Document of The World Bank FOR OFFICIAL USE ONLY Report No: 67387-IN PROJECT APPRAISAL DOCUMENT ON A PROPOSED CREDIT IN THE AMOUNT OF SDR 168.40 MILLION (US$255 MILLION EQUIVALENT) TO THE REPUBLIC OF INDIA FOR A NATIONAL AIDS CONTROL SUPPORT PROJECT March 28, 2013 Human Development Department South Asia Region This document is being made publicly available prior to Board consideration. This does not imply a presumed outcome. This document may be updated following Board consideration and the updated document will be made publicly available in accordance with the Bank's policy on Access to Information. CURRENCY EQUIVALENTS (Exchange Rate Effective March 21, 2013) Currency Unit = Rupee 54.28 = US$1 US$1 = SDR 0.66 FISCAL YEAR April 1 - March 31 ABBREVIATIONS AND ACRONYMS AAP Annual Action Plan MARP Most At Risk Population AIDS Acquired Immuno-Deficiency Syndrome MDG Millennium Development Goals AWP Annual work programs MMR Matemal Mortality Ratio BCC Behavior Change Communication MoHFW Ministry of Health and Family Welfare BSS Behavioral Surveillance Survey MSM* Men who have sex with men C&AG Comptroller and Auditor General MTR Mid-term Implementation Review CAS Country Assistance strategy NACB National AIDS Control Board CBO Community Based Organization NACO National AIDS Control Organization CDC Center for Disease control NACP National AIDS Control Programme CPFMS Computerized Project Financial Management System NACSP National AIDS Control Support Project CMIS Computerized Management Information System NCA National Council of AIDS CST Care Support and Treatment NCB National Competitive Bidding DAC Department of AIDS Control NGO Non-Governmental Organization DAPCU District AIDS Prevention and Control Unit NNCC NACP-NRHM Coordination Committee DC Direct contracting NRHM National Rural Health Mission DEA Department of Economic Affairs ORAF Operational Risk Assessment Framework DLN District Level Network OST Opioid Substitution Therapy FM Financial Management PLHIV People Living with HIV/AIDS FSW Female Sex Worker PPP Public Private Partnership GIPA Greater Involvement of People Living with AIDS Project World Bank funded project GOI Govemment of India QBS Quality-Based Selection HIV Human Immunodeficiency Virus QCBS Quality- and Cost-Based Selection HIV/TB Human Immunodeficiency Virus/Tuberculosis RCH Reproductive Child Health HRG High Risk Group RNTCP Revised National Tuberculosis Control Program HSS HIV Sentinel Surveillance RTI Reproductive Tract Infection IBBS Integrated Bio Behavioral Surveillance study SACS State AIDS Control Society IBRD Intemational Bank for Reconstruction and SIMS Strategic Information Management System Development ICB International Competitive Bidding SSS Single Source Selection ICTC Integrated Counseling and Testing Centre STI Sexually Transmitted Infections ICWMP Infection Control and Waste Management Plan STRC State Training and Resource Centre IDA Intemational Development Association TG Transgender IDU Injecting Drug User TI Targeted Intervention IEC Information Education Communications ToR Terms of Reference IMR Infant Mortality Rate TSU Technical Support Unit LIB Limited Intemational Bidding *MSM Definition ofDAC/NACO is High Risk MSM Regional Vice President: Isabel M. Guerrero Country Director: Onno Ruhl Sector Director: Jesko S Hentschel Sector Manager: Julie McLaughlin Task Team Leader: Sameh El-Saharty INDIA National AIDS Control Support Project TABLE OF CONTENTS Page I. STRATEGIC CONTEXT .................................................................................................1 A. Country Context ......................................................... 1 B. Sectoral and Institutional Context. ....................................... 1 C. Higher Level Objectives to which the Project Contributes ................... 3 II. PROJECT DEVELOPMENT OBJECTIVES ...........................................................3 A. PDO........................................................ 3 B. Project Beneficiaries ..................................... ........ 3 C. PDO Level Results Indicators......................4.... ............4 III. PROJECT DESCRIPTION ......................................................................................... 4 A. Project Components ..................................... ........ 4 B. Project Financing .......................................... ..... 7 IV. IM PLEM ENTATION .................................................................................................. 9 A. Institutional and Implementation Arrangements ..................... ..... 9 C. Results Monitoring and Evaluation ................................... 10 D. Sustainability ................................................. 11 V. KEY RISKS AND MITIGATION MEASURES......................................................11 A. Risk Ratings Summary Table ...................................... 11 B. Overall Risk Rating Explanation .............................. ...... 12 VI. APPRAISAL SUMMARY .........................................................................................13 A. Economic and Financial Analysis. ......................... .......... 13 B. Technical .................................................... 14 C. Financial Management...................... ................. 15 D. Procurement ......................................... ......... 16 E. Social (including Safeguards) ...................................... 17 F. Environment (including Safeguards) ................................. 18 Annex 1: Results Framework and Monitoring ....................................................................19 Annex 2: Detailed Project Description .................................................................................. 27 Annex 3: Implementation Arrangements............................................................................. 32 Annex 4: Operational Risk Assessment Framework (ORAF).............................................52 Annex 5: Implementation Support Plan ................................................................................ 55 Annex 6: Definitions of Targeted Interventions and Methods for validation of size estimates of High Risk Groups and Contracting of NGOs to deliver TIs...........................................57 Annex 7: Detailed Project Activities and Costs.....................................................................60 Annex 8: Governance and Accountability Plan (GAAP).................................................... 66 Annex 9: Innovations and Good Practices in NACP III ......................................................69 Annex 10: Economic and Financial Analysis ........................................................................71 PAD DATA SHEET India National AIDS Control Support Project (P130299) PROJECT APPRAISAL DOCUMENT SOUTH ASIA SASHN Report No.67387-IN Basic Information Project ID Lending Instrument EA Category Team Leader P130299 Specific Investment B - Partial Assessment Sameh El-Saharty Loan Project Implementation Start Date Project Implementation End Date 1-June-2013 31-December -2017 Expected Effectiveness Date Expected Closing Date 1-June-2013 31-December-2017 Joint IFC: No Sector Manager Sector Director Country Director Regional Vice President Julie McLaughlin Jesko S. Hentschel Onno Ruhl Isabel M. Guerrero Borrower: INDIA, through its Department of Economic Affairs (DEA) Responsible Agency: National AIDS Control Organisation, Department of AIDS Control Contact: Mr. Lov Verma/Ms. Aradhana Title: Secretary / Additional Secretary Johri Telephone No.: 91-11-23351700 Email: nacoasdg@gmail.com / aradhana.johri(gnic.in Project Financing Data(US$M) [ ] Loan [ ] Grant [ ] Other [X] Credit [ ] Guarantee For Loans/Credits/Others Total Project Cost (US$M): 510.00 Total Bank Financing 255.00 (US$M): Financing Source Amount(US$M) BORROWER/RECIPIENT 255.00 International Development Association (IDA) 255.00 FOREIGN SOURCES (UNIDENTIFIED) 0.00 Total 510.00 Expected Disbursements (in USD Million) Fiscal Year 2013 2014 2015 2016 2017 Annual 44.00 49.00 53.00 55.00 54.00 Cumulative 44.00 93.00 146.00 201.00 255.00 Project Development Objective(s) The Project Development Objective (PDO) is to increase safe behaviors among high risk groups in order to contribute to the national goal of reversal of the HIV epidemic by 2017. Components Component Name Cost (USD Millions) Scaling up targeted prevention interventions 220.00 Behavior change communications 20.00 Institutional strengthening 15.00 Compliance Policy Does the project depart from the CAS in content or in other significant respects? Yes [ ] No [X] Does the project require any waivers of Bank policies? Yes [ ] No [X] Have these been approved by Bank management? Yes[ ] No [ ] Is approval for any policy waiver sought from the Board? Yes [ ] No [X] Does the project meet the Regional criteria for readiness for implementation? Yes [X] No Safeguard Policies Triggered by the Project Yes No Environmental Assessment OP/BP 4.01 X Natural Habitats OP/BP 4.04 X Forests OP/BP 4.36 X Pest Management OP 4.09 X Physical Cultural Resources OP/BP 4.11 X Indigenous Peoples OP/BP 4.10 X Involuntary Resettlement OP/BP 4.12 X Safety of Dams OP/BP 4.37 X Projects on International Waterways OP/BP 7.50 X Projects in Disputed Areas OP/BP 7.60 X Legal Covenants Name Recurrent Due Date Frequency Project Monitoring and Reporting Semi-annual Description of Covenant The Recipient, through Department of AIDS Control/National AIDS Control Organization (DAC/NACO), shall prepare Project Reports to cover the period of six months of Project implementation, and shall furnish to the Association not later than sixty days after the end of the period covered by such report. Name Recurrent Due Date Frequency Safeguards X Description of Covenant The Recipient, through DAC/NACO shall, or shall cause each State AIDS Control Society (SACS) and each Beneficiary to carry out the Project in accordance with the Gender Equity and Social Inclusion Strategy (GESI) and the Infection Control and Waste Management Plan (ICWMP) in a manner satisfactory to the Association and to submit to the Association semi-annual progress reports, as part of the Project Reports, on compliance with social and environmental safeguard measures under the Project. Conditions Name Type Description of Condition Team Composition Bank Staff Name Title Specialization Unit David Wilson Program Director Program Director HDNVP Mariam Claeson Regional Coordinator Team Lead SASH4N Sameh E1-Saharty Senior Health Specialist Team Lead SASH4N Juan Carlos Alvarez Senior Counsel Legal LEGES Manvinder Mamak Sr Financial Sr Financial SARFM Management Specialist Management Specialist Maria E. Gracheva Senior Operations Senior Operations SASH4N Officer Officer Ruma Tavorath Senior Environmental Senior Environmental SASDI Specialist Specialist Shanker Lal Senior Procurement Senior Procurement SARPS Specialist Specialist Onika Vig Mahajan Program Assistant Program Assistant SASHD Rajeev Ahuja Economist (Health) Economist (Health) SASH4N Satya N. Mishra Social Development Social Development SASDS Specialist Specialist Supriti Dua Financial Management Financial Management SARFM Analyst Analyst Bathula Amith Nagaraj Operations Officer Operations Officer SASHN Non Bank Staff Name Title Office Phone City Locations Country First Location Planned Actual Comments Administrative Division Institutional Data Sector Board Health, Nutrition and Population Sectors / Climate Change Sector (Maximum 5 and total % must equal 100) Major Sector Sector % Adaptation Mitigation Co-benefits % Co-benefits % Health and other social services Health 100 Total 100 I certify that there is no Adaptation and Mitigation Climate Change Co-benefits information applicable to this project. Themes Theme (Maximum 5 and total % must equal 100) Major theme Theme % Human development HIV/AIDS 90 Human development Health system performance 10 Total 100 I. STRATEGIC CONTEXT A. Country Context 1. India, with a population of 1.21 billion, is going through rapid demographic and epidemiological transitions, facing the unfinished agenda of maternal mortality, childhood illnesses, malnutrition and communicable diseases on one hand, and the emerging burden of non- communicable diseases, as a result of increased life expectancy and life style changes, on the other hand. In 2006-2007, 19 percent of India's population was living under the poverty line and 21 percent of the poor resided in rural areas. Malnutrition rates remain very high, and although infant mortality rate (IMR) has declined slightly from 58 (2005) to 53 deaths in 2008, it is well behind the Millennium Development Goal (MDG) target of 28 deaths per 1,000 live births. The Maternal Mortality Ratio (MMR) remains high with 212 women aged 15-49 years dying due to maternal causes per 100,000 live births in 2007-2009 and it is unlikely that the MDG of 100 deaths per 100,000 live births will be reached by 2012. 2. India is on track to meet the MDG for HIV and AIDS, which is to halt and reverse the epidemic. However, with 2.4 million people living with HIV and AIDS, the national burden of HIV and AIDS in India ranks third globally after South Africa and Nigeria. The Indian HIV epidemic scenario is characterized by concentrated epidemics among high risk groups (HRG). It is a highly diverse and heterogeneous epidemic scenario, driven by sex work, unprotected sex among MSM, and IDU. The national HIV prevalence started to level off in the late 1990s - early 2000s, with declines in HIV prevalence in some states and districts and among some high risk groups, and with a more rapid decline during the last decade in districts with high coverage of targeted prevention interventions. There is, therefore, a mixed picture, ranging from some states that face a mature epidemic with HIV prevalence trends leveling off or declining, to some states that still face emerging epidemics among HRG. B. Sectoral and Institutional Context 3. India launched the first National AIDS Control Program (NACP I) in 1992, focusing on blood safety, prevention among high risk groups (HRGs), raising awareness in general population and improving surveillance. In the second phase, (NACP II, 1999-2006), India continued to expand the program at state level, with greater emphasis on targeted interventions (TIs) and involvement of NGOs. In the third phase, (NACP III, 2007-2012), India has scaled up targeted HIV prevention interventions for most at risk population groups and further expanded the surveillance system. 4. The NACP III has made steady progress towards the national goal to halt and reverse the HIV epidemic. The HIV estimates for 2008-09 showed an overall reduction in adult HIV prevalence from 0.39% (2.6 million people living with HIV and AIDS, i.e., PLWHA) in 2004, to 0.31% (2.4 million PLWHA) in 2009. The estimated trend of new infections shows a reduction in HIV incidence of more than 50% over the past decade from about 0.27 million (2000) to 0.12 million (2009). Preliminary data suggest that these rates have further declined (HIV Sentinel Surveillance, unpublished) in 2010-11. As per the reports of the National AIDS Control Organization (NACO), targeted prevention interventions have reached 81% of female sex workers (FSW, 700,000), 66% of men who have sex with men (MSM, 274,000), and 81% of I injecting drug users (IDU, 144,000). Anti-retroviral treatment for adults increased by 30% between 2009-10 and 2010-11, and the estimated annual deaths from HIV have steadily declined from 199,502 (2006) to 172,041 (2009). An impact evaluation conducted in 2011 has shown progress in the decline of HIV among FSWs associated with increase in condom use . A cost effectiveness analysis, also conducted in 2011, estimates that 3 million HIV infections will have been averted under the national program (by 2015) through targeted prevention interventions alone2. 5. Although the overall progress towards reversal of the epidemic has been impressive, progress has been uneven within and between states, and there are districts and vulnerable population groups with varying HIV trends. The population groups most at risk include young sex workers, IDUs and their partners, and MSM, as well as transgender groups. Although India is a low HIV prevalence country, there are three risks to development associated with the current status of HIV and AIDS: (i) the risk of escalation of concentrated epidemics; (ii) the economic welfare costs due to the disproportionate impact on vulnerable population groups and the inability of households to cope with chronic illnesses such as AIDS, and the associated stigma and other structural amplifiers increasing the marginalization of those affected households; and, (iii) the fiscal cost of scaling up treatment. These economic development risks can be effectively addressed by accelerating and institutionalizing the effective prevention focus of the Indian response, contributing to inclusive growth. 6. During NACP III, efforts were made by the Department of AIDS Control (DAC) and the National Rural Health Mission (NRHM) of the Ministry of Health and Family Welfare (MoHFW), to strengthen convergence of essential program components that were common to HIV/AIDS and other diseases, conditions or programs, with the aim to increase both effectiveness and efficiency in service delivery. For example, joint implementation plans and division of responsibilities and budgets were agreed on for the scaling up of the management of sexual transmitted infections, provision of safe blood, reproductive health services and testing and counseling facilities. To increase the effectiveness of TIs to most at risk population groups, non-government organizations (NGOs) and community based organizations (CBOs) were contracted to deliver the services, and technical support units under the umbrella of State AIDS Control Societies (SACS) helped to support and monitor the quality of the TIs. The NACP III was well resourced through the contributions of a wide consortium of development partners providing both technical and financial support to all aspects of the national program. 7. In the fourth phase of the National AIDS Control Program, India aims to accelerate the reversal of the epidemic and to further integrate the response by: reaching out to the hard-to- reach population groups at high risk with targeted prevention interventions through innovative approaches; increasing access to comprehensive care, support and treatment; expanding information, education and communication with a focus on behavior change, demand generation and stigma reduction; further strengthening the institutional capacity and process of integration; 1 Kumar et al Impact of targeted interventions on heterosexual transmission of HIV in India, BMC Public Health 2011, 11:549 2Prinja et al, Cost effectiveness of targeted HIV prevention interventions for female sex workers in India, Sex Transm Infect 2011: 87:354-361 2 and, continuing to innovate across program components - generating knowledge and lessons learned for India and beyond. The national program has five major strategies: (i) prevention; (ii) care, support and treatment; (iii) IEC including behavior change and demand generation; (iv) institutional strengthening of program management; and (v) strategic information systems. This will be a transformational phase of the national response, ensuring that the national program remains effective and sustained, while integrating selected program elements, i.e., shifting more of the responsibilities for the financing, management and implementation of critical components and activities (such as facility based testing and treatment and blood safety and other health services), from the DAC/NACO and State AIDS Control Society (SACS) to the National Rural Health Mission (NRHM) and government health services. The HIV prevention program that relies on effectively reaching HRG and vulnerable populations through peer outreach will continue to be separately managed through the contracting of NGOs and CBOs under DAC/NACO. C. Higher Level Objectives to which the Project Contributes 8. The goals of the fourth phase of the NACP are aligned with the Government's Twelfth Five Year Plan (2012-2017) goals of inclusive growth and development for long term sustainability. The national program goals are to accelerate reversal of the HIV epidemic and integrate the response over the next five-year phase. The National AIDS Control support Project (NACSP) will support the Strategic Plan of the fourth phase of NACP 2012 - 2017, with a focus on outcomes (the prevention of HIV) and selectivity (targeted interventions). In accordance with the Bank's Country Assistance Strategy (CAS), the Project will improve the delivery of public services and contribute to inclusive growth by reaching out to the most vulnerable and marginalized population groups, increasing their access to, and utilization of services, and reducing their stigma and discrimination through the TIs and behavior change communications. 9. The Project meets the "Finance Plus" criteria that the Department of Economics Affairs (2011) has defined to govern the selection of projects for external financing: (i) systemic or transformational impact, by striving for greater convergence and integration with other government health services and programs and mainstreaming across key sectors; (ii) innovations and piloting of new approaches, including innovations in financial management and outreach services; and, (iii) leveraging of resources, notably significant domestic resources. II. PROJECT DEVELOPMENT OBJECTIVES A. PDO 10. The Project Development Objective (PDO) is to increase safe behaviors among high risk groups in order to contribute to the national goal of reversal of the HIV epidemic by 2017. B. Project Beneficiaries 11. The primary beneficiaries for the TIs and related behavior change communications under the Project are HRGs, i.e., FSWs, MSM, Transgender (TG)/Hijra population and IDUs. (By the end of 2017, it is estimated that 90% of the estimated HRGs would be covered i.e. 810,000 FSWs, 306,000 MSM (including TG/Hijra) and 162,000 IDUs will have been reached by 3 targeted prevention interventions. Other vulnerable groups at high risk, such as partners of IDUs and bridge populations, which include migrants and truckers, will also be reached with tailored interventions. The behavior change communications will support demand generation for prevention and treatment services, primarily among HRG and other vulnerable populations groups at risk including youth. Stigma reduction will also address the attitudes and perceptions of general population, including health professionals who provide services for HRG. C. PDO Level Results Indicators 12. The Project Key Results Indicators and Targets3 that will be used to track progress on the Project Development Objective are: A The percentage of female sex workers who report using a condom with their last client will increase from about 80% to 85%, by 2017. & The percentage of men who have sex with men who report using a condom during sex with their last male partner will increase from about 45% to 65%, by 2017. & Percentage of injecting drug users who do not share injecting equipment during the last injecting act will increase from about 45% to 65%, by 2017. 13. These key results to achieve and maintain 75 - 85% safe behaviors- condom use and safe injection practices -- among high risk population groups, by 2017, are based on triangulation of data from current estimates of coverage of safe practices under NACP III (Behavioral Sentinel Surveillance, 2009 and Integrated Bio Behavioral Assessment, in six high prevalence states 2009). The baseline data are taken from the lower range of the estimates of the Behavioral Surveillance study 2009, and might need to be adjusted based on data from forthcoming Integrated Bio Behavioral Surveillance, to be rolled out in late 2013. See Annex I for Results Framework. The ability of DAC/NACO to tailor the response and track: (i) TIs and other activities (project inputs); (ii) access and use of services (outputs); (iii) the effect on behavior change (outcomes); and (iv) HIV prevalence and estimated incidence (program impact), is based on a very well developed nationwide strategic information management system, including HIV sentinel surveillance, the mapping and size estimation of HRG (knowing the denominator), and a 4 dashboard to monitor program management performance. III. PROJECT DESCRIPTION A. Project Components 14. The Project5 will contribute to three of the five strategies of the National AIDS control program: (i) the prevention component, (ii) the behavior change component, and (iii) the institutional strengthening component. The two other components, namely, the provision of care, 3 Targets may be revised upward or downward based on the results of the IBBS 2012-13, which may establish new baseline data. Percentage of increase is already fixed, only baseline will change based on IBBS result. 4 Knowing your HIV/AIDS epidemic and tailoring an effective response: how did India do it? S Sgaier SK, Claeson M, Gilks C, et al, Programme Science, Sex Trans. & Infect (2012). 5 The Project refers to the NACSP "project" supported by IDA and the Government; a part of the overall NACP IV five year "program" 4 treatment and support to people living with HIV and AIDS (PLWHA) and strategic information systems (SIMS), including disease surveillance, will be supported by the national budget, with technical and financial support from other donors. The main support of the Project will go towards the scale up of HIV prevention interventions, with a focus on the high impact and cost- effective targeted prevention interventions for population groups at high risk, and IEC including behavior change and demand generation. The Project will also support DAC/NACO to further strengthening its project management including human resource support and technical support for TIs. The program management functions that are beyond the scope of targeted prevention interventions, such as the integration and convergence of selected program elements including treatment of sexually transmitted infections (STI), blood safety, facility-based integrated counseling and testing, treatment services and prevention of parent to child transmission (PPTCT), are not included in the Project. The Project has the following three components that include implementation at the national, state and district levels: Component 1: Scaling Up Targeted Prevention Interventions (total estimated cost -US$440 million) 15. This component will support the scaling up of TIs with the aim of reaching out to the hard to reach population groups who do not yet access and use the prevention services of the program, and saturate coverage among the HRGs. In addition, this component will support the bridge population, i.e. migrants and truckers. The different types and implementation of TIs are described in Annex 6, including site validation, size estimation and micro planning; NGO/CBO selection and performance evaluation; and, community participation and accountability for monitoring of NGO activities. Component 1 includes the following two subcomponents: 1.1 Scaling up coverage of TIs among HRG (total estimated cost -US$359 million): The project aims to reduce new HIV infections by expanding reach and coverage of quality targeted prevention interventions among HRGs over the next five years. This will be implemented through a large number of successfully proven TIs with a focus on FSWs, MSM6 including TG/Hijra population, and IDUs, through the contracting of NGOs and CBOs. This sub-component will support the continuation of ongoing TIs as well as launching additional new TIs. The interventions under this sub-component will include: (i) the provision of behavior change interventions to increase safe practices, testing and counseling, and adherence to treatment, and demand for other services; (ii) the promotion and provision of condoms to HRG to promote their use in every sexual encounter; (iii) provision or referral for STI services including counseling at service provision centers to increase compliance of patients with treatment, risk reduction counseling with focus on partner referral and management; (iv) needle and syringe exchange for IDUs as well as scaling up of Opioid Substitution Therapy (OST) provision from 79 existing centers to 350 across the country and increasing the number of patients on OST from about 5000 to 36,000 over 5 years. This sub-component also includes the financing of operating costs for about 25 State Training Resource Centers as well as participant training costs over a period of 5 years. 6 The definition used by NACO for MSM is high-risk MSM. 5 1.2 Scaling up of interventions among other vulnerable populations(total estimated cost US$81 million): Vulnerable population groups include partners of sex workers, partners of IDUs, bridge populations which include migrants and long distance truckers moving between high and low prevalence areas and engaging in unsafe practices. The activities under this subcomponent will be guided by the information from the mapping of peer networks in order improve their access to prevention services, and will include: (i) risk assessment and size estimation of migrant population groups and truckers at transit points and at workplaces. For migrants, an assessment of interventions at source, transit and destination points would also be carried out to tailor TIs; (ii) behavior change communications (BCC) for creating awareness about risk and vulnerability, prevention methods, availability and location of services, increase safe behavior and demand for services as well as reduce stigma; (iii) promotion and provisioning of condoms through different channels including social marketing; (iv) development of linkages with local institutions, both public and NGO owned, for testing, counseling and STI treatment services, which will be an important area of public-private partnerships; (v) creation of "peer support groups" and "safe spaces" for migrants at destination; (vi) establishment of need-based and gender-sensitive services for partners of IDUs; and (vii) strengthening networks of vulnerable populations with enhanced linkages to service centers and risk reduction interventions, specifically condom use. Component 2: Behavior Change Communications (total estimated cost US$40 million) 16. The coordination and implementation of behavior change communications (BCC) activities will be financed under this component. This component will include: (i) communication programs (media campaigns, creative development campaigns and short films) for risk reduction and safe behavior including advocacy, social mobilization and BCC to integrate PLWHA and HRG into society and to encourage normative changes aimed at reducing stigma and discrimination in society at large, and in health facilities specifically, as well as to increase demand and effective utilization of testing and counseling services; (ii) financing of a research and evaluation agency to assess the cost-effectiveness and program impact of behavior change communications activities; and (iii) establish and evaluate a helpline at the national and state level to further increase access to information and services. Component 3: Institutional Strengthening (total estimated cost US$30 million) 17. This component will support DAC/NACO's steering, coordination and managerial roles in managing the prevention component of the program, during the transformational phase of NACP IV. This component will support innovations to enhance performance management including fiduciary management, such as the use of the computerized financial management system, at national and state levels. The support for institutional capacity will also help strengthen procurement and supply chain management, including training on supply chain management. This component will also finance the staff and operating costs of Technical Support Units (TSU) over a period of 3-4 years to ensure the oversight of the quality of TIs through monitoring and supportive supervision, build capacity of States and assist them in effective use of available information in support of evidence-based planning, program roll out and performance monitoring. This sub-component will also support the services of a 6 procurement agent for the purposes of procuring OST during project implementation. The dissemination of best practices and innovations from the project at the national and state levels through annual knowledge dissemination forum will also be financed by this sub-component. This component will also finance the necessary project audits (external, internal and the audits of NGOs). These audits established under NACP III will continue under NACSP to ensure effective compliance with all fiduciary requirements, as part of DAC/NACO's core fiduciary and managerial functions. See Annex 2 for more details. B. Project Financing Lending Instrument 18. The Lending Instrument for the proposed National AIDS Control Support Project (NACSP) is a Specific Investment Loan (SIL), with a total amount of US$255 million to be financed by an IDA Credit. The Project will be implemented over a period of 5 years with the Closing Date on December 31, 2017. Other results based instruments such as Program for Results were considered and discussed with the Government of India but the Government opted for a SIL to benefit from the Bank's fiduciary oversight and contribution to capacity building. Efforts will be made to ensure the sustainability of the targeted prevention interventions through a needs-based approach beyond the duration of the project, and a stocktaking exercise will be done at mid-term to this effect. Other components of the national program such as treatment and other basic services -- not part of this project -- will be sustained through institutionalization, integration and mainstreaming of program activities. Project Cost and Financing 19. The total cost of the National AIDS Control Program, which is presented in the five-year National AIDS Strategic Action Plan, was approved by the Planning Commission in the total cost of US$2,267 million for five years. According to DAC/NACO, the five-year allocation for each program component was not yet finalized. The total cost of the proposed Project is US$510 million of which the Bank and Government will finance the equal proportion i.e. the Bank and government will finance US$255 million each. The total project cost, US$510 million comprises a pool of Bank (US$255 million) and Government (US$255 million) funds to support the project. Table 1 below provides detailed project costs. Financing for the program is also sought from other donors, with the current estimated contribution from the Global Fund for AIDS, TB and Malaria for 2012-13 at US$79million. Annex 7 provides detailed project activities and costs. 7 Table 1: Estimated Total NACP I Program Costs (U$ million) Program National GOI Other Project Component Plan* Non donor Pool funds** pool s IDA GOI Targeted prevention 27 220 220 interventions Care, support & 52 0 0 treatment Behavior change 20 20 communications Institutional and 15 15 capacity strengthening Strategic information management system 0 0 (SIMS) Grand Total 2,267 2,012 79 255 255 * The five-year allocation for each program component was not yet finalized. **Project "pooling" of funds will be done through pooled financing by IDA and Government C. Lessons Learned and Reflected in the Project Design 20. Several lessons from the implementation of previous NACPs and international experience were incorporated in the design of NACSP and include the following: & Project interventions will likely have the greatest impact if they are based on evidence, including cost effectiveness, and scale up best practice. Considering that more than 99 percent of the population is not HIV infected and that the epidemic is concentrated, the project will place the highest priority on targeted prevention interventions, which are the most effective ways to reduce transmission of HIV. In addition, successful planning of TIs will include micro-site mapping (explained in Annex 6) that is repeated periodically, to help identify coverage gaps and reach the hard to reach population groups at highest risk, often mobile population groups. & Allocation of resources to project interventions should be commensurate with their priority. A focus on the drivers of the epidemics, buying and selling sex, unprotected sex among MSM and IDU, and working with the populations that have the highest risk of exposure to HIV will receive the highest priority in TIs. Also, bridge populations that are carrying infections to general population will be effectively addressed. & Structural amplifiers, such as stigma and discrimination that increase vulnerability and risk will be tackled through behavior change communications. The Project will collaborate with communities at risk and other partners to further reducing stigma. This will also include communications interventions to change the attitudes, perceptions and practices of service providers towards PLWHA and HRG, to reduce stigma encountered in the health care settings. 8 & Functioning technical support to SACS/NACO can be an effective tool in ensuring quality of TIs. The Technical support through TSUs/NTSUs is need-based and aimed at creating capacity at SACS level to ensure monitoring of TIs. A Developing a platform for generation and dissemination of innovations and good practices is an important role the national program, to inform priorities and policy of the national AIDS response, as well as other public health programs within and beyond borders. This knowledge and innovation role will be further strengthened and institutionalized under NACP IV. Details of program good practices, innovations and impact, from the NACP III Dissemination Summit 2012 are summarized in Annex 9. IV. IMPLEMENTATION A. Institutional and Implementation Arrangements 21. The implementation structures and institutional arrangements of NACP III will remain the same as under NACSP, with the project being managed by DAC/NACO at the central level and the State AIDS Control Societies (SACS) at state level. A part of the National AIDS Control Program-IV would be assisted through this Credit. 22. The National AIDS Control Organization (NACO) provides the leadership of the National AIDS Control Program in India, headed by the Secretary and Director General, NACO, DAC, MoHFW. NACO is responsible for the preparation, implementation and monitoring of the National Strategic Plan for HIV/AIDS and is accountable to the National Council of AIDS (NCA) chaired by the Prime Minister of India and the National AIDS Control Board (NACB). To ensure effective coordination and integration with the National Rural Health Mission (NRHM), a NACP-NRHM Coordination Committee (NNCC) has been established to provide policy direction and functional and structural integration of several NACP IV program elements under NRHM. 23. The Technical Support Units (TSUs) that were established during NACP III to oversee the quality, mentoring, handholding and supporting the TIs in the states along with SACS will continue to play a key technical role to ensure the quality of TIs. The financing and management of some TSUs have already been transferred from development partners to DAC/NACO, while some continue to be supported by partners before being phased out under NACP IV. The Project will finance the operating costs of 11 TSUs for the duration of 3-4 years, as described above under Component 3. Along with technical support to TIs, TSUs will strengthen the capacity of respective SACS to ensure the sustainability of the program so as these functions are well incorporated in the SACS. 24. States AIDS Control Societies (SACS): During the NACP II, the national program implementation was decentralized to the SACS, which are semi-autonomous societies implementing the state level annual action plans that are guided and financed by DAC/NACO. SACS are governed by (a) the SACS Governing Body represented by key government departments, members of the civil society, representatives of trade and industry, private health sector and representatives from the community networks; and (b) the Executive Committee, 9 which exercises powers as delegated to it by the Governing Body. The Executive Committee provides oversight to the program at state level and approves the expenditure of SACS. The deliverables, administrative control and financial agreement between the SACS and the NGOs/CBOs are governed by contractual arrangements. District AIDS Prevention Control Units (DAPCU) are the district level administrative structures under SACS, established in high burden districts in India with the objective of coordinating NACP activities at district level and facilitating multi sector mainstreaming with other departments in the district. B. Sub-Projects 25. DAC/NACO, through the SACS, shall make available grants from the credit on a non- reimbursable basis to NGOs and/or CBOs for the carrying out of TI activities under Component 1 of the Project (Sub-project). These NGOs/CBOs will be identified and selected in accordance with the criteria set forth in the NGO/CBO Guidelines approved by the Bank. DAC/NACO, through the SACS, will enter into these grant agreements with the selected NGOs/CBOs as detailed in Annex 3. C. Results Monitoring and Evaluation 26. DAC/NACO has developed a very strong and robust monitoring and evaluation system, including a computerized management information system (CMIS) which has been incorporated into a web-based Strategic Information Management System (SIMS) that is being rolled out across the country. These systems generate information from the SACS on key performance indicators that help DAC/NACO to track program performance. The core performance management data are included in a national "dash board", to be updated for NACSP and continue to serve as a management tool for SACS, DAC/NACO and its development partners. The SIMS will enable individual level data collection for key program areas and has built-in real-time analytical, triangulation and data validation capabilities, to be fully optimized during NACSP. 27. DAC/NACO has prepared a NACP IV results framework, establishing program objectives, and activities to support those objectives, with performance indicators and targets. The Project Results Framework is aligned with the DAC/NACO broader framework for 2012- 2017, and includes a subset of those targets and indicators. For the evaluation of the key behavior indicators, DAC/NACO will roll out a second generation surveillance system, and conduct the first round of national integrated bio-behavioral surveillance (IBBS) in 2012-13, building on the experience of Integrated Bio Behavioral Assessment carried out in selected high prevalence southern states in 2006 and 2009 and on the lessons learned from several rounds of national HIV sentinel site surveillance and the 2009 behavioral surveillance surveys in selected states. This will provide the Project baseline data and might result in the fine-tuning of some of the Project's targets by the end of the first year of implementation. The IBBS will complement the current annual HIV sentinel surveillance system that generates data on HIV prevalence among HRG and general population. The IBBS and HSS would generate data for estimation of HIV incidence among HRG and general population. 10 D. Sustainability 28. Sustainability of the national program will be addressed through institutionalization of the response, including integration and mainstreaming, financing and civil society involvement: A First, institutional integration will take place under NACP IV through the NACP- NRHM Coordinating Committee and other government mechanisms that will facilitate the gradual functional and structural integration of several NACP IV program elements -- beyond the scope of the Project -- such as safe blood, management of STIs, and provision of anti-retroviral therapy. However, prevention interventions financed by the Project are not likely to be integrated within the regular government health services during the fourth phase of the program, due to (i) the need to effectively reach out to most at risk population groups though peer led outreach activities and (ii) because of the barriers to access and use of services facing stigmatized and marginalized population groups. It will therefore be important to assess the strategies and the plans for how to sustain those targeted prevention interventions beyond the next five years, assessing progress to tackle barriers to access and use of services and the creation of a more enabling environment though the behavior change communications component of the Project. K Second, financial sustainability of the national program, including the project supported components, is assured by domestic funding. The government share of the total NACP financing has been steadily increasing. The financial sustainability is described in more detail in the economic and financial analysis in Section VI. A. A Third, the central role that civil society and communities at risk play in the implementation of the program contributes to their ownership of TI, the accountability of services and the sustainability of project outcomes - i.e. sustained behavior change among communities at risk. V. KEY RISKS AND MITIGATION MEASURES A. Risk Ratings Summary Table Risk Rating Stakeholder Risk Low Implementing Agency Risk - Capacity Moderate - Governance Substantial Project Risk - Design Low - Social and Environmental Low 11 - Program and Donor Low - Delivery Monitoring and Sustainability Low Overall Implementation Risk Moderate B. Overall Risk Rating Explanation 29. The overall implementation risk is Moderate. The project is well aligned with the national strategic plan, and DAC/NACO has managed the national program well during the three phases, NACP I - III. The NACSP structure is well established at the national, state and district levels. Going forward, the performance of the prevention component will continue to depend on the SACS, Technical Support Units (TSUs) and the peer led outreach of services, contracted by NGOs and CBOs. The TSUs will contribute to the overall effectiveness of SACS to manage and oversee prevention activities. The financial and procurement management systems at DAC/NACO level have been strengthened during the three phases of the program, therefore the internal Governance risks are moderate while the external and State-level Governance risks are estimated as Substantial. DAC/NACO's financial performance monitoring system has been recognized as a best practice; however, significant opportunities remain to further strengthening the overall control framework for financial management, also discussed in Annex 3 (financial management) and in the ORAF. To ensure that the contracting of NGOs and CBOs is effective, several mitigation measures are put in place under the Project, including institutional capacity building, strengthening of the fiduciary arrangements, such as improving the use of the computerized financial management system for managerial decision making, strengthening the performance based management of NGO contracts, improved controls for cash advances at State AIDS Control Societies (SACS), improved internal control environment, and enhanced monitoring control observed by DAC/NACO over SACS. 30. The environmental and social safeguard risks are low in view of the limited scope of the Project, financing prevention and not the treatment and basic services components of the program, such as blood banks and antiretroviral treatment and other referral services. The safeguards approach adopted for this project remains consistent with the NACP III, which is rated satisfactory for safeguards performance. A well-functioning infection control and waste management system has been institutionalized at national and state levels. DAC/NACO and SACS have strengthened the focus on gender, social inclusion, greater involvement of people living with AIDS (GIPA) and reaching out to vulnerable populations, including for tribal populations, where need is demonstrated. The NACSP builds on an active civil society platform and foundation as it aims to reach the hard to reach vulnerable population groups over the next five year phase through continued engagement of communities at risk. NACSP aims to focus specifically on the marginalized and hard-to-reach population groups not yet accessing HIV prevention, testing and treatment services. No physical structures or facilities are planned to be undertaken in NACSP and therefore, the project will not generate any involuntary resettlement risks. DAC/NACO will prepare a Gender Equity and Social Inclusion Strategy based on the "4social assessment" carried out which would guide the implementation of the prevention interventions under NACSP, including for the tribal populations, where need is demonstrated. 12 VI. APPRAISAL SUMMARY A. Economic and Financial Analysis 31. Prevention has been the mainstay of India's HIV program which seeks to prevent new infections through saturation coverage (>80%) of HRGs with TIs. Scaling up of prevention services has been shown in several studies to have played an important role in the overall reduction in adult prevalence from 0.39% in 2004 to 0.31% in 2009 and the decline in its incidence by more than 50% observed over the past decade. A number of studies in India have shown the effectiveness of TIs for FSWs in reducing risky sexual behavior.7 Other studies have used mathematical modeling to relate improvements in behavior, with a declining trend in HIV incidence and prevalence in India8.Studies conducted in other developing and developed countries context have also shown that preventive strategies promote safer sexual behavior and are also cost effective.9 32. Two recent studies, an independent impact evaluation 10 and a cost-effectiveness analysis" of India's response to HIV, have found the TIs for FSWs to be associated with the national decline in HIV prevalence, averting an estimated three million new infections. The cost- effectiveness analysis estimate that the Government and development partners spend on average US$104 (INR4680) per HIV infection averted, and US$10.7 per disability-adjusted life-year (DALYs) averted. Discounting at 3%, in India TIs for FSWs cost US$105.5 (INR4,748) and US$10.9 per HIV case averted and DALY averted, respectively. Given its GDP per capita, TIs are a cost-effective strategy for HIV prevention in India. The impact evaluation, using a quasi- experimental approach to retrospectively compare changes in HIV prevalence according to the intensity of TIs, found a significant decline in the prevalence among FSWs and young women (15 - 24 years) attending antenatal care in four high HIV prevalence southern states (Tamil Nadu, Karnataka, Andhra Pradesh and Maharashtra). Among those antenatal care attendees in high TI intensity districts, HIV prevalence declined by more than 50 percent from 1.9 percent in 2001 to 0.8 percent in 2008, whereas in low TI intensity districts, the rate remained constant at 0.9 percent in both 2001 and 2008. 33. The economic welfare costs of HIV and AIDS in India are significant 12 although the impact on economic growth is small. The HIV epidemic has a disproportionate impact on key population groups, and frequently results in and exacerbates poverty as shown by estimates of economic impact on households and the ability to cope with stigma and other structural amplifiers. Indicators of access to prevention and treatment are correlated with socioeconomic parameters such as gender, educational attainment and wealth. The ability to cope with 7Reza-Paul et al 2008, Basu et al. 2004; Fung et al. 2007. 8Boily et al. 2008. 9 Walker 2003, Hogan et al. 2005 10 R. Kumar, S. Mehendale, S. Panda, et al. "Impact of Targeted Interventions on Heterosexual Transmission of HIV in India." BMC Public Health 2011, 11:549. " S. Prinja, P. Bahuguna, S. Rudra, et al. "Cost Effectiveness of Targeted HIV-Prevention Interventions for Female Sex Workers in India." STI2011, 87:354-61. 12 HIV and AIDS in South Asia, An Economic Development risk. Hacker M and Claeson M et al. Directions in Development, Human Development, The World Bank, 2009. 13 catastrophic illnesses such as AIDS at the household level is limited for those below or on the margin of poverty thresholds. Reflecting both infection patterns and the low socioeconomic status of widows, women are particularly vulnerable to the social and economic consequences of HIV and AIDS in India, as is highlighted by the above referenced economic benefit analysis and also by the lessons learned from NACP I-III. Investing in prevention efforts, therefore, contributes to contain poverty, has benefits beyond the epidemiological benefits, and keeps down the fiscal costs associated with scaling up treatment. 34. An analysis of budget allocations made in successive phases of the NACP program shows a dramatic increase in those allocations in absolute terms and in the share of government financing in those allocations thus reflecting the country's strong commitment and ability to financially sustain the program activities beyond the life of the project. Since the financing of the fourth phase of NACP will primarily depend on domestic resources, one of the critical challenges facing the program is to continue to invest in cost effective interventions and to move towards efficient approaches through convergence and integration of selected program components with the general health system. The Project interventions are designed keeping this challenge in mind. Even though the IDA credit plays only a minor financial role, the Project is critical for the kind of activities it finances, such as the contracting of NGOs and CBOs to deliver services. The Project will also invest, even if modestly, in further enhancing the Program's capacity to contract NGOs and CBOs for TIs so that such need-based activities could be sustained managerially as well technically beyond the Project life. B. Technical 35. The Project is technically outstanding. It builds on three previous projects over 15 years. Independent published evaluations indicate that the national program is averting about 3 million and that the Us to reduce new HIV infections among FSWs, MSM, IDUs and their sexual partners, are highly cost effective. The HRGs are mobile with newer pockets detected and newer areas brought under intervention and to maintain a high coverage of 80 percent will be a good indicator of program success. The TIs are based on a well validated package of tightly integrated services including peer behavior change communication, condom or clean injecting equipment distribution and referral to sexual health or drug treatment services. 36. To realize its full impact, the project must vigilantly safeguard several critical success factors and ensure the following principles and actions are upheld. The three HRGs - FSWs, MSM and IDUs and their sexual partners - must be prioritized. The feasibility and scalability of migrant source interventions will need to be studied particularly in terms of their strength across migration corridors in contributing linkages with services for returnee migrants and spouses of migrants. The project's central aim is to sustain identified vulnerabilities and increase safe sexual and injecting practices in those high prevalence areas, while identifying new hotspots and ensure that high quality TIs are rapidly implemented in these areas early. The Project must target traditional venues and networks, while also developing, rigorously evaluating, documenting, codifying and promoting effective TIs for sex workers, MSM including transgenders, IDUs and their direct sexual partners as well as bridge populations who meet through non-traditional channels, including mobile phones and internet. The project must continue to focus on sex workers and MSM who have the highest risk of acquiring and transmitting HIV. Among sex workers, these may include new sex workers and brothel-based sex workers with very large 14 numbers of clients. Among MSM, these may include male sex workers and hijras. The emerging epidemics (in low prevalence states) as has been shown in the HSS 2010-11 need to be addressed. In addition, DAC/NACO has designed "Revised HIV Migrant Policy" to focus on the migrants at the destination, transit and source. The Harm Reduction Strategy needs to address changing drug use patterns, especially changes from opioids to other injectable drugs and synthetic amphetamine type substances and refine the program interventions accordingly. 37. The TSUs, overseen by a national technical support unit, will continue to play a vital role in improving and ensuring the quality of TIs. The TSUs operate in coordination with TI Division of DAC/NACO and SACS. Lessons learned from NACP-III show that this synergy has contributed to improving the quality and future capacity building within SACS and DAC/NACO will be enhanced for ensuring sustainability. Effective linkages with TI will help in producing better results. 38. Since the baseline and target setting of the Project is based on triangulation of multiple baseline estimates, it will be important for the Project to focus on the end-point results - maintaining or increasing condom use. Experience shows that as behavioral surveillance quality improves, people report risk behavior more honestly, so reports of risky behavior may actually increase over time, even if the real occurrence of risk behavior declines. The HIV/AIDS epidemic in India remains highly concentrated among HRGs and it is appropriate for the Project to focus on high impact and cost-effective targeted prevention interventions for HRGs that reduce HIV transmission including condom promotion. 39. The support for TIs will be enhanced by behavior change communications activities, focusing on demand generation and stigma reduction, including among health professionals, who provide services for HRGs. Successfully expanding coverage and effectively implementing prevention interventions with involvement of HRGs will result in achieving and maintaining high levels of condom use and safe injecting practices - and will directly reduce HIV incidence (new infections), contributing to the achievement of the Project results. The effective implementation of high quality TIs will require the support of a strong management and technical structures. The second component is therefore intended to strengthen the institutional capacity, especially the steering role and technical capacity of DAC/NACO, as the national program moves through a transition phase with integration and convergence of selected program elements. Both project components are therefore interdependent and their interventions are clearly linked to the overall project development objective. C. Financial Management 40. DAC/NACO has developed a financial management system that efficiently and reliably provides timely information required to manage and monitor the implementation of the program and the project. The guiding principle in the determination of the financial management arrangements for NACSP has, therefore, been to (a) use the existing systems to meet the accounting and financial reporting requirements for the project; and (b) work with DAC/NACO to strengthen the systems and address the weaknesses identified in a manner that assists DAC/NACO to significantly enhance the levels of fiduciary assurance in the use of funds for the entire program. 15 41. This is a follow-on project from three previous National AIDS Control Programs. The financial management systems at DAC/NACO level have been gradually strengthened over the three phases of the program. A customized Computerized Project Financial Management System (CPFMS) has been designed for the NACP, which essentially combines the features of standard government accounting rules and practices with a double entry accounting system to prepare monthly and annual financial statements. The financial management arrangements, including the financial rules and policies, as established by DAC/NACO for the program, are robust and may be considered as best practice. External and internal audit reports, however, do point to some weaknesses in the areas of internal controls, as evidenced by: (a) significant volumes of transactions in cash or through staff advances; (b) large volumes of unadjusted advances to NGOs and other institutions; and, (c) management of advances to staff and peripheral units. All these suggest that the processes put in place for reporting and accounting of expenditures by NGOs and other institutions needs to be strengthened as per CPFMS. The appraisal identified the following specific areas to be focused on: (a) making better use of the CPFMS information for disbursements and management decision making; (b) management of NGO grants, specifically in the context of reporting and accounting of expenditures by NGOs in SACS books of accounts; (c) improved control framework for cash advances at SACS; (d) strengthened approach to selection of external auditors; (e) improved internal control environment at SACS; and, (f) timely release of funds to NGOs and enhanced monitoring controls observed by DAC/NACO over SACS. 42. Disbursements from the Credit will be on reimbursement basis for expenditures reported by DAC/NACO quarterly through the Interim Unaudited Financial Reports (IUFRs). The program expenditures reported in the IUFRs will be subject to confirmation/certification by the expenditures reported in the annual audit reports of the implementing states and GOI. Therefore, a designated account will not be used for the Credit. Reimbursement applications supported by the IFRs would be submitted to the Bank through the office Controller of Aid, Accounts and Audit Division of the Ministry of Finance. D. Procurement 43. The Project will mostly involve grant to NGOs and CBOs for TIs, for which selection procedures, as described in the NGO and CBO Manual of NACO, shall be used. TI grants will be awarded by State and Municipal AIDS control societies, which have handled such grants in the past (during implementation of NACPIII) and thus have adequate experience and capacity. For institutional capacity building and program management, some consultancy services and goods are proposed to be procured at DAC/NACO's level. No major procurement of works is envisaged under the Project. 44. The major areas of concern are delays in procurement decision making which are now , being streamlined; potential for external interference in the procurement process (particularly for decentralized procurement) and challenges for DAC/NACO to effectively monitor decentralized procurement and ensure compliance to agreed procurement arrangement by SACS (due to the federal structure of the country, and health being a state responsibility). These risks are likely to be mitigated to some extent by close monitoring, internal and external audits (by the Government), disclosure of procurement information, and post reviews of TI grants by the Bank. 16 45. The institutional capacity building and program management component of the Project will also assist the government in strengthening and improving the procurement and supply chain management systems to ensure timely availability of quality drugs, equipment and other supplies in order to deliver quality health services. This may also include moving to an e-procurement system. E. Social (including Safeguards) 46. The project will primarily benefit population groups at high risk including FSWs, MSM, including TG/Hijra population, and IDUs through TIs. As the project will be implemented nation-wide including in the tribal districts, where relevant OP 4.10 is triggered. This is a continuation of the broad safeguards approach established for NACP-III during which DAC/NACO adopted a framework for preparing tribal action plans (TAP) addressing specific impacts, concerns and issues relating to the tribal people, and their awareness and service needs with regard to HIV. Based on this framework, DAC/NACO prepared and implemented TAPs in 65 A and B category (high HIV prevalence) tribal districts across 13 states during NACP-III. Under the Project, the specific focus of TIs will be on hard-to-reach high-risk groups (HRGs) and other vulnerable populations, wherever they are identified irrespective of their tribal or non- tribal status. A pilot HIV vulnerability assessment carried out in Gujarat under NACP-III ruled out any statistically significant correlation of HIV prevalence with geographical location, social system, or ethnic identity of tribal people living in pockets of the state. The study, at the same time, emphasized the need for special IEC and other support measures for HIV prevention amongst the tribal people in view of their low awareness levels, poor health seeking behavior, and weak socio-economic conditions. A Social Assessment has been carried out, based on which a Gender Equity and Social Inclusion (GESI) Strategy was prepared for the project. The GESI strategy includes relevant measures for enhancing the benefit of NACP IV for various disadvantaged groups including the tribal populations, where need is demonstrated 47. The social issues addressed by the fourth phase of the NACP relate to gender; gender minorities and social inclusion; including participation of PLWHA, FSWs, MSM including TG/Hijra population, and IDUs; economically disadvantaged migrants; stigma and discrimination; social protection of vulnerable groups through linkages with other sectors; and, promoting greater participation of the people living with HIV/AIDS (GIPA) so that infection from positive people does not spread. Special working groups were formed by DAC/NACO on these issues to understand key problems and implementation issues in preparation of the NACP IV, including behavior change communications emphasizing demand generation and stigma reduction. Accordingly, DAC/NACO has carried out a Social Assessment, discussed in Annex 3, which summarizes achievements and lessons learned and recommends measures to strengthen the focus on gender equity and social inclusion issues. The Social Assessment has been disclosed on NACO website. The GESI strategy was also finalized based mainly on the SA and disclosed by DAC/NACO and the Bank Info-shop prior to project negotiations. 48. Stakeholder risks, Consultations and Grievance Redress: DAC/NACO and SACS work closely with various CSOs, associations, and advocacy groups representing various stakeholders and affected groups in designing and implementing various activities. They are also working with other departments in order to mainstream HIV interventions within various programs and schemes. DAC/NACO and SACS have adopted a highly consultative approach in 17 planning and implementing NACP activities in recognition of the socio-cultural sensitivities and awareness needs of the people and to encourage participation of various stakeholders including CSOs. The Social Assessment documents consultations held so far provide a framework for future consultations. During NACP III, grievance redress mechanisms have been established to respond to reported cases of stigma and discrimination, which will be reviewed and strengthened as required. DAC/NACO has established detailed implementation mechanisms, which have been provided in the Annex3. F. Environment (including Safeguards) 49. The primary environmental risks associated with the project relate to the handling and disposal of infectious wastes resulting from HIV preventive activities. The wastes related to AIDS treatment and basic services are not covered by activities funded by the Project, such as sharps (infected needles and syringes, surgical equipment, IV sets) infected blood, HIV test kits used in Voluntary Integrated Counseling and Testing centers, blood banksl3 and laboratories and pharmaceutical wastes. However, proper management of such wastes is integral to prevention of further infection and control of the epidemic. The overall context for health care waste management in India is provided by the Government's Bio-Medical Rules (prepared in 1998 and amended in 2000 and 2011). The Rules, which apply to all persons and institutions, which generate, handle, treat and dispose infectious waste, are based on the principles of segregation at generation, followed by adequate treatment and disposal to prevent recycling of such infectious waste and reduce adverse impacts on public health and the environment. The current proposed project has been classified as Category 'B' as per the World Bank's Operational Policy (OP 4.01) on Environmental Assessment (EA). 50. In compliance with the national policy, DAC/NACO had prepared an Infection Control and Waste Management Plan under NACPIII in 2006, to ensure the efficient and sustainable management of potentially harmful waste generated from all its centers, which cater to the prevention, care and treatment of HIV/AIDS. In preparation for NACP IV, DAC/NACO has undertaken a situation and gap analysis with recommendations for improved implementation under the program. The recommendations reiterate the need for a strong institutional framework both at the national and state levels, scaling up the implementation of infection control and waste management in TI areas, intensifying capacity building activities and reducing the volume of infectious waste generated through effective segregation and waste management. These recommendations, which are synchronized with the revised Bio-Medical Waste Management Rules (2011), have to be detailed into an Action Plan. DAC/NACO has finalized and posted the 14 Plan on its website 13 Blood banks and "treatment" are included here, although the Project will not finance safe blood interventions or antiretroviral therapy, which is covered by domestic funding 14http://nacoonline.org 18 Annex 1: Results Framework and Monitoring A. Results Framework Indicators and targets Source and Frequency of Data Project Development Outcome Indicators Objective: Percentage of female sex workers who To increase safe report using a condom with their last behaviors among high client will be increased from about risk groups, in order to 80% to 85%, by 2017 (5 percent contribute to the national increase over the baseline of IBBS National Integrated goal by 2017. 2012-13). Bio Behavioral Surveillance among Percentage of men who have sex with HRGs in 2012-13 men who report using a condom during (Baseline) and 2016-17 sex with their last male partner will (End line) increase from about 45% to 65%, by Note: Baseline and 2017 (20 percent increase over the targets may have to be baseline of IBBS 2012-13). adjusted upward or downward when IBBS Percentage of injecting drug users who becomes available in do not share injecting equipment 2013. during the last injecting act will increase from about 45% to 65%, by 2017 (20 percent increase over the baseline of IBBS 2012-13). Component 1: Intermediate Indicators Sub-component 1 Percentage of HRGs who have been SIMS, Annual To maintain/increase reached by targeted interventions will access to targeted increase: interventions for - from 80% to 90% for FSWs prevention of HTV - from 67% to 80% for MSM, and among populations at - from 80% to 85% for IDUs, by highest risk 2017. Output indicators DAC/NACO Reports, 75% of the TIs that have validated semi-annually high risk group size data in the last 12 months by 2017. 75% of the Us will be graded SIMS, semi-annually according to the performance indicators of S(MS**. 19 Percentage of TIs that report condom SIMS, quarterly stock outs in last quarter will decrease from 10% to 2%, by 2015. Component 1: 90% of planned prevention SIMS, annually Sub-component 2 interventions for bridge populations To scale-up prevention (migrants and truckers) implemented interventions for bridge by 2017 population groups Component 2: 90% of States submitting completed CPFMS, DAC/NACO Sub-component 1 audit reports to DAC/NACO within reports, semi-annually agreed time limits, by 2017. To strengthen the institutional capacity 80% of NGO contracted as per SACS NACSP Dashboard, and program annual plan, by 2015. SIMS, quarterly management 90% of states updating, reporting and DAC/NACO reports, responding to dashboard indicators, by quarterly 2015. Component 2: 80% of high burden states/districts DAC/NACO reports, Sub-component 2 implementing IEC/BCC strategy with annually To increase demand for focus on demand generation AND HTV services through stigma reduction, by 2017 behavior change communications 50% of HRGs have been tested for HIV in the last 12 months, by 2017 SIMS, annually <30 % of health care provider express discriminatory attitudes towards Special studies people living with HTV conducted by DAC/NACO, 2013 and 2016 * iHealth facility surveyI The health care provider indicator is based on a set of sti1standardized questions *Note: This Results Framework refers to the project activities funded by World Bank only. The fourth phase of the National AIDS Control Program Goal is to accelerate the reversal of HIV epidemic and integrated response. The NACSP will contribute to these national program goals and indicators. Set of indicators from SIMS used for grading the TIs on quarterly bases pTools to be developed to conduct the survey. 20 H 히 c C) C) C C-It C-It C-It CD C> C> C> Cý Cý CD CD 1.11 Cý CY, 00 00 r- r- rq CD C> C> C> C> C> In 00 oc r- r- oc oc oc C> CD CD C> C> CD CD CD <=ý 1:ý Cý Cý C> CD CD CD CD kn c; Cý 1.-ý 1.-ý c:ý rq 00 00 00 rq C> C> C> <ý CD CD C> C> krý cý krý Cý cý cý cý 00 r- 00 00 r- CD CD CD CD C> C> C> C> cs c; krý Irý 00 r- oc r- r- r- C> CD CD C> C> CD CD CD CD C> C> CD cý cý C; u u Q> u u u zi Q> rq Q> C) tQ ýDO ýD, r凸 히 > .2 r-- u 0 -N0 -E MI> u b4 U a> 1> 44>~ b $~ 0 . 0. ~ 1> : u. 8 > 4U 414 0 u~ M 44 ~ o 4> 20 o 4 .> o >o 2 0 > - ~ 25 o - -&o 0a co a o - ~ 0o~ 4>w a- 0 boT bO 0 ~>4 42 .2 %0 - ~ ~ 0 o bo 0 bn 5 o - 1>0 .0*~b -9 og~ ."caa o 0 o bO >0 -CO 8 å . - 2 0 .0 o0 Oc -~ © t o bo oý u --5 o4 ou xy c) o 1 4M o cœ eo 0 o 0 0 4>4> 4.0 g å g a c.> 08 ®cn ®cd.- 0 & H 404> - , 0 He H 0 c4E oU 0bo 2U boo bo -54 2 pý (D 00I å 4>j (-C4 o* 0 o. o~0 H 3 2¤ 0o .- u~. 01 e~b ý o S 0 0 r, u o ~ -0 0 l et bo bk u> bo- 0bk bn 01 ;å bo t-rD b b p b r, 0ý r4 15 15 "g I~~ o s-2 f 3 04 e.. 508 24 .0% 6.0 .0 o50 19~ -> u u~ > 5-~ u> u>~ u C - U u U u 00 U0 o12 >C CA>b0- ~ .O -e a ,o ~ -- 4 - u o - p cn 0 0 u0 140 c5~ cO ow . 0- 42 ä 긔 · Annex 2: Detailed Project Description India: National AIDS Control Support Project (NACSP) 1. The objective of the Project is to increase and maintain safe behaviors through access and utilization of prevention services among high risk groups and other vulnerable population groups, in order to contribute to the national goal of accelerating reversal of the HIV epidemic. This will be achieved by reaching and maintaining 75 - 85% safe behavior condom use and safe injecting practices among high risk population groups including female sex workers (FSWs), men who have sex with men (MSM) and injecting drug users (IDUs) and bridge population. This will require a focus on targeted prevention interventions among these groups coupled with strong behavior change communications for creating awareness on risk and vulnerability, methods of prevention, availability and location of services and for increasing safe behavior and demand for services as well as reduce stigma. This will be supported by strengthening the institutional capacity to ensure program sustainability beyond 2017. 2. The Project will be informed by a set of tenets that include the "Three Ones" principle (one national program plan, one national AIDS coordinating authority, NACO, and one national monitoring and evaluation framework); respect for legal, ethical and human rights of PLWHA and most at risk populations; creation of an enabling environment; and civil society participation in planning and implementation of NACSP. The project will also build on the lessons learned from NACP 111, i.e., evidence based priorities and data driven responses, and will continue to support innovations and generation of new knowledge, especially to strengthen program performance at all levels. 3. The Project will focus on HIV prevention. The national program will be working towards integration and convergence of other services such as treatment of sexually transmitted infections, blood safety, facility-based testing and treatment services and prevention of parent to child transmission (PPTCT) along with the National Rural Health Mission and other health services and programs. It will also be important to engage other key stakeholders in mainstrearning of the response, including the private sector and key government departments; and to continue to engage civil society, vulnerable communities at highest risk and PLWHA networks. The project intends to leverage the financial and technical resources of other development partners to achieve the program objectives. 4. The Project will support three components of the national AIDS control program. The Government and IDA will pool resources for first component that will support scaling up of targeted prevention interventions. The Project will finance the institutional strengthening and behavior change communications component. Provision of care and treatment to PLWHA and strategic information management system (SIMS), including disease surveillance, will be supported by the national program. Project Components 5. The Project will mainly support the scale up of prevention interventions under NACP IV, with a focus on the high impact targeted prevention interventions for population groups at high 27 risk, and related behavior change communications. The project will also support DAC/NACO to further strengthen project management, especially as it moves through a transitional phase with integration and convergence of different program elements. The project has the following three components that include activities at the national, state, and district levels: Component 1: Scaling Up Targeted Prevention Interventions (total estimated cost - $440 million). 6. This component responds to the nature of the HIV epidemic in India, which is characterized by concentrated epidemics among high risk groups, and builds on a successful national program, with the aim of reaching out to the hard to reach population groups who have not yet been reached by the program. The scaling up and strengthening of prevention interventions for high risk groups is therefore the primary focus of this component. In addition, this component will support bridge population groups such as migrants and truckers and include activities that support behavior change communication, primarily focusing on demand generation and stigma reduction. This component would include the following two sub-components: (a) Scaling up coverage of Targeted Interventions (TIs) among HRG (total estimated cost - US$359 million): The project aims to reduce new HIV infections by expanding reach and coverage of quality targeted prevention interventions among HRGs over the next five years. This will be implemented through a large number of successfully proven TIs working with communities of FSWs, MSM, including TG/Hijra, and IDUs, through the contracting of NGOs and CBOs. This subcomponent includes the following activities: A Site validation, size estimation and micro planning of targeted interventions for HRGs; A BCC interventions targeted to HRG in order to increase safe practices, testing and counseling, and adherence to treatment, and demand for other services and products - this will include a variety of interventions such as face to face education of sex workers individuals in negotiation skills, and training on use of condoms for personal protection; A Promotion and provision of condoms to HRG to promote their use in every sexual encounter; & Provision of STI services including counseling at service provision centers to increase compliance of patients with treatment regimens, risk reduction counseling, and a focus on partner referral; & Interventions to strengthen community response to HIV and capacity building in order to empower HRG and ensure ownership to implement the program in their communities, which will also promote sustainability of the program; K Support the strengthening of the linkages between HIV related care, support and treatment and other services so that HRG can access them without stigma or discrimination; & Creation of an enabling environment to facilitate dialogue with relevant stakeholders such as the police, community leaders, local public functionaries and introduce changes in the social, structural, and policy environment to motivate the community to practice safer behaviors; 28 K Scaling up harm reduction, including needle and syringe exchange for IDUs and increasing Opioid Substitution Therapy (OST) provision from 79 existing centers to 350 across the country and increasing the number of patients on OST from about 5000 to 36,000 over 5 years; and K The financing of operating costs for the State Training Resource Centers and participant training costs over a period of 5 years. (b) Scaling up of interventions among other vulnerable populations (total estimated cost - US$81 million): Vulnerable population groups include regular clients/partners of sex workers, regular sex partners/spouses of IDUs, bridge populations (migrants and long distance truckers) moving between high and low prevalence areas and engaging in unsafe practices. The activities under this subcomponent will be guided by the information from the mapping of peer networks in order to influence the choices of the vulnerable populations and improve their access to prevention services. Interventions for migrants will include activities at source, at transit points, at destination and at workplace as well as targeted female migrant worker interventions. Interventions for truckers will be carried out at transit points and at work places. This subcomponent would include the following activities for these two vulnerable groups: A Risk categorization and size estimation of migrant population groups at destination points; & Strengthening interventions across the corridors of migration with increased involvement of frontline workers in high out migration districts which include source and transit points; K Creation of "peer support groups" and "safe spaces" for migrants at destination; & Expansion of truckers' interventions to include TSL and other potential areas; K BCC through peer led interventions of either individuals or groups to create awareness of their vulnerability and increase demand for products and services; & Promotion and provisioning of condoms through different channels including social marketing; K Development of linkages with local institutions, both public and NGO owned, for testing, counseling and STI treatment services, which will be an important area of public-private partnerships within the program; and & Strengthening networks of vulnerable populations with enhanced linkages to service centers and risk reduction interventions. Component 2: Behavior Change Communications (total estimated cost -US$40 million) 7. This component will include the following activities: (i) communication programs (media campaigns, creative development campaigns and short films) for risk reduction and safe behavior including advocacy, social mobilization and BCC to integrate PLWHA and HRG into society and to encourage normative changes aimed at reducing stigma and discrimination in society at large, and in health facilities specifically, as well as to increase demand and effective utilization of testing and counseling services; (ii) financing of a research and evaluation agency to assess the cost-effectiveness and program impact of behavior change communications activities; and 29 (iii) establish and evaluate a helpline at the national level to further increase access to information and services. This component will include: A Media Campaigns and their monitoring & Evaluation and Research & Helpline Component 3: Institutional Strengthening (total estimated cost -US$30 million) 8. This component will support DAC/NACO's steering, coordination and managerial roles in managing the prevention component of the program, during the transformational phase of NACP IV. This component will support innovations to enhance performance management including fiduciary management, such as the use of the computerized financial management system, at national and state levels. The support for institutional capacity will also help strengthening procurement and supply chain management with increased staffing, including training on supply chain management, in support of the TIs. This component will also finance the staff and operating costs of 11 Technical Support Units' (TSU)15over a period of 3-4 years to ensure the oversight of the quality of TIs through monitoring and supportive supervision, and assist states in effective use of available information in support of evidence-based planning and performance monitoring and program roll out. Subsequently, as the capacity is built, the functions of the TSUs will be assumed by the Government. This sub-component will also support the services of a procurement agent for the purposes of procuring OST during project implementation. Finally, this sub-component will finance the dissemination of best practices and innovations from the project at the national and state levels through annual conferences. This component will also finance the necessary project audits (external, internal and the audits of NGOs). These audits established under NACP III will continue under NACSP to ensure effective compliance with all fiduciary requirements, as part of DAC/NACO's core fiduciary and managerial functions. The specific activities under the component are: & Strengthening of internal and external quality control systems; & Providing high quality, operational training in areas critical to the scaling up of the program, such as support to establishment of TIs; & Providing technical support to the TIs through TSU by supporting TSU where needed; & Dissemination of best practices and innovations from the project; & Financial management system through up gradation of CPFMS, and support different audits under the project (internal, external and NGO level); and & Procurement agent for the purpose of OST and support the staff for effective supply chain management. 9. Table 1 below provides the overview of the costs by component and by financier. 15Delhi, Orissa, Punjab, West Bengal, Andhra Pradesh, Karnataka, Chhattisgarh, Jhankhand,Madhya Pradesh, Kerala and Tamil Nadu 30 Table 1: Summary Project Costs by Component and Financiers US$ (million) Component/ Sub-components Bank Govt Total financing Financing Project Cost Component 1 - Scaling Up Targeted Prevention Interventions Sub-component 1 - TIs for High-Risk Groups 179.36 179.36 359 Sub-component 2 - TIs for migrants and truckers 40.64 40.64 81 Component 1 total 220.00 220.00 440.00 Component 2 -Behavior Change Communications (BCC) 20.00 20.00 40.00 Component 3 -Institutional Strengthening 15.00 15.00 30.00 Total Project Cost 255.00 255.00 510.00 10. The detailed project costs, including breakdown by year and by financiers, are presented in Annex 7. 31 Annex 3: Implementation Arrangements India: National AIDS Control Support Project (NACSP) Project Institutional and Implementation Arrangements 1. The implementation structures and institutional arrangements of NACSP will remain the same as under NACP III, with the program being managed by NACO in the Department for AIDS Control, at the central level, the State AIDS Control Societies (SACS) at state level, and the District AIDS Prevention Control Units (DAPCUs) at the district level. 2. The National AIDS Control Organization (NACO) leads the National AIDS Control Program in India. Since 2008, NACO is in the Department for AIDS Control, in the Ministry of Health and Family Welfare (MoHFW), headed by the Director General for NACO and Secretary of the Department of AIDS Control. NACO is responsible for the preparation, implementation and monitoring of the National Strategic Plan for HIV/AIDS and is accountable to the National Council of AIDS (NCA) chaired by the Prime Minister of India and the National AIDS Control Board (NACB), chaired by the Minister, MoHFW. Within NACO, each program unit (i.e., finance, procurement, targeted interventions (TIs), basic services, treatment, IEC, Strategic Information Systems, including surveillance and research) is led by a head of the division. The "three ones" principles governs the national AIDS response in India: one national coordinating body, NACO, one national program and strategic plan, and one common monitoring and evaluation framework which all partners adhere to. These principles ensure harmonization among development partners, and have contributed to the effectiveness of the national response to HIV and AIDS. The technical oversight and guidance to the national program are provided through different mechanisms: the Technical Resource Groups, the national level Technical Support Unit and the Steering Committee (consisting of all development partners, civil societies and private sector). 3. States AIDS Control Societies (SACS): During the NACP II, the national program implementation was decentralized to the SACS, which are semi-autonomous societies implementing the state level annual action plans that are guided and financed by DAC/NACO. At state level the SACS are governed by (a) the SACS Governing Body represented by key government departments, members of the civil society, representatives of trade and industry, private health sector and representatives from community Networks; and (b) the Executive Committee which exercises powers as delegated to it by the Governing Body. The Executive Committee provides oversight to the program at state level and approves the expenditure of SACS. SACS are assisted by Technical Support Units which help in monitoring of targeted interventions and provide other managerial support to the program. The broad operational areas of SACS are: administration, planning, inter and intra sectoral coordination, monitoring & evaluation, project implementation, financial management and procurement. Involvement of NGOs and CBOs are important to the effectiveness of program implementation. The deliverables, administrative control and financial agreement between the SACS and the NGOs/CBOs are governed by contractual arrangements. District AIDS Prevention Control Units (DAPCU) are the district level administrative structures under SACS, established in the last three years in high burden districts (i.e., in category A and B districts) in India. The main 32 objective of DAPCU is to coordinate NACP activities at district level and facilitate multi sector mainstreaming with other departments in the district. 4. Technical Support Units (TSUs) were established during NACP III to oversee the quality and monitoring, handholding, mentoring and supporting of the targeted interventions in the states. The financing and management of some TSUs have been transferred from development partners (i.e. Bill and Melinda Gates Foundation/Avahan program, DFID and USAID) to DAC/NACO, while some might continue to be supported by partners for a limited period. During NACP IV, the human resources strategy of DAC/NACO will be reviewed to ensure adequate staffing of key positions at all levels, especially for carrying on the functions that TSUs now perform in order to enhance the SACS capacity and ensure the sustainability of the program. 5. Sub-Projects: DAC/NACO, through the SACS, shall make available, TI Grants to NGOs/CBOs for the carrying out of sub-projects, in accordance with terms and conditions of the NGO/CBO Guidelines, approved by the Bank, and which shall include, inter alia, the obligation of the NGOs/CBOs to: (a) Carry out the relevant sub-project, diligently and efficiently in a manner satisfactory to the Bank, and pursuant to the criteria and procedures set forth in the NGO/CBO guidelines, and in accordance with the provisions of the ICWMP, the anti-corruption guidelines and the GAAP as well as the GESI, to the extent applicable; (b) Take all necessary measures to contribute to the achievement of the key performance indicators relevant to the specific sub-project; (c) Maintain a financial management system and prepare financial statements in accordance with the procedures set forth in this section, the operational guidelines on financial management of NACP, and the NGO/CBO guidelines; and (d) Enable the recipient, the Bank and DAC/NACO to review the activities, facilities and/or operations financed out of the TI grant proceeds, and any relevant records and documents. 6. DAC/NACO, through the SACS, shall, under the TI Grant Agreement, obtain rights adequate to protect its interests and those of the Government and the Bank, including the right to (i) suspend or terminate the right of the Beneficiary to use TI Grant proceeds, and (ii) recover all or any part of the amount of TI Grant proceeds then withdrawn, upon the NGO/CBO's failure to accomplish any task(s) as stipulated in the TI Grant Agreement. 7. DAC/NACO shall exercise its rights under each TI Grant Agreement in such manner as to protect the interests of the Government and the Bank's and to accomplish the purposes of the Financing. Financial Management Financial Management Capacity Assessment 33 8. This is a follow-on project from NACPI - III. The financial management systems at DAC/NACO level have been gradually strengthened over the three phases of the program. A Computerized Project Financial Management System (CPFMS) has been designed for NACP, which essentially combines the features of standard accounting practices with a double entry accounting system to prepare monthly and annual financial statements. The system is web based and is in use across all SACS, except Lakshwadeep. DAC/NACO's financial performance monitoring system is widely recognized as a best practice. 9. Significant opportunities however, remain to further strengthen the overall control framework for financial management, especially with respect to: (a) making better use of the CPFMS information for disbursements and management decision making; (b) management of the NGO grants, specifically in the context of reporting and accounting of expenditures by NGOs in SACS books of accounts; (c) improved control framework for cash advances at SACS; (d) strengthened approach to selection of external auditors; (e) improved internal control environment at SACS; and, (f) enhanced monitoring controls observed by DAC/NACO over SACS. 10. The major learning and areas for development identified under NACP-III have been highlighted below: Proposed Mitigation Measures Identified Gaps A separate budget within MoHFW identifies It has been agreed that Central level the annual fund allocation for the project, expenditures will also be entered in CPFMS. against which expenditures are booked by the Pay & Accounts Office (PAO). A parallel set of records are required to be maintained by DAC/NACO for purposes of the project which are not presently entered in CPFMS. The bulk (75%) of the program expenditures NACO has proposed several measures to are incurred at 38 States and Union Territories. strengthen the internal audit quality and Six monthly internal audits of the SACS follow-up. These include: conducted by CA firms engaged by revision of guidelines for selection of CA DAC/NACO (against detailed TORs) are the firms for internal audits, including primary source of in-year fiduciary assurance. considering the option of using of regional There however, remain a number of hub approach for the selection of the CA challenges with respect to the internal audit firms; process: consider option of using FBS method of & The quality of internal audit varies across selection of CA firms; the various CA firms; revision of the ToR for the internal audit & The follow up process of the internal audit assignment and consider the option of reports remains weak; these are typically including thematic reviews; and constitute forwarded to the SACS for responses Audit Committees at each SACS who will & There are presently no institutional be responsible for ensuring compliance mechanisms at SACS level to ensure with the audit observations at the state compliance with the issues highlighted in level. 34 Proposed Mitigation Measures Identified Gaps the internal audit reports. Detailed guidelines issued by DAC/NACO Strengthened processes for periodic review of provide the framework for procurement, the unadjusted advances to NGOs will be put contracting, disbursement and monitoring of in place by DACNACO. These include: NGOs/CBOs at the SACS level. These include Review and revise the TORs of NGO Audit mechanisms for periodic financial reporting, to focus on certification of the correctness timely settlement of advances, audits etc. A and eligibility of expenditures on a number of weaknesses have however, been quarterly basis; identified with respect to NGO contracting and Review and revise procedures that are management: adopted to empanel auditors at SACS level A Internal and external audit reports identify review and revise the formats for quarterly several instances of non-compliance with financial reports to be submitted by the the guidelines for selection of NGOs; NGOs; and, K Continuous large volume of unadjusted Review and revise the disbursement cycle balances in advances to NGOs in the SACS to ensure that the financial reporting, books of accounts indicate delays in auditing and disbursements are financial reporting and its settlement; synchronized; K Substantial project resources are required to put in place arrangement for the financial audit of the books of accounts of the NGOs, often seen as a duplication of the audit processes at NGO level; K There is lack of clarity with respect to the ownership of assets created at the NGO level from the project funds - these have become especially important in instances where NGO grants have been discontinued. External annual audits are conducted by CA DAC/NACO has agreed to revise the firms engaged by SACS following LCS guidelines for selection of CA firms for method of selection. external audits by SACS /DACNACO will also consider the option of using fixed budget selection method for selection of the audit firms. The experience with other projects in the India portfolio indicates that LCS method of There is also an alternate proposal to seek an selection of auditors may not be appropriate, agreement with the C&AG's Office to This is essentially due to intense competition undertake financial annual audits across the for prized assignments (such as World Bank SACS. financed projects) amongst the large number of audit firms. The lower prices which follow, often results in situations where selected firm/s are unable to put in the level of effort or resources envisaged and required. All of the above results in poor quality of assurance (as e 35 Proposed Mitigation Measures Identified Gaps evidenced by substantial delays in the submission of audit reports and inconsistencies in the quality of audit reports) from the audit process for all stakeholders, including the World Bank. CPFMS needs to be updated to make it more As a first step, DAC/NACO will prepare a useful as a management tool for monitoring of medium term road map sequencing on a financial progress. timeline the various areas of further development and its implementation. DAC/NACO will also consider the feasibility of making CPFMS web based and enhancing public access to SACS compiled financial statements on NACO website. Implementing Entities 11. The project will be implemented by DAC/NACO at the central level and by the SACS at the state level. DAC/NACO is responsible for overall management of the project, its financial management, central level procurement, review and approval of annual work programs (AWP), management and technical support to the states, and the annual progress review of the program. The Secretary of DAC/NACO has the overall responsibility for the Project. The Secretary is supported by technical specialists including an Additional Secretary in charge of Prevention, including TIs, Administration, Procurement, IEC and Social Mobilization; and a finance unit headed by the Director Finance, a senior officer, responsible for financial management. 12. At the state level SACS have been in existence under the NACP II and III Projects and have been implementing the program at state and district levels. The Project Director of the SACS supported by a financial controller is responsible for financial management of the project within the state, state level procurement, annual work plans management and technical support to the districts and annual progress review of the program in the state. 13. Involvement of NGOs/CBOs and peripheral units comprising of, for example, ICTCs, Medical Colleges, district and taluk level hospitals, District Collectors and other private and public institutions are important arms of the execution of the program. While the deliverables, administrative control and grant agreement between the SACS and the NGOs/CBOs are governed by the TI Grant Agreements, assistance to other implementing agencies is on the basis of funds sanctioned and transferred for specific activities. Budgeting & Annual Work Plans 14. At the Gol level the project's funding requirements are provided within the budget of the MoHFW, and the NACP IV program has a separate budget head (minor head). At the national level, the budget is operated by DAC/NACO. The annual budgets for the Project would be allocated as per national project implementation plan and the actual pace of implementation. At 36 the state level the budget would be allocated to each state based on the approved state Annual Work Plan (AWP). As this is a 100% centrally sponsored scheme, funds would be made available to the states, on a full grant basis. The existing scheme guidelines/ Financial Management (FM) manual will be reviewed and updated to incorporate the revised cost norms, the timelines for preparation of AWP by SACS and review and approval by DAC/NACO. Timelines would be incorporated to ensure that all AWPs are reviewed and approved by DAC/NACO before the start of the financial year. In addition, DAC/NACO will carry out a mid- year review of AWP and implementation performance of the SACS. Fund Flow Arrangement 15. The annual budget allocated to each state would be released in installments during the fiscal year. Funds required to implement the Project will be released by DAC/NACO to the SACS. The SACS in turn would release necessary funds to various implementing units (NGOs, district units, etc.) based either on contractual obligations under a specific TI Grant Agreement with NGOs or sanctioned amount for the specific activity. The release of the first installment by DAC/NACO to the SACS would be determined on the basis of the approved AWP and will be in compliance of General Financial Rules (GFR) of the Government of India. 16. As for all Central funds, release of subsequent installment from DAC/NACO to the SACS would be incumbent on the receipt of the audit certificates and Utilization Certificates for the previous year. Under NACSP, the fund flow process for NGO's needs to be further strengthened to addresses the issue of timely payment and outstanding advances with the NGO's. Books of Accounts and Accounting Policies 17. The project costs incurred at DAC/NACO (program management, IEC, etc.) would be recorded in the books of DAC/NACO at the MoHFW in accordance with procedures and policies prescribed in the General Financial Rules (GFR). As the Gol follows cash accounting system, all funds either transferred to the states and to central level implementing units are recorded as expenditure in the books of the Gol. 18. The CPFMS for the Project is in use by the project at the SACS level to account for all expenditures. Expenses would be recorded on a cash basis and would follow broadly the project activities for ease in reporting to various stakeholders. Standard books of accounts on a double entry basis (cash and bank books, journals, fixed assets register, advance registers) are available in the CPFMS and will continue to be maintained under the project by DAC/NACO/SACS. 19. Within the CPFMS accounting processes, the following general principles apply: & SACS will be responsible for accounting for expenditures reported by NGO's peripheral units and DAPCUs. The accounting for advances and expenditures will be as per the accounting policies of the program; & Fund releases to NGOs/CBOs through TI Grants and peripheral units will be treated as advances and accounted for as expenditures on receipt of detailed statements of 37 expenditures and supporting documentation. Similarly, funds transferred to procurement and IEC agencies will be treated as advances on settlement of the advances; A At the DAPCU level, the district officers are authorized to open and operate a bank account to meet the day-to-day expenses of the unit. For the purpose, DAPCU will be provided with imprest advances to be accounted for in the SACS books of accounts on receipt of monthly statement of accounts along with vouchers and supporting documents to SACS & NGOs and peripheral units will be required to maintain the required books of account to report on the expenditures incurred under the program, detailed instructions are contained in Finance and Administration Procedure Manual for CSOs funded by SACS. Internal Controls 20. Under NACP III significant weaknesses have been observed in the compliance with the agreed internal control mechanisms at state level, specifically in the areas concerning: transactions in cash or against staff advances, fixed assets management, NGO / peripheral units assessment and management (including settlement of advances) and absence of timely bank reconciliations. 21. Efforts are being made to address these issues by reviewing and updating the NGO/CBO guidelines (which includes financial management aspects) and the FM Manual which provides the overall internal control framework for the project. The FM Manual laying down the financial policies and procedures, periodic & annual reporting formats including financial statements, flow of information and methodology of compilation, budgeting & flow of funds, format of books of accounts, chart of accounts, information systems, disbursement arrangements, internal control mechanisms, and internal and external audits for the project, are being reviewed and updated to incorporate various guidelines, circulars and amendments issued during the implementation and to also reflect 'better practices' adopted by certain states. Finance Staffing and Training 22. The Finance Unit in DAC/NACO is headed by a Director - Finance and supported by 4 finance staff and consultants. The finance cell is responsible for establishment of the agreed financial management arrangements, providing timely financial reports to the stakeholders including the Bank, ensuring smooth and timely flow of funds and providing overall guidance in respect of the financial management issues for the project. At the state level depending on the size of the program the finance unit is headed by a Finance Controller/Finance Officer. The FM assessment study has suggested strengthening the finance units in larger states and a focus on regular and periodic training. Financial Reporting and Monitoring 23. Based on the individual state reports, DAC/NACO will prepare and submit consolidated financial reports on a quarterly basis. The quarterly financial reports, by way of Interim Unaudited Financial Reports (IUFR) will be submitted within 45 days of the close of each 38 quarter. The IUFR's will include state wise and activity wise expenditure for the quarter, year to date and cumulative to date. External Audit 24. The external audit arrangements will be as follows: & Audit of SACS will be done by firms of private Chartered Accountants (CA) as per TORs approved by IDA. DAC/NACO has agreed to consider revising the guidelines for selection of CA firms for external audits by SACS to Fixed Budget Selection (FBS) method of selection. There is also an alternate proposal to seek an agreement with the Comptroller & Auditor General's(C&AG's) Office to undertake financial annual audits across the SACS. & Audit of DAC/NACO will be carried out by the C&AG. The audit will be conducted as per the terms of reference agreed by IDA and consented by the C&AG, wherein an opinion on the project financial statements (sources and uses of funds) will be given by the C&AG. 25. The following audit reports will be monitored in Audit Reports Compliance System (ARCS): Implementing Agency Audit Auditors DAC/NACO, MoHFW Project Financial Statements Comptroller & Auditor General of India SACS Project Financial Statements Private Chartered Accountants Internal Audit 26. Six monthly or quarterly internal audits of SACS will be conducted by CA firms engaged directly by DAC/NACO. Internal auditors selected shall not be the external auditors also for any individual SACS. Responsibilities of the internal auditor will include reporting on the adequacy of internal controls, the accuracy and propriety of transactions, the extent to which assets are accounted for and safeguarded, and the level of compliance with financial norms and procedures. In order to address the concerns over the quality of the audit, it has been agreed that DAC/NACO will consider (a) using a regional hub approach to the selection of internal auditors; (b) using the 'fixed budget selection' method for the selection of internal auditors; and (c) revise the TORs to include thematic focused reviews selected on the basis of risk assessment. Selected CA for internal audit will carry out the audit & submit the report directly to DAC/NACO. Audit Committee will be established at the SACS level with adequate representation from senior management, DAC/NACO etc. and will be responsible for reviewing and ensuring timely follow up of the external and internal audit observations. 27. Given that a significant portion of the project activities are carried out by NGOs out of funds advanced by the SACS through the TI Grants, the SACS are also required to put in place adequate internal audit arrangements. The audit will entail visits to NGO offices and will be 39 carried out on a concurrent quarterly or six monthly basis. The scope of the audit will cover certification of the quarterly financial statements for correctness and eligibility of all NGOs. In States where there is a large number (more than 25) of NGOs/CBOs, separate auditors/panel of auditors may be appointed for on-site audit of NGOs. The audit fee will be fixed for payment on delivery of timely and audit reports of acceptable quality. Disbursements 28. Disbursements from the Credit will be on reimbursement basis for expenditures reported by DAC/NACO quarterly through the Interim Unaudited Financial Reports (IUFRs). The program expenditures reported in the IUFRs will be subject to confirmation/ certification by the expenditures reported in the annual audit reports of the implementing states and Gol. Therefore, a designated account will not be used for the Credit. The Project will be pre-financed through a dedicated budget line under MoHFW, Gol, which will release funds directly to SACS as well as meet the expenditures incurred at DAC/NACO. Reimbursement applications supported by the IUFRSs would be submitted to the Bank through the office of Aid, Accounts and Audit Division. Withdrawals from the Credit up to an amount not exceeding 20 percent of the total Credit amount may be made for eligible expenditures made on or after June 1, 2012 Procurement 29. The Pool (co-financing by the Bank and Gol) of US$ 510 million will finance targeted prevention interventions, institutional capacity strengthening and program management and the behavior change communications components. The institutional capacity strengthening component will mostly involve procurement of consultancy and non-consultancy services. TI grants will be issued at decentralized level by SACS while DAC/NACO will handle the procurement under institutional capacity building and program management, behavior change communications and procurement of drugs under targeted prevention interventions. The following table provides the details of items proposed to be financed under the Project: Table 1: Items to be financed under the Project Item Estimated Cost Procurement by Note (US$ Millions*) TI grants to NGO/CBO 391 SACS Grants worth US$ 62 Million have already been issued Behavior change 40 DAC/NACO communications CPFMS/other MIS 0.4 DAC/NACO Procurement/FM/Logistics 9.3 DAC/NACO Management Consultants State Training and 5.53 DAC/NACO/SACS Contracts worth US$ 0.8 Resource Centre (STRC) Million have already been management 15.45 issued under advance contracting Technical Support Unit DAC/NACO 40 Item Estimated Cost Procurement by Note (US$ Millions*) (TSU) Procurement of OST 12.06 DAC/NACO drugs Total 473.74 1 1 * Remaining US$ 36.26 will finance training and operating expenses. 30. Procurement for the project will be carried out in accordance with the World Bank's "Guidelines: Procurement of goods, works and non-consulting services under IBRD loans and IDA credits & grants by World Bank borrowers" dated January 2011 ("Procurement Guidelines") and "Guidelines: Selection and employment of consultants under IBRD loans and IDA credits & grants by World Bank borrowers" dated January 2011 "(Consultant Guidelines)". A. Procurement Capacity 31. There are about 38 state and municipal AIDS control societies (both collectively termed as "SACS" in this section) which have varying procurement capacities. However, these societies have been handling the selection of NGO and CBO under NACP-III and are well conversant with NACO's Guidelines for selection of NGOs and CBOs. SACS will only handle the selection of NGO/CBO and no procurement of goods, works or services is envisaged at SACS level and hence the capacity of SACS is considered to be adequate. Though certain cases of non- compliance to NGO/CBO Guidelines were reported in NACP-III, the major area of concern at SACS level is not so much an issue of capacity as the potential challenge of managing the external influence in selection process. 32. DAC/NACO will handle the procurement under institutional capacity building and program management component, which will mostly involve procurement of services and procurement of drugs under TIs. DAC/NACO has adequate capacity to handle procurement of services based on the experience of NACP-III, though delay in procurement decision-making is an area of concern. DAC/NACO also proposes to take help of a procurement agent who will be handling procurement of drugs. B. Procurement Arrangements under the Project 33. For the institutional capacity and program management component, the day-to-day procurement function (procurement planning and monitoring, coordination with technical cells, reporting and coordination with the Bank, implementation of procurement risk mitigation plan etc.) under the project will be looked after by the procurement cell of DAC/NACO, which is headed by a Director and consisting of procurement officers and consultants. Director (Procurement) reports to Additional Secretary, who in turn reports to the Secretary. 34. At SACS level, there are posts of procurement officers who are responsible for handling procurement. However, in the selection of NGO/CBO for TI, other officials of SACS are also involved. For example, the short-listing of NGO/CBO is finalized by the Technical Advisory Committee (of SACS), consisting of the JD/DD/AD (TI), Procurement Officer, and one NGO 41 representative from Executive Committee (EC). Similarly, the short-listed applications are appraised by a three-member joint team consisting of a Technical officer of SACS, financial consultant and one external technical consultant. Technical Advisory Committee has to approve the reports of Joint Appraisal Team and executive committee of SACS finally approves the grant award recommendations. 35. E-Procurement: As of now DAC/NACO or SACS do not use the e-Procurement system. However, if needed in the futurel6, e-Procurement may be permitted up to NCB threshold provided the system proposed to be used is assessed and found acceptable by the Bank. C. Strengthening of Procurement and Supply Management under the Project 36. The Institutional capacity building and program management component of the project will assist the government in strengthening and improving the procurement and supply chain management systems to ensure timely availability of quality drugs, equipment and other supplies in order to deliver quality prevention services. This may also include moving to an e- procurement system. D. Monitoring and Supervision of Procurement 37. DAC/NACO will act as single point of contact for the Bank for the purpose of implementing/monitoring the agreed procurement arrangement under the Project (including the procurement handled by SACS). DAC/NACO will prepare a consolidated summary report containing important information on the progress on the procurement. The format for the consolidated report on prior review contracts (which will be submitted to the Bank on quarterly basis as part of IUFRS) will be agreed with the Bank by DAC/NACO. The information received by DAC/NACO (through audit reports or otherwise) and Bank's Implementation Support missions (including post reviews) will be analyzed by DAC/NACO and an action plan shall be prepared and corrective measures shall be taken by DAC/NACO to remedy the situation. E. Procurement Risk Assessment 38. Table 2 below lists major procurement related risks and the mitigation plan. The risk ratings have been decided based on both the probability of occurrence of various events (including fraud and corruption risks related to procurement) as well as their likely impact. Based on the risk factors and mitigation measures, the overall residual procurement risk rating for the project is determined as substantial. The residual rating on procurement will however be reviewed and updated periodically by the Bank. 16 The Ministry of Finance, Government of India has issued an office memorandum on March 30, 2012 as per which Department of AIDS Control will switch over to e-Procurement by February 2013. 42 Table 2: Perceived Procurement Risks and Mitigation Measures Risk Factor Initial Risk Mitigation Measure Completion Date Residual Risk Limited capacity Moderate Monitoring by DAC/NACO Continuous from year 1 Moderate and inefficiencies for SACS level procurement resulting in delays in Use of skilled procurement procurement staff for handling procurement process of services Monitoring through procurement plan and quarterly reports (by DAC/NACO and by the Bank) Use of a procurement agent for procurement of drugs/other goods Non-compliance Moderate Monitoring by DAC/NACO Continuous from year 1 Moderate with agreed for SACS level procurement (during early phase of procurement grant cycle) arrangements Post-review by the Bank for (particularly for TI grants (ORs to be agreed decentralized upon with DAC/NACO) procurement) ExternalM17 Substantial External/internal procurement Continuous from year 1 Substantial interference in audits the procurement process Set-up code of ethics (particularly for decentralized Disclosure of procurement procurement) related information Appropriate handling of complaints Overall Risk Substantial E p CSubstantial F. Methods of Procurement 39. The Table 3 given below gives highlight of the various procurement methods to be used for this project. These along with agreed thresholds would be reproduced in the procurement plan. The thresholds indicated in the following table is for the initial 18 months period and is based on the procurement performance of the project, these thresholds would be modified as and 17 "External" means sources external to NACO and SACS 43 when required. Domestic preference will be applicable for ICB procurement of Goods as per Appendix 2 of the Procurement Guidelines. Table 3: Procurement Methods Category Method of Procurement Threshold (US$ Equivalent) Goods and Non- ICB >1,000,000 consultant services LIB wherever agreed by Bank NCB Up to 1,000,000 (with NCB conditions) Shopping Up to 50,000 DC As per para 3.7 of Guidelines Force Account As per para 3.9 of Guidelines Framework Agreements As per para 3.6 of Guidelines Procurement from UN Agencies As per para 3.10 of Guidelines Works ICB >15,000,000 NCB Up to 15,000,000 (with NCB conditions) Shopping Up to 50,000 DC As per para 3.7 of Guidelines Force Account As per para 3.9 of Guidelines Consultants' CQS/LCS Up to 300,000 Services SSS Asper para 3.9-3.11 of Guidelines Individuals As per Section V of Guidelines Selection of Particular Types of As per para 3.15-3.21 of Consultants Guidelines QCBS/QBS/FBS for all other cases i. International shortlist >800,000 (ii) Shortlist may comprise national consultants only Up to 800,000 G. Grants to NGO/CBO for TI 40. A major part of the Project is to be implemented through NGO/CBO, which are selected to deliver services ranging from designing a targeted intervention to distributing condoms, drugs or other consumAables. For delivering these services, NGO/CBO are provided grants up to US$100,000 per TI per year, or US$ 500,000 per TI over 5 years. These services are delivered to high risk groups like female sex workers, men who have sex with men, transgender community, injecting drug users, and vulnerable groups like truckers and migrants. Because of the specialized nature of these services and the target recipients, these can only be delivered by a small group of service providers, mainly non-profit organizations, already working with the recipients. Due to these factors, selection of NGOs and CBOs for the carrying out of TI under Component 1 will be done using a special method, which is described in detail in the NGO/CBO Guidelines prepared by DACNACO. The highlights of this method are given below: 44 K SACS invites Expressions of Interest (EOI) for TI grants through advertisement in regional (not national) newspapers as well as on website (not all the SACS have functional website). K All the EOIs are reviewed by Technical Advisory Committee (of SACS), which checks the registration and track record of organization. & This is followed by visit to shortlisted NGO/CBO by a Joint Appraisal Team (of SACS). The scope of visit of Joint Appraisal Team includes a) Review of records and registers of the applicant organization to check staffing, governance, M&E, FM and procurement systems, b) Discussion with Board of Directors / Trustees and Staff, and c) Visit the field/sites to assess the project work and rapport the applicant organization has with the community and stakeholders. K Report of the Joint Appraisal team will be submitted to Technical Advisory Committee. The NGO/CBO are shortlisted on the basis of decision of Technical Advisory Committee. No organization is normally provided grant support for carrying-out more than 3 TI projects. For exceptional cases, DAC/NACO is to be approached for relaxing the limit of 3 TI projects. K SACS conduct a Proposal Development Workshop for all the short-listed organizations. At this workshop the short-listed organizations are trained to develop a detailed proposal as per the guidelines. K SACS evaluates the proposals received from NGO/CBO on technical criteria only. The NGO/CBO, who score more than 75% are awarded the grants. A grant of Rs.20,000/- is provided to conduct need assessment and site level micro-planning. & The grants are input based rather than lump-sum. Initial grant duration is one year (later modified to 2 years) but the same could be extended further based on end term evaluation and decision based on evaluation recommendations. Evaluation protocol will be developed by DAC/NACO. The performance of the selected NGO/CBO is monitored by SACS and in case of poor performance, the grant agreement is terminated. 41. In the initial years of NACP-III, TI grants were issued for one year duration and subsequently the duration was made two years. Though ideally it would be desirable to close these grants at the end of original duration and run fresh competition. DAC/NACO strongly feels that because of specialized nature of services provided, need for the selected NGO/CBO to build trust/relationship with end-recipient of services and significant efforts/investment made in capacity building of selected NGO/CBO, it would be desirable to extend the duration of grant to NGO/CBO if their performance is found satisfactory. Bank's task team has carefully evaluated the technical rationale behind this argument and concluded that this approach yields optimum results on ground. Moreover as evident from following table, because of yearly grant agreement termination of non-performing NGO/CBO and gradual increase in number of TI (the number of TI grant is proposed to be increased to 2744 by the year 2017), a large number of fresh grants are awarded competitively each year. Hence there is an opportunity for new NGO/CBO to compete for these TI grants. Based on these arguments, it is proposed to continue with the approach described above for TI grants to be financed by the Bank under NACSP. 45 Table 4: Break-up of TI Grants Year Number of TI Number of Number of Number of new Number of grants at the grants grants extended grants issued TI grants at beginning of terminated without following NGO the end of the the year during the competition Guidelines year year 2007-08 821 132 689 89 778 2008-09 778 109 669 522 1191 2009-10 1191 144 1047 176 1223 2010-11 1223 161 1062 385 1447 2011-12 1447 109 1338 289 1627 2012-13* 1627 180 16434 360 2003 # including 196 TI grants, which were financed/issued by other donors namely USAID and BMGF (out of these 192 grants were issued competitively but not following NGO/CBO guidelines and 4 were issued on single source basis) during NACP-I and now proposed to be transferred to the Bank financing under NACSP. * Estimated number of TIs H. Additional Provisions for Procurement of Goods 42. If NCB/ICB contracts for goods (including drugs and medical supplies) are financed from the Pool, following additional requirements will be applicable: & A professional procurement agent (selected through competitive procedure or a UN Agency) will be used for handling all NCB and ICB procurement of goods. K Drugs and medical supplies will be procured through ICB only (irrespective of value) with additional qualification requirement of WHO GMP certification. The WHO GMP certification of the recommended bidder will be audited by DCGI team before the contract is awarded. & In case of procurement of drugs, medical supplies and equipment, pre-dispatch inspections will be carried out by a qualified agency. & The authenticity of experience certificates (and other documents submitted with the bid) will be checked on random basis or when in doubt. K Independent experts will be included in bid evaluation process. & Record of public opening of bids for all contracts will be shared with the Bank within two working days. K Payment to the suppliers will be released within 30 working days of receiving the bill with supporting documents from the suppliers. In case of any deficiency in the bill, the same will be communicated to suppliers within 15 working days. & Complaints, if received, will be handled promptly, listed in the bid evaluation report and the Bank will be informed periodically about status of such complaints. I. Review by the Bank 43. The Bank will prior review following contracts: K Works: All contracts more than US$10.0 million equivalent; 46 A Goods: All contracts more than US$1.0 million equivalent; A Services (Other than consultancy): All contracts more than US$1.0 million equivalent; A Consultancy Services: > US$500,000 equivalent for firms; and A Consultancy Services: > US$200,000 equivalent for individuals. 44. In addition, the justifications for all contracts to be issued on LIB, single-source or direct contracting basis will be subject to prior review. In the case of the selection of individuals, the qualifications, experience, terms of reference and terms of employment shall be subject to prior review. These thresholds are for the initial 18 months period and are based on the procurement performance of the project, these thresholds will be modified. The prior review thresholds will also be indicated in the procurement plan. The procurement plan will be subsequently updated annually (or earlier/later, if required) and will reflect the change in prior review thresholds, if any. The Bank will carry out an annual ex post procurement review of the procurement falling below the prior review threshold mentioned above. The Bank will also carry out a post-review of TI grants. The TORs for this review will be agreed upon with DAC/NACO. 45. Frequency of Procurement Supervision: The Bank will normally carry out the implementation support mission on semi-annual basis. The frequency of the mission may be increased or decreased based on the procurement performance of the Project. 46. Use of Government Institutions and Enterprises: Government owned enterprises or institutions in India may be hired for unique and exceptional nature if their participation is considered critical to project implementation. In such cases the conditions given in clauses 1.13 of Consultant Guidelines shall be satisfied and each case will be subject to prior review by the Bank. Social (including safeguards) 47. A Social Assessment (SA) was undertaken to document achievements, challenges, and lessons learnt in addressing social issues in NACP-III and to recommend improvements for NACSP. The project will primarily benefit key populations at high risk such as FSWs, IDUs, MSM and transgender groups, through TIs, and bridge population such as migrants and truckers, who include population groups living in or, and from both plain and tribal areas. The active involvement of these vulnerable communities at high risk in TI Community Committees is described in Annex 6 (TI Operational guidelines, NACO 2007). The key areas requiring attention include: (i) creating an enabling environment; (ii) addressing stigma and discrimination (S&D); (iii) addressing human rights, legal and ethical issues pertaining to the HIV/AIDS control program; (iv) addressing gender equality issues; and (v) addressing needs of the vulnerable groups in order to reduce barriers to access and utilization, address outreach challenges, reduce S&D and redress grievances, strengthen women's empowerment, work towards to meet differential needs of vulnerable groups, including youth, children and tribal groups, minimize cultural risks affecting behavior change, and, facilitate enhanced beneficiary and civil society participation. Working groups constituted by DAC/NACO on different themes have reflected on the NACPIII experience and have provided their recommendations on various themes including gender, targeted intervention for different beneficiary groups, beneficiary participation, S&D, information, IEC; capacity building, coordination and mainstreaming. The draft Social 47 Assessment (SA) summarizes achievements, challenges, innovations, best practices and lessons learned and recommendations for improvement offered by the working groups. Based on the SA, DAC/NACO has prepared a Gender Equity and Social Inclusion (GESI) strategy. The SA has been disclosed on the NACO website along with the GESI strategy that was also disclosed on the NACO website and the Bank Info-shop. 48. Indigenous Peoples: The Bank's Operational Policy 4.10 (Indigenous Peoples) has been triggered in view of the implementation of NACSP country-wide both in plain and tribal areas, as a continuation of the NACP III framework. India recognizes that tribal groups living in specific regions of the country need special protection and such areas are listed based on provisions in the Fifth Schedule of the Constitution. The Indian government takes care to extend benefits under all its programs and schemes especially to tribal people. The specific focus of TIs under the Bank-funded project will be on HRGs and other vulnerable populations irrespective of their location and ethnic status. Therefore the tribal groups meeting HRG identification criteria will equally benefit from the targeted intervention under the Program. The Project will not be specifically targeted at the tribal populations. An HIV vulnerability assessment carried out among tribal groups on a pilot basis in Gujarat, ruled out any specific HIV vulnerability of tribal people in view of their location or ethnic identity. The study however recognized the need for special IEC and other measures for HIV prevention amongst the tribal people in view of their low awareness levels, behavioral risks (poor health seeking behavior), and weak socio-economic conditions. Therefore, complying with the Bank safeguards requirements (OP 4.10), DAC/NACO, based on the Social Assessment, adopted a GESI strategy, which includes appropriate and relevant measures that will benefit gender groups and socially disadvantageous groups, including the tribal people, where need is demonstrated, and economically disadvantaged groups such as migrants, and enhancing the quality of support services, IEC and social protection through linkages with other sectors. The GESI strategy will provide guidelines for outreach, IEC, and other support services. DAC/NACO undertook a "vulnerability and need assessment study in category A and B (i.e., high burden) tribal districts of Gujarat on a pilot basis during NACP-III, lessons learnt from which will be incorporated in the GESI strategy. 49. Key Actions: The Social Assessment lists out important policy and implementation measures for addressing the key social issues listed above. These emphasize: (i) training and sensitization; (ii) policy advocacy to remove legal-institutional barriers, (iii) raising public awareness through innovative and culturally sensitive IEC strategies for fighting S&D and for accelerating behavior change, (iv) capacity building of beneficiary groups and CBOs/NGOs implementing TIs; (iv) encouraging community participation in IEC activities; and (v) effective linking of TIs with testing, care, treatment, and support services. DAC/NACO has already taken several measures which address these concerns and will fine tune its implementation strategy to better address these during the project. 50. Stakeholder Risks, Consultations, and Grievance Redress: DAC/NACO and SACS are working closely with several CSOs, associations, and advocacy groups representing key stakeholders and affected groups in designing and implementing various activities, including as members of TI the Community Committees at local level. They are also working with other departments in order to mainstream HIV interventions within programs and schemes. DAC/NACO and SACS have adopted a highly consultative approach in planning and 48 implementing NACP activities in recognition of the socio-cultural sensitivities and awareness needs of key stakeholders including CSOs. Five regional consultations were carried out at New Delhi, Kolkata, Guwahati, Bangaluru, Ahmedabad to prepare the design for the NACP IV; the summary of discussions and stakeholder recommendations have been documented in the draft Social Assessment, which is finalized. The project design includes a framework for stakeholder consultations during the implementation process. A dissemination workshop on the best practices was held in 2012 with all the stakeholders wherein all the above were discussed and presented. Grievance redress mechanisms have been established at the state levels to respond to reported cases of stigma and discrimination, especially in health service providing institutions to reduce access barriers, which will be strengthened as required for the project. 51. Implementation Strategy: Elaborate implementation mechanisms have been established for NACP IV, which are a continuation of the systems and procedures established for NACP-III with improvements wherever required. DAC/NACO and selected SACS have established special cells for "mainstreaming", which handles issues of social inclusion, gender equity including measure for socially vulnerable populations in coordination with other agencies. The TIs for specific beneficiary high risk groups will be implemented in partnership with the CSOs and CBOs having required skills and experience in the field and locality and having the sensitivity to important social issues involved. In order to improve the performance of the TIs in terms of community participation in IEC and outreach activities, the program will encourage community outreach as an important element of the intervention strategy. Capacity building requirements in specific areas have been highlighted in the draft SA, based on which the Program will plan and implement demand driven training and awareness programs for various stakeholders having a key role to play in the implementation. . Further details of the implementation strategy will be finalized prior to the Project negotiations. Environment (including safeguards) 52. The primary environmental risks associated with the proposed project relate to the handling and disposal of infectious wastes resulting from HIV related preventive activities. The wastes resulting from treatment and other basic services, not financed by the Project, include sharps (infected needles and syringes, surgical equipment, I.V. fluid sets) infected blood, HIV test kits used in ICTC centers, blood banks 18 and laboratories and pharmaceutical wastes. However, proper management of such wastes is integral to prevention of further infection and control of the epidemic. The overall context for health care waste management in India is provided by the Government's Bio-Medical Rules (prepared in 1998 and amended in 2000 and 2011). The Rules, which apply to all persons and institutions, which generate, handle, treat and dispose infectious waste, are based on the principles of segregation at generation, followed by adequate treatment and disposal to prevent recycling of such infectious waste and reduce adverse impacts on public health and the environment. The current proposed project has been classified as Category 'B' as per the World Bank's Operational Policy (OP 4.01) on Environmental Assessment (EA). 18 Blood banks and "treatment" are mentioned here, although the Project will not finance safe blood interventions or antiretroviral therapy, which are covered by domestic funding and other donors. 49 53. Incompliance with the national policy, DAC/NACO had prepared an Infection Control and Waste Management Plan under NACP-III in 2006, to ensure the efficient and sustainable management of potentially harmful waste generated from all its centers which cater to the prevention, care and treatment of HIV/AIDS. Under NACP IV, DAC/NACO has undertaken a situation and gap analysis based on which recommendations have been made to improve implementation under the program. The assessment team found that IC-WM practices were satisfactory in most facilities, including ICTCs, PPTCTs, ARTs, and Blood Banks (government and private) within the sample group. There were well-established systems for IC-WM and consumables and PPEs were found to be in adequate supply. The regular training programs that had been conducted ensured that all staff were trained and well aware of the guidelines and risks associated with their services. Most of the HIV/AIDS program staff are immunized against Hepatitis B and there are systems in place for reporting of needle-stick injuries. However, the report indicated that sharps handling and disposal needs to be improved as there were a few instances of recapping and improper disposal even though needle cutters were available. The IC- WM committees were found to be not very active in many hospitals. The issue of final disposal was also raised since many of the HIV-AIDS services are provided within large government hospitals and hence are dependent on waste disposal facilities of the hospital. These findings closely match those of the World Bank's supervision and review findings during the NACP-III implementation. 54. The recommendations reiterate the need for a strong institutional framework both at the national and state levels, scaling up ICWM implementation in TI areas, intensifying capacity building activities and reducing the volume of infectious waste generated through effective segregation and waste management. These recommendations, which are synchronized with the revised Bio-Medical Waste Management Rules (2011), have been detailed into an Action Plan, which has been finalized and uploaded on NACO's website. Monitoring & Evaluation 55. DAC/NACO has developed a very strong and robust monitoring and evaluation system, including a computerized management information system (CMIS) which has been incorporated into a web-based Strategic Information Management System (SIMS) that is being rolled out. DAC/NACO has also developed a Computerized Financial Management System (CPFMS), also to be linked with the SIMS. These systems generate quarterly information from the SACS on key performance indicators that help DAC/NACO to track program performance. The core performance management data are included in a national "dash board", to be updated for NACSP and continue to serve as a management tool for SACS, DAC/NACO and its development partners. The SIMS will enable individual level data collection for key program areas and has built-in real-time analytic, triangulation and data validation capabilities, to be more fully optimized during NACP IV. 56. DAC/NACO has prepared a results framework for the fourth phase of the NACP, establishing program objectives, and activities to support those objectives, with performance indicators and targets. The Project Results Framework is aligned with DAC/NACO's broader framework for 2012-2017, and includes a subset of those targets and indicators. For the evaluation of the key project indicators and targets, DAC/NACO will commence a second generation surveillance system, and conduct the first national Integrated Bio-Behavioral 50 Surveillance (IBBS) in 2013, building on the experience of Integrated Bio Behavioral assessment carried out in selected high prevalence southern states in 2006 and 200919 and on the lessons learned from several rounds of national HIV sentinel site surveillance and the 2009 behavioral surveys in selected states. The IBBS will provide the Project baseline data and might result in the fine-tuning of some of the Project's targets by the end of the first year of implementation. The IBBS will complement the current annual HIV sentinel surveillance system that generates data on HIV prevalence among HRG and the general population. Role of Partners 54. Despite reduction in funding from many donors, some development partners will continue to support to the national response to HIV and AIDS over the next 2 - 5 years. The Joint UN theme group (UNAIDS, UNESCO, UNODC, ILO, UNFPA, UNIFEM, UNICEF and UNDP) will continue their support to priority areas for the next five years under UNDAF and UBRAF. The GFATM will contribute about US$340 million, including about US$84 million for expanding access to anti-retroviral treatment and counseling & testing facilities. The US Government (CDC, PEPFAR and USAID) will primarily support lab systems strengthening, human capacity development and strategic information. In addition, the Bill and Melinda Gates Foundation will continue its technical support for condom promotion and some other activities. '9Round I and II of IBBA, Avahan Project. 51 凶 亂n rn 亂n 臘 · Annex 5: Implementation Support Plan 1. The implementation support plan of the Project will focus on strengthening DACNACO's and SACS's financial management and procurement capacity, especially in contracting of NGOs and CBOs to deliver TI, drawing on the lessons learned from the last three phases of the national program. Strategy and Approach for Implementation Support 2. The implementation support consist of multiple strategies and approaches to ensure effective support to NACP, including Biannual joint reviews of the Project, including review of the dashboard indicators and other program management data, and specifically the fiduciary aspects of the program. Active involvement of the task team, as needed and requested, in relevant Technical Resource Groups that meet intermittently to review the program and provide direction on specific technical areas of the program where the Bank team can bring international expertise and experiences, also from other Bank projects. This includes participation of task team members in the surveillance technical advisory group. Support to DACNACO's financial management and procurement teams, especially to enhance the contracting of NGOs and CBOs, and oversight, discussed in more detail in Sections VI. D. Implementation Support Plan 3. The implementation support plan for DACNACO is divided into two parts, (i) semi- annual implementation review conducted by the Bank and partners to support DACNACO in implementation, (ii) quarterly, and/or needs based participation in technical discussions held with TRG and other groups related to issues to be determined, meetings with financial and procurement team to support effective fiduciary performance management, and other needs based support to DACNACO during the project implementation related to safeguards. 4. Similar to the previous Projects (NACP 11- 111), the Bank will participate in semi-annual implementation review of the program covering the Project components supported by IDA. The first implementation review will be conducted in September 2013 and the mid-term review will be held in September 2015. 5. The financial and procurement support to the Project will be ongoing. From the initiation phase of the project, the Bank team will support DACNACO in strengthening their systems for effective procurement and financial management, including specific inputs in preparation of ToRs for auditors and NGO grant agreements. 6. Other need based support expressed by DACNACO and gaps in implementation identified by technical team will be addressed throughout the implementation. The Bank team will monitor institutional strengthening interventions and technical support units. To ensure high quality and to bring global experiences in innovations and international best practice, while considerinR the Project design, the Bank team will provide public health expertise, economists, 55 FM and procurement specialists, safeguards, and governance and accountability know how, with the specific team composition for each mission determined based on the requirements at that time. 7. The specific support in implementation during the project period in mentioned below: Time Focus Skills Needed First 12 months Overall coordination Task Team Leader (TTL) Project Launch Task team (TTL, Operations Officer, FM specialist, Procurement Specialist, Environmental Specialist and Social Development Specialist) Review of NGO contracting and Procurement specialist/ Operations procurement system; Procurement officer and procurement consultant for training and review, as needed sample contracts for post reviews Strengthen the financial management by Financial management specialist review of ToR for auditors; FM training and review, as needed Institutional arrangement and GAAP Operations officer / FM Specialist/Procurement specialist Integrated Bio Behavioral Survey TTL or other Technical specialist Base line data 12-48 months Review of performance data from CMIS, TTL/ Operations officer dashboard Review of procurement management Procurement specialist Implementation review (biannually) Task team (TTL, Operations Officer, FM specialist, Procurement Specialist, Environmental Specialist, Social Development Specialist, and Technical Specialist, as needed) Review of GAAP Operations officer / FM specialist/ Procurement specialist Mid-Term Review Task Team (TTL, Operations Officer, FM specialist, Procurement Specialist, Environmental Specialist, Social Development Specialist, and Technical Specialists) Other need based support expressed by As required DAC/NACO and one felt by task team 56 Annex 6: Definitions of Targeted Interventions and Methods for validation of size estimates of High Risk Groups and Contracting of NGOs to deliver TIs NACSP Targeted Interventions and services for vulnerable groups Intervention Services Project Results Services for female Community based response to risk Female sex workers use a sex workers (FSWs) reduction services like, Peer education; condom with their most recent condom and STI services and referrals client to other HIV related services-ICTC, ART, HIV/TB etc. Services for men who Peer education; condom and lubricant Men who have sex with men have sex with men supplies; community- based response use a condom during sex with (MSM) and risk reduction services; STI service most recent partner referrals; and referrals to other HIV services-ICTC, ART, HIV/TB etc. Services for Peer education; condom / lubricant Transgender and Hijra use a Transgender and Hijra supplies; community- based response condom during sex with most population and risk reduction services; STI service recent partner referrals; and referrals to other HIV services-ICTC, ART, HIV/TB etc. Harm reduction Peer education; provision for needle Injecting drug users do not interventions for IDUs and syringe, opioid substitution therapy; share injecting equipment and referrals to ICTC, ART, HIV/TB, during the last injecting act STI etc. Services for truckers Peer education for behavioral change; Migrants/truckers reached by migrant workers STI service; condom promotion, and preventive services/using referrals to ICTC, ART, HIV/TB, etc. condom with most recent partner 1. Validation of size estimates for targeting of prevention interventions for high risk groups: DAC/NACO has identified a standard methodology that involves validation of HRG estimates and site assessment. The overall objective of validation is to identify or confirm locations within the states and districts where TIs should be available to reach those populations who are most at risk. To understand the mobility pattern among the HRGs, the TI program also conducts community led, social network analysis (SNA) that helps in identification of hard to reach high risk groups for example new/ young sex workers periodically. The information from mapping or site validation is used for micro-site planning of TIs by the NGOs and CBOs. 57 2. NGO/CBO selection process and evaluation: DAC/NACO selects NGOs and CBOs to implement TI following the Operational Guidelines. The selection process entails detailed review and capacity assessment of the NGOs that initially express an interest in implementing TI. The NGOs/CBOs are appraised in the field, and scored on seven categories including: governance structure, staffing pattern, institutional experience, procurement system, financial management, planning and monitoring, and relationship with external partners. Based on the scores, short- listed NGOs submit their proposals. The detail process of NGO selection and condition for termination of grant agreement are found in the "Operational Guidelines for NGO and CBO selection. The operational guidelines explain how to: call for applications and obtaining information from NGO, CBO and Networks; carry out a desk appraisal for preliminary screening of applications to shortlist agencies for institutional appraisal; conduct field visits of shortlisted agencies to assess their institutional capability and program effectiveness; conduct needs assessment of shortlisted agencies and how to conduct the "Proposal Development Workshop" for short-listed agencies and review of proposals and award of grants; extend or terminate grants. 3. NGO performance evaluation: Biennially, DAC/NACO evaluates NGO/CBO performance using the TI Evaluation Tool that assesses three aspects of the performance: organizations' capacity, program delivery, and finance. Under each of these broad areas, there are sets of indicators which are used to evaluate the NGOs/CBOs and score them. A weighted average of all these scores is then calculated for each NGO. This evaluation categorizes them into three groups based on the number of years these NGO have been implementing TIs. To evaluate the TIs, various qualitative and quantitative tools and techniques are used including focus group discussions, key informant interview, and participatory observations. The third party evaluation team that evaluates the NGOs/CBOs consists of program and finance expert who verify the relevant documents and registers during the evaluation. Based on the weighted average, the NGO are ranked and weak NGOs are provided support to strengthen their implementation, while non-performing are terminated. The overall process is transparent and the results along with the details of the score are disclosed on the website of SACS and DAC/NACO: http://nacoonline.org. 4. Community participation and accountability for monitoring NGO activity: DAC/NACO has formed committees comprising of representatives from the TI projects as well as HRG communities. These committees act as monitoring agents for the program in each location and hold periodic meetings to address issues that arise during the implementation20. The broad objectives of the committees are: to identify the needs of the HRGs in their area; help HRGs to attain better health, socioeconomic empowerment and improved quality of life; assist NGOs in planning and implementation of the project; address advocacy and legal issues; and demand generation for STI and HIV services. 5. In addition, each TI project also constitutes various sub committees with representation of community members. The different NGO level sub committees in the TIs are as follows: STI committee; IPC committee; and ethical & grievance committee. The formation of intervention level sub committees also check and ascertain whether the services meet the needs and are of 20 TI Operational guidelines, volume- I, NACO. 2007 58 acceptable quality to the beneficiaries and work with NGOs to improve the services. Under the revised costing guidelines of NACO (April 2009), the community based activity has the provision of budget allocated for conducting meetings with community and stakeholders at project and hotspot level. 59 \ os _ 000,1 r l 'fl 0 oo i n 0 - 0 0l 0000a~ \0C - 0 oo oo - C, s ofo \0os 00o e V)1 VI) C,, ID ,01 rý 0 w ri r n-cý C 00 0n 00 005 0) C0 C) eo e VI) soo ea e s eo o. en mene -- oo v- kr -ý v s e V o e '- l 00 c 0 V : -C CD 0- - en 00 o r cl-- o- - S o e V' ":j- e C9 o1 V)r en 0,1 ,en co,] 0 c^,] V -00 V fn .45 en nj v- o c 00 c^ . Tj .j- (n ,0a c en e--n C C^,] 00 ovi o en c, vi- ro r kr V-- D ri t C C v V oo_- - o - C 00 c,]0j ~ o 0 - - o - 00 o |0 4 rrt -0 -fl CA 'l 0 'l0' 'l L f ooo -l. >o-o ol. -c> o o. CAC 1.~ ;,, 0 e 00 00 V,0 0\0 -0 o R n o 0~~ 0 0 4o rin o o oo o CD en 0o Ni n CD inn © 00r 5 00 C-V1 n 00V en e~n oo 0, nl 11 \0\0 00 en~i 1,- t- r4 V) - 0 en ~ 00 00 i C00 v r- C tio N 1o00 V en0 00 k r kr)- o ro 0 0,1 K in n 0\0'Z 00 eni 6O- r4 V' ý 00 c,] V,1 -r004i N r-in r © o inrN v CD r- r - C " en v 'e -0n roo- 00 r-ch 0 A 0 eo 6 o - L inn - o in < oo o' - oe i e~e e oNn e aoo Co ri r i- 0 00 e0 e om- tå v rn ID 0R --\ n - - ~ -. eCd~0 -Or, , ~ c)E *f 4 ~~~~, ri'~- 0 ct ä 0 ri*~ c7] c> c> e새 C 세· c9 C- V CD cý t- c^,] v CD "c ri CN CD CD cý cý 5 5 en en en fn 0,1 CN V CD le 1,5 11cý Cý' V V kfý en en cý 5 5 rJ C,, 1,0 CN V CD in V,1 V,1 00 cý ID = CD 06 ce V,1 1,0 CD CD r4 OG 5 v VI) CD c,] m r-ý' CZ, 25 00 tn r4 v t ý0 le CD C4 Ci 1r cý CD ý0 - CD c,] = 00 en tn - c,] M ',D V) IT ri 25 25 't 06 f r--ý 1,0 r4 c,] le tn g r- 5 6 tn 00 t- r4 c9 cý tn nj- 00 r4 v ID cý tn 4.0 25 25 n - V C,] ao CS C) C4 r t- CD 00 ý.5 't 00 S 00 le en ,j- c9 ý0 V rý 00 00 in 00 t- CD CD c^,] m ID t- ý0 v v , "c r4 00 25 m r,ý 65 ý.4 5 c5 c m ntr ~ 5 ý.5 00 00 t- rn nj- tn C) 1,0 -1 V V-ý le CD 00 r4 tn CD CD le 00 25 c-, dr 06, m V-I cý 25 c-, r4 V-ý 00 C4 ri trý ~ -ý 0-, t-ý, ri en 0 C) 102 52 19 V) cn cn cn 긔 · Annex 8: Governance and Accountability Plan (GAAP) India: National AIDS Control Support Project (NACSP) Introduction 1. The National AIDS Control Organization, Department of AIDS Control, Ministry of Health and Family Welfare (MoHFW) has successfully implemented a Governance and Accountability Plan (GAAP) for the Third National AIDS Control Program (2007- 2012). The actions taken included: improvement in quality assurance mechanisms through mandatory certification schemes and post-delivery testing of drugs and kits during entire life in addition to mandatory pre-delivery inspection and testing; improving bidding process and mitigating collusion through checking the authenticity of the experience certificates, manufacturer authorization, bid security etc ... ; improving competition through evolving generic and broad technical specifications and past using those specifications in the schedule of requirement; strengthening procurement implementation and contract monitoring through use of data of market survey of manufacturers and suppliers of health sector goods (with its continuous updates) while framing qualification criteria and preparation of Annual Procurement Plans by SlAs. strengthening inventory management system by increasing oversight on decentralized management of storage and distribution of drugs and kits. disclosing information by posting annual procurement plans, technical specifications, bidding documents and request for proposals on the NACO website; improving program management using a dashboard at national and state levels to effectively monitor program performance, and developing the computerized financial management system. 2. NACSP offers an opportunity to further strengthen governance and accountability at both national and state levels. 3. The GAAP for NACSP is based on the experience of implementing three phases of National AIDS Control Program, and will address remaining institutional challenges and fiduciary, governance and accountability risks in the new design of the project to be financed by Govt. of India, GFATM, World Bank and other donor partners. Specific arrangements will be made as summarized in the Table (annex 4), to mitigate actual and potential risks and to ensure that funds are used effectively and efficiently. The main aim of the GAAP is to ensure that the project development objectives are achieved by mitigating governance risks and ensuring institutional effectiveness and accountability. The GAAP will be monitored and risks reassessed during the annual Joint Implementation Reviews, involving the Bank and the NACSP Steering Committee. 66 Main Identified Risks A. Procurement and Contract Management: Based on the experience of NACP III, there are areas of improvements in the contracting of NGOs and CBOs to deliver targeted interventions to high risk groups. There is also a need for strengthening capacity of some SACS in compliance to NGO/CBO Guidelines and monitoring of NGO/CBO grants. B. Financial Management: Although the NACP III has introduced the computerized financial management system, but there is a need to strengthen capacity of DAC/NACO and SACS to improve FM performance, including better oversight on grant management, timely and effective compliances to audit observations, preparation of Interim Financial Reports, and to build internal control environment, including measures to monitor and manage staff and other advances. C. Accountability and Transparency: Although DAC/NACO follows up on incoming complaints and other reports received at state and national level on a case by case basis, there is a need to strengthen grievance redressal system. The classification of procurement and contract related information need to be done for public disclosure. The procurement and contract related information need to be continuously disclosed by all SACS at the state level. 4. The table below summarizes the key risks, mitigation measures, responsibility and timeline with status: Risk description Mitigation steps Responsibility Timeline/ Status Procurement and (i) Further Streamline the DAC/NACO Revised NGO/CBO Contract contracting procedure for with SACS Guidelines Management: NGO/CBO and monitoring of prepared by end of NGO/CBO grants May 2012. (ii) Improving the capacity of SACS in NGO/CBO selection. Status: Done. Financial Strengthening existing DAC/NACO Plan for Management: financial management system with SACS strengthening of by: financial (i) Making better use of management under CPFMS information for NACSP by end of disbursements and Feb 2013. management decision making; (ii) Improved systems for Status: The plan timely and effective was done and compliances to audit implementation is observations; underway.. (iii) Improved internal control environment at SACS, including measures to monitor and manage staff and other 67 Risk description Mitigation steps Responsibility Timeline/ Status advances: and, (iv) enhanced monitoring controls observed by DAC/NACO over SACS. Accountability and (i) Information classification DAC/NACO transparency for uploading at website done with SACS at national and SACS level. Status: Done. Status: Done. Status: Done. . (ii) uploading key procurement and contract related information on website of SACS and DAC/NACO. (iii) Strengthening Grievance redressal system, and designating Grievance Redressal Officer at DAC/NACO and SACS level. 68 Annex 9: Innovations and Good Practices in NACP III 1. Each phase of the national AIDS Control Program of India has built on the lessons learned from the previous phase. The third phase of the National AIDS Control Program (NACP III) stimulated a lot of innovations, which were carried out by DAC/NACO and its partners, including development partners, bilateral agencies, foundations, private sector and other government institutions which have resulted in improvement in access and use of prevention, treatment and care. These innovations include new delivery mechanisms; strategic planning (including evidence generation and data use), program management and quality improvement; and the creation of new products, technologies and health care options. To encourage the process of learning from this experience, during the mid-term review of the third phase of NACP, DFID as one of the pooling partners with the World Bank and the Government, initiated the process of identifying program innovations across states and sectors for wide dissemination. 2. Innovations were introduced in many program areas: A. Innovations to scale-up prevention included: (i) Peer led high risk group (HRG) mapping to enable effective scale-up of targeted interventions (TIs); (ii) link workers scheme as a strategy for reaching high risk populations in rural areas; (iii) involvement of public- private partnership for extension of treatment for sexual transmitted infections (STI), integrated counselling and testing centres (ICTC) and prevention of parent to child transmission (PPTCT) services; (iv) providing opioid substitution therapy for IDUs in public health settings; (v) the nurse practitioner model for providing HIV services to people at primary health services is step towards greater convergence with government health facilities; (vi) master health check-up program in Tamil Nadu linked to existing government services normalised health services for HRGs; and (vii) single prick syphilis/HIV tests. Separate interventions are initiated for TG/Hijra in relevant sites. Migrant intervention strategy is revised based on evidence. B. Innovations to strengthen care, support and treatment for people living with HIV and AIDS (PLWHAs) include: (i) decentralisation of HIV treatment through linked Anti- Retroviral Therapy (ART) centres; (ii) introduction of an electronic patient card (smart card) for improved access to ART across the country; (iii) involvement of DAPCU as district level functionary to improve access to government social protection schemes for HRGs and PLWHAs; (iv) introduction of health insurance for PLWHAs under RSBY; and (v) the provision of legal aid services at ART centres. The above innovations allowed DAC/NACO to increase the number of people who need ART and other social entitlements. C. Innovations to strengthen the information management system include: (i) the patient monitoring system; (ii) broad mapping of HRGs; (iii) district epidemiological profiling using data triangulation; and (iv) the use of Strategic Information Management System - a web based reporting system for effective program monitoring. These innovations have raised high performance level of the DAC/NACO monitoring and evaluation system, allowing for easy transfer of data and knowledge dissemination. DAC/NACO continues 69 to make further improvements in its surveillance methods, including planning for second generation surveillance system: integrated bio behavioral surveillance. D. Performance management innovations include: (i) a web-based computerized financial management system linked with program performance; (ii) TI NGO selection and evaluation procedures that assess NGOs compliance against a standard set of performance criteria, including fiduciary issues, governance, human resource and program performance; (iii) a dash board that provides crucial information for program monitoring, generated from the computerized management information system (CMIS), including a set of 21 operational indicators that require management attention; and (iv) NACO operational guidelines on every component of the program. 3. Dissemination of innovations and way forward: As India moves to implement the fourth phase of the NACP, DAC/NACO intends to build on the above-mentioned innovations and good practices that have significantly contributed to the effectiveness of the program. A three-day National Summit on Good Practices and Innovations in NACP-III was held in Delhi on April 25-27th, 2012 where these innovations and good practices were presented by DAC/NACO and its development partners, implementation agencies, government functionaries and civil societies, including community members. More than 400 participants from across India and from other countries attended the Summit where presentations, poster sessions and interactive technical sessions showcased innovations and good practices in prevention, care, support and treatment. The information and lessons presented at the Summit will be taken into consideration for planning and implementation of the next phase of the program, and are reflected in this Project document. DAC/NACO will continue to innovate in NACP IV and to disseminate good practices with the assistance and collaboration of development partners, research institutions and through private public partnerships. 70 Annex 10: Economic and Financial Analysis Economic Analysis 1. Prevention has been the mainstay of India's HIV program which seeks to prevent new infections through saturation coverage (>80%) of HRGs with targeted interventions (TIs). Scaling up of prevention services has been shown in several studies to have played an important role in the overall reduction in adult prevalence from 0.39% in 2004 to 0.31% in 2009 and the decline in its incidence by more than 50% observed over the past decade. A number of studies in India have shown the effectiveness of TIs for FSWs in reducing risky sexual behavior.21 Other studies have used mathematical modeling to relate improvements in behavior, with a declining trend in HIV incidence and prevalence in India22. Studies conducted in other developing and developed countries context have also shown that preventive strategies promote safer sexual behavior and are also cost effective. 23 2. Two recent studies, one an independent impact evaluation 24 and the other a cost- effectiveness analysis25 of India's response to HIV, have found the TIs for FSWs to be associated with the national decline in HIV prevalence, averting an estimated three million new infections. The cost-effectiveness analysis estimate that the Government and development partners spend on average US$104 (INR4680) per HIV infection averted, and US$10.7 per disability-adjusted life- year (DALYs) averted. Discounting at 3%, in India TIs for FSWs cost US$105.5 (INR4748) and US$10.9 per HIV case averted and DALY averted, respectively. Given its GDP per capita, TIs are a cost-effective strategy for HIV prevention in India. The impact evaluation, using a quasi- experimental approach to retrospectively compare changes in HIV prevalence according to the intensity of TIs, found a significant decline in the prevalence among FSWs and young women (15 - 24 years) attending antenatal care in four high HIV prevalence southern states (Tamil Nadu, Karnataka, Andhra Pradesh and Maharashtra). Among those antenatal care attendees in high TI intensity districts, HIV prevalence declined by more than 50 percent from 1.9 percent in 2001 to 0.8 percent in 2008, whereas in low TI intensity districts, the rate remained constant at 0.9 percent in both 2001 and 2008. 3. The economic welfare costs of HIV and AIDS in India are significant 26 although the impact on economic growth is small. The HIV epidemic has a disproportionate impact on key population groups, and frequently results in and exacerbates poverty as shown by estimates of economic impact on households and the ability to cope with stigma and other structural amplifiers. Indicators of access to prevention and treatment are correlated with socioeconomic parameters such as gender, educational attainment and wealth. The ability to cope with 21Reza-Paul et al 2008, Basu et al. 2004; Fung et al. 2007. 22Boily et al. 2008. 23 Walker 2003, Hogan et al. 2005 24 R. Kumar, S. Mehendale, S. Panda, et al. "Impact of Targeted Interventions on Heterosexual Transmission of HIV in India." BMC Public Health 2011, 11:549. 25 S. Prinja, P. Bahuguna, S. Rudra, et al. "Cost Effectiveness of Targeted HIV-Prevention Interventions for Female Sex Workers in India." STI2011, 87:354-61. 26 HIV and AIDS in South Asia, An Economic Development risk. Hacker M and ClaesonM et Al. Directions in Development, Human Development, The World Bank, 2009. 71 catastrophic illnesses such as AIDS at the household level is limited for those below or on the margin of poverty thresholds. Reflecting both infection patterns and the low socioeconomic status of widows, women are particularly vulnerable to the social and economic consequences of HIV and AIDS in India, as is highlighted by the above referenced economic benefit analysis and also by the lessons learned from NACP I-III. Investing in prevention efforts, therefore, contributes to contain poverty, has benefits beyond the epidemiological benefits, and keeps down the fiscal costs associated with scaling up treatment. 4. An analysis of budget allocations made in successive phases of the NACP program shows a dramatic increase in those allocations in absolute terms and also in the share of government financing in those allocations -- from 17% in NACP II to more than 90% in NACP IV (in part due to reduction in donor funding for HIV/AIDS), indicating no doubt, of the country's ability to financially sustain the project activities beyond the life of the project. Since the financing of NACP IV will primarily depend on domestic resources, one of the critical challenges facing the program is to continue to invest in cost effective interventions and to move towards efficient approaches through convergence and integration of selected program components with the general health system. The Project interventions are designed keeping this challenge in mind. Even though the IDA credit plays only a minor financial role, the Project is critical for the kind of activities it finances, such as the contracting of NGOs and CBOs to deliver services. The Project will also invest, even if modestly, in further enhancing the Program's capacity to contract NGOs and CBOs for TIs so that such activities could be sustained managerially as well technically beyond the Project life. In the absence of this support, there is a real risk of TI interventions being scaled-down - something that the country can ill-afford, especially after successfully achieving most of the targets set under NACP III to halt and reverse the HIV epidemic in India. Financial Analysis 5. The year 2005-06 marked a turning point for the health sector in India. In 2005-06, government of India launched national flagship program called National Rural Health Mission (NRHM) with the aim of strengthening public service delivery that had become dysfunctional in many states due to years of neglect that was apparent from low and declining public health spending. The strong political commitment resulted in the adoption of an explicit health financing goal, which is to step up public health spending from 1% of GDP in 2004-05 to 2 - 3% of GDP by 2011-12, that is, in a span of 7 years. As a result, public health spending has grown substantially (by around 20% per annum in nominal terms) since 2005-06. 6. Against this backdrop, Government of India (GOI) allocations to Department of AIDS Control (DAC), National AIDS Control Organization (NACO) doubled between 2004-05 and 2005-06 and over the last 7 years the allocations have trebled from INR 534 crores (or $107 million) in 2005-06 to INR 1700 crores ($340 million) in 2011-12 (see the tables below). In the last few years, HIV/AIDS program accounted for anywhere between 5% and 6.5% of total central health allocations - this is roughly the same share as that of all national disease control programs put together that include vector borne disease control program, TB control program, Leprosy control program, blindness control program and so forth. This is not surprising given that HIV/AIDS is a 100% centrally sponsored scheme which means that states are not expected 72 to make any financial contributions in implementing the core prevention and treatment strategies of the program, which is generally not the case with national disease control programs. Nevertheless, many states do provide on their own account various types of benefits, including financial benefits, to the people affected by HIV. Table 1: Government Health Allocations and Expenditures (in INR crores) 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 -03 -04 -05 -06 -07 -08 -09 -10 -11 -12 -13 1068 1299 1585 1812 2264 2515 3045 3448 MoHFW Budget 6753 7620 8438 7 7 7 5 2 6 6 9 MoHFW Budget 1094 1441 1766 2256 2445 Spent 6521 6856 8087 9650 8 0 1 7 0 NDCP 491 492 510 701 829 968 1196 1188 1204 1395 1768 DAC/NACO Allocations 225 225 259 534 706 815 1100 1100 1435 1700 1700 DAC/NACO Revised Allocations 242 233 426 534 706 954 1123 980 1400 1500 DAC/NACO Expenditures 240 232 422 533 669 918 1031 938 1167 1291 Share of NDCP in MoHFW budget 7.27 6.46 6.04 6.56 6.38 6.10 6.60 5.25 4.79 4.58 5.13 Share of DAC/NACO in MoHFW budget Sources: (i) Notes on Demands for Grants, Expenditure Budget, Central Government Budget (Various Years), (ii) Budget Information share by DAC/NACO, and (iii) NACO website: www.nacoonline.org Table 2: Government Health Allocations and Expenditures (in million US$) 200 200 200 200 200 200 200 200 201 201 201 2-03 3-04 4-05 5-06 6-07 7-08 8-09 9-10 0-11 1-12 2-13 135 152 168 213 259 317 362 452 503 609 689 MoHFW Budget 1 4 8 7 9 1 5 8 1 1 8 130 137 161 193 219 288 353 451 489 MoHFW Budget Spent 4 1 7 0 0 2 2 3 0 NDCP 98 98 102 140 166 194 239 238 241 279 354 DAC/NACO Allocations 45 45 52 107 141 163 220 220 287 340 340 DAC/NACO Revised Allocations 48 47 85 107 141 191 225 196 280 300 DAC/NACO Expenditures 48 46 84 107 134 184 206 188 233 258 Share of NDCP in MoHFW budget 7.27 6.46 6.04 6.56 6.38 6.10 6.60 5.25 4.79 4.58 5.13 Share of DAC/NACO in MoHFW budget 3.33 2.95 3.07 4.99 5.43 5.14 6.07 4.86 5.70 5.58 4.93 DAC/NACO Budget Utilization Rate 99.2 99.6 99.1 99.8 94.8 96.2 91.8 95.7 83.4 86.1 73 7. The current year marks the beginning of the new phase (NACP IV) of the program. In the earlier phases of the project, external donors have contributed a lion's share to the total financing of the program (90.5% of total NACP II financing and 59.2% of NACP III financing). However, in the new phase (NACP IV), the situation has changed with Government of India stepping up its funding. 8. Of the total NACP allocations during 2007-08 and 2010-11, 66.8% was allocated to states for implementing various program interventions. Similarly, of the total NACP expenditure over the same period, 57.4% was spent by the states and the balance at the central level, most of which goes in financing central level procurement of commodities. With over 90% budget utilization rate, the DAC/NACO record on spending the resources allocated to it has been excellent, except for the last two years when the utilization rate tended to decline. Perhaps, for this reason the allocations for 2012-13 have remained the same as those in the previous year. 9. The financial envelop of the proposed Bank financing is US$255 million over a period of 5 years, beginning 2012-13. Assuming this envelop to be evenly distributed over the project period, the amount of US$50 million in the current year (2012-13), which when combined with the GOI allocations already made for this fiscal year (US$340 million), would constitute 12.8% of the total available budget for this year. With the increase in the overall GOI program allocations over the coming years, this share is expected to decline further. The record of government substantially increasing its share in the total financing of the program should leave no doubt on the financial sustainability and government ownership of activities supported under this project beyond the project life. 74