Public Disclosure Copy The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) Maldives: PFM Systems Strengthening Project (P145317) SOUTH ASIA | Maldives | Governance Global Practice | IBRD/IDA | Investment Project Financing | FY 2014 | Seq No: 5 | ARCHIVED on 04-Jan-2018 | ISR30360 | Implementing Agencies: Ministry of Finance and Treasury, Ministry of Finance and Treasury Key Dates Key Project Dates Bank Approval Date:26-Jun-2014 Effectiveness Date:02-Oct-2014 Planned Mid Term Review Date:16-Apr-2017 Actual Mid-Term Review Date:10-Apr-2017 Original Closing Date:31-Jul-2019 Revised Closing Date:31-Jul-2019 Project Development Objectives Project Development Objective (from Project Appraisal Document) The proposed project development objectives (PDO) are to enhance budget credibility, transparency, and financial reporting of central government finances. Has the Project Development Objective been changed since Board Approval of the Project Objective? No PHRPDODEL Components Name Contingency:(Cost $0.10 M) Strengthening the PFM Environment:(Cost $1.45 M) Strengthening Budget Execution:(Cost $4.40 M) Project Management:(Cost $0.55 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO  Satisfactory  Satisfactory Overall Implementation Progress (IP)  Satisfactory  Moderately Satisfactory Overall Risk Rating  --  Substantial 1/4/2018 Page 1 of 11 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) Implementation Status and Key Decisions Based on implementation progress, disbursement performance, results achieved, and discussions with the Government of Maldives, the project remains on track and the likelihood of achieving the PDOs remains high. Summary of key achievements are as follows: • The technical work for the revision of the legal and regulatory framework for budget formulation, public investment management, budget execution, and financial reporting has been completed. In addition, the new draft Audit Law has been finalized and submitted to Parliament. Several consultations have been held with the Public Accounts committee • Preparation of a comprehensive Medium-Term Macro Fiscal Framework and establishment of budget ceilings based on the fiscal space determined by the framework has progressed. The model is effective and was used to update the fiscal strategy for 2018-2020 and for initial revenue forecasts. The cash flow forecasting model was updated and used extensively in weekly cash flow planning meetings. The Debt management strategy (2017-2019) has been revised and updated in July. • Improving the budget preparation processes to bring more consistency and discipline to the process. The Budget Manual is in the final phase of being updated, based on the changes brought to the Business Planning and Consolidation (BPC) module of SAP in September 2017. The Budget Call Circular for FY2018 has been issued and aligns with new budget manual. The BPC module has been rolled-out to line ministries as well as other key modules of SAP and related training was conducted. Live data entry of the budget proposals, (“go live”), has been processed by line ministries under FAD monitoring in July 2017. • Improving the quality of financial reporting via regular reconciliation with the bank statements, preparing information on budget execution for decision-makers, public expenditure information, and improving annual financial statement formats to align with international public sector standards. In particular, a gap analysis of the financial statements has been produced and a sequenced action plan towards implementation of the IPSAS cash basis standards has been applied. Financial statements compliant with IPSAS cash basis has been issued for the 2016 fiscal year. The Auditor General will send to parliament an audit opinion on those in December. A revised Internal Audit Manual has been finalized and includes, checklists, and questionnaires that are immediately actionable by internal auditors Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance  --  --  High Macroeconomic  --  --  High Sector Strategies and Policies  --  --  Substantial Technical Design of Project or Program  --  --  Moderate Institutional Capacity for Implementation and Sustainability  --  --  Moderate Fiduciary  --  --  Moderate Environment and Social  --  --  Low Stakeholders  --  --  Moderate Other  --  --  -- Overall  --  --  Substantial Results Project Development Objective Indicators 1/4/2018 Page 2 of 11 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) PHINDPDOTBL  Deviation between aggregate expenditure out turn and the original approved budget (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 18.74 6.15 6.15 5.00 Date 31-Dec-2013 10-Nov-2016 22-Nov-2017 31-Jul-2019 PHINDPDOTBL  Public Access to Key Fiscal Information (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Public disclosure of (1) Complete set of annual budget documents when they are submitted to legislature. Y3 target partly achieved. (2) Monthly in- BERs are being year budget regularly produced from execution the system and used for reports within economic decision one month of making. However, they completion. Documents not made are not being published available to the public: yet in the form of a BER. (3) Info (1) Year-end state financial MoFT has commenced concerning statements of the Republic publishing expenditure resources of Maldives; (2) In-year Y2 results are met. reports at an aggregate available to budget execution reports; Budget documentation level. Value primary service (3) Contracts awarded. for 2016 are published units at least on the MoFT Website. Audit planning for FY 16 annually or Budget documents and audit has commenced. A available on resources available to decision has been made request for primary service units are to publish the unaudited primary service available in public domain. statements starting from units with FY 2016 annual financial national statements. coverage in at least 2 sectors. (4)Year-end financial statements of the Republic of Maldives published within 6 months of completed audit. (5) Contracts 1/4/2018 Page 3 of 11 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) awarded above US$100,000 published at least quarterly. Date 28-Feb-2014 10-Nov-2016 22-Nov-2017 31-Jul-2019 PHINDPDOTBL  Quality of debt data recording and reporting. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Achieved. BERs with commitment information, the annual financial statements with payables as well a Y2 results are met.CS- regular system DRMS has been generated reports on upgraded and tested Domestic and payables are sufficient for capturing the public foreign debt to meet the requirement debt stock (external, records are of recording payables. domestic, grants, complete, Islamic domestic debt includes Commonwealth instruments and payable Secretariat Debt external and domestic amount Recording and Annual statement of debt guarantees). Data updated and Management System covering domestic and entered thus far have reconciled has been upgraded and Value external debt is prepared, been reconciled for quarterly. tested for capturing the but there are gaps and accuracy. 2016 annual Comprehensive public debt stock reconciliation problems. debt review and five management (external, domestic, bulletins (since Q2 of and statistical grants, Islamic domestic 2015) were prepared reports debt instruments and and circulated within (covering debt external and domestic MoFT by RMDMD. service, stock guarantees). Data Decision yet to be and operations) entered thus far have made at Minister level are produced at been reconciled for on publication. least annually. accuracy. A practice of a quarterly reconciliation of debt records have commenced. Date 28-Feb-2014 10-Nov-2016 22-Nov-2017 31-Jul-2019 PHINDPDOTBL  Coverage and quality of the internal audit function (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value There is no internal audit Y 2 – Partially met. Partially achieved The internal 1/4/2018 Page 4 of 11 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) focused on systems 57% of CGEs over Rf audit function is monitoring. 500 revenue/exp have Internal audit is operational in internal audit units. functional in over 50% of 100% of CGEs CGEs with revenues with revenues System reviews will be and/or expenditures and/or undertaken with the over Rf 500 million. expenditures support of consultants Going forward a over Rf 500 hired under the BPR decision has been made million, and consultancy (there is a to centralize the internal internal audit component to audit function at the undertakes strengthen internal MoFT and to deploy some systems audit in the BPR auditors to carry out reviews (at consultancy) audits of government least 20% of . entities. staff time). . Date 28-Feb-2014 10-Nov-2016 22-Nov-2017 31-Jul-2019 Overall Comments Intermediate Results Indicators PHINDIRITBL  Coherent set of PFM laws and regulations (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Draft proposal for revised PFM laws prepared and presented to Parliament. Policy direction received The legal review report to proceed with drafting Draft laws exist is finalized and legal of laws. Drafting that support the drafter is being commenced during Q4 Value NIL timely recruited to commence 2016 and the first draft preparation and drafting the of FRL has been public amendments. submitted to AG office in dissemination Q1 2017. of key reports, fill gaps, and remove inconsistencies in regulations. Date 28-Feb-2014 10-Nov-2016 22-Nov-2017 31-Jul-2019 1/4/2018 Page 5 of 11 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) PHINDIRITBL  Decreased variation in expenditures out-turn : within year (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 10.00 6.15 6.15 5.00 Date 28-Feb-2014 10-Nov-2016 22-Nov-2017 31-Jul-2019 PHINDIRITBL  Reduced variance of the composition of expenditure from the original budget (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 20.00 24.00 24.00 12.00 Date 28-Feb-2014 10-Nov-2016 22-Nov-2017 31-Jul-2019 PHINDIRITBL  Increased capacity on macro fiscal planning (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Credible macro fiscal framework exists and used for budget preparation. Final macro The MTFF was not fiscal used for the forecasting tool MTEF was used for preparation of the 2017 exists and fiscal strategy budget, as the model used. formulation. Staff were 0% of staff trained on was not ready. The trained on MTEF and macro fiscal planning. No team plans to finish it in Final DSA in 2015. MTEF Value credible MTFF and February 2017 with WB framework additional work on-hold framework for assessing staff support after the exists and used until the completion of investment projects exists. visit of the DSA for assessing BPC. Assistance in consultant in economic policy research and November 2016, so viability and analysis is needed. that the 2018 budget prioritization of can be based on it. public investment projects 100% of staff trained on all aspects of macro fiscal planning. 1/4/2018 Page 6 of 11 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) Date 28-Feb-2014 10-Nov-2016 22-Nov-2017 31-Jul-2019 PHINDIRITBL  Increased capacity on debt and cash management (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Y3 results met. Debt management strategy exists. 100% of staff Debt management Strengthened capacity trained on debt strategy for 2016-2018 of the Debt Management and cash submitted to the Division to take lead in management Parliament in July 0% of staff trained on cash preparing and updating 2016.100% of staff and debt management DMS. Strengthened trained on debt capacity on cash management. forecasting. Technical Credible DMS Credible DMS does not staff at RMDMD trained exists and Value A template provided by exist. to update the DMS but implemented. the IMF for CFF exists. additional training is still TPAD Cash required for proper CFF plan Management Wing will capacity building. exists: prepare the 2017 and CFF model does not exist. prepared for Q1 2017 plans in Cash Management fiscal year and collaboration with FAD Committee has been updated (EDPD) and RMDMD formulated and initial monthly based by January 15 meetings are ongoing. on CFF model. More training is required on the implementation side. Date 28-Feb-2014 10-Nov-2016 22-Nov-2017 31-Jul-2019 PHINDIRITBL  Timely and comprehensive in-year budget execution reports (BERs) produced (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target BERs are regularly- Percentage of MM System- daily- produced and module rolled out to generated used for economic Male based agencies is monthly BERs decision making. 80%. Business with information Value NIL However, they lack Intelligence module of on actual information on the SAP, which will expenditures vs commitments and generate the BERs, has budget, plus virements, and are not been configured. The commitments published. Also the staff who were trained produced and 1/4/2018 Page 7 of 11 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) integrity of the data can are on two years leave reconciled for be enhanced by more and existing staff do not all business timely reconciliation of have the necessary areas and key accounts. capacity. consolidated by MOFT within 2 weeks of end of month. Date 28-Feb-2014 10-Nov-2016 22-Nov-2017 31-Jul-2019 PHINDIRITBL  BERs subjected to audit by internal auditors (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 100.00 Date 28-Feb-2014 10-Nov-2016 22-Nov-2017 31-Jul-2019 PHINDIRITBL  Timely preparation of annual financial statements (AFS) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target AFS for FY2015 produced and sent to Y3 results met. the Auditor General, with slight delay of 2 MOFT staff and other weeks, beyond the AGA's have been legally mandated date trained on preparation of of April 14. AFS according to System- IPSAS. Pre-briefing Integration with MIRA generated AFS AFS not accepted by audit provided to AGA's on system in operation submitted to Value as complete and ready for SAP module prior to from November 2, audit within 4 audit. rolling out. BI rollout has 2016. Other months from been completed up to integrations – year end. 75%. Work has initiated ASYCUDA, on functional upgrades Establishment and design has been Registers, Debt developed, but changes Management System- have not been made live have not been to external users. completed. Date 28-Feb-2014 10-Nov-2016 22-Nov-2017 31-Jul-2019 1/4/2018 Page 8 of 11 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) PHINDIRITBL  Enhance payroll controls (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target CSC continues to maintain stand- alone Initial scoping document Establishment No integration and establishment register. completed for an registers that reconciliation between Integration of interface between SAP drive payroll Value personnel records and establishment register payroll and the software through payroll data with PAS not used in Civil Service integrated completed, and has no Commission. system exists. traction so far. Date 28-Feb-2014 10-Nov-2016 22-Nov-2017 31-Jul-2019 PHINDIRITBL  Procurement performance and monitoring system (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The M&E Standards are yet to be developed which are dependent on the outcome of the Procurement 100% of Consultancy Organizational structure contract awards assignment. It is Value NIL of the Procurement meet required expected that the Division revised. M&E contract will be standards. awarded by end November 2016 and the Consultant will be onboard by early January 2017. Date 28-Feb-2014 10-Nov-2016 22-Nov-2017 31-Jul-2019 PHINDIRITBL  Improved communication of project activities (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Communication strategy exists All planned consultation workshops held This is not done yet. for legal and No PFM communication This is one of the Communication strategy business Value strategy priority areas of the prepared. process review new MISC. Fifteen change management workshops for key stakeholders held in total by 1/4/2018 Page 9 of 11 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) end of FY5. stakeholders held in total by end of FY5. Date 28-Feb-2014 10-Nov-2016 22-Nov-2017 31-Jul-2019 Overall Comments Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P145317 IDA-H9510 Effective USD 6.50 6.50 0.00 4.06 1.95 62% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P145317 IDA-H9510 Effective 26-Jun-2014 17-Aug-2014 02-Oct-2014 31-Jul-2019 31-Jul-2019 Cumulative Disbursements 1/4/2018 Page 10 of 11 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) Restructuring History There has been no restructuring to date. Related Project(s) P164322-Maldives Public Financial Management Systems Strengthening Project 1/4/2018 Page 11 of 11 Public Disclosure Copy