Document of The World Bank Report No: 74916-BR RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF THE PERNAMBUCO EDUCATION RESULTS AND ACCOUNTABILITY PROJECT APRIL 14, 2009 TO THE STATE OF PERNAMBUCO WITH A GUARANTEE OF THE FEDERATIVE REPUBLIC OF BRAZIL APRIL 17, 2013 Human Development Department Brazil Country Management Unit Latin America and the Caribbean Region Restructuring Status: Final Restructuring Type: Level Two Last modified on date : 04/17/2013 1. Basic Information Project ID & Name P106208, Pernambuco Education Results and Accountability Project Country Brazil Task Team Leader Michael Drabble Sector Manager/Director Reema Nayar / Keith Hansen Country Director Deborah L. Wetzel Original Board Approval Date 04/14/2009 Original Closing Date: 12/31/2013 Current Closing Date 12/31/2013 Proposed Closing Date [if applicable] N/A EA Category C-Not Required Revised EA Category N/A EA Completion Date N/A Revised EA Completion Date N/A 2. Revised Financing Plan (US$m) Source Original Revised BORR 426.40 426.40 IBRD 154.00 154.00 Total 580.40 580.40 3. Borrower Organization Department Location State of Pernambuco Secretariat of Planning and Federative Republic of Brazil Management 4. Implementing Agency Organization Department Location Secretariat of Education State of Pernambuco ii 5. Disbursement Estimates (US$m) Actual amount disbursed as of 4/11/2013 117.07 Fiscal Year Annual Cumulative 2013 25.00 142.07 2014 11.93 154.00 Total 154.00 6. Policy Exceptions and Safeguard Policies Does the restructured project require any exceptions to Bank policies? N Does the restructured project trigger any new safeguard policies? N 7. Project Development Objectives/Outcomes The development objectives are to: (a) improve the quality, efficiency and equity of public education in Pernambuco; and (b) introduce management reforms that will lead to greater efficiency in the use of the Government of the State of Pernambuco's (GOP) public resources in the education sector. iii ABBREVIATIONS AND ACRONYMS EEPs Eligible Expenditure Programs FE Fundamental or Basic Education (Ensino Fundamental) GoP Government of the State of Pernambuco OM Operational Manual PDE School Development Plan (Plano de Desenvolvimento Escolar) PDO Project Development Objective PEFA Public Expenditure and Financial Accountability Framework PMGPE Program for Modernization of Public Management and Education (Programa de Modernização da Gestão Pública em Educação) PPE Pact for Education (Pacto Pela Educação) SAD State Secretariat of Administration (Secretaria de Administração do Estado de Pernambuco) SAEPE Pernambuco’s Educational Assessment System (Sistema de Avaliação Educacional de Pernambuco) SEE State Secretariat of Education (Secretaria Estadual de Educação) SEPLAG Secretariat of Planning and Management (Secretaria de Planejamento e Gestão) Regional Vice President: Hasan A. Tuluy Country Director: Deborah L. Wetzel Sector Manager: Reema Nayar Task Team Leader: Michael Drabble iv BRAZIL PERNAMBUCO EDUCATION RESULTS AND ACCOUNTABILITY PROJECT CONTENTS Page A. SUMMARY ................................................................................................................ 1 B. PROJECT STATUS.................................................................................................... 1 C. PROPOSED CHANGES ............................................................................................ 2 ANNEX 1: RESULTS FRAMEWORK AND MONITORING ......................................... 7 v PERNAMBUCO EDUCATION RESULTS AND ACCOUNTABILITY PROJECT RESTRUCTURING PAPER A. SUMMARY 1. The main changes to the Project and rationale are: (a) Under Component 1, a reduction in the scope of the overage correction program, due to a reduction in State-sponsored overage literacy and accelerated learning programs; a revision in the basic standards schools must meet; and additions to the list of eligible expenditure programs (EEPs) due to changes in budget lines and numbers introduced by the Government of the State of Pernambuco (GoP). (b) Under Component 2, a more ambitious activity for the improvement of public management, and a revised focus on the Pact for Education, consistent with the government’s revised strategy. (c) The reclassifying of all original Outcome Indicators as Intermediate Results Indicators since they measure Project outputs; and the reclassification of one original Intermediate Results Indicator as an Outcome Indicator and the introduction of three Outcome Indicators to improve measurement of the achievement of the Project Development Objectives; and changes to targets of one Outcome Indicator and six Intermediate Result Indicators consistent with the changes to Project activities and implementation timetable. B. PROJECT STATUS 2. The Project was approved on April 14, 2009, and became effective on December 3, 2009, five months later than originally expected. It has two components:  Component 1: Improvement of Basic Education, including sub-components 1.1 – Basic Standards Program; 1.2 – Literacy Program; 1.3 – Overage Correction Program; and 1.4 – Monitoring and Evaluation.  Component 2: Public Sector Management, including sub-components 2.1 – General Public Sector Management Interventions; and 2.2 – Education Sector Management Interventions. 3. Progress in the implementation of Project activities under Component 1 (Improvement of Basic Education) has been satisfactory. The GoP has exceeded the target of students certified as literate by the end of the first cycle of low fundamental education, and it has achieved the targets associated with applying its Educational Assessment System (SAEPE, Sistema de Avaliação Educacional de Pernambuco) and disseminating the results to parents, as well as developing and monitoring school improvement plans (PDE, Planos de Desenvolvimento Escolar). However, the GoP has faced delays and difficulties in the implementation of two other activities. First, in 2012 the GoP raised the school basic standards to provide for a better quality schooling 1 environment. Two main changes to the standards were introduced: (i) the list and number of the required facilities (e.g.: furniture and equipment) is now based on the size of the school; and (ii) the standards are expanded by including for instance an internet connection in the headmaster’s office and replacing ventilators with air conditioning. It took time for the Secretary of Education to comply with these new standards and a lower number of schools than expected were able to achieve the revised basic standards in 2012. It is expected that the Secretary of Education will achieve the target for 2013. Secondly, the demand for State-sponsored overage literacy and accelerated learning programs has been lower than initially expected. This drop is due to a number of factors, including: (i) the growth of federal and municipal overage literacy programs; and (ii) the transition of some students from state schools to municipal schools, who, therefore, have not joined the State-sponsored programs. Nonetheless, the GoP via the Secretary of Education continues to offer these programs to several thousands of students every year with positive results in terms of graduation rates. 4. Progress in the implementation of activities under Component 2 has also been delayed. The main bottlenecks to implementation have been (i) the strengthening of the GoP’s procurement system (sub-component 2.1) to create a comprehensive computerized system to manage all procurement processes, including the management of assets and inventory; (ii) a change in the focus of strategic planning for the education sector (sub- component 2.2), from the Program for Modernization of Public Management and Education (PMGPE, Programa de Modernização da Gestão Pública em Educação) to a new instrument for performance-based management in the education sector that was launched in September 2011, namely the Pact for Education (PPE, Pacto Pela Educação); and (iii) delays in the hiring of consultants for studies to be conducted under sub-component 2.2. These bottlenecks have been addressed by (i) an updated concept and action plan for the finalization of the computerized system for the management of procurement; (ii) a renewed diagnosis and strategy based on the PPE, with the corresponding action plans; and (iii) an updated schedule for the timely completion of the studies included under sub-component 2.2. C. PROPOSED CHANGES Components 5. The changes in Component 1 are:  Sub-component 1.1 (Basic Standards Program) would apply a new set of basic standards that build on the existing ones, given the 2012 changes in the standards.  Sub-component 1.3 (Overage Correction Program) would target fewer students, given that demand for the State program has been lower than expected.  Six additional budget numbers and lines for the EEPs were introduced for 2012 to consolidate the budget numbers and lines financing Component 1 2 (See Table 1). The original list of 25 budget numbers and lines, which was included in the PAD and in the Loan Agreement has been discontinued. Table 1 – Additional budget numbers and lines for the EEPs New Budget Program Component 1 Number Extending support to educational 4072 activity 4538 Provision of school feeding Improving the effectiveness of Component 1.1 Basic Standards Program 4327 learning in fundamental education – standard performance 4118 Provision of instructional resources Component Component 1.2 1.3 Average Literacy Program Correction (comprehensive Program (age- literacy program grade Improving the effectiveness of that will cover distortion of 4051 learning in fundamental education – students enrolled in overage standard performance the early years of students basic education, as enrolled in well as literacy basic and tutors who will, in secondary turn, train teachers.) education.) Component 1.4 Monitoring and Education (upgrading and implementing a monitoring and Improving the effectiveness of evaluation learning in secondary education – system, as well 4439 standard performance as a student assessment system, in order to evaluate educational policies in the basic and secondary level) 6. The changes in Component 2 are:  Sub-component 2.1 (General Public Sector Management Interventions) would be expanded to finance a more ambitious activity for the 3 improvement of public management, including procurement, consistent with the government’s revised action plan.  Sub-component 2.2 (Education Sector Management Interventions) would switch its focus from the Program for Modernization of Public Management to the more comprehensive, highly visible Pact for Education (PPE, Pacto Pela Educação), consistent with the government’s revised strategic focus. Results/Indicators 7. Three new Outcomes Indicators were introduced to measure the achievement of the Project Development Objectives. One original Intermediate Results Indicator was upgraded to Outcome Indicator to complement the three new ones, and its targets were revised. The changes are described below and detailed in Annex 1. Target years were also revised, in line with the Loan Agreement and the delayed effectiveness of the Project. Outcome Indicators 8. Three new Outcome Indicators have been introduced. (i) Outcome Indicator 1: Improve the Quality of Public Education in Pernambuco. “Performance in Portuguese and Mathematics at the end of Low Fundamental Education.”  Targets: For Portuguese: 171 in 2010, 180 in 2011, 185 in 2012 and 187 in 2013. For Mathematics: 181 in 2010, 196 in 2011, 202 in 2012 and 204 in 2013. (ii) Outcome Indicator 2: Improve the Efficiency of Public Education in Pernambuco. “Repetition Rates in Low and High Fundamental Education.”  Targets: For Low Fundamental Education: 11.4% in 2010, 9% in 2011, 8.8% in 2012 and 8.6 in 2013. For High Fundamental Education: 15.7% in 2010, 14.8% in 2011, 14.5% in 2012 and 14.3% in 2013. (iii) Outcome Indicator 4: Achieve Greater Efficiency in the Use of the GoP’s Public Resources in the Education Sector. “Percentage of SEE’s personnel delivering education services in schools.”  Target: 83% in 2013. 9. One Intermediate Results Indicator was upgraded to Outcome Indicator, given that it measures the Project’s impact on improved equity, and its targets were revised. 4 (i) Outcome Indicator 3: Improve the Equity of Public Education in Pernambuco. “Number in the State system schools meeting basic standards.”  Previous targets: (i) 221 in 2012 and 221 in 2013.  Revised targets: (i) 159 in 2012 and 221 in 2013. 10. The target for 2012 has been lowered due to an increase in the set of basic standards. The original target for 2013 remains unchanged. Intermediate Result Indicators 11. All original Outcome Indicators were downgraded to Intermediate Results Indicators. The targets of six out of the eleven Intermediate Results Indicators were revised. The targets for 2012 and 2013 for Intermediate Results Indicators 2, 3, 4 and 5 have been revised downward because progress has been slower than expected given that fewer eligible students are enrolled in State-sponsored overage literacy and accelerated learning programs provided by the GoP and, therefore, fewer students will be certified. (i) Intermediate Results Indicator 2: “Number of overage illiterate students in the lower fundamental education (grades 1 to 4) in the State system certified as literate by the end of the school year.”  Previous targets: 20,000 in 2012 and 20,000 in 2013.  Revised targets: 7,400 in 2012 and 7,000 in 2013. (ii) Intermediate Results Indicator 3: “Number of overage students in the lower fundamental education in the State system (grades 1 to 4) that are certified as accelerated or promoted by the end of the school year.” (Note: Original Indicator measurement encompassed the State and municipal system and not just the State system)  Previous targets: 10,500 in 2012 and 10,500 in 2013.  Revised targets: 5,300 in 2012 and 4,600 in 2013. (iii) Intermediate Results Indicator 4: “Number of overage students in the later years of fundamental education in the State system (grades 5 to 8), that are certified as accelerated or promoted by the end of the school year.” (Note: Original Indicator measurement encompassed the State and municipal system and not just the State system)  Previous targets: 18,000 in 2012 and 27,000 in 2013.  Revised targets: 6,000 in 2012 and 6,000 in 2013. 5 (iv) Intermediate Results Indicator 5: “Number of overage students in the secondary education in the State system that are certified as having completed the education cycle by the end of the school year.”  Previous targets: 30,000 in 2012 and 36,000 in 2013.  Revised targets: 7,200 in 2012 and 12,000 in 2013. 12. The targets for Intermediate Results Indicator 9 for 2012 and 2013 have been revised in line with the GoP’s new focus on the PPE. v) Intermediate Results Indicator 9: “Development and monitoring of the implementation of a strategic plan and derived action plans (updated yearly) for the education sector, satisfactory to the Bank, identifying priority activities and a hierarchy of management indicators to be incorporated into the budget cycle.”  Previous targets: For both 2012 and 2013: (1) Formal written review of education progress against indicators included in the PMGPE; (2) upgrading of action plan including funding; (3) publication and wide dissemination of results.  Revised targets: For 2012: (1) Substitution of the Program for Modernization of Public Management and Education for the Pact for Education (PPE); (2) Action Plan for the education sector including funding, as per the PPE; (3) presentation and publication of results in meetings with the Government’s Management Core. For 2013: (1) Formal written review of education progress, including the implementation of the Action Plan of the PPE; (2) upgrading of action plan including funding; (3) presentation and publication of results in meetings with the Government’s Management Core. 13. The targets for Intermediate Result Indicator 11 for 2012 and 2013 have been revised to accommodate (i) the broadening of the goals to e-procurement as part of an integrated and computerized system for the management of procurement, bidding, assets and stocks; and (ii) the delays in introducing the systems stemming from the adjustments to the goals. vi) Intermediate Results Indicator 11: “Development and implementation of an action plan for the strengthening of procurement function, including its management, E-procurement system and other procurement procedures through the Web, resulting from the application of the OECD Indicators diagnostic.”  Previous targets: For 2012: E-procurement design is completed and approved by SAD. For 2013: Results of E-procurement consultancy are evaluated and disseminated. 6  Revised targets: For 2012: Bidding process concluded and contract assigned. For 2013: Integrated and computerized solution for public management, including procurement, bidding, assets and stocks is in place. 7 ANNEX 1 Results Framework and Monitoring BRAZIL: Pernambuco Education Results and Accountability Project Project Development Objective (PDO): The development objectives are to: (a) improve the quality, efficiency and equity of public education in Pernambuco; and (b) introduce management reforms that will lead to greater efficiency in the use of the Government of the State of Pernambuco's (GOP) public resources in the education sector. Cumulative Target Values Core C=Continue Unit of Data Source/ Responsibility for Indicators Baseline Frequency R=Revised Measure 2010 2011 2012 2013 Methodology Data Collection N=New PDO LEVEL RESULTS INDICATORS Indicator One: Improve the quality of public education in Pernambuco. Performance in Statement Portuguese and Mathematics at 167 171 180 185 187 Learning N % Annual SEE the end of Low Fundamental 175 181 196 202 204 Assessment Education. System - in Portuguese - in Mathematics Indicator Two: Improve the efficiency of public education in Pernambuco. Repetition rates in Low and High 9.7% 11.4% 9% 8.8% 8.6% Annual Fundamental Education. N % Annual Statistical SEE - in Low Fundamental 15.3% 15.7% 14.8% 14.5% 14.3% Report Education - in High Fundamental Education Indicator Three: Improve the The OM equity of public education in contains a Pernambuco. Number in the checklist with State system schools meeting measurable basic standards. [DLI #1]. R # 0 121 121 159 221 Annual criteria SEE identifying what unambiguously constitutes basic standards. 8 Cumulative Target Values Core C=Continue Unit of Data Source/ Responsibility for Indicators Baseline Frequency R=Revised Measure 2010 2011 2012 2013 Methodology Data Collection N=New Indicator Four: Achieve greater efficiency in the use of the GOP’s public Annual resources in the education N % 50% -- -- -- 83% Annual Statistical SEE sector. Percentage of SEE’s Report personnel delivering education services in schools. INTERMEDIATE RESULTS Component 1: Improvement of Basic Education Intermediate Result Indicator Certification of One: Share of students in the literacy (ability State system certified as literate to read and write at the end of the first cycle of of students basic education. [DLI #2] graded at range 50-60 in the SAEPE scale) will be defined as certification by SAEPE results or by an C % 55 61 61 63 65 Twice a year SEE external agency according to guidelines and procedures vetted by the Bank and described in the OM. Targets for this indicator are not cumulative. Intermediate Result Indicator Public system Two: Number of overage R # 18,916 20,000 20,000 7,400 7,000 Twice a year refers to State SEE illiterate students in the lower and municipal 9 Cumulative Target Values Core C=Continue Unit of Data Source/ Responsibility for Indicators Baseline Frequency R=Revised Measure 2010 2011 2012 2013 Methodology Data Collection N=New fundamental education (grades schools. 1 to 4) in the State system Targets for this certified as literate by the end indicator are not of the school year. [DLI #3] cumulative. Intermediate Result Indicator Promoted Three: Number of overage (accelerated) students in the lower means that the fundamental education in the student is State system (grades 1 to 4) promoted 1 (at R # 8,039 10,500 10,500 5,300 4,600 Twice a year SEE that are certified as accelerated least 2) grade or promoted by the end of the levels. school year. [DLI #4] Targets for this indicator are not cumulative. Intermediate Result Indicator Promoted Four: Number of overage (accelerated) students in the later years of means that the fundamental education in the student is State system (grades 5 to 8), promoted 1 (at R # 0 9,000 9,000 6,000 6,000 Twice a year SEE that are certified as accelerated least 2) grade or promoted by the end of the levels. school year. [DLI #5] Targets for this indicator are not cumulative. Intermediate Result Indicator Certification is Five: Number of overage defined as students in the secondary certification by education in the State system the school that are certified as having according to completed the education cycle testing by the end of the school year. R # 0 24,000 24,000 7,200 12,000 Twice a year guidelines and [DLI #6] procedures vetted by the Bank and included in the OM. Targets for this 10 Cumulative Target Values Core C=Continue Unit of Data Source/ Responsibility for Indicators Baseline Frequency R=Revised Measure 2010 2011 2012 2013 Methodology Data Collection N=New indicator are not cumulative. Intermediate Result indicator SAEPE- Six: SAEPE assessment is applicati SAEPE- applied at grades 2, 4 and 8 in on on all SAEPE- SAEPE- applicatio all State schools, and applied in SAEPE- students application application n on all an increasing share in application of 2nd, 4th on all on all students municipal schools. [DLI #7] on all and 8th students of students of of 2nd, 4th students of grades of 2nd, 4th and 2nd, 4th and and 8th Schools with at 2nd, 4th and Fundame 8th grades 8th grades grades of least 5 students 8th grades of ntal of of Fundamen are considered. Fundamental Educatio Fundament Fundament tal A yearly report Education n and 3rd al al Education with method, C % and 3rd of of Education Education Twice a year SEE and 3rd of results and Secondary Secondar and 3rd of and 3rd of Secondary diagnostics of education in y Secondary Secondary education SAEPE will be all State educatio education education in all State provided to the schools and n in all in all State in all State schools Bank. in at least State schools and schools and and in at 80% of schools in at least in at least least 90% municipal and in at 90% of 90% of of schools least municipal municipal municipal 90% of schools schools schools municipa l schools Intermediate Result indicator Dissemin Dissemina Disseminati Disseminati Seven: Dissemination of ation of tion of Schools with at on of on of SAEPE information on school SAEPE SAEPE least 5 students SAEPE SAEPE performance to parents. [DLI 2009 2011 are considered. 2010 2012 #8] results to results to A yearly report results to results to parents parents in with method, C % -- parents in parents in Twice a year SEE in all all State results and all State all State State schools diagnostics of schools and schools and schools and in SAEPE will be in 80% of in 90% of and in 90% of provided to the municipal municipal 80% of municipal Bank. schools schools municipa schools 11 Cumulative Target Values Core C=Continue Unit of Data Source/ Responsibility for Indicators Baseline Frequency R=Revised Measure 2010 2011 2012 2013 Methodology Data Collection N=New l schools Intermediate Result indicator 50% of Eight: Development and schools 80% of 40% of 60% of 80% of monitoring of an Action Plan with schools schools with schools schools of remedial measures (PDE) to PDE with PDE PDE with PDE with PDE improve teaching practices and including including Results will be including including including other impediments to learning remedial remedial published on the remedial remedial remedial in the State system schools, measures measures SEE website and C % measures measures measures Twice a year SEE satisfactory to the Bank, in under under disseminated under under under response to results of student impleme implement physically to implementati implementa implementa assessments. [DLI #9] ntation ation and schools. on and being tion and tion and and being monitored. being being being monitored monitored. monitored. monitore . d. Component 2: Public Sector Management Interventions Intermediate Result Indicator (1) (1) Formal (1) (1) Formal Nine: Development and Debate of Formal written Substituti written monitoring of the INDG written review of on of review of implementation of a strategic findings, review education INDG’s education plan and derived action plans development of progress diagnosis progress, (updated yearly) for the and educatio against and including education sector, satisfactory to agreement n indicators strategy the The basis of the the Bank, identifying priority on a fully progress included in for the implementa Action Plan is activities and a hierarchy of funded, against the Pact for tion of the the Pact for management indicators to be R Text time-bound indicator PMGPE; Education Action Plan Twice a year SEPLAG Education (PPE, incorporated into the budget Strategy and s (2) (PPE); (2) of the PPE; Pacto Pela cycle. [DLI #10] Action Plan. included upgrading Action (2) Educação). Launch of in the of action Plan for upgrading some PMGPE; plan the of action activities. (2) including education plan Agreement upgradin funding; sector including on hierarchy g of (3) including funding; of indicators. action publication funding, (3) plan and wide as per the presentatio 12 Cumulative Target Values Core C=Continue Unit of Data Source/ Responsibility for Indicators Baseline Frequency R=Revised Measure 2010 2011 2012 2013 Methodology Data Collection N=New includin dissemianti PPE; (3) n and g on of presentati publication funding; results. on and of results in (3) publicatio meetings publicati n of with the on and results in Governmen wide meetings t’s dissemia with the Manageme ntion of Governme nt Core. results. nt’s Managem ent Core. Intermediate Result Indicator Developmen Interim E-fisco Results of Ten: Development and t of a fully report on consultanc E-fisco implementation of an action costed, E-fisco y is consultancy plan for the strengthening of sequenced consultancy completed are financial management, action plan is prepared evaluated satisfactory to the Bank, with funding and resulting from the application identified for disseminate A report will be of PEFA Framework. implemen- d issued with the (Implementation of the ting status of the State e-fisco project recommen- entire Action management module will be dations. E- C Text Twice a year Plan and a SAD used as a proxy of the FISCO separate section implementation of the action project on the plan). [DLI #11] management implementation module of the E-fisco. chosen as proxy for the implemen- tation of PEFA recommen- dations. Intermediate Result Indicator Develop- Interim Bidding Integrated A report will be Eleven: Development and R Text ment of a report on process and Twice a year issued with the SAD implementation of an action fully costed, E-procure- concluded computeriz status of the 13 Cumulative Target Values Core C=Continue Unit of Data Source/ Responsibility for Indicators Baseline Frequency R=Revised Measure 2010 2011 2012 2013 Methodology Data Collection N=New plan for the strengthening of sequenced ment and ed solution entire Action procurement function, action plan consultancy contract for public Plan and a including its management, E- with funding is prepared. assigned. manageme separate section procurement system and other identified for nt, on the procurement procedures implementin including implementation through the Web, resulting g recommen- procuremen of the E- from the application of the dations. t, bidding, procurement OECD Indicators diagnostic. State’s e- assets and system. [DLI #12] procure- stocks is in ment system place. is chosen as proxy for the implement- ation of OECD’s DAC recommen- dations. 14