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 | Public Sector Governance Global Practice | Recipient Executed Activities | Investment Project Financing | FY 2014 | Seq No: 3 | ARCHIVED on 19-May-2015 | ISR19140 | Implementing Agencies: Ministry of Economy and Finance, Royal Government of Cambodia Key Dates Key Project Dates Board Approval date:06-Nov-2013 Effectiveness Date:07-Nov-2013 Planned Mid Term Review Date:16-Jul-2015 Actual Mid-Term Review Date:-- 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 5/19/2015 Page 1 of 10 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. A few specific remedial actions identified in the last Implementation Status Report (ISR) have been addressed by the Implementing Agency. The Project Implementation Plan (PIP) for the FMIS, a key document identifying main project milestones and deliverables corresponding to the FMIS contract that was signed between the Implementing Agency and the contractor in February 2014, has been further updated to reflect actual progress. Progress against the FMIS PIP is monitored and reported by the FMIS working group (FMWG). . During the last eight months (September 2014-May 2015), two supervision missions, led by the project team and supported by the FMIS and IPSAS experts, were fielded to provide technical advice and recommendations on the implementation. An ongoing challenge discussed during the missions is the need to focus onmore 'hands - on ' training to ensure that Treasury/Budget and other MEF department users acquire necessary skills to carry out their tasks in the automated environment. A change impact assessment on the FMIS implementation has been completed and provided important information for the government to streamline its existing business processes. The government will adopt a two-step “add and confirm” process for approving transactions and the streamlining of existing processes outside the system will occur in parallel. The project team is in continous dialogue with key functional departments such as the General Department of the National Treasury (GDNT), the Budget Formulation Department (BFD), the General Department of Internal Audit (GDIA), and the Information Technology Department (ITD). As confirmed during the most recent mission conducted by the World Bank, the partial “go live” date for the FMIS is July 2015. This is made possible by significant progress in a number of areas. First, the Budget Department has been able to load the 2015 budget in accordance with the 2015 Budget Law and the new account code structure. Second, installation of the main Data Center (and the disaster recovery center) for the FMIS including the servers, storage and communication facilities was completed in January 2015 and is operational. Third, the ITD Help Desk has been established to help address specific system configuration issues during implementation. The Help Desk subsequently will serve as the point of contact and assistance for all FMIS users. 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. Additional support for the implementation of the RMS totalling USD 1.5 Million has been provided. 5/19/2015 Page 2 of 10 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Cambodia PFM Modernization Project (P143774) 5/19/2015 Page 3 of 10 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 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 Contractor is in place Ledger and Budget 26(fully Procurement process in Value and working with the Allocation) are operational progress FMWG scheduled to ‘go live’ FMIS) July 2015. The remaining modules (Accounts Payable, Account Receivables, Cash Management, and Purchase Order) are 5/19/2015 Page 4 of 10 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Cambodia PFM Modernization Project (P143774) under configuration and will ‘go live’ for central sites October 2015. The main data center and disaster recovery center have been installed. A Help Desk is in place that initially will assist with system configuration issues. After the system goes live, the Help Desk will provide assistance to all 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 12-Sep-2014 06-May-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 reporting format was piloted for the 2011, 2012, and 2013 IPSAS cash Preparation of IPSAS cash Value -- budgets. The reporting basis report basis in progress format has been shared produced with the contractor for configuration into the FMIS. Date -- -- 06-May-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% 14.6% 15.0% 16.0% Date 31-Dec-2012 31-Aug-2014 31-Dec-2014 31-Dec-2016 Overall Comments 5/19/2015 Page 5 of 10 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Cambodia PFM Modernization Project (P143774) 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), Administrative Classification (AC), All 6 segments have All 6 segments have EC, AC, GC, Value Economic Classification been populated for the been populated for the PC, FC, SFC, (EC), Program FY 2015 budget FY 2015 budget and Project Classification (PC), Geographic Classification (GC), Source of Fund Classification (SFC)] Date 31-Dec-2012 30-May-2014 06-May-2014 31-Dec-2016 PHINDIRITBL  Business processes for FMIS-related processes reengineered (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The 'to be' business processes have been configured in the FMIS Efficient to include a two-step business To be business processes 'add and confirm' processes Value being developed and -- process for transactions. successfully finalized In parallel, the implemented by streamlining of existing the FMIS processes outside the system is underway. Date -- -- 06-May-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 and Change management and is being implemented. Full Value communication plan under -- Current key activities implementation development focus on promoting awareness of the FMIS implementation within government. Date 08-Sep-2014 -- -- 31-Dec-2016 5/19/2015 Page 6 of 10 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 The process for improving the quality and process of Budget strategic plans preparing Budget Value have been developed and -- Strategic Plans is 10 are of varying quality. underway. This work will accelerate through resources provided by the addtional financing. Date 08-Sep-2014 -- -- 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 targeted a two month closing period after the end of the 2014 financial 5 to 6 months delay in Value -- year to capture all 1 to 2 months financial account closure outstanding transactions. The 2014 Financial Statements are being finalized. Date 30-Jun-2013 -- -- 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 100% at the Value FMIS being configured -- module is scheduled to national level 'go live' October 2015. Date -- -- 06-May-2015 31-Dec-2016 5/19/2015 Page 7 of 10 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 (RMS) with a relatively good detail and sequenced action plan has been adopted by government. The RMS Revenue mobilization Interim Inputs for the Revenue focuses on revenue strategy developed and monitoring Value Mobilization Strategy administration, revenue (2013-2018) being reports have been provided policy, and monitoring finalized developed and evaluation. Implementation of the RMS is underway, and more resources to support this work are provided under the AF for the project. Date 31-Dec-2012 12-Sep-2014 12-Sep-2014 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 13.00 Date 31-Dec-2013 -- 31-Dec-2014 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 progress. Six additional Full provinces are covered implementation Some ministries and 8 during the period of April Value -- (all subnational provincial administrations - June 2015. With this administrations) roll out, the total number and monitoring of provinces using official non-tax revenue receipt is 14. Date 08-Sep-2014 -- 06-May-2015 31-Dec-2016 5/19/2015 Page 8 of 10 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Cambodia PFM Modernization Project (P143774) 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 PFM related training in These figures have not Beginning to strengthen 2014. As of March 31, Value been provided by the 20.0% women’s participation 2015, 23 female staff GSC participated in training workshops. Date 31-Dec-2012 12-Sep-2014 31-Mar-2015 31-Dec-2016 Overall Comments The team will work more closely with the GSC to ensure they enhance their record keeping regarding the percentage of female staff from the MEF and relevant agencies are trained on PFM related skills. Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P143774 TF-15434 Effective USD 5.90 5.90 0.00 3.25 2.66 55% 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 Cumulative Disbursements 5/19/2015 Page 9 of 10 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Cambodia PFM Modernization Project (P143774) Restructuring History There has been no restructuring to date. Related Project(s) P151984-Cambodia PFMMP-Additional Financing P151984 5/19/2015 Page 10 of 10 Public Disclosure Copy