Public Disclosure Copy The World Bank Implementation Status & Results Report Cambodia PFM Modernization Project (P143774) Cambodia PFM Modernization Project (P143774) EAST ASIA AND PACIFIC | Cambodia | Governance Global Practice | Recipient Executed Activities | Investment Project Financing | FY 2014 | Seq No: 7 | ARCHIVED on 30-Mar-2017 | ISR27367 | Implementing Agencies: Key Dates Key Project Dates Bank Approval Date:04-Dec-2013 Effectiveness Date:07-Nov-2013 Planned Mid Term Review Date:16-Jul-2015 Actual Mid-Term Review Date:20-Jul-2015 Original Closing Date:14-May-2016 Revised Closing Date:14-May-2017 Project Development Objectives Project Development Objective (from Project Appraisal Document) The project development objective is to enhance public financial management by strengthening: (a) revenue mobilization and (b) budget execution processes through the implementation of the Financial Management Information System (FMIS). Progress against the principal objective will be measured by the contribution made to the PFMRP’s Key Performance Indicators and Targets set forth under the Stage Two of the PFMRP. Has the Project Development Objective been changed since Board Approval of the Project Objective? No PHRPDODEL Components Name Mobilization of Revenue and Project Management Functions of the GSC:(Cost $2.00 M) Improving budget execution processes through the implementation of the Financial Management Information System (FMIS):(Cost $17.50 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO  Satisfactory  Satisfactory Overall Implementation Progress (IP)  Satisfactory  Satisfactory Overall Risk Rating  Substantial  Substantial Implementation Status and Key Decisions 3/30/2017 Page 1 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Cambodia PFM Modernization Project (P143774) Satisfactory progress has been made on the implementation of the Revenue Mobilization Strategy (RMS), resulting in substantially improving domestic revenue to 18.5 percent of GDP in 2015, up from 15.1 percent of GDP in 2013. This achievement well exceeded the target of 0.5 percent of GDP increase per annum set by the PFMRP. However, much of the increase in revenue resulted from increased auditing and strengthened debt collection. For sustainable and long term improvement pursuing reforms in tax administration to boost revenue collection capacity and promoting voluntary compliance will be critical. The project continued good progress towards achievement of FMIS Phase I Implementation as envisaged. The FMIS is now capable of providing government finance managers a wealth of information to manage and deploy Government financial resources across various programs, projects and spending units. Because the system now operates at both the center and provinces, information can be retrieved directly from the system on the amounts and the number of transactions being paid through FMIS at the center and the provinces. IT Department noted that FMIS users begin to take advantage of the system now. Users at central offices of the MEF (GDNT and GBD) who master and have good knowledge about the system start to draw data and report from the system, and they are able to locate data in less than 30 minutes. The key priority challenge for the duration of the project will be to stabilize the system so that FMIS can be expanded to line ministries and other levels of government (Phase II which is outside this project scope). Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance  --  Moderate  Moderate Macroeconomic  --  Low  Low Sector Strategies and Policies  --  Substantial  Substantial Technical Design of Project or Program  --  Substantial  Substantial Institutional Capacity for Implementation and Sustainability  --  Substantial  Substantial Fiduciary  --  Moderate  Moderate Environment and Social  --  Low  Low Stakeholders  --  Low  Low Other  --  --  -- Overall  --  Substantial  Substantial Results Project Development Objective Indicators PHINDPDOTBL  Improved timeliness to locate financial data and reports (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target FMIS users who have FMIS users who have It took up to two days to good knowledge about good knowledge about Less than 30 Value locate specific data the system are the system are minutes beginning to use the beginning to use the 3/30/2017 Page 2 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Cambodia PFM Modernization Project (P143774) system. It now takes system. It now takes less than 30 minutes to less than 30 minutes to locate financial data locate financial data and and reports. reports. Date 31-Dec-2013 05-Sep-2016 06-Feb-2017 12-May-2017 PHINDPDOTBL  Improved timeliness in the payment processing at GDNT (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Business processes Business processes from procure to pay at from procure to pay at MEF have been MEF have been streamlined and a streamlined and a Standard Operating Standard Operating Procedure has been Procedure has been developed. Payment developed. Payment Payment process could processing at GDNT processing at GDNT for 10 -15 working Value take between 15 to 30 for many payments many payments (with no days days in 2013 (with no corrections) corrections) are are completed between completed between 10 - 10 -15 days. Salary 15 days. Salary payments can be payments can be processed in less than processed in less than 5 5 working days. working days. Date 31-Dec-2013 05-Sep-2016 06-Feb-2017 12-May-2017 PHINDPDOTBL  More timely closure of financial accounts at the end of the fiscal year (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target 6 months. The 2015 financial statements were finalized in June and submitted to the National Audit Authority 6 months. The 2015 (NAA) in July-August financial statements 2016. For the 2016 were finalized in June budget, GDNT has 9 to 10 months delay in and submitted to the issued an instruction for Value 3 to 4 months financial account closure National Audit Authority provincial treasuries to (NAA) in July-August complete payment 2016. processing in FMIS by end of Feb 2017; however a number of treasuries have not yet completed this task. We anticipate on these can be submitted by the 3/30/2017 Page 3 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Cambodia PFM Modernization Project (P143774) closing date of the project and will confirm during the next mission scheduled for May 1 - 9. Date 31-Dec-2013 30-Jun-2016 06-Feb-2017 12-May-2017 PHINDPDOTBL  More non-tax revenue sources (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target 36 inter-ministerial 38 inter-ministerial Prakases of which 6 Prakases have been are new and 2 have signed as of January 37 inter- been revised, brining 2017 between the 24 inter-ministerial ministerial Value the total number of between MEF and Prakases (2013) Prakases (22 services collecting fees central and subnational revised) (revenue sources) is government units on the 3,940. collection of non-tax revenue. Date 31-Dec-2013 13-Oct-2016 06-Feb-2017 12-May-2017 PHINDPDOTBL  Revenues from property and customs tax increased (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target KHR 54.31 billion has KHR 151 billion has Revenue from property tax been collected as of Value been collected for 2016 KHR 85 billion 62.7 billion KH Riel (2013) September 2016 Date 31-Dec-2013 13-Oct-2016 30-Dec-2016 12-May-2017 Overall Comments Intermediate Results Indicators 3/30/2017 Page 4 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Cambodia PFM Modernization Project (P143774) PHINDIRITBL  Improve budget classification through the implementation of the uniform account code structure (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target EC, AC, PC are EC, AC, PC are currently in use in the currently in use in the system. The remaining system. AC and PC four segments, have not need to be revised and been implemented, updated. MEF created Seven budget though all the required a Technical Working classification codes segments have been Group on budget developed [Function designed and configured classification and the Classification (FC), in the system. ITD Chart of Accounts in Administrative indicated their plans to September 2016, Classification (AC), implement the chaired by DG of EC, AC, GC, Value Economic Classification Administrative GDNT, to revise and PC, FC (EC), Program Classification during improve budget Classification (PC), 2017. The task team has classification and chart Geographic Classification provided guidance to of accounts. Prakas for (GC), Source of Fund MEF on next steps an the GC was issued in Classification (SFC)], and how the remaining February 2015, but Project Classification codes – Programs, mechanism and Function, and guidance need to be Geographic - are developed for automatically picked up implementation. by the system through mapping. Date 31-Dec-2013 13-Oct-2016 30-Dec-2016 12-May-2017 PHINDIRITBL  Financial Statements presented with disclosure of the accounting standards used as the basis for their preparation and accounting policies followed (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target GDNT has prepared a roadmap for preparation of IPSAS cash basis Preparation of IPSAS through the FMIS with 3 cash basis through the Partial IPSAS Preparation of IPSAS cash of the 6 steps Value FMIS still under cash basis basis in progress completed. Templates discussion between report produced for the statements were GDNT and ITD. agreed between GDNT and ITD and are now available in FMIS. Date 31-Dec-2013 13-Oct-2016 09-Jan-2017 12-May-2017 3/30/2017 Page 5 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Cambodia PFM Modernization Project (P143774) PHINDIRITBL  FMIS implemented at MEF and Provincial Treasury (PTs) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The FMIS is The FMIS is operational operational at MEF and at MEF and all provincial all provincial treasuries treasuries (PTs). An (PTs). An average of 2 average of 2 additional Procurement process in additional FMIS users MEF and all Value FMIS users have been progress have been added to PTs added to each PT, each PT, increasing increasing the average the average number of number of FMIS users at FMIS users at each PT each PT to 8. to 8. Date 31-Dec-2013 13-Oct-2016 13-Oct-2016 12-May-2017 PHINDIRITBL  Budget control and execution modules implemented (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Budget Budget Allocation (BA); Budget Allocation (BA); Allocation (BA); General Ledger (GL) General Ledger (GL) General Ledger implemented in July implemented in July (GL), Account 2015. The Account 2015. The Account Receivable Receivable (AR); Receivable (AR); (AR); Account Value 0 module implemented Account Payable (AP); Account Payable (AP); Payable (AP); Cash Management Cash Management Cash (CM); and Purchase (CM); and Purchase Management Order (PO) Order (PO) implemented (CM); and implemented since since January, 2016. Purchase Order January, 2016. (PO) Date 31-Dec-2013 29-Jan-2016 29-Jan-2016 14-May-2017 PHINDIRITBL  Revenue mobilization action plans developed and its implementation monitored (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Interim monitoring Interim monitoring reports have been reports have been developed. These developed. These Revenue mobilization Interim provide detailed provide detailed strategy developed and monitoring Value information on information on (2013-2018) being reports achievements and achievements and finalized developed challenges against challenges against RMS RMS indicators. indicators. Date 31-Dec-2012 13-Oct-2016 13-Oct-2016 12-May-2017 3/30/2017 Page 6 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Cambodia PFM Modernization Project (P143774) Overall Comments Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P143774 TF-15434 Effective USD 18.80 18.80 0.00 17.45 1.35 93% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P143774 TF-15434 Effective 07-Nov-2013 07-Nov-2013 07-Nov-2013 14-May-2016 14-May-2017 Cumulative Disbursements Restructuring History 3/30/2017 Page 7 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Cambodia PFM Modernization Project (P143774) Level 2 Approved on 04-May-2016 Related Project(s) P151984-Cambodia PFMMP-Additional Financing P151984 3/30/2017 Page 8 of 8 Public Disclosure Copy