will be easy to compare and analyze variances, since FPP model was developed internally. Date 28-Feb-2014 20-Aug-2019 14-Nov-2019 31-Jul-2022 Controlled budget execution IN00781640 ►Capacity building on procurement through the implementation of a new Procurement curricula (Text, Custom) 2/14/2020 Page 6 of 9 The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) Baseline Actual (Previous) Actual (Current) End Target Value NIL Nil Nil 15.00 Date 28-Feb-2014 20-Aug-2019 14-Nov-2019 31-Jul-2022 IN00781645 ►BERs subjected to audit by internal auditors (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 100.00 Date 28-Feb-2014 20-Aug-2019 14-Nov-2019 31-Jul-2022 IN00781646 ►Updated gender disaggregated statistics to inform fiscal policy (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target No recent data on household income/expenditures. Establishment of civil No recent data on Ongoing. Results of service registry Findings from HHIES Value household the HHIES expected in commenced on have been published income/expenditures September 2020. December 2018. NPC approval for finance cadres is expected to start on March 2020. Date 01-May-2018 20-Aug-2019 14-Nov-2019 31-Jul-2022 IN00781647 ►Improved asset management (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Asset portal has been developed and is End year Financial Asset registry not Asset registry not currently being rolled Value Statements with asset annexed to AFS annexed to AFS out. Asset registry is registry compiled through the portal. Date 01-May-2018 20-Aug-2019 14-Nov-2019 31-Jul-2022 External scrutiny and audit IN00781641 ►Inclusion of CPA techniques in Performance Audit (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Two pilot Performance Not done. ToR has Value No use of CPA No use of CPA. Audits conducted been developed. using CPA Date 01-May-2018 20-Aug-2019 14-Nov-2019 31-Jul-2022 2/14/2020 Page 7 of 9 The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) Project and Change Management IN00781642 ►Improved communication of PFM reforms (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Communication strategy exists The change management strategy All planned is yet to be developed consultation Draft Communication and will be submitted workshops held for strategy exists. The by November 18, legal and business No PFM communication implementation will be 2019. Change process review Value strategy enhanced and will take management strategy into account the change expected to be Fifteen change management strategy. submitted by 31 March management 2020. One Change workshops for key Management stakeholders held in Workshop was held. total by end of FY5. stakeholders held in total by end of FY5. Date 28-Feb-2014 20-Aug-2019 14-Nov-2019 31-Jul-2022 Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P145317 IDA-62200 Effective USD 6.00 6.00 0.00 0.00 5.84 0% P145317 IDA-D2950 Effective USD 6.00 6.00 0.00 0.80 5.00 14% P145317 IDA-H9510 Effective USD 6.50 6.50 0.00 5.95 0.08 99% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P145317 IDA-62200 Effective 07-Jun-2018 31-Jul-2018 28-Sep-2018 31-Jul-2022 31-Jul-2022 P145317 IDA-D2950 Effective 07-Jun-2018 31-Jul-2018 28-Sep-2018 31-Jul-2022 31-Jul-2022 P145317 IDA-H9510 Effective 26-Jun-2014 17-Aug-2014 02-Oct-2014 31-Jul-2019 31-Jul-2022 Cumulative Disbursements 2/14/2020 Page 8 of 9 The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) Restructuring History There has been no restructuring to date. Related Project(s) P164322-Maldives Public Financial Management Systems Strengthening Project 2/14/2020 Page 9 of 9