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: 6 | ARCHIVED on 22-Nov-2016 | ISR25497 | Implementing Agencies: Ministry of Economy and Finance, Royal Government of Cambodia Key Dates Key Project Dates Bank Approval Date:04-Dec-2013 Effectiveness Date:07-Nov-2013 Planned Mid Term Review Date:16-Jul-2015 Actual Mid-Term Review Date:20-Jul-2015 Original Closing Date:14-May-2016 Revised Closing Date:14-May-2017 Project Development Objectives Project Development Objective (from Project Appraisal Document) The project development objective is to enhance public financial management by strengthening: (a) revenue mobilization and (b) budget execution processes through the implementation of the Financial Management Information System (FMIS). Progress against the principal objective will be measured by the contribution made to the PFMRP’s Key Performance Indicators and Targets set forth under the Stage Two of the PFMRP. Has the Project Development Objective been changed since Board Approval of the Project Objective? No PHRPDODEL Components Name Mobilization of Revenue and Project Management Functions of the GSC:(Cost $2.00 M) Improving budget execution processes through the implementation of the Financial Management Information System (FMIS):(Cost $17.50 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO  Satisfactory  Satisfactory Overall Implementation Progress (IP)  Satisfactory  Satisfactory Overall Risk Rating  Substantial  Substantial Implementation Status and Key Decisions 11/22/2016 Page 1 of 7 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Cambodia PFM Modernization Project (P143774) Satisfactory progress has been made on the implementation of the Revenue Mobilization Strategy (RMS), resulting in substantially improving domestic revenue to 17.5 percent of GDP in 2015, up from 15.1 percent of GDP in 2013. This achievement well exceeded the target of 0.5 percent of GDP increase per annum set by the PFMRP. However, much of the increase in revenue resulted from increased auditing and strengthened debt collection. For sustainable and long term improvement pursuing reforms in tax administration to boost revenue collection capacity and promoting voluntary compliance will be critical. The project continued good progress towards achievement of FMIS Phase I Implementation as envisaged. The FMIS is now capable of providing government finance managers a wealth of information to manage and deploy Government financial resources across various programs, projects and spending units. Because the system now operates at both the center and provinces, information can be retrieved directly from the system on the amounts and the number of transactions being paid through FMIS at the center and the provinces. IT Department noted that FMIS users begin to take advantage of the system now. Users at central officers of the MEF (GDNT and GBD) who master and have good knowledge about the system start to draw data and report from the system, and they are able to locate data in less than 30 minutes. The key challenges for the duration of the project will be to stabilize the system so that FMIS can be expanded to line ministries and other levels of government (Phase II which is outside this project scope). Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance  --  Moderate  Moderate Macroeconomic  --  Low  Low Sector Strategies and Policies  --  Substantial  Substantial Technical Design of Project or Program  --  Substantial  Substantial Institutional Capacity for Implementation and Sustainability  --  Substantial  Substantial Fiduciary  --  Moderate  Moderate Environment and Social  --  Low  Low Stakeholders  --  Low  Low Other  --  --  -- Overall  --  Substantial  Substantial Results Project Development Objective Indicators PHINDPDOTBL  Improved timeliness to locate financial data and reports (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Although system is FMIS users who have operational, report good knowledge about generation remains the system are It took up to two days to problematic. The task beginning to use the Less than 30 Value locate specific data team is working work system. It now takes minutes with MEF to resolve less than 30 minutes to these reporting issues locate financial data and as a matter of priority. reports. 11/22/2016 Page 2 of 7 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Cambodia PFM Modernization Project (P143774) Date 31-Dec-2013 05-May-2016 05-Sep-2016 12-May-2017 PHINDPDOTBL  Improved timeliness in the payment processing at GDNT (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Business processes Business processes from procure to pay at from procure to pay at MEF have been MEF has been streamlined and a streamlined and a Standard Operating Standard Operating Procedure has been Procedure has been developed. Payment Payment process could developed. A 10-15 processing at GDNT for 10 -15 working Value take between 15 to 30 working day period for many payments (with no days days in 2013 payment processing at corrections) are GDNT is achievable completed between 10 - under normal 15 days. Salary circumstances. payments can be Payment processes processed in less than 5 experience some delay working days. at GDNT at year end. Date 31-Dec-2013 06-May-2016 05-Sep-2016 12-May-2017 PHINDPDOTBL  More timely closure of financial accounts at the end of the fiscal year (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target 6 months. The 2015 financial statements 5 months (2015 were finalized in June 9 to 10 months delay in financial statements and submitted to the Value 3 to 4 months financial account closure have not been National Audit Authority submitted) (NAA) in July-August 2016. Date 31-Dec-2013 05-May-2016 30-Jun-2016 12-May-2017 PHINDPDOTBL  More non-tax revenue sources (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target 11/22/2016 Page 3 of 7 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Cambodia PFM Modernization Project (P143774) 36 inter-ministerial Prakases of which 6 are new and 2 have been 37 inter- 33 inter-ministerial 24 inter-ministerial revised, brining the total ministerial Value Prakases of which 6 Prakases (2013) number of services Prakases (22 have been revised. collecting fees (revenue revised) sources) is 3,940. Date 31-Dec-2013 31-Dec-2015 13-Oct-2016 12-May-2017 PHINDPDOTBL  Revenues from property and customs tax increased (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target KHR 6.286 billion was KHR 54.31 billion has Revenue from property tax collected for the been collected as of Value KHR 85 billion 62.7 billion KH Riel (2013) FY2016 budget as of September 2016 April 2016. Date 31-Dec-2013 31-Dec-2015 13-Oct-2016 12-May-2017 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 EC, AC, PC are currently in use in the system. AC and PC need to be revised and Seven budget updated. MEF created a classification codes Technical Working The Economic and developed [Function Group on budget Administrative Classification (FC), classification and the classifications were Administrative Chart of Accounts in populated and Classification (AC), September 2016, uploaded as part of the EC, AC, GC, Value Economic Classification chaired by DG of GDNT, partial go - live of FMIS PC, FC (EC), Program to revise and improve completed July 20, Classification (PC), budget classification and 2015. Program Geographic Classification chart of accounts. classification (PC) was (GC), Source of Fund Prakas for the GC was populated for 2016. Classification (SFC)], and issued in February 2015, Project Classification but mechanism and guidance need to be developed for implementation. 11/22/2016 Page 4 of 7 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Cambodia PFM Modernization Project (P143774) Date 31-Dec-2013 05-May-2016 13-Oct-2016 12-May-2017 PHINDIRITBL  Financial Statements presented with disclosure of the accounting standards used as the basis for their preparation and accounting policies followed (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Preparation of IPSAS cash basis through the Partial IPSAS Preparation of IPSAS cash Preparation of IPSAS Value FMIS still under cash basis basis in progress cash basis in progress discussion between report produced GDNT and ITD. Date 31-Dec-2013 05-May-2016 13-Oct-2016 12-May-2017 PHINDIRITBL  FMIS implemented at MEF and Provincial Treasury (PTs) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The FMIS is operational at MEF and all provincial treasuries (PTs). An The FMIS is average of 2 additional Procurement process in operational at MEF and MEF and all Value FMIS users have been progress all provincial treasuries PTs added to each PT, (PTs) increasing the average number of FMIS users at each PT to 8. Date 31-Dec-2013 31-Mar-2016 13-Oct-2016 12-May-2017 PHINDIRITBL  Budget control and execution modules implemented (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Budget Allocation (BA); Budget Allocation (BA); Budget General Ledger (GL) General Ledger (GL) Allocation (BA); implemented in July implemented in July General Ledger 2015. The Account 2015. The Account (GL), Account Value 0 module implemented Receivable (AR); Receivable (AR); Receivable Account Payable (AP); Account Payable (AP); (AR); Account Cash Management Cash Management Payable (AP); (CM); and Purchase (CM); and Purchase Cash 11/22/2016 Page 5 of 7 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Cambodia PFM Modernization Project (P143774) Order (PO) Order (PO) implemented Management implemented in since January, 2016. (CM); and January, 2016. Purchase Order (PO) Date 31-Dec-2013 29-Jan-2016 29-Jan-2016 14-May-2017 PHINDIRITBL  Revenue mobilization action plans developed and its implementation monitored (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Interim monitoring reports have been Interim monitoring developed. These Revenue mobilization Interim reports are under provide detailed strategy developed and monitoring Value development. A draft information on (2013-2018) being reports has been shared with achievements and finalized developed the task team. challenges against RMS indicators. Date 31-Dec-2012 05-May-2016 13-Oct-2016 12-May-2017 Overall Comments Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P143774 TF-15434 Effective USD 15.50 15.50 0.00 15.50 0.01 100% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P143774 TF-15434 Effective 07-Nov-2013 07-Nov-2013 07-Nov-2013 14-May-2016 14-May-2017 Cumulative Disbursements 11/22/2016 Page 6 of 7 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Cambodia PFM Modernization Project (P143774) Restructuring History Level 2 Approved on 04-May-2016 Related Project(s) P151984-Cambodia PFMMP-Additional Financing P151984 11/22/2016 Page 7 of 7 Public Disclosure Copy