The World Bank SL Public Sector Pay & Performance (P128208) REPORT NO.: RES29587 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF SL PUBLIC SECTOR PAY & PERFORMANCE APPROVED ON MAY 31, 2012 TO REPUBLIC OF SIERRA LEONE GOVERNANCE AFRICA Regional Vice President: Makhtar Diop Country Director: Henry G. R. Kerali Senior Global Practice Director: Deborah L. Wetzel Practice Manager/Manager: George Addo Larbi Task Team Leader: Roberto O. Panzardi The World Bank SL Public Sector Pay & Performance (P128208) I. BASIC DATA Product Information Project ID Financing Instrument P128208 Investment Project Financing Original EA Category Current EA Category Not Required (C) Not Required (C) Approval Date Current Closing Date 31-May-2012 31-Oct-2017 Organizations Borrower Responsible Agency Ministry of Finance and Economic Development - Human REPUBLIC OF SIERRA LEONE Resources Management Office Project Development Objective (PDO) Original PDO Improve competitiveness in pay, performance management and accountability of, and increase staffing of middle and senior staff in, the civil service in Sierra Leone. Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-51220 31-May-2012 26-Jun-2012 23-Oct-2012 31-Oct-2017 17.00 12.69 3.21 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No II. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES The World Bank SL Public Sector Pay & Performance (P128208) 1. IDA credit of SDR11 Million for the Pay and Performance Project (P&PP) was approved by the Board on May 31, 2012. It became effective after five months on October 23, 2012. The Project Development Objectives (PDO) are to improve competitiveness in pay, performance management and accountability of, and increase staffing of middle and senior staff in, the Civil Service in Sierra Leone. 2. The Government of Sierra Leone’s (GoSL) public sector reform program – “Improving Productivity through Management and Pay Reforms” - addresses these problems by focusing on Pay Reform, Performance Management and Recruitment and Staffing. The project is supporting the GoSL Program through the combination of a Program- based Investment Lending - PBIL) instrument and a Technical Assistance (TA) component. The PBIL component is disbursing against the achievement of Disbursement Linked Indicators (DLIs) which is a combination of results and key steps on defined reform paths in each of the three Program Areas. The TA component is supporting specific inputs for which close technical support and supervision by the Bank is justified and has been requested by the GoSL. 3. The Project supports the higher level goals identified in the GoSL Program by supporting the achievement of a set of necessary conditions and DLIs.. The Project will benefit present and future public servants in Sierra Leone by improving internal equity and competitiveness of pay and through an improved selection and performance appraisal system. This, in turn, will benefit the people of Sierra Leone by providing them with a more productive and better performing government and, over time, better services. The TA component will directly benefit the implementing agencies in particular the Public Sector Reform Unit (PSRU), Public Services Commission (PSC) and the Human Resource Management Office (HRMO). 4. The six PDO level indicators are: (a) Indicator One: Civil Servants in grade 6 and above paid in accordance with the approved Pay Structure; (b) Indicator Two: Priority Vacancies have been filled in accordance with the Annual Recruitment Plans and the approved Recruitment Procedures. (c) Indicator Three: Annual Performance Appraisal Reports of Civil Servants in Grade 7 to 10 are of appropriate quality. (d) Indicator Four: Annual Performance Reports of Civil Servants in Grade 11 and above in Pilot Ministries on Performance Contracts in Pilot Ministries are of appropriate quality; (e) indicator Five: All Ministries’ performances against Performance Targets have been evaluated jointly by GoSL and relevant non-state actors: and (f) Indicator Six: Direct project beneficiaries (number), of which are female (%). 5. The total projected cost of the P&PP is US$203.0 million. IDA financed the Project using a Specific Investment Loan (SIL) of SDR 11 million (US$17.0 million equivalent at the time of approval), using a results-based investment lending modality to support project implementation. The Project was restructured twice. The first restructuring in 2015 was aimed at revising and updating the Result Framework and Monitoring (RF&M) with new Disbursement Linked Indicators (DLIs), re-oriented and budgeted technical assistance and the extension of the closing date by one year from October 31, 2015 to October 31, 2016. The second restructuring was for the extension of the closing date by one more year to October 31, 2017. 6. As of October 15, 2017, the Project has disbursed about XDR8,660,469 (US$ 12,326 million equivalent) which represents about 78.73 per cent of the original amount. Out of the total of nine DLIs, four are outstanding to be attained. GoSL also disbursed over US$94.5 million. 7. Despite the outbreak of the Ebola Virus Disease (EVD) in 2014 and 2015 which significantly slowed down project implementation, Government remains committed to the objectives of the project and are working with a team of consultants to complete the job evaluation exercise which is central to the attainment of the rest of the project indicators. The World Bank SL Public Sector Pay & Performance (P128208) 8. The recently concluded implementation support mission in June 2017 rated the project moderately satisfactory since 4 of the DLIs were yet to be attained but notes that given some additional time, the PDO can be satisfactorily attained. 9. The following are the DLIs that are yet to be met: (i) DLI 1.2: (All Civil Service jobs have been evaluated in accordance with a Job Evaluation Scheme and assigned to a Grading Structure approved by the CSSC) (ii) DLI 1.3 (100 % of Civil Servants in Grade six and above paid according to the approved Pay Structure) (iii) DLI 2.5 (LTAs have been integrated in accordance with an approved Mainstreaming Policy and Action Plan) (iv) DLI 3.4 75% of the Annual Performance Reports for Civil Servants in Grade 11 and above in Pilot Ministries are of appropriate quality. 10. Despite the challenges encountered from 2014 due to the outbreak of the EVD, the project was able to achieve some results.Through the introduction of increased and sustained payroll control measures, the number of civil servants on the payroll reduced from 19,050 (in April 2016) to 17,002 (in May 2017). A remuneration survey was conducted as part of the job evaluation process. The PSC in collaboration with the HRMO developed a revised open, competitive and competency based recruitment procedure manual. A total of 805 new middle level staff were recruited based on the Annual Recruitment Plans prepared by the HRMO through a merit-based recruitment process. A new Performance Management Policy (PMP) was developed by the HRMO, approved by Cabinet and is under implementation. A Handbook on PMP was also developed and is being used to train civil servants. As at June 2017, a total of 330 supervisors in the civil service were trained by the HRMO. In 2016, the Office of the Cabinet Secretary signed Performance Contracts with 128 Civil Servants in Grades 11 -14 in the Pilot Ministries, Departments and Agencies (MDAs). In 2017, 126 Performance Contracts were signed. 11. There is no outstanding audit report. The Project however has an inactive Designated Accounts for over 30 months and this has been discussed with the project team. The agreement reached is that the Project will document expenditures by preparing an Interim Unaudited Financial Report (IFR) for the last quarter ending September 30, 2017 for approval by the TTL and submitted through the system latest by November 10, 2017. PROPOSED CHANGES: 12. During the last Implementation Support Mission (ISM) Mission in June 2017, the project team was informed that due to the delays in mobilizing the job evaluation consultants to return to the country, there were some delays in implementation and the Government of Sierra Leone (GoSL) will need additional time to achieve the remaining DLIs. 13. The Government sent a formal letter on October 12, 2017 requesting for the extension of the closing date by twelve months from the current closing date of October 31, 2017 to October 31, 2018. The main reason was the outbreak of the Ebola Virus Disease (EVD) which affected the implementation project activities. Notable among these activities are the Job Evaluation consultancy which involved a foreign consulting firm that took time to mobilize and return to the country and trainings in Performance Management for staff in various grades in the civil service. As soon as the job evaluation assignment is completed, the government team would review the report and weigh the options available before implementing the recommendations. 14. The Bank team evaluated the request and considered it feasible and technically sound but note that the extension should be for eight months (that is to June 30, 2018). The additional eight months would enable the The World Bank SL Public Sector Pay & Performance (P128208) consultants working on the job evaluation assignment to complete and present a report to the client. The government team would also need about two to three months to discuss the recommendations and the options before implementation. General elections are expected to be conducted in Sierra during the first quarter of the 2018 calendar year and extending the closing date to June 2018 will provide the opportunity to engage the new government on pay reform issues before project closure. 15. The proposed extension of the closing date will help the GoSL to implement outstanding activities under the program and work towards achieving the remaining DLIs within the existing result and monitoring framework. The only DLI which poses a challenge is DLI 1.3 as it also depends on the fiscal space of GoSL in the immediate future. The Bank team believes that even if DLI 1.3 is not met but all the rest are met, then the PDO would be achieved. III. DETAILED CHANGES LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications 31-Oct-2016, 31-Oct- IDA-51220 Effective 31-Oct-2015 30-Jun-2018 30-Oct-2018 2017