Document of The World Bank FOR OFFICIAL USE ONLY Report No: ICR00004991 IMPLEMENTATION COMPLETION AND RESULTS REPORT TF A4474 ON A SMALL GRANT IN THE AMOUNT OF USD 0,5 MILLION TO THE CREFIAF FOR Regional Support for the Oversight of Extractive Industry in French speaking countries (P162380) December 2019 Governance Global Practice Africa Region Regional Vice President: Hafez M. H. Ghanem Country Director: Abdoulaye Seck Regional Director: Deborah Wetzel Practice Manager: Manuel Antonio Vargas Madrigal Task Team Leader(s): Celestin Adjalou Niamien ICR Main Contributor: Celestin Adjalou Niamien ABBREVIATIONS AND ACRONYMS CREFIAF Contrôle des Finances Publiques de l’Afrique Francophone Subsaharienne CRRI Comité Régional de Renforcement Institutionnel DRC Democratic Republic of Congo EITI Extractive Industry Transparency Initiative FM Financial Management INTOSAI International Organization of Supreme Audit Institutions ISR Implementation Status and Results Report IT Information Technology, PASIE Projet d’Appui au Secteur de l’Industrie Extractive PDO Project development objective SAI Supreme Audit Institution UNDP United Nations Development Program CEMAC Communauté Economique et Monétaire de l’Afrique Centrale TTL Task Team Leader WAEMU West African Economic and Monetary Union WB World Bank TABLE OF CONTENTS DATA SHEET ....................................................................... ERROR! BOOKMARK NOT DEFINED. I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES ....................................................... 4 II. OUTCOME ...................................................................................................................... 7 1- Relevance of Objectives......................................................................................................7 III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME ................................ 11 IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME .. 12 V. LESSONS LEARNED AND RECOMMENDATIONS .............................................................. 14 ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS ........................................................... 16 ANNEX 2. PROJECT COST BY COMPONENT ........................................................................... 21 ANNEX 3. RECIPIENT, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS ...... 22 ANNEX 4. SUPPORTING DOCUMENTS (IF ANY) ..................................................................... 26 The World Bank Regional Support for the Oversight of Extractive Industry in French speaking countries (P162380) DATA SHEET BASIC INFORMATION Product Information Project ID Project Name Regional Support for the Oversight of Extractive Industry P162380 in French speaking countries Country Financing Instrument Africa Investment Project Financing Original EA Category Revised EA Category Not Required (C) Organizations Borrower Implementing Agency CREFIAF CREFIAF Project Development Objective (PDO) Original PDO The Project Development Objective (PDO) is to improve the oversight of the revenues from the extractive industry in targeted countries. This will lead to a more inclusive and sustainable economic growth stemming from extractive industry activities Page 1 of 26 The World Bank Regional Support for the Oversight of Extractive Industry in French speaking countries (P162380) FINANCING FINANCE_TBL Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$) Donor Financing TF-A4474 500,000 500,000 494,907 Total 500,000 500,000 494,907 Total Project Cost 500,000 500,000 494,907 KEY DATES Approval Effectiveness Original Closing Actual Closing 07-Mar-2017 28-Mar-2017 30-Jun-2019 30-Jun-2019 RESTRUCTURING AND/OR ADDITIONAL FINANCING Date(s) Amount Disbursed (US$M) Key Revisions KEY RATINGS Outcome Bank Performance M&E Quality Satisfactory Satisfactory Negligible RATINGS OF PROJECT PERFORMANCE IN ISRs Actual No. Date ISR Archived DO Rating IP Rating Disbursements (US$M) 01 10-Jul-2017 Satisfactory Moderately Satisfactory 0.00 02 18-Jul-2018 Satisfactory Satisfactory 0.23 03 27-Jun-2019 Satisfactory Satisfactory 0.47 Page 2 of 26 The World Bank Regional Support for the Oversight of Extractive Industry in French speaking countries (P162380) ADM STAFF Role At Approval At ICR Regional Vice President: Makhtar Diop Hafez M. H. Ghanem Country Director: Elisabeth Huybens Abdoulaye Seck Director: Elisabeth Huybens Deborah L. Wetzel Manuel Antonio Vargas Practice Manager: Chiara Bronchi Madrigal Celestin Adjalou Niamien, Kolie Task Team Leader(s): Celestin Adjalou Niamien Ousmane Maurice Megnan ICR Contributing Author: Celestin Adjalou Niamien Page 3 of 26 The World Bank Regional Support for the Oversight of Extractive Industry in French speaking countries (P162380) I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES Context Africa has recorded over years growth in the extractives industry sector. Despite the fall in the price of the commodities, the extractive industry has remained one of the main sources of growth in the Sub-Saharan Africa. Yet, this growth has not been translated into poverty alleviation and the improvement of services delivery to the population. Amongst the various explanations to this situation, the lack of effective oversight mechanisms across the sector emerges as the most important. This situation is characterized by (i) the insufficiencies in the legal framework and regulations governing the sector, (ii) the signing of contracts with the private sector containing provisions and regulations that are non-compliant with the law and (iii) the existence of the revenues not entirely recorded in the public treasury to finance public good. While it is crucial to address the issues associated with the legal framework and the compliance with the regulations, the transparency and accountability of the revenues from the extractive sector is an important complementary agenda. Therefore, improved oversight of extractive sector activities appeared critical through the role of the oversight bodies such as Supreme Audit Institutions (SAI), Technical Inspectoral of the Ministry of Natural Resources, and Civil Society Organizations. Also, tools such as the EITI+ framework recognize the role of these oversight bodies in the agenda to converge towards a greater impact of the extractive industry revenues. While the SAIs are being considered as a key player in the EITI oversight framework, they generally lack the capacity to fulfill this important mandate and needed a tailored support. In a context where the SAIs in the Africa region are grouped by regional clusters, a regional approach for the support to the SAIs to address this issue appeared more adequate and cost effective. The Francophone cluster is represented by the “Conseil Régional de formation des Institutions Supérieures de Contrôle des Finances Publiques de l’Afrique Francophone Subsaharienne�, CREFIAF which is an International Association created in 1997 to strengthen the institutional capacity of Supreme Audit Institutions. It has legal status and is based in Cameroon. Key lessons learned from a Canadian support project to CREFIAF showed that (i) there is a strong expectation from the Civil Society Organization (CSO) and the Supreme Audit Institutions for a greater transparency on the extractive industry revenues, and (ii) obtaining of reliable information on the sector could be a challenge that was considered being overcome by an intensive policy dialogue. The oversight of the revenue from the extractive industry is a crucial part of the World Bank’s shared prosperity agenda. The previous World Bank funded project supported the CREFIAF to (i) develop several audit guidelines such as financial audit, performance audit and code of ethics, (ii) test these tools through financial audit in 5 countries, and (iii) disseminate the tools in other countries. This track record in the field Page 4 of 26 The World Bank Regional Support for the Oversight of Extractive Industry in French speaking countries (P162380) of financial audit gave to the World Bank a comparative advantage to support CREFIAF’s on the financial audit of the flow of revenues from extractive industries. In this regard, the World Bank proposed financed project intended to focus on the audit of the revenues -- an area which was not covered by Canadian support project but complementary. Theory of Change Causality. The key expected long-term outcomes of the project were (a) an improved oversight of the revenue from the extractive industry through SAIs endowed with skills and capacity to audit such revenue, and (b) greater transparency on the revenue from the extractive industry for better inclusive and sustainable economic growth. The theory of change for the objective of improving the oversight of the revenues from the extractive industry in targeted countries was that building the capacity of selected SAIs in the field of the audit of those revenues and disseminating the findings of the audits conducted would lead to better oversight and greater transparency resulting in greater impact of the extractive industry revenues on public good. For the achieved outcomes to be sustained, identified assumptions in terms of long-term development were as follows : (a) the pursuit of the training of SAIs auditors through the e-learning platform, (b) the involvement of CREFIAF experts, now able to coach and guide SAIs in the field of the audit of the revenue from the extractives industry and (iii) the need to mobilize additional resources to ensure a continued support to SAIs in all aspects of the project development objective. Outcome attribution. The key outcomes achieved at project closing are attributable to (a) the CREFIAF and the Government for the preparatory work, the creation of conditions to launch this project; (b) the World Bank for its convening capacity and the supply of the funding covering the project activities; (c) the SAIs in targeted countries and also SAIs of the four additional countries that have made a spontaneous request, for their participation and financing of part of the field missions; and (d) the Canadian financed support operation to the extractives industry for providing experts endowed with skills in the area of the extractive industry. Project Development Objectives (PDOs) The regional Support for the Oversight of Extractive Industry in French speaking countries in the amount of US$ 500,000 became effective March, 28 2017 and closed on June 30, 2019. Its development objective (PDO) was to improve the oversight of the revenues from the extractive industry in targeted countries with the aims to reach a more inclusive and sustainable economic growth stemming from extractive industry activities in CREFIAF members countries. This was done through (i) supporting the Supreme Audit Institutions of selected countries to conduct audit of the revenues flow in the extractive industry and (ii) disseminating related audit manual to other SAIs. Page 5 of 26 The World Bank Regional Support for the Oversight of Extractive Industry in French speaking countries (P162380) CREFIAF and its SAI members were the main project beneficiaries. The Secretariat of the Comité Regional de Renforcement Institutionnel (CRRI), the executing department of this organization, was responsible for the implementation of the activities under the proposed project. It consists of a Directorate, a training coordination department, an IT department, and an accounting department. The CRRI Secretariat signed the grant agreement and managed the funds. The CREFIAF General Assembly acted as Steering Committee of the Grant and did oversee its implementation Key Expected Outcomes and Outcome Indicators Specifically, the project was aimed at increasing capacity of auditors from targeted Supreme Audit Institutions and other relevant national institutions to carry out specialized extractive industries audit and increasing capacity of CREFIAF to collaborate on extractive industry audit. In doing so, the project was essentially promoting: (i) the actual enforcement of the professional auditing standards recently developed by CREFIAF, building on the work of the International Association of Supreme Audit Institutions (INTOSAI); and (ii) the enlargement of CREFIAF capacity to the specific topic of the audit of the revenue from the extractive industry. It also built on the regional body of expertise in financial audit and the audit tools and guidelines developed under the first operation that closed on May 22, 2016 and aimed to improve the professionalism and expertise of CREFIAF member institutions on financial audits with issuance of audit opinions. To measure the project success and outcomes, three related indicators were agreed upon (i) number of auditors trained in the audit of revenues pertaining to the extractives industry, (ii) number of reports issued by the SAI on audit of the revenues of the extractives industry and (iii) time elapsed between the end of the audit and the publication of the report. As explained below, the three indicator targets were achieved. Components The project consisted of three components: (i) supporting the Supreme Audit Institutions of selected countries to conduct audit of the revenues flow in the extractive industry; (ii) dissemination of the audit manual on flow of revenue to other SAIs; and (iv) project management, monitoring and evaluation. Component 1: CREFIAF’s capacity to coach/mentor its members was built in the field of the financial audit thanks to the support from the WB closed project which developed and tested in 5 countries audit guidelines and methodology in line with the International Standards for Supreme Audit Institutions (ISSAI). During the implementation of this initial project, about 20 staff from CREFIAF and the pilot SAIs were trained and accredited as “CREFIAF experts�. Also, an agreement was reached to use UNDP eLearning platform, and all audit guidelines were adapted in eLearning training modules. This second project was to leverage on the financial audit guidelines in order to (i) elaborate a manual on audit of the flow of revenue in line with EITI + requirement 4 on revenues collection and (ii) test this manual in DRC, Gabon, Niger and Guinea. Two audits related to the flow of revenues in the extractives industry were to be conducted in each of these countries on two different years using CREFIAF experts and the auditors from the selected SAIs. The audit objective was to (i) ensure that the contracts signed with the private sector in the extractive industry field comply with the legal framework and the regulations, (ii) reconcile the revenues (host Government’s Page 6 of 26 The World Bank Regional Support for the Oversight of Extractive Industry in French speaking countries (P162380) production entitlement, national state-owned enterprise company production entitlement, profit taxes, royalties, dividends, bonuses, license fees, rental fees, entry fees, any other significant payments and material benefit to Government) declared by the private sector complied with the provisions of the contracts, (iii) reconcile the revenues declared by the private sector and recorded by the revenues generating administrations and the public treasury. In addition, to address the issue of the production of an audit report on the flow of revenues of the extractive industry in line with the international auditing standards and EITI+ requirement 4.91, the project was to pay a special attention to the lead time between the completion of the audit and the publication of the report as to ensure a timely publication of the report. During the course of these audits, the Supreme Audit Institutions was to rely on technical expertise available at the Ministry of Natural Resource. Component 2: This component was to support CREFIAF to use existing training facility (Regional Training Institute and eLearning platform) to have a multiplier effect and disseminate at a lower cost, the final version of the abovementioned audit manual as to strengthen the capacity of the other member countries. This was to be done by (i) adapting the audit manual in eLearning training modules, (ii) printing the manual for dispatching in the 23 SAIs, (iii) and providing local trainings sessions in 10 additional countries. Component 3: Coordination of the above activities was to remain with the Secretariat of the CREFIAF. This included management of funds, ensuring that required outputs are delivered in an agreed timeframe and the financial audit of the project proceeds are conducted on time II. OUTCOME Assessment of Achievement of Each Objective/Outcome 1- Relevance of Objectives The relevance of the grant’s development objective, design and implementation is assessed as being Substantial. CREFIAF’s main objective is to reinforce the capacity of its member countries’ SAIs. Its 2013- 2017 strategic plan identified some capacity weaknesses that prevent the SAIs from exercising appropriately their institutional mandate. These were related to the shortage/absence of competency and/or professionalism to carry out said mandate causing a negative effect on the credibility of SAIs. During the August 2014 CREFIAF’s annual general meeting held in Yaoundé, the 23 members’ countries endorsed a resolution by which CREFIAF was given a mandate to mobilize funds as to strengthen the capacity of the SAIs in the field of oversight of the extractive industry. Hence the grant’s design (i) was in line with CREFIAF’s institutional and organizational objective to reinforce SAIs' capacity and credibility in the Francophone part of sub Saharan Africa, and (ii) was a response to its mandate to mobilize funds in the overall context of getting the SAIs endowed with the appropriate skills to take an active part in the governance scheme of the oversight of the revenues in the extractives industry sector. All activities developed under the three operational 1 EITI requirement 4.9 on data quality and assurance of the audit report. Page 7 of 26 The World Bank Regional Support for the Oversight of Extractive Industry in French speaking countries (P162380) components were thus linked to the development objective and have contributed to leverage on the tools and skills developed under the previous bank financed operation and build SAIs capacity in the field of the audit of the revenues of the extractives industry. The proposed project was also well aligned with both the CREFIAF strategic and operational plan, particularly the second pillar that focused on the strengthening of the technical capacity of the SAIs and the World Bank Group’s shared prosperity agenda that call for improved oversight of revenues from the extractive industry. Said project is a response to the call for action made by the CREFIAF for a greater impact of the extractives industries revenues on the life of the citizen. 2- Efficacy Based on the evaluation of the three performance indicators, the achievement of the Project Development Objective (PDO) is rated as High. The project aimed at improving the oversight of the revenues from the extractive industry in targeted countries. In order to achieve that objective, four countries which are rich in natural resource wealth and where the provision of basic services to the population remains a concern for the Government, were identified. These are DRC, Guinea and Niger where the EITI+ compliance status was to be consolidated and Gabon, in need of assistance to achieve one compliance criteria2. In so doing the project was able to train 190 auditors in 8 SAIs of which 40 females. In order to join theory to practice, reinforce their capacity, this acquired knowledge was translated into field audit mission that resulted in 8 audit reports in the 4 targeted countries. Promoting transparency was established during the dissemination workshop that was held one month after the audit reports were finalized at technical level. All these results were achieved through intermediate actions and results that consisted mainly in the development of an audit guide, and face to face trainings sessions. Sustainability is being gained through the provision of tools and the e-learning platform developed under the project for CREFIAF. At the time of this ICR, the platform has been used to trained 147 additional auditors. The achievement status of the associated indicators is detailed in the following table. PDO Indicators Base Target value Comments value achieved 1. Number of Auditors (of which None 80 190 Fully achieved. Finally, in addition to the 4 female) trained in the audit of initially targeted SAIs, 4 additional SAI all revenue of the extractive industry (of which totaling 190 auditors of which 40 women have revenue 40 been trained: females) - 20 from Gabon SAI of which 6 women - 27 from Niger SAI of which 6 women - 25 from Guinea SAI of which 4 women - 28 from DRC SAI of which 2 women 4 additional SAIs have also benefitted from the 2 Audit of the reconciliation of the revenues declared and revenues recorded by the Supreme Audit Institution. Page 8 of 26 The World Bank Regional Support for the Oversight of Extractive Industry in French speaking countries (P162380) training: - 20 from Senegal SAI of which 4 women - 21 from CAR SAI of which 5 women - 26 from Chad SAI of which 5 women - 23 from Cote d’Ivoire of which 8 women In addition, 147 additional auditors got trained through the new CREFIAF e-learning platform since its operationalization in May 15 2019 2. Number of Reports issued by None 8 8 Fully achieved. 8 audit reports have been SAI on audit of the revenue of the elaborated following the missions undertaken in extractive industry the four targeted countries. 3. Time (months) elapsed between None 6 1 Achieved. The audits reports were finalized in the end of the audit and the May and were disseminated publicly in June 2019 publication of the report but not yet published on line. To reinforce this indicator, SAI and CREFIAF will publish the reports on their respective websites. At the time of preparing this ICR, the publication of all 8 reports on the SAIs and CREFIAF websites was pending each SAI internal validation process. It is expected that all reports are published on line following their internal approval The main findings resulting from the 8 Compliance Audit of contracts and revenues from the extractive industry conducted in the 4 targeted countries are the following: SAI Coverage Main weaknesses Niger Mine and Oil. 100 % of (i) Weak administrative, technical and financial monitoring system for mining permits contracts (18) have (ii) Absence of periodic reconciliations between liquidations and recoveries of mining been reviewed for the and petroleum revenues; years 2015 and 2016 (iii) Cases of non-conformity between the declared revenues and those recorded. In 2016, there was a discrepancy of USD 2.8 million between amounts declared by mining companies and those computed by State departments responsible for collecting revenues; (iv) Lack of a mechanism for coordination between the structures responsible for collecting mineral and petroleum revenues/ DRC Mine and Oil (2015- (i) Discrepancy between the amounts declared and paid by enterprises and those 2016)- Sample not registered by the tax administration in 2015 estimated at a minimum shortfall for the communicated State of USD 680 k; (ii) Dividends stemming from the 5 % of the State’s share part of the capital of mining and petroleum operators are not paid to the State resulting in an important financial gap; (iii) Some operators do not correctly fulfill their obligations in connection with the implementation of contracts; (iv) risk of fraud on the declaration of revenues due to the attribution by the tax administration of several fiscal identifiers to the same operator. Gabon Mine and Oil (2015- (i) Opacity in the management of revenues from the extractive industries sector: the 2016)- Sample not revenue collection mechanism is unreliable and the data relating to it is not very communicated sincere; (ii) The application text to set up the industrial responsibility Fund has still not been Page 9 of 26 The World Bank Regional Support for the Oversight of Extractive Industry in French speaking countries (P162380) taken; resulting in undue sites rehabilitation responsibility for the State in the event of environmental damage; (iii) The mining administration did not validate the production data declared by the operators. Also, operators sometimes communicate identical or unreliable data from one quarter to the next. This results in the non-control of the real level of production and a reduction in revenues for the State; (iv) The mining operators do not transmit production related declarations and there is not a mechanism for verifying admissible expenditure at the level of the Mines administration. This situation runs the risk of fraud by an artificial over-evaluation of eligible expenses and therefore a drop in revenues to be collected for the State. Guinea Mine (2015-2016)- (i) Discrepancy between the amounts declared by enterprises and those declared by the Sample not collecting structures in 2015 estimated at a minimum shortfall for the State of USD 75 communicated million (ii) Cases of non-compliance of income declared with mining conventions (iii) At least one convention over its entire duration grants total exemption from the tax on industrial and commercial profits contrary to the provisions of the Mining Code of the Republic of Guinea In some cases (like in DRC), the government has taken additional steps for the actual implementation of the recommendations. Due to lack of data and for the sake of time, the auditors were not always able to assess with accuracy the full financial impact of the weaknesses identified but this remains work in progress… 3- Efficiency Efficiency is rated as Substantial. The project was implemented in an efficient manner, as all of its intermediate indicators were met and, in some cases, exceeded the expectations (See annex 1), within the grant’s initial envelope. By end of the disbursement date, the disbursement from the initial budget of USD US$500,000 stood at a satisfactory rate of 99 %. The efficiency achieved resulted mainly from the design of the project that built on the lessons learned and capacity built under the previous Bank financed operation to CREFIAF. Indeed, the project relied upon (i) CREFIAF experts who contributed to the update of the audit guidelines and conducted associated courses benefitting SAIs, (ii) SAIs auditors who supervised the audit missions. In addition, synergy was built with the Canadian financed Extractive Industry Support Project, (PASIE). With the savings generated from that approach (involvement of CREFIAF experts, SAIs auditors, synergies with experts from a complementary project and national experts instead of international consultants), the CRRI was able to undertake additional activities amounting to more than US$45,000 under Components 1 and 2, related to the setup of CREFIAF own e-learning platform, the dissemination workshop of the audit reports and the translation of the audit guide in Portuguese for 3 CREFIAF members countries (Sao Tome & Principe, Cabo Verde and Guinea Bissau). Furthermore, an agreement was reached with the SAI of Morocco to carry out the audit mission instead of recruiting an external auditor, leading to an optimization of the transaction cost associated with a procurement process. Page 10 of 26 The World Bank Regional Support for the Oversight of Extractive Industry in French speaking countries (P162380) Finally, as per the information gathered from CREFIAF website administrator, the e-learning platform, has contributed to the training of 147 auditors in addition to those 190 initially trained in the 8 countries. Overall Outcome Rating The project PDO indicators were in line with the project objective and expected results. The overall outcome rating for the grant is deemed Substantial with regard to: (i) the relevance of the grant which substantially contributed to reinforce the capacity and credibility of CREFIAF SAI members in terms of audit of the revenues of the extractive industry, (ii) the well-designed implementation arrangements building on CREFIAF’s organization and team that led to a strong ownership, (iii) the set-up of an e-learning platform that is contributing to knowledge and audit tools sharing with all CREFIAF SAI members and beyond and finally (iv) the synergy gained with the Canadian financed operation and through the use of the existing tools e.g. the financial audit guidelines, developed under the previous Bank financed operation. All PDO indicators and all intermediate results indicators were fully achieved and, in some cases, went beyond expectations. In addition to the dissemination workshop, it is expected the eight audit reports will be published on the SAIs and CREFIAF websites early in January 2020. Moreover, the number of auditors trained surpassed the target by more than 200 percent and the project achieved a good ratio of female participation to trainings at more than 20 percent Other Outcomes and Impacts The efficiency gained during the implementation of the project resulted in additional activities that pertained mainly to the development of CREFIAF own e-learning platform. A previous partnership with the United Nations Development Program (UNDP) gave access, for e-learning, to UNDP learning platform dedicated mostly to the promotion of the Central African Economic and Monetary Community (CEMAC) directives. The new e-learning platform brings in greater impact and sustainability as all CREFIAF SAI members have now access at no cost to the tools developed for the audit of the revenues of the extractives industry and so far around 147 additional auditors have been trained. This has contributed to reinforce CREFIAF credibility toward its 23 SAI members III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME The below key factors have positively affected the implementation and outcomes of the project. Firstly, the project was a response to CREFIAF’s capacity building need in line with the EITI+ framework that recognizes the role of the oversight bodies in the agenda to converge towards greater transparency and accountability of the revenues from the extractive sector for tangible and positive impact on the population. As such, during their general annual meeting held in August 2014, the 23 members’ countries endorsed a resolution by which CREFIAF was given a mandate Page 11 of 26 The World Bank Regional Support for the Oversight of Extractive Industry in French speaking countries (P162380) to mobilize funds as to strengthen the capacity of the SAIs in the field of oversight of the extractive industry. Secondly, the said request did build on lessons learned, expertise and tools developed under the previous WB’s project and was complementary to the Canadian financed operation that focus mostly on developing (i) extractive audit guidelines and audit training curriculum on various topics such as review of mining contracts, social and environmental impact, audit the transfer price, and (ii) communications tools allowing to reinforce the relationship between the SAI and the external stakeholders of the extractive industry sector. These joint supports from donors (including other donors such as the African Development Bank) has reinforced CREFIAF credibility in the Francophone part of sub Saharan Africa. Finally, similarly to the previous WB financed operation, the project was prepared jointly with CREFIAF and implemented by dedicated CREFIAF unit, contributing to establish ownership that was reinforced by the involvement of CREFIAF board of Directors and General Assembly. These high-level involvements paved the way for a smooth implementation and oversight over the project activities. However, it is worth noting that the project experienced significant delay in the implementation of its activities, due mainly to the delay in setting up the designated account and receiving the initial advance i.e.8 months after the effective date. But the team managed well and was able to catch up and even conduct additional activities within the implementation timeline. The single external audit mission covering the entire project implementation period did not raise any significant issue that could have undermined the quality of the financial statements. However, some internal control issues were reported of which shortcomings in the procurement processes and in the archiving system. CREFIAF will ensure proper corrective measures are taken to strengthen the internal control system. IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME (a) Bank Performance in Ensuring Quality at Entry Bank performance is Satisfactory. The grant was designed by a field-based qualified Task Team from the Financial Management (FM) unit and was based on the CREFIAF request in line with its 2013-2017 strategic plan. The selection of the PDO indicators was appropriate and in line with the grant’s components and activities. All the PDO indicators were fully achieved thanks to a timely assessment of the associated risk and adequate implementation of mitigation measures. Considering the SAIs internal validation process of audit reports that may have put a risk to the disclosure of the audit reports, the Bank team proactively worked with CREFIAF team and Page 12 of 26 The World Bank Regional Support for the Oversight of Extractive Industry in French speaking countries (P162380) designed a dissemination workshop that disclosed the audit reports and contributed to meet the indicator related to the publication of the audit reports. (b) Quality of Supervision Bank supervision performance is Satisfactory. Three formal supervision missions led by the TTL, were conducted in the course of the project implementation period and outcomes/challenges were discussed with CREFIAF. These missions were complemented by three FM supervision missions and one Post Procurement Review (PPR). In addition, interim financial reports were duly submitted and were of acceptable quality. The FM supervision reports were duly transmitted to CREFIAF and the Implementation Status and Results Reports, ISRs were duly submitted and approved by the Bank’s Management. Recommendations from supervision were implemented regularly. FM performance ratings as shown in the FM monitoring system, PRIMA were rated mostly satisfactory and associated risk was deemed moderate with regards to the relatively small amount of the project, the lack of complexity in the project design and implementation and the continuous and closed fiduciary and technical implementation support provided to CREFIAF when the need has arisen by the field-based team including the Financial Management and Procurement Specialists. Procurement performance was rated moderately satisfactory. (c) compliance issue The project was implemented following the arrangements agreed upon and set up in the financing agreement. No compliance issue was encountered. (d) Rating for Overall Bank Performance Overall, Bank performance is deemed Satisfactory. This is substantiated by the appropriate design at entry, regular supervision missions, hands on support, and overall continuous and close fiduciary and technical support (as confirmed by the implementation unit) provided thorough the project duration in order to meet the PDO indicators. (e) Risk to development outcome Overall, the risk to development outcome is Moderate as the project was a response to a request from CREFIAF that was facing the challenge to respond to the growing capacity building need of SAIs to play a significant role in the transparency scheme of the extractive industry. In so doing, the project contributed significantly to provide the audit manual, tools and trainings to equip SAIs Page 13 of 26 The World Bank Regional Support for the Oversight of Extractive Industry in French speaking countries (P162380) with the needed knowledge and skills to perform the audit work. This is in line with the Public Finance Directives in the West African Economic and Monetary Union (WAEMU) and CEMAC member countries (more than half of these countries are members of CREFIAF), that aimed at reinforcing the role of SAIs in the oversight of the management of public funds. The Sustainability of the project outcome will be further reinforced through mainly the strong ownership of the project results by CREFIAF and its SAI member countries and the continuous set up and implementation of the communication strategy between SAI and their key stakeholder initiated under the previous Bank financed operation. In addition, the e-learning platform develop for CREFIAF will promote greater results and more sustainability as many more SAIs will be able to attend the e-learning courses. V. LESSONS LEARNED AND RECOMMENDATIONS The following lessons were learned during the implementation of the grant: • Reliance on the CREFIAF staffing and organization was critical in the grant’s preparation and implementation. The cost of external consultants foreseen for activities under Component 1 and 2 was consequently reduced and the ownership was guaranteed; • Building on lessons learned from previous operation and developing synergy with other complementary donor funded project were key for ensuring efficiency and cost effectiveness; • Involvement at an earlier stage of the beneficiaries SAI and during implementation is key to ensure appropriate ownership for the success of the project, as well as adequate follow up and sustainability following the project’s closure; • Proactivity and continuous and close support of the Bank team are essential to get results; • The option to merge the project disbursement categories in a single category was key to smoothen the project implementation, as it reduces the time allocated to budget overrun approval procedures; • Including some operating costs in the project design was instrumental to create additional incentives for CREFIAF staff to go the extra miles and achieve desired results. During the 8th General Assembly in Ouagadougou, Burkina Faso, in 2018, the SAIs members of CREFIAF expressed the need to see this project extended to other SAIs. Likewise, the members of the Executive Committee, during their 18th meeting, recommended that the CREFIAF contact the World Bank so that this project could be extended to other SAIs. In turn, considering the important results that have been demonstrated in the project at the regional level, the World Bank will consider showcasing the achievements and share with the other Page 14 of 26 The World Bank Regional Support for the Oversight of Extractive Industry in French speaking countries (P162380) INTOSAI regional bodies in the form of a case study. In addition, the Bank is encouraged to take any opportunity to reinforce and scale up these achievements to other SAIs through specific support to CREFIAF or as part of the design of any new governance project . Page 15 of 26 The World Bank Regional Support for the Oversight of Extractive Industry in French speaking countries (P162380) ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS A. RESULTS INDICATORS A.1 PDO Indicators Objective/Outcome: Improve the oversight of the revenues from the extractive industry in targeted countries Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Auditors (of which female) Number 0.00 80.00 80.00 190.00 trained in the audit of revenue of the extractive industry 24-Feb-2017 30-Jun-2019 30-Jun-2019 30-Jun-2019 revenue Comments (achievements against targets): Fully achieved. In addition to the 4 initially targeted SAIs, 4 other SAIs have been trained, all totaling 190 auditors of which 40 women, . Moreover, 147 additional auditors have got trained through the new CREFIAF e-learning platform (developed under the project) since its operationalization in May 15 2019 Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Report issued by SAI on audit of Number 0.00 8.00 8.00 8.00 the revenue of the extractive industry 24-Feb-2017 30-Jun-2019 30-Jun-2019 30-Jun-2019 Page 16 of 26 The World Bank Regional Support for the Oversight of Extractive Industry in French speaking countries (P162380) Comments (achievements against targets): Achieved. eight audit reports have been elaborated following the missions undertaken in the four targeted countries Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Time elapsed between the end Months 0.00 6.00 6.00 1.00 of the audit and the publication of the report 24-Feb-2017 30-Jun-2019 30-Jun-2019 30-Jun-2019 Comments (achievements against targets): Achieved. The audits reports were finalized in May and were disseminated in June i.e. one month later. To reinforce this indicator,SAI and CREFIAF will published the reports on their respective websites. At the time of preparing this ICR, the publication of all 8 reports on the SAI & CREFIAF websites was pending each SAI internal validation process. It is expected that all reports are published in the first quarter of 2020. A.2 Intermediate Results Indicators Component: Component 1 : Audit of the extractives industry revenues in selected SAIs Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion A manual of audit on control of Text NO YES Yes YES flow of revenues of the extractive industry is 24-Feb-2017 30-Jun-2019 30-Jun-2019 30-Jun-2019 Page 17 of 26 The World Bank Regional Support for the Oversight of Extractive Industry in French speaking countries (P162380) developed Comments (achievements against targets): Achieved Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Training sessions conducted on Number 0.00 8.00 8.00 15.00 the audit manual 24-Feb-2017 30-Jun-2019 30-Jun-2019 30-Jun-2019 Comments (achievements against targets): Fully Achieved Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Coaching/mentoring missions Number 0.00 8.00 8.00 16.00 on the audit of revenue flows 24-Feb-2017 30-Jun-2019 30-Jun-2019 30-Jun-2019 Comments (achievements against targets): Fully achieved Page 18 of 26 The World Bank Regional Support for the Oversight of Extractive Industry in French speaking countries (P162380) Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Audit work programs are Yes/No N Y Y Y adopted before conducting the audit mission and issuing the 24-Feb-2017 30-Jun-2019 30-Jun-2019 30-Jun-2019 audit report Comments (achievements against targets): Achieved Component: Component 2 :Dissemination in other SAIs Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Training sessions conducted on Number 0.00 8.00 8.00 15.00 the audit manual 24-Feb-2017 30-Jun-2019 30-Jun-2019 30-Jun-2019 Comments (achievements against targets): Fully Achieved Page 19 of 26 The World Bank Regional Support for the Oversight of Extractive Industry in French speaking countries (P162380) B. ORGANIZATION OF THE ASSESSMENT OF THE PDO Objective/Outcome 1 1. Number of Auditors (of which female) trained in the audit of revenue of the extractive industry revenue Outcome Indicators 2. Number of Reports issued by SAI on audit of the revenue of the extractive industry 3. Time (months) elapsed between the end of the audit and the publication of the report 1. A manual of audit on control of flow of revenues of the extractive industry is developed 2. Training sessions conducted on the audit manual Intermediate Results Indicators 3. Coaching/mentoring missions on the audit of revenue flow 4. Audit work programs are adopted before conducting the audit mission and issuing the audit report 1. Component 1 : Audit of the extractives industry revenues in selected SAIs - Manual of audit on control of flow of revenues of the extractive industry - 15 Trainings sessions conducted Key Outputs by Component - Eight Audit reports (linked to the achievement of the Objective/Outcome 1) 2.Component 2 : Dissemination in other SAIs - E-Learning platform - Trainings sessions conducted Dissemination workshop Page 20 of 26 The World Bank Regional Support for the Oversight of Extractive Industry in French speaking countries (P162380) . ANNEX 2. PROJECT COST BY COMPONENT Amount at Approval Actual at Project Percentage of Approval Components (US$M) Closing (US$M) (US$M) Audit of the extractive industry revenues in selected 312,000.00 305,706 98% SAIs Dissemination in others SAIs 139,500.00 102,326 73% Project coordination 48,500.00 83,922 173% Total 500,000.00 491,954 98% Page 21 of 26 The World Bank Regional Support for the Oversight of Extractive Industry in French speaking countries (P162380) ANNEX 3. RECIPIENT, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS 1-Press clip_The daily Guardian post: Stakeholders pledge to boost transparency in extractive industries revenue (www.theguardianpost.info) Stakeholders in the auditing of resources accruing from extractive industries within the Central African sub region, with Cameroon inclusive, have pledged to boost transparency. This was in Yaounde June 28 during a workshop for the dissemination of an audit report of revenue accruing from the extractive industries sector. It was presided over by the Minister Delegate at the Presidency of the Republic in charge Supreme State Audit, Rose Mbah Acha Fomundam, in the presence of the Minister of Mines, Industries and Technological Development, Gabriel Dodo Ndoke, the Minister Delegate in the Ministry of the Economy, Planning and Regional Development in charge of Planning, Paul Tasong, and also the Minister Delegate in Page 22 of 26 The World Bank Regional Support for the Oversight of Extractive Industry in French speaking countries (P162380) the Ministry of Finance. Also present were the resident representative of the World Bank, Elisabeth Huybens, and the head of the European Union delegation to Cameroon. The audit report was the outcome of a project supported by the World Bank. The project was because in recent years there has been some growth in the activities of the extractive industries in sub-Saharan Africa, but despite the rise in prices of basic commodities, this increase in activities of extractive industries does not translate to reducing poverty and increasing the standard of living of the population. Thus, a better audit of this sector will make concerned countries see their populations benefit from the extraction of minerals, oil and gas. In this regard, the role of Supreme State Audit Institutions is primordial as they are seen as major actors in the promotion of good governance and surveillance of the extractive industries. It was therefore necessary to build their capacities in auditing revenue from extractive industries. On March 28, 2017, Cameroon signed a protocol accord with the World Bank to finance a regional project to support supreme state audit institutions in the monitoring of revenue in extractive industries. The said accord was within the framework of the putting in place of a strategic plan from 2013 to 2017 adopted in 2012. The project to support supreme state audit institutions to audit revenue from extractive industries has as general objective to ameliorate professionalism and quality of work. The workshop on June 28 had as general objective to disseminate the results and products of the project. It also had as specific objectives: to present the global results of the project to support supreme state audit institutions, technical and financial partners, share experiences between partners, sensitize partners and authorities on the added value effected by supreme state audit institutions among others. In his welcome address during the workshop, Gilbert Ngoulakia, head of the supreme state audit institution of Gabon, said it was an occasion to seek ways in improving on “efforts to better control revenue from extractive industries�. On behalf of other beneficiaries of the project, he said they hope the results will contribute to positive change. He regretted the fact that many African countries are endowed with natural resources but the finances from these resources do not impact the lives of citizens, therefore warranting the project which was carried out in Cameroon, Chad, Gabon, Equatorial Guinea among others. On her part, the Director of Operations at the World Bank, Elisabeth Huybens, disclosed that since 2013, over 900 million FCFA has been mobilized to reinforce the capacity of supreme state audit institutions. She noted that transparency in the extractive industries is crucial for the economy of nations. Elisabeth Huybens also expressed satisfaction at the results obtained and declared the World Bank’s readiness to continue the support. When she took the cue, the Minister Delegate at the Presidency of the Republic in charge Supreme State Audit, Rose Mbah Acha Fomundam, noted that the government of Cameroon prioritizes transparency with the extractive industries. She assured the reinforcement of capacities of Supreme State Audit institutions to ensure proper management of their state resources. She also regretted that natural resources are being exploited with little going to the state, citing many mechanisms put in place to stem the tides. Minister Mbah Acha noted that all the earmarked project activities were carried out with appreciable levels of execution. “I can say with certainly that the project bore positive fruits,� she stated Page 23 of 26 The World Bank Regional Support for the Oversight of Extractive Industry in French speaking countries (P162380) 2- Recognition Letter from the Minister delegate to the Superior Council of State. Page 24 of 26 The World Bank Regional Support for the Oversight of Extractive Industry in French speaking countries (P162380) Page 25 of 26 The World Bank Regional Support for the Oversight of Extractive Industry in French speaking countries (P162380) ANNEX 4. SUPPORTING DOCUMENTS (IF ANY) Due to their volumes the following supporting document are filed in WBdocs/portal - Project presentation - Audit report findings presentation - Extractives industry Audit Guide Page 26 of 26