Public Disclosure Copy The World Bank Implementation Status & Results Report Cambodia PFM Modernization Project (P143774) Cambodia PFM Modernization Project (P143774) EAST ASIA AND PACIFIC | Cambodia | Governance Global Practice | Recipient Executed Activities | Investment Project Financing | FY 2014 | Seq No: 4 | ARCHIVED on 09-Oct-2015 | ISR20503 | Implementing Agencies: Ministry of Economy and Finance, Royal Government of Cambodia Key Dates Key Project Dates Board Approval date:04-Dec-2013 Effectiveness Date:07-Nov-2013 Planned Mid Term Review Date:16-Jul-2015 Actual Mid-Term Review Date:20-Jul-2015 Original Closing Date:14-May-2016 Revised Closing Date:14-May-2016 Project Development Objectives Project Development Objective (from Project Appraisal Document) The project development objective is to enhance public financial management by strengthening: (a) revenue mobilization and (b) budget execution processes through the implementation of the Financial Management Information System (FMIS). Progress against the principal objective will be measured by the contribution made to the PFMRP’s Key Performance Indicators and Targets set forth under the Stage Two of the PFMRP. Has the Project Development Objective been changed since Board Approval of the Project Objective? No PHRPDODEL Components Name Mobilization of Revenue and Project Management Functions of the GSC:(Cost $2.00 M) Improving budget execution processes through the implementation of the Financial Management Information System (FMIS):(Cost $17.50 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO  Satisfactory  Satisfactory Overall Implementation Progress (IP)  Satisfactory  Satisfactory Overall Risk Rating  Substantial  Substantial Implementation Status and Key Decisions 10/9/2015 Page 1 of 14 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Cambodia PFM Modernization Project (P143774) The project is progressing satisfactorily toward the achievement of its development objectives. The implementation of the Financial Management Information System (FMIS) is on track and satisfactory progress towards achievement of FMIS Phase I Implementation as envisaged for this project. This assessment is based on the fact that most of the issues related to system configuration and start up as highlighted in the last implementation support mission Aide Memoire have been addressed including: (i) issues related to the Chart of Accounts (COA) structure and business processes; (ii) business rules; (iii) source of data for the opening budget; (iii) expenditure and receipts for the period January 1 to June 30, and the migration of this data to the FMIS from legacy systems and other data sources. A Change Management Impact Assessment has been completed.The Data Warehouse has been installed with data uploaded from PeopleSoft and initial training is underway. A help desk facility has been developed by the contractor with help from a Bank consultant to enable recording of tickets and tracking their resolution as the system begins operation. The project achieved its first major milestone with the operationalization (Go-Live) of the general ledger and budget allocation modules of the Financial Management Information System (FMIS) at key agencies including the accounting and budget departments of the MEF. The FMIS implementation will help to improve budget execution processes by having audit trails for each transaction, allowing for quicker and more secure payments, and preparing timely and consistent budget execution reports. Work is on-going to implement more FMIS modules that will allow for recording commitments and improving cash management. These modules are expected to be implemented by October, 2015. The Revenue Mobilization component also progresses well. The Revenue Mobilization Strategy (RMS) was adopted in October 2014. The RMS focuses on revenue administration, revenue policy, and monitoring and evaluation. The Additional Financing, which became effective in May 2015, provides additional support of USD 1.5 Million for Revenue Mobilization and GSC Project Management Functions Component in which USD 1 million was provided to support the revenue mobilization sub-component. Many of the supported activities are currently underway. 10/9/2015 Page 2 of 14 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Cambodia PFM Modernization Project (P143774) 10/9/2015 Page 3 of 14 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Cambodia PFM Modernization Project (P143774) 10/9/2015 Page 4 of 14 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Cambodia PFM Modernization Project (P143774) 10/9/2015 Page 5 of 14 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Cambodia PFM Modernization Project (P143774) 10/9/2015 Page 6 of 14 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Cambodia PFM Modernization Project (P143774) Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance  --  Moderate  Moderate Macroeconomic  --  Low  Low Sector Strategies and Policies  --  Substantial  Substantial Technical Design of Project or Program  --  Substantial  Substantial Institutional Capacity for Implementation and Sustainability  --  Substantial  Substantial Fiduciary  --  Moderate  Moderate Environment and Social  --  Low  Low Stakeholders  --  Low  Low Other  --  --  -- Overall  --  Substantial  Substantial Results Project Development Objective Indicators 10/9/2015 Page 7 of 14 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Cambodia PFM Modernization Project (P143774) PHINDPDOTBL  Improving budget execution processes through the implementation of the FMIS (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target FMIS system configuration is progressing in line with the project implementation plan. Initial modules (General Ledger and Budget Allocation) are FMIS system scheduled to ‘go live’ configuration is July 2015. The progressing in line with remaining modules the project (Accounts Payable, implementation plan. Account Receivables, Initial modules (General Cash Management, Ledger and Budget and Purchase Order) Allocation) went live on are under configuration July 20, 2015 as and will ‘go live’ for planned. The remaining central sites October 26(fully Procurement process in modules (Accounts Value 2015. The main data operational progress Payable, Account center and disaster FMIS) Receivables, Cash recovery center have Management, and been installed. A Help Purchase Order) are Desk is in place that under configuration and initially will assist with will ‘go live’ for central system configuration sites in October 2015. issues. After the Roll out to provincial system goes live, the treasuries for all the six Help Desk will provide modules is planned for assistance to all January 2016. system users. A change impact assessment on the FMIS implementation has been completed to assist the government in streamlining existing business processes. Date 31-Dec-2013 06-May-2015 30-Jul-2015 31-Dec-2016 PHINDPDOTBL  Budget Execution Reports/Financial Statements presented with disclosure of the accounting standards used as the basis for their preparation and accounting policies followed (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The cash basis IPSAS The cash basis IPSAS reporting format was reporting format was piloted for the 2011, piloted for the 2011, IPSAS cash Preparation of IPSAS cash 2012, and 2013 2012, and 2013 Value basis report basis in progress budgets. The reporting budgets. The reporting produced format has been format has been shared shared with the with the contractor for contractor for configuration into the 10/9/2015 Page 8 of 14 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Cambodia PFM Modernization Project (P143774) configuration into the FMIS. A reporting format FMIS. in Khmer language is being developed. Date -- 06-May-2015 30-Jul-2015 31-Dec-2016 PHINDPDOTBL  Enhanced revenue mobilization as measured by (an average of) 0.5 percent of GDP domestic revenue increment per annum (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 13.0% 15.0% 16.6% 16.0% Date 31-Dec-2012 31-Dec-2014 31-Jul-2015 31-Dec-2016 Overall Comments Intermediate Results Indicators PHINDIRITBL  Improve budget classification through the implementation of the uniform account code structure (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Six budget classification codes developed [Function Classification (FC), The Economic and Administrative Administrative Classification (AC), All 6 segments have classifications were EC, AC, GC, Value Economic Classification been populated for the populated and uploaded PC, FC, SFC, (EC), Program FY 2015 budget as part of the partial go - and Project Classification (PC), live of FMIS completed Geographic Classification July 20, 2015. (GC), Source of Fund Classification (SFC)] Date 31-Dec-2012 06-May-2014 30-Jul-2015 31-Dec-2016 10/9/2015 Page 9 of 14 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Cambodia PFM Modernization Project (P143774) PHINDIRITBL  Business processes for FMIS-related processes reengineered (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The 'to be' business processes have been The 'to be' business configured in the FMIS processes have been to include a two-step configured in the FMIS 'add and confirm' Efficient to include a two-step process for transactions. business To be business processes 'add and confirm' In parallel, the processes Value being developed and process for streamlining of existing successfully finalized transactions. In processes outside the implemented by parallel, the system is underway. the FMIS streamlining of existing The development of a processes outside the Standard Operation system is underway. Procedures (SOPs) manual is underway. Date -- 06-May-2015 30-Jul-2015 31-Dec-2016 PHINDIRITBL  Change management for FMIS-related business processes implemented (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target A change management and communication plan has been developed, A change management implemented, and is and communication being further updated to plan has been ensure adequate developed and is being support is provided in Change management and implemented. Current preparation for the next Full Value communication plan under key activities focus on planned go live event in implementation development promoting awareness October 2015 and the of the FMIS roll out to provincial implementation within treasuries in January government. 2015. A change agent network for all provincial treasuries has been developed. Date 08-Sep-2014 -- 30-Jul-2015 31-Dec-2016 10/9/2015 Page 10 of 14 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Cambodia PFM Modernization Project (P143774) PHINDIRITBL  Improved Budget Strategic Plans with detailed costing at 10 ministries implementing the Program budgeting (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Guidelines for the Preparation of Budget Strategic Plan are being revised by the MEF The process for General Department of improving the quality Budget. The MEF has and process of requested the Bank to Budget strategic plans preparing Budget conduct a review of the Value have been developed and Strategic Plans is Program Budget 10 are of varying quality. underway. This work implementation to will accelerate through assess progress and resources provided by suggest corrective the addtional financing. actions. Based on the outcomes, the timeline may be adjusted and will be reflected in the next ISR. Date 08-Sep-2014 -- 30-Jul-2015 31-Dec-2016 PHINDIRITBL  More timely closure of financial accounts at the end of the fiscal year (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The government The government targeted a two month targeted a two month closing period after the closing period after the end of the 2014 financial end of the 2014 year to capture all 5 to 6 months delay in Value financial year to outstanding 1 to 2 months financial account closure capture all outstanding transactions. However, transactions. The 2014 the 2014 Financial Financial Statements Statements were are being finalized. finalized finalized with a 5-6 months delay. Date 30-Jun-2013 -- 30-Jul-2015 31-Dec-2016 PHINDIRITBL  Improved commitment control implemented under the FMIS through the use of system generated purchase order (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The Purchase Order The Purchase Order 100% at the Value FMIS being configured module is scheduled to module is scheduled to national level 'go live' October 2015. 'go live' October 2015. Date -- 06-May-2015 30-Jul-2015 31-Dec-2016 10/9/2015 Page 11 of 14 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Cambodia PFM Modernization Project (P143774) PHINDIRITBL  Revenue mobilization action plans developed and its implementation monitored (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The Revenue Mobilization Strategy The Revenue (RMS) and a sequenced Mobilization Strategy action plan has been (RMS) with a relatively adopted by government. good detail and The RMS focuses on sequenced action plan revenue administration, has been adopted by revenue policy, government. The RMS monitoring and Revenue mobilization Interim focuses on revenue evaluation. strategy developed and monitoring Value administration, revenue Implementation of the (2013-2018) being reports policy, and monitoring RMS is underway. finalized developed and evaluation. Recruitment of needed Implementation of the consultants to support RMS is underway, and M&E is underway. Most more resources to of the activities to support this work are support the RMS were provided under the AF programmed under the for the project. Additional Financing, which became effective in May 2015. Date 31-Dec-2012 12-Sep-2014 30-Jul-2015 31-Dec-2016 PHINDIRITBL  Tax revenue (direct, indirect, and trade taxes) as a percentage of GDP is increased by 0.3 annually (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 11.80 12.90 13.50 13.00 Date 31-Dec-2013 31-Dec-2014 30-Jul-2015 31-Dec-2016 PHINDIRITBL  Non-tax revenue official receipts rolled out to sub-national administration (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Non-tax revenue receipts rolling out in The roll out of the Non- progress. Six additional tax revenue receipt in Full provinces are covered provinces is underway. implementation Some ministries and 8 during the period of Value The total number of (all subnational provincial administrations April - June 2015. With provinces using the administrations) this roll out, the total official non-tax revenue and monitoring number of provinces receipt is 15. using official non-tax revenue receipt is 14. 10/9/2015 Page 12 of 14 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Cambodia PFM Modernization Project (P143774) Date 08-Sep-2014 06-May-2015 30-Jul-2015 31-Dec-2016 PHINDIRITBL  Female staff from the MEF and targeted agencies trained on PFM related skills increased (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target 45 female staff received 45 female staff PFM related training in received PFM related 2014. As of June 30, training in 2014. As of 2015, 189 female staff Beginning to strengthen Value March 31, 2015, 23 participated in training 20.0% women’s participation female staff workshops. This figure participated in training excludes some data that workshops. is not disaggregated by gender. Date 31-Dec-2012 31-Mar-2015 30-Jul-2015 31-Dec-2016 Overall Comments As a result of the mid-term review, the Results Framework and the PDO will be revised in September to better measure progress in project implementation. The next ISR should reflect these amendments that will be monitored and reported for the duration of the project. A key mid term review recommendation is that the MEF/GSC has agreed to recruit a local Monitoring and Evaluation Specialist to coordinate with the implementing departments (ID) data collection and reporting on project activity results implemented by all IDs. The specialist will prepare a consolidated results report for the project and monitor its implementation and progress. The recruitment of the specialist is underway. Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P143774 TF-15434 Effective USD 13.50 13.50 0.00 4.99 8.52 37% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P143774 TF-15434 Effective 07-Nov-2013 07-Nov-2013 07-Nov-2013 14-May-2016 14-May-2016 10/9/2015 Page 13 of 14 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Cambodia PFM Modernization Project (P143774) Cumulative Disbursements Restructuring History There has been no restructuring to date. Related Project(s) P151984-Cambodia PFMMP-Additional Financing P151984 10/9/2015 Page 14 of 14 Public Disclosure Copy