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: 8 | ARCHIVED on 08-Sep-2019 | ISR38279 | 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-2022 pdoTable 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? Yes Board Approved Revised Project Development Objective (If project is formally restructured) The PDO (project development objectives) for the proposed AF is to enhance budget credibility, transparency, and financial reporting of public sector finances. The PDO remains relevant and the likelihood of achieving it remains high in view of the project’s implementation progress, disbursement performance, and results achieved to date. Components Table Name Policy-based fiscal strategy and budget credibility:(Cost $2.73 M) Controlled budget execution:(Cost $6.08 M) Accounting, reporting and internal audit:(Cost $1.70 M) External scrutiny and audit:(Cost $0.42 M) Project and Change Management:(Cost $1.07 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Satisfactory Overall Risk Rating High High Implementation Status and Key Decisions 9/8/2019 Page 1 of 9 The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) Despite initial inception delays of the project's additional financing, the project remains on track. Based on implementation progress, disbursement performance, results achieved, and discussions with the Government of Maldives, the likelihood of achieving the PDOs as defined in the original project remains high. A draft of Public Finance Act and Fiscal Responsibility Law has been submitted to the Attorney General. A new Corporate Governance Code for SOEs has been adopted. The Ministry of Finance has: developed a medium-term expenditure framework, adopted virement rules; rolled out the Public Accounts System (ITMIS); developed a cash flow forecasting model, used in weekly cash flow planning meetings. Budget Execution Reports (BERs) are web-published monthly by the Fiscal Affairs Division (FAD). The Auditor General has started to work on the backlog of audit of government consolidated financial statements by focusing on FY2017- 2018 accounts. Work on asset valuation and management has commenced. The Ministry of Finance has established the Public Finance Service Center (Center of Excellence) to help roll out of the PFM reforms and systems. The Ministry has established a procurement Portal to announce bid opportunities and to enable registration of suppliers online. MoF has established its PFM academy to enhance its training function and offering. The National University has approved the MoF training center to provide certification to procurement staff on completion of training. The project has reached out to Civil Society Organizations and aims to involve them more, through the publication of an open budget portal and the pilot testing of participatory audits with the AGO. Preparations for the Country's next Household Income and Expenditure Survey supported by the project have started. The public investment management component has witnessed some delays with the establishment of a new ministry and the initial focus on the medium term development plan. It is recommended to strengthen the public investment management policy and system to support the joint vetting between Planning and MoF of priority affordable, ready and high impact projects, anchored in the medium term fiscal framework and the new development plan. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance -- High High Macroeconomic -- High High Sector Strategies and Policies -- Moderate Moderate Technical Design of Project or Program -- Moderate Moderate Institutional Capacity for Implementation and Sustainability -- High High Fiduciary -- Moderate Moderate Environment and Social -- Low Low Stakeholders -- Substantial Substantial Other -- -- -- Overall -- High High Results PDO Indicators by Objectives / Outcomes To enhance budget credibility, transparency, and financial reporting of public sector finances IN00735538 ►Deviation between aggregate expenditure out turn and the original approved budget (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target 9/8/2019 Page 2 of 9 The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) Value 18.74 6.15 6.15 5.00 Date 31-Dec-2013 19-Dec-2018 20-Aug-2019 31-Jul-2022 IN00735539 ►Public Access to Key Fiscal Information (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target BERs are being regularly produced from the system and used for economic Documents not made BERs are being regularly decision making. MoF available to the public: produced from the has commenced (1) Year-end state system and used for publishing expenditure Public disclosure of financial statements of economic decision reports at an the following key fiscal the Republic of Maldives; making. MoF has aggregate level. Basic information: (a) Annual (2) In-year budget commenced publishing contract award budget documentation, execution reports; expenditure reports at an Value data for contracts (b) In-year budget (3) Contracts awarded. aggregate level. awarded above USD execution reports, (c) 100,000 have been Year-end financial Budget documents and published in MoF statements, (d) tenders resources available to website above USD 100 000. primary service units are available in public domain. Date 28-Feb-2014 19-Dec-2018 20-Aug-2019 31-Jul-2022 IN00735540 ►Comprehensiveness of debt data recording and reporting (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value Annual statement of debt Achieved. Achieved. Domestic and foreign covering domestic and debt records are external debt is BERs with commitment BERs with complete, includes prepared, but there are information, the annual commitment payable amount gaps and reconciliation financial statements with information, the annual updated and problems. payables as well a financial statements reconciled quarterly. regular system generated with payables as well a Comprehensive reports on payables are regular system management and sufficient to meet the generated reports on statistical reports requirement of recording payables are sufficient (covering debt service, payables. to meet the stock and operations) requirement of are produced at least Commonwealth recording payables. annually. Secretariat Debt Recording and Commonwealth Management System has Secretariat Debt been upgraded and Recording and tested for capturing the Management System public debt stock has been upgraded (external, domestic, and tested for grants, Islamic domestic capturing the public debt instruments and debt stock (external, external and domestic domestic, grants, guarantees). Data Islamic domestic debt entered thus far have instruments and been reconciled for external and domestic 9/8/2019 Page 3 of 9 The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) accuracy. A practice of a guarantees). Data quarterly reconciliation of entered thus far have debt records have been reconciled for commenced. accuracy. A practice of a quarterly reconciliation of debt records have commenced. Date 28-Feb-2014 19-Dec-2018 20-Aug-2019 31-Jul-2022 IN00735556 ►SOE financial reporting and disclosure (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 50.00 70.00 70.00 100.00 Date 05-Mar-2018 19-Dec-2018 20-Aug-2019 31-Jul-2022 Intermediate Results Indicators by Components Controlled budget execution IN00735558 ►Capacity building on procurement through the implementation of a new Procurement curricula (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value NIL Nil Nil 15.00 Date 28-Feb-2014 18-Dec-2018 20-Aug-2019 31-Jul-2022 IN00735563 ►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 19-Dec-2018 20-Aug-2019 31-Jul-2022 IN00735564 ►Updated gender disaggregated statistics to inform fiscal policy (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target No recent data on household income/expenditures. No recent data on No recent data on Establishment of civil Findings from HHIES Value household household service registry have been published income/expenditures income/expenditures commenced on December 2018. NPC approval for finance 9/8/2019 Page 4 of 9 The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) cadres is expected to start on March 2020. Date 01-May-2018 19-Dec-2018 20-Aug-2019 31-Jul-2022 IN00735565 ►Improved asset management (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target End year Financial Asset registry not Asset registry not Asset registry not Value Statements with asset annexed to AFS annexed to AFS annexed to AFS registry Date 01-May-2018 19-Dec-2018 20-Aug-2019 31-Jul-2022 External scrutiny and audit IN00735559 ►Inclusion of CPA techniques in Performance Audit (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Two pilot Performance Value No use of CPA No use of CPA. No use of CPA. Audits conducted using CPA Date 01-May-2018 19-Dec-2018 20-Aug-2019 31-Jul-2022 Policy-based fiscal strategy and budget credibility IN00735557 ►Increased capacity on debt and cash management (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Debt management RMDMD staff have strategy exists. received basic training Strengthened capacity of on the CS-DRMS the Debt Management modules. However, Division to take lead in they still require preparing and updating additional training on DMS. Strengthened this, to improve and capacity on cash understand the system forecasting. Technical better. staff at RMDMD trained to update the DMS but Trainings include: Credible DMS does not additional training is still • Specialized Debt management exist. required for proper trainings on loan strategy produced capacity building. analysis. Value • On-the-job Cash flow committee training to analyze the formed with loans and sovereign representatives from guarantee requests MIRA and MMA. Monthly that came in meetings are being held • Database on on first Tuesday of every current outstanding month. MOFT internal guaranteed debt. The cash flow committee database on meetings are being held • current weekly. Cash flow outstanding forecasts are followed guaranteed debt has and adjustments are not been completed as made when and if there were problems 9/8/2019 Page 5 of 9 The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) required. Updated cash in entering it to the flows are shared with system. However, MMA on daily basis. Guarantee guideline More training is required have been prepared on the implementation and approved. side. • Identifying reporting needs and preparing required reports. • Development of first quarterly debt bulletin • Data analysis and reporting, editing, version management, the use of graphics and data visualization issues etc. Cash flow committee formed with representatives from MIRA and MMA. Monthly meetings are being held on first Tuesday of every month. MOFT internal cash flow committee meetings are being held weekly. Cash flow forecasts are followed and adjustments are made when and if required. Updated cash flows are shared with MMA on daily basis. More training is required on the implementation side. Date 28-Feb-2014 19-Dec-2018 20-Aug-2019 31-Jul-2022 IN00735562 ►Increased capacity on macro fiscal planning (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0% of staff trained on MTEF was used for fiscal Staff were trained on Production of a Macro macro fiscal planning. strategy formulation. the MTFF model fiscal forecasting tool Staff were trained on theory and on how to to inform the annual No credible MTFF and MTEF and DSA in 2015. update it in the future. budget framework for assessing MTEF additional work MTEF model was used investment projects on-hold until the to update the fiscal exists. completion of BPC. strategy for 2018-2020 Assistance in policy and for initial revenue research and analysis is forecasts. MTEF needed. model was used to update the fiscal strategy for 2018-2020 and for initial revenue forecasts. The MTEF and Financial Programing and Policy (FPP) were updated in Q1 2019. The updates 9/8/2019 Page 6 of 9 The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) were not complete at the end of Q1, as most macroeconomic forecasts were being revised the end of the quarter. A brief training on financial programming and macroeconomic linkages were carried out. MTFF model creates a table similar to the budget table, and hence it will be easy to compare and analyze variances, since FPP model was developed internally. Date 28-Feb-2014 19-Dec-2018 20-Aug-2019 31-Jul-2022 Project and Change Management IN00735560 ►Improved communication of PFM reforms (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Communication strategy exists All planned Communication strategy consultation Draft Communication prepared. The workshops held for strategy exists. The implementation will be legal and business implementation will be No PFM communication enhanced and will take process review Value enhanced and will take strategy into account the into account the Additional Financing-- Fifteen change change management including the change management strategy. management strategy. workshops for key stakeholders held in total by end of FY5. stakeholders held in total by end of FY5. Date 28-Feb-2014 19-Dec-2018 20-Aug-2019 31-Jul-2022 Accounting, reporting and internal audit IN00735561 ►Timely preparation of annual financial statements (AFS) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target MOFT staff and other MoF staff and other AGA's have been trained AGA's have been on preparation of AFS trained on preparation System-generated AFS not accepted by according to IPSAS. Pre- of AFS according to AFS submitted to audit Value audit as complete and briefing provided to IPSAS. Pre-briefing within 4 months from ready for audit. AGA's on SAP module provided to AGA's on year end. prior to rolling out. BI SAP module prior to rollout has been rolling out. BI rollout 9/8/2019 Page 7 of 9 The World Bank Implementation Status & Results Report Maldives: PFM Systems Strengthening Project (P145317) completed up to 75%. has been completed Work has initiated on up to 75%. Work has functional upgrades and initiated on functional design has been upgrades and design developed, but changes has been developed, have not been made live but changes have not to external users. been made live to external users. MoF has provided comments to the Audited 2016 FS and sent to the Audit Office. The Audit Office is expected to revise the statements as per these comments, following which, it can be published. Date 28-Feb-2014 19-Dec-2018 20-Aug-2019 31-Jul-2022 Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P145317 IDA-62200 Effective USD 6.00 6.00 0.00 0.00 5.84 0% P145317 IDA-D2950 Effective USD 6.00 6.00 0.00 0.80 5.06 14% P145317 IDA-H9510 Effective USD 6.50 6.50 0.00 5.60 0.43 93% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P145317 IDA-62200 Effective 07-Jun-2018 31-Jul-2018 28-Sep-2018 31-Jul-2022 31-Jul-2022 P145317 IDA-D2950 Effective 07-Jun-2018 31-Jul-2018 28-Sep-2018 31-Jul-2022 31-Jul-2022 P145317 IDA-H9510 Effective 26-Jun-2014 17-Aug-2014 02-Oct-2014 31-Jul-2019 31-Jul-2022 Cumulative Disbursements 9/8/2019 Page 8 of 9 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 9/8/2019 Page 9 of 9