Document of The World Bank FOR OFFICIAL USE ONLY Report No: PAD816 INTERNATIONAL DEVELOPMENT ASSOCIATION PROJECT APPRAISAL DOCUMENT ON A PROPOSED GRANT IN THE AMOUNT OF SDR 5.2 MILLION (US$8 MILLION EQUIVALENT) TO THE REPUBLIC OF YEMEN FOR A CIVIL SOCIETY ORGANIZATIONS SUPPORT PROJECT February 4, 2014 Sustainable Development Department Middle East and North Africa Region This document is being made publicly available prior to Board consideration. This does not imply a presumed outcome. This document may be updated following Board consideration and the updated document will be made publicly available in accordance with the Bank’s policy on Access to Information. CURRENCY EQUIVALENTS (Exchange Rate as of December 1, 2013) Currency Unit = Yemeni Rial 214.90 = US$1 US$1.53 = SDR 1 FISCAL YEAR January 1 – December 31 ABBREVIATIONS AND ACRONYMS ANSA-AW Affiliated Network for Social Accountability in the Arab World CBA Center for Business Administration CBO(s) Community-Based Organization(s) CDD Community-Driven Development CHM Complaints Handling Mechanism CPS Country Partnership Strategy CSO(s) Civil Society Organization(s) EU European Union FA Financing Agreement FM Financial Management GAC Governance and Anti-Corruption GCC Gulf Cooperation Council GMC Grant Making Committee GNR Government of National Reconciliation GoY Government of Yemen IDA International Development Association IFC International Finance Corporation INGO(s) International Non-Governmental Organization(s) ISN Interim Strategy Note M&E Monitoring and Evaluation MAF Mutual Accountability Framework MENA Middle East and North Africa MIS Management Information System MoPIC Ministry of Planning and International Cooperation MoSAL Ministry of Social Affairs and Labor MOU Memorandum of Understanding NSA/LA Non State Actors and Local Authorities in Development PIE Project Implementation Entity PNGO Palestinian Non-Governmental Organization Project PNPM National Program for Community Empowerment PDO Project Development Objectives RGP Responsive Governance Project SAP Sector Action Plan SFD Social Fund for Development SNACC Supreme National Authority for Combating Corruption TA Technical Assistance USAID United States Agency for International Development UNDP United Nations Development Programme WBG World Bank Group Regional Vice President: Inger Andersen Country Director: Hartwig Schafer Sector Director: Junaid Kamal Ahmad Sector Manager: Franck Bousquet Task Team Leader: Najat Yamouri REPUBLIC OF YEMEN CIVIL SOCIETY ORGANIZATIONS SUPPORT PROJECT TABLE OF CONTENTS Page I. STRATEGIC CONTEXT .................................................................................................1 A. Country Context .......................................................................................................... 1 B. Sectoral and Institutional Context ............................................................................... 2 C. Higher Level Objectives to Which the Project Contributes ........................................ 5 II. PROJECT DEVELOPMENT OBJECTIVE ..................................................................7 A. PDO ............................................................................................................................... 7 B. Project Beneficiaries...................................................................................................... 7 C. PDO Level Results Indicators ..................................................................................... 8 III. PROJECT DESCRIPTION ..............................................................................................8 A. Project Components .................................................................................................... 8 B. Project Financing ...................................................................................................... 11 Project Cost and Financing ............................................................................................... 11 C. Lessons Learned and Reflected in the Project Design .............................................. 11 IV. IMPLEMENTATION .....................................................................................................13 A. Institutional and Implementation Arrangements....................................................... 13 B. Results Monitoring and Evaluation .......................................................................... 14 C. Sustainability............................................................................................................. 15 V. KEY RISK AND MITIGATION MEASURES ............................................................15 A. Risk Ratings Summary Table ................................................................................... 15 B. Overall Risk Rating Explanation .............................................................................. 16 VI. APPRAISAL SUMMARY ..............................................................................................16 A. Economic and Financial (if applicable) Analysis ..................................................... 16 B. Technical ................................................................................................................... 18 C. Financial Management .............................................................................................. 19 D. Procurement .............................................................................................................. 19 E. Social (including Safeguards) ................................................................................... 19 F. Environment (including Safeguards) ........................................................................ 20 Annex 1: Results Framework and Monitoring.................................................................. 21 Annex 2: Detailed Project Description ............................................................................. 25 Annex 3: Implementation Arrangements .......................................................................... 36 Annex 4: Operational Risk Assessment Framework (ORAF) .......................................... 50 Annex 5: Implementation Support Plan............................................................................ 55 Annex 6: Action Learning Small Grants .......................................................................... 57 . PAD DATA SHEET Yemen, Republic of Yemen Civil Society Organizations Support Project (P146312) PROJECT APPRAISAL DOCUMENT . MIDDLE EAST AND NORTH AFRICA MNSSU Report No.: PAD816 . Basic Information Project ID EA Category Team Leader P146312 C - Not Required Najat Yamouri Lending Instrument Fragile and/or Capacity Constraints [ ] Investment Project Financing Financial Intermediaries [ ] Series of Projects [ ] Project Implementation Start Date Project Implementation End Date 28-Feb-2014 30-Jun-2018 Expected Effectiveness Date Expected Closing Date 30-May-2014 31-Dec-2018 Joint IFC No Sector Manager Sector Director Country Director Regional Vice President Franck Bousquet Junaid Kamal Ahmad Hartwig Schafer Inger Andersen . Borrower: Ministry of Social Affairs and Labor Responsible Agency: Ministry of Planning and International Cooperation Contact: Dr. Mohammed Al-Hawri Title: Deputy Minister Telephone Email: No.: Responsible Agency: Social Fund for Development Contact: Mr. Saleh Sagheer Title:A Telephone 011967711442298 Email: ssageer@sfd-yemen.org No.: . i Project Financing Data(in USD Million) [ ] Loan [ ] Grant [ ] Guarantee [ ] Credit [ X ] IDA Grant [ ] Other Total Project Cost: 8.00 Total Bank Financing: 8.00 Financing Gap: 0.00 . Financing Source Amount BORROWER/RECIPIENT 0.00 IDA Grant 8.00 Total 8.00 . Expected Disbursements (in USD Million) Fiscal 2014 2015 2016 2017 2018 2019 Year Annual 0.50 2.40 2.35 1.85 0.90 0.00 Cumulati 0.50 2.90 5.25 7.10 8.00 8.00 ve . Proposed Development Objective(s) The objective of the project is to increase transparency and ease of entry in the CSO sector and enhance CSO capacity in social accountability. . Components Component Name Cost (USD Millions) Increase transparency and ease of entry in the CSO sector 3.30 CSOs Capacity Building, Certification and Small Grants for 3.60 Action Learning Program Management 1.10 . Institutional Data Sector Board Social Development . Sectors / Climate Change Sector (Maximum 5 and total % must equal 100) Major Sector Sector % Adaptation Mitigation Co-benefits % Co-benefits % Health and other social services Other social services 50 ii Public Administration, Law, and Sub-national government 50 Justice administration Total 100 I certify that there is no Adaptation and Mitigation Climate Change Co-benefits information applicable to this project. . Themes Theme (Maximum 5 and total % must equal 100) Major theme Theme % Social dev/gender/inclusion Other social development 100 Total 100 . Compliance Policy Does the project depart from the CAS in content or in other significant Yes [ ] No [ X ] respects? . Does the project require any waivers of Bank policies? Yes [ ] No [ X ] Have these been approved by Bank management? Yes [ ] No [ X ] Is approval for any policy waiver sought from the Board? Yes [ ] No [ X ] Does the project meet the Regional criteria for readiness for implementation? Yes [ X ] No [ ] . Safeguard Policies Triggered by the Project Yes No Environmental Assessment OP/BP 4.01 X Natural Habitats OP/BP 4.04 X Forests OP/BP 4.36 X Pest Management OP 4.09 X Physical Cultural Resources OP/BP 4.11 X Indigenous Peoples OP/BP 4.10 X Involuntary Resettlement OP/BP 4.12 X Safety of Dams OP/BP 4.37 X Projects on International Waterways OP/BP 7.50 X Projects in Disputed Areas OP/BP 7.60 X . Legal Covenants Name Recurrent Due Date Frequency iii Description of Covenant . Conditions Name Type Article V 5.01 Effectiveness Description of Condition The Subsidiary Agreement has been executed on behalf of the Recipient and the Project Implementing Entity. Name Type Schedule 2, Section IV, B.1(b) Disbursement Description of Condition With regard to the Small Grants made for Action Learning Activities, review and approval by the IDA, of the first five Sub-grant Agreements executed between the Project Implementing Entity. Team Composition Bank Staff Name Title Specialization Unit Tracy Hart Senior Environmental Senior Environmental MNSEE Specialist Specialist Ali Khamis Senior Operations Senior Operations MNSSU Officer Officer Zeina Afif Senior Communications Senior Communications ECRWS Officer Officer Samantha M. Constant Consultant Consultant MNSSU Chaogang Wang Senior Social Senior Social MNSSU Development Specialist Development Specialist Samra Shaibani Senior Communications Senior Communications MNAEX Officer Officer Guido Rurangwa Senior Country Officer Senior Country Officer MNSED Edith Ruguru Mwenda Senior Counsel Senior Counsel LEGAM Najat Yamouri Senior Social Team Lead MNSSU Development Specialist Mariana T. Felicio Social Development Social Development MNSSU Specialist Specialist Ray Salvatore Jennings Consultant Consultant MNSSU iv Maiada Mahmoud Abdel Finance Officer Finance Officer CTRLA Fattah Kassem Andrianirina Michel Eric Finance Officer Finance Officer CTRLA Ranjeva Maya Abi Karam Senior Counsel Senior Counsel LEGAM Anil S.V. Das Consultant Consultant MNSSU Moad M. Alrubaidi Sr Financial Financial Management MNAFM Management Specialist Specialist Kanishka Senath Consultant Consultant MNSSU Balasuriya Matthieu Louis E T Consultant Legal Consultant LEGAM Bonvoisin Charlene D'Almeida Program Assistant Operational Support MNSSU Non Bank Staff Name Title Office Phone City . Locations Country First Location Planned Actual Comments Administrative Division Yemen, Sanaa Sanaa X Republic of Yemen, Aden Muhafazat `Adan X Republic of v I. STRATEGIC CONTEXT A. Country Context 1. In 2011, Yemen ranked 154 out of 187 countries on the Human Development Index and had a Gross Domestic Product of US$ 1,209 (Purchasing Power Parity (PPP)). Yemen today faces a complex set of developmental challenges, among them rapid population growth, lack of clear alternatives to an oil economy, rapidly depleting water reserves, poor infrastructure with inadequate access to basic services for the majority of the population and acute gender inequality. According to the 2012 World Economic Forum’s Global Gender Gap report, “Yemen continues to occupy the last place in the region as well as in the overall ranking of 135 countries”. Illiteracy amongst women in Yemen is 76 percent, compared to 30 percent for men and only 7.6 percent of women over 25 have completed secondary education. Since the unification in 1990, Yemen has been grappling with establishing a pluralistic political system within a unified nation-state. With the onset of the Arab Spring in 2010, Yemen witnessed a wave of protests. Following a power transfer agreement, President Ali Abdullah Saleh stepped down after 33 years in power. Elections took place on February 21, 2012, and Abdo Rabbo Mansoor Hadi assumed office as the new President. 2. Yemen has embarked on a political transition process since the transfer of power in February 2012. One of the most important elements in the transition process was the initiation of the National Dialogue, a process in which all forces and political actors, including youth, the Southern Movement, the Houthis, other political parties, civil society representatives and women are participating to address fundamental issues such as restructuring the state and drafting a new constitution, addressing Southern concerns over centralized governance, improving relations with the Houthi Movement 1, attending to long standing governance (civil service, judiciary, and local governance) issues, and the rights of vulnerable groups such as women and children. Yemen faces significant risks if reforms do not materialize quickly and if the population does not perceive that this process is bringing forth substantive changes. 3. Civil Society Organizations (CSOs) in Yemen are amongst the most vibrant and dynamic in the Middle East and North Africa (MENA) region. Before the transition process in 2011, about 7,000 CSOs were registered across different sectors, most of them being welfare oriented and located in urban centers. Limited participation of women, youth and marginalized groups, as well as attempts by the Government to control CSO activities characterized the CSO sphere. CSOs did not have a strong role in service delivery and had limited impact in terms of holding the Government accountable or establishing appropriate mechanisms to voice community needs and grievances. The current transition has brought new opportunities for CSOs to play a greater role, through engaging with the Government and donors, on development and reform programs. Similarly, the Government of National Reconciliation (GNR) has a unique opportunity to harness the constructive engagement 1 The Houthi’s are an important tribe in Yemen, of Shia origin and comprising about 25 percent of the population. The Houthi movement is a group that controls parts of North Yemen having waged a conflict against the Government from 2004 until 2010. The Houthi’s are concerned with social, religious and economic discrimination in Yemen. 1 emerging in Yemeni civil society in order to strengthen its legitimacy and to collectively address complex reform issues and support the immediate transition and longer-term state building. B. Sectoral and Institutional Context 4. The political transition in Yemen has created opportunities for CSOs to engage constructively with the Government and donors. It also makes CSO engagement imperative for the negotiation and set up of a new social contract between the state and citizens. With the country facing momentous development and transition challenges, engaging with Yemeni CSOs is increasingly being seen by the Government as an important part of the state-building process. Organized civil society constitutes an important link between the state and citizens, in channeling communities’ voices and citizens’, especially women, youth and other marginalized groups, to authorities and in the public arena. For the first time in Yemen’s modern history, the political and institutional space is opening-up for CSOs to work with Government counterparts in improving service delivery, supporting institution building and policy reforms. 5. At present, more than 8,300 CSOs are registered in Yemen, with 24 percent of this total coming into existence since 2011. 2 The rapid growth in civil society activity is attributable to the social and political openings associated with the political transition, the increased donor presence and the growing demand for greater Government accountability by citizens. Most of the registered development-oriented CSOs that participated in the “Yemen CSO Mapping and Capacity Assessment Study” 3, undertaken by the Bank, provide education, health, women’s services, and poverty reduction assistance. 4 While some CSO networks do exist in Yemen, they are not well coordinated and remain informal as there is no legal platform that allows for their formal establishment. 6. The CSO Mapping and Capacity Assessment study findings also suggest that local CSOs suffer from a number of weaknesses including: fragmentation along religious and political fault lines, mistrust between groups due to geographic isolation, scarce donor funding, politicization of the civic space, and diverse capacity deficits that inhibit knowledge sharing and coordination efforts. A high turnover rate of membership and employees, weak internal governance, and a lack of transparency in administrative processes and financial management are also among the most difficult challenges that CSOs face. A strong dependence on donor funding also impacts CSO’s work with many frequently adjusting their portfolios to donor priorities rather than to their constituencies' needs or their particular sectoral expertise. 7. The GNR and CSOs remain uncertain on how to build constructive partnerships for development. The space for constructive dialogue created by the transition is an 2 Figures provided by Yemen Ministry of Social Affairs and Labor (MoSAL) 3 “Yemen CSO Mapping and Capacity Assessment Study”, World Bank, 2012. This study was part of phase one of a programmatic approach to supporting civil society. 4 CSOs register with MoSAL either in Sana’a or with a MoSAL directorate office in the governorate where the CSO is active. 2 important opening for the Government to connect meaningfully to its citizens and for CSOs to play their role as social intermediaries between the Government and citizens or communities. This window of opportunity has brought into light new demands for technical assistance from the donor community to ensure such dialogue and collaboration lead to an effective and productive partnership. The weak enabling environment 5 limits CSOs ability to operate as effective development partners and highlights the capacity deficits within the GNR and among CSOs inhibiting such cooperation. 8. However, certain attributes of the CSO community in Yemen are likely to enable the ongoing constructive dialogue towards effective partnership. Strengths in the CSO community include geographic diversity and the multi-sectoral focus of many organizations. Moreover, many CSOs have young and energetic leadership committed to improving the effectiveness of their organizations. Many have a familiarity with new technologies and social media and an understanding of how it can aid their work. CSOs also enjoy a relatively good reputation in regard to their field presence, advocacy and service delivery practices in the communities where they work and thus have a high potential for channeling the voices of citizens to Government and vice versa for more participation and inclusion in development programs. 9. There is also an important opening in Yemen at present to encourage the integration of social accountability approaches in CSOs work, including increased CSO engagement in monitoring and assessing Government performance, particularly providing feedback on and voicing demand for improved service delivery, and in deepening the evolving social contract. Citizen engagement facilitated by CSOs enables communities to voice their needs and priorities to policymakers and makes service providers more responsive. CSOs also see the current transition as an important opportunity for a streamlined registration process, to participate in setting standards within the CSO sector, and to advocate for regulatory reforms such as a new Law of Associations. 6 10. The World Bank’s support to Yemeni CSO sector transformation is timely and draws on its global experience in strengthening civil society and promoting social accountability approaches. The importance of social accountability has been growing as the World Bank views participation and beneficiary feedback as critical for effective social and economic development and poverty reduction. In carrying out its core mission of poverty reduction, the Bank engages with civil society across a wide range of activities—for example, in building local ownership of reforms; giving voice to beneficiaries, particularly the poor and marginalized; bringing local innovative ideas and solutions to development challenges; and in increasing country capacity for effective service delivery. 7 11. Strengthening the relationship between civil society and Government is seen as critical to development progress in fragile states and those experiencing conflict. The 5 The enabling environment including, inter alia, the policy and legal framework, political space, and institutional capacity of Government. 6 These two issues-the lack of transparency and backlog in the registration process for CSOs and the existing legal framework were identified by the CSO mapping study as being some of main challenges faced by CSOs in formal entry into the sector. 7 World Bank (2005). “Issues and Options for Improving Engagement between the World Bank and Civil Society Organizations”. 3 World Development Report 2011, which focuses on Fragile and Conflict affected states, highlights the imperative of building legitimate and accountable institutions that respond to the needs of citizens as the way to fight fragility and institute sound development progress. Social accountability, where citizens directly inform government of their needs and hold government accountable for its promises, is particularly important in fragile states. Citizen engagement is also a priority for the World Bank’s MENA Region as it responds to the region’s transformation and demand for increased citizens voice and participation while supporting a stronger social contract between the governments and citizens. Strengthening the CSO sector complements the Bank’s development program in Yemen by investing in CSO capacity to deliver services and building trust with Government institutions that reinforce legitimacy. This project is part of a programmatic approach 8 and contributes to both CSO capacity building as well as improving the enabling environment that will help Yemeni CSOs become viable and credible development partners. 12. The project builds on previous or existing activities/programs by other donors and the Government to advance reforms initiated during the current transition or the CSO- Government dialogue. Under the Mutual Accountability Framework (MAF) that resulted from the Riyadh Donor conference in September 2012, and where donors set specific targets for CSO support, the Government committed to revise the CSO legislation and bylaws. The renewed commitment by both sides, against the backdrop of the broader transition taking place in the country, provides an opportunity for close cooperation between the Government and CSOs towards reforming the legal and institutional framework. 13. Several donors currently provide assistance to CSOs in Yemen. A summary of current donor activities is provided below: a) European Union (EU) The EU has facilitated dialogue and closer partnership between the Government and CSOs through its Sharaka program. b) United States Agency for International Development (USAID) funds the Yemen Responsive Governance Project (RGP), encouraging more citizen participation. Through the RGP, USAID also funds basic CSO capacity building through Sana’a and Aden Universities. c) United Nations Development Programme (UNDP) provides technical support to the process of consultations and the implementation of the and public participation, for effective participation d) Oxfam is working with the Government and CSOs on implementing various projects, including the response to the rising hunger levels and emergency programs among other programs. e) Islamic Relief works on peace building programs that include capacity building of community leaders and support to humanitarian and Islamic charitable programs in Yemen. 8 The Programmatic approach is three-phased. Phase 1 involved a CSO Mapping and Capacity Assessment that was conducted, presented and disseminated in July 2013. In Phase 2, based on the study’s preliminary findings, the Government-CSO Partnership Project (P#) (MENA Transition Fund) was developed to enhance Government- CSOs partnerships in implementation and monitoring of sector development programs. Finally, as part of Phase 3, this proposed CSO Support Project builds on the study’s operational recommendations and existing support to civil society by the international community and will help address the main constraints identified by the CSO sector in Yemen. 4 f) Partneraid partners with disadvantaged communities providing relief with a focus on rehabilitation, education, health and water and nutrition. g) Progressio focuses on increasing the capacity of partner CSO’s, local authorities and communities in participatory governance in target communities. 14. The proposed project complements the objectives of the MAF and supports more effective delivery of World Bank and various donor-supported programs through strengthening of CSO capacities across sectors, and by promoting dialogue and partnership with public institutions. The Bank’s comparative advantage arises from a combination of its unique relationship with Government, the range and reach of its partnership and knowledge services, convening power, and the ability to match supply and demand-side accountability interventions for better development results. The Independent Evaluation Group’s recent evaluation of Governance and Anti-Corruptions (GAC) challenges recommends civil society capacity building as part of the Bank’s approach to institution building for better in- country economic governance. 9 15. The proposed project will build upon and fill the gaps that exist in current donor support in promoting Government-CSOs constructive engagement. The CSO mapping and assessment study conducted in 2013 confirmed the demand on the part of CSOs for reforms of the legal and institutional framework to improve the CSO enabling environment and make it more conducive for CSOs to play their role as development partners. The study also found another major challenge to be MoSAL’s capacity for registering of CSOs as there is currently a backlog of over 1,500 applications yet to be entered into the database, including applications that are over two-years old. MoSAL’s capacity for outreach to CSOs was also pointed to as another area which requires significant strengthening. There is no support to enhance CSO/Government dialogue on the improvement of the enabling environment, and secondly, existing capacity building programs do not include social accountability approaches and tools. The proposed project will take the existing training delivered as a foundation to build upon and reinforce CSO capacities across sectors and programs. By facilitating knowledge transfer on social accountability, analyzing the enabling environment, building CSOs capacity and facilitating outreach, the project will help CSOs enhance effectiveness of development programs across sectors. C. Higher Level Objectives to Which the Project Contributes 16. The proposed Project is aligned with the MENA Regional Strategy, supporting the pillar on inclusion, and links directly to the Yemen Interim Strategy Note (ISN) pillar of “Enhancing governance and local service delivery, accountability, capacity building, and institutional strengthening”. Additionally, the proposed project is in line with the ISN’s implementation principles of: (a) intensifying participation and inclusion, especially among women and young people; (b) strengthening institutional capacity, internal governance, transparency, and accountability; and (c) establishing accountable institutional systems, to 9 See World Bank Country-Level Engagement on Governance and Anticorruption: An Evaluation of the 2007 Strategy and Implementation Plan (p. xxii), available at http://ieg.worldbankgroup.org/content/dam/ieg/gac/gac_eval.pdf. 5 ensure a level playing field in the respective sectoral/geographical areas of engagement. The project is also aligned with the World Bank Group’s twin goals of reducing poverty and promoting shared prosperity. 17. International donors and the GNR support an augmented role for CSOs in effective service delivery, participation, and decentralization programs. Affirmation by the GNR and donors in the MAF and at the Riyadh conference of their commitment to work with CSOs as key development partners is important. These developments signal an increasing recognition among the GNR and the donor community that CSOs’ constructive engagement, particularly in areas that impact women, youth as well as other marginalized groups, will contribute to a peaceful and successful transition and to more inclusive and sustainable development in Yemen. Building a stronger and more inclusive civil society and fostering constructive and sustainable partnerships between the Government and CSOs is one of the cornerstones in Yemen’s transition process. 18. The project is part of a phased, programmatic approach to supporting and strengthening the role of CSOs as effective service providers and partners in the state building process. In response to the Government of Yemen’s request to the World Bank to support the CSO sector, the Bank initiated a three phased strategic approach (see diagram below). First, a CSO Mapping and Capacity Assessment was conducted, presented and disseminated in July 2013 at a conference which brought together more than 100 participants representing CSOs, donors and the Government. The participants endorsed the findings and operational recommendations of the study. Second, based on the study’s preliminary findings, the Government-CSO Partnership Project was developed with financing of the MENA Transition Fund, to enhance Government-CSOs partnerships in implementation and monitoring of sector development programs. Finally, this proposed CSO Support Project builds on the study’s operational recommendations and existing support to civil society by the international community and will help address the main constraints faced by the CSO sector in Yemen. It complements the ongoing Government-CSO Partnership Project by providing programmatic and sequenced support to strengthen CSOs in Yemen and improve the enabling environment. 6 II. PROJECT DEVELOPMENT OBJECTIVE A. PDO 19. The objective of the project is to increase transparency and ease of entry in the CSO sector and enhance CSO capacity in social accountability. B. Project Beneficiaries 20. The primary beneficiaries of the proposed project will be CSOs in Yemen, in particular those addressing issues related to women, youth and other marginalized groups. Direct beneficiaries also include the Ministry of Social Affairs and Labor (MOSAL), as well as the Universities of Sana’a and Aden. Indirect beneficiaries of the project are the citizens who are served by the CSOs that will benefit from the project. a) Civil Society Organizations: The project will address the main challenges linked to the shortcomings in the CSO institutional and legal environments in Yemen while providing support and training to address their self-identified capacity shortfalls (see Component 2). The project will help clear the registration backlog and assist more CSOs to enter the sector by enhancing the process of registration to allow for greater transparency and ease of registration. The project will also enable up to 300 CSOs to strengthen their own institutional capacities and internal governance to better operate as development partners, network their efforts, and integrate social accountability mechanisms in the course of their work. There will be a particular focus on women CSOs and youth groups. b) Universities providing training on social accountability: The project will work through the University of Sana’a‘s Center for Business Administration (CBA) and University of Aden CSO Management unit in delivering training to CSOs and in assisting in the managing of the small grants for Action Learning. The ‘training of trainers’ approach used will ensure that these capacities - in training in social accountability and in administering small grants for action learning- are enhanced and institutionalized within training institutions in the country. c) The Ministry of Social Affairs and Labor, MoSAL, has requested the proposed project to improve the institutional and regulatory environment for CSOs and to facilitate their constructive engagement in development. Several constraints that were identified in the CSO Mapping and Capacity Assessment study including delays and non-transparent registration for CSOs, poor maintenance/updating of a CSO database, will be addressed. d) Citizens: Citizens in the targeted areas are expected to benefit from the enhanced ability of CSOs to integrate social accountability approaches and tools in their work. CSOs equipped with social accountability skills will support communities in articulating effectively their needs and grievances, as well as constructively addressing service deficits in coordination with state institutions. 7 e) Donors and International nongovernmental organization (INGOs): The project supports more effective delivery of various donor-supported programs through improved MoSAL institutional capacities, better tracking of CSO activity, and strengthening of CSO capacities to deliver services and support policy reforms. C. PDO Level Results Indicators 21. PDO level project indicators have been included in the Results Framework to measure the increase in transparency in the CSO sector and the ease of registration. 22. The PDO level results indicators are: • Ease of entry: 1,000 CSOs using E-registration system to register with MoSAL [Disaggregated by geography (governorate/ district), and sector which includes focus on gender] • CSO capacity: 200 CSOs that integrate social accountability approach and tools into their projects • 6,000 direct project beneficiaries 10 (number), of which female (40%) III. PROJECT DESCRIPTION A. Project Components 23. The project will consist of two mutually reinforcing components that will strengthen the enabling environment at the national level and build capacity of CSOs to engage effectively in development. a) Component One – Increase transparency and ease of entry in the CSO sector (US$ 3.3 Million). Under this component, the project will: (i) Streamline and digitalize the CSO registration process to improve ease of access into the CSO sector. MoSAL would be supported to develop standardized and streamlined operating procedures relating to CSO registration and to develop an operating manual on the reformed registration process. Further outreach support will be provided to mainstream the new procedures among MoSAL offices and to disseminate information on the new registration process among CSOs and the general public. The E-registration system will link MoSAL’s main offices with five governorate-level offices. Additionally, a user-friendly online interface would be developed to provide public access to the system. 10 This includes CSOs trained, that have received grants through the project and that continue to implement social accountability activities in their own programs, as well as constituencies benefiting from the CSO programs funded through the Action Learning Small Grants being implemented on social accountability. The precise nature of what will be counted as a social accountability activity will be detailed in the M&E plan, but will include activities such as consultation with and feedback from civil society constituencies, dedicated processes for raising the voices of marginalized groups, feedback from Government authorities, amongst others. 8 (ii) Technical assistance will be provided to support MoSAL-CSO dialogue on reforming the legal and institutional framework. There will be an exchange of best practices and comparative legal experiences at the regional and global level, as well as independent reviews of the current laws, bylaws and implementing arrangements. These are expected to feed the public debate on the reform, as well as help inform MoSAL in terms of reform options of the Law of Association. Further, the project will also support the consultation with civil society in the reform process and formulation of the new law. 24. Additionally, MoSAL’s outreach and consultation capacity will be strengthened. An outreach program will be developed on improved registration and a series of sequenced consultations with CSOs around reform options of the Law of Association following the dissemination of the analytical and comparative Law of Association Study. In particular, the project will include training of MoSAL staff on how to provide customer service, outreach, and consultations, including qualitative feedback and providing support to formulate annual outreach and communication plans. Further, a stakeholder mapping and analysis will be included as part of the proposed communications plan. 25. MoSAL will publish a Manual of CSO Registration Procedures and make these widely available in order to ensure that interested CSOs are aware of the steps in the registration process. Additionally, these registration procedures will be simplified, translated into easy-to- understand brochures/posters and made widely available online and offline at all Helpdesk locations and MoSAL offices in Governorates. In addition to these steps, MoSAL will implement a thirty day response period to CSOs requests - which is expected to improve transparency in the sector. User feedback surveys at the helpdesk locations and three CSO surveys during the project duration will help track and monitor the ease of use of the E- registration process and provide feedback on improving transparency further. b) Component Two - CSOs Capacity Building: Certification and Small Grants for Action Learning (US$ 3.6 Million) 26. This component will deliver training for CSOs building on the basic capacity-building opportunities offered by other USAID and Social Fund for Development (SFD) programs. Proposed activities under this component will consist of (a) classroom-based training on social accountability approaches and tools, 11 b) a competitive small grants program for action learning and field-based mentoring for integrating social accountability mechanisms into CSO’s work. 27. Step one (US$2.1 million) will entail classroom instruction that will provide four modules of training in: (a) project cycle management; (b) monitoring and evaluation; (c) fundraising; (d) and social accountability concepts, principles and tools. In Step two (US$1.5 million), successful graduates of the classroom-based training will be provided with a certificate of completion. Those certified will be invited to submit grant proposals to compete for grants up to US$20,000 for social accountability activities that demonstrate their mastery of social accountability principles and practices. CSOs choosing to apply for small grants will 11 The tools that will be presented to the CSOs will be drawn from existing tools used and tested by the World Bank. Please see the detailed project description for more detail. 9 receive feedback on their proposals mid-way through the drafting process to maximize learning opportunities for CSOs while engaging in the proposal-writing. In Step three, small grant awards for implementing social accountability activities will be awarded and these CSOs will receive on-site field mentoring and monitoring assistance during implementation of their social accountability initiatives. 28. Eligibility for the capacity building program will be based on criteria that assess whether CSOs applying for proposed class-room based training have requisite basic skills in order to enter the capacity building program built around social accountability. Intake will target CSOs that have completed either the Social Fund for Development basic skills training program or basic skills and capacity-building training currently offered by the University of Sana’a and University of Aden. Under this component, the capacities of approximately 300 CSOs will be strengthened. 29. Small Grants for Action Learning on social accountability will complement the classroom-based training, and is expected to create a cadre of CSOs with both classroom and field training on integrating social accountability mechanisms in their development initiatives. Through these grants, CSOs will be able to implement various citizen engagement and social accountability tools such as citizen report cards, community scorecards and social audits. The Small Grants for Action learning will be competitively awarded on an ongoing basis to CSOs completing classroom-based training. A multi-stakeholder Grant Making Committee (GMC) will be responsible for managing the grantees selection process (The Operations Manual will detail membership and selection criteria- which have already been agreed upon (see detailed project description). The small grants will be provided to approximately 85 CSOs during the four year duration of the proposed project. The grant making scheme will be structured through a competitive and transparent process. The grants will build on new/planned CSO projects and ongoing ones being implemented by grantee CSOs. c) Component Three – Project Management (US$ 1.1 Million) 30. This component will facilitate project implementation by providing effective and efficient management support including auditing, monitoring and evaluation, and safeguard compliance. Supporting transparency in the CSO environment as well as strengthening the CSO sector are key objectives of the project, both of which necessitate effective citizen engagement mechanisms. CSO and citizen feedback mechanisms are integrated in both Components One and Two as detailed in the paragraph below. 31. Citizen engagement is embedded throughout the project design as well as reflected in the results framework and monitoring tools with a particular focus on the role of CSOs as social intermediaries. A CSO satisfaction survey will be conducted on the registration process at the beginning, mid-term and end of the project in order to collect CSO feedback. The satisfaction survey and online feedback mechanisms mentioned above as part of the E-registration process will disaggregate and analyze data by location (rural/urban), sector/subsectors and gender. User feedback from CSOs will also be received through user feedback surveys through the E-registration website and at all helpdesks. This feedback will be collected, analyzed, and acted upon to the extent possible on a quarterly basis. For Component Two, feedback from the participants in the classroom-based training part of the capacity building program will be continuously collected, analyzed and integrated into the 10 modules as the curriculum is revised and updated. Moreover, the Small Grants for Action Learning will engage field mentors who will provide technical expertise and collect feedback from grantee CSOs and citizens engaged in social accountability interventions. This will encourage greater downward accountability of governments and service providers. Further, a three-stage online and offline grievance redress/complaints mechanism will be integrated to ensure that grievances related to grantee selection, grant disbursement, inadequacy of mentoring support, etc. are recognized and promptly resolved. B. Project Financing Project Cost and Financing IDA Project Components Project cost Financing (in USD % Financing (in USD Millions) Millions) 100% Component One: Increase transparency and ease of entry in the CSO sector 1. Simplifying and Digitalizing the CSO Registration 2.17 2.17 and Relicensing Process 2. Knowledge Sharing and Awareness Raising on Law of Association Reforms 1.13 1.13 Sub-Total Costs 3.3 3.3 Total Project Costs Front-End Fees Total Financing Required 100% Component Two: CSO Capacity Building, Certification and Small Grants for Action Learning 1. Classroom based training and action learning 2.1 2.1 2. Action-Learning grants for Social Accountability 1.5 1.5 Sub-Total Costs 3.6 3.6 Component Three: Project Management 100% Sub-total Costs: 1.1 1.1 Grand Total: 8.0 8.0 100% C. Lessons Learned and Reflected in the Project Design 32. The project’s components are built around the main recommendations of the World Bank-funded CSO Mapping and Capacity Assessment (June 2013). 12 Based on this study’s findings and subsequent validation consultations, the CSO registration procedures as well as the constraining Law of Association are major challenges to CSOs’ constructive engagement. 12 See World Bank, Yemen Civil Society Organizations in Transition: A Mapping and Civil Society Assessment of Development-Oriented Civil Society Organizations in Five Governorates, June 2013. 11 Addressing these constraints would unlock CSOs’ potential and pave the way to Government- CSOs partnership to improve development results. Moreover, the study and the extensive CSO consultations highlighted the need to support capacity building and introduction to social accountability to better channel communities voice and needs and work collaboratively with the government entities at the national and local levels. 33. The project design also reflects best practices in capacity-building programs for CSOs. Short-term trainings are rarely effective and programs that do not support a hands-on component or field mentoring are not as effective as programs that include such features. 13 Component Two of the proposed project provides pedagogically relevant classroom-based training with workshops among participating CSOs and government partners. This activity is complemented with the provision of small grants to selected CSOs. The small grants enable action learning in integrating social accountability approaches in CSOs projects. 34. International experience has shown that enhancing the capacity of CSOs during transitions, particularly in the area of social accountability, helps deliver critical services while enabling CSOs to mediate between the state and citizens. Lessons learned from the transitions in Cambodia, Indonesia, and the Philippines are particularly relevant to the context in Yemen. Lessons from the World Bank’s Program to Enhance Capacity in Social Accountability (PESCA - [P106040]) in Cambodia can be drawn in the context of how best to support social accountability practices among CSOs in environments where demand for constructive engagement with government is high. Specific lessons include the need to balance individualized versus institutionalized training. The former harnesses the potential of change agents but runs the risk of not transferring the knowledge to others within the institution. The latter is more sustainable but is more restrictive in number of CSOs trained. The National Program for Community Empowerment (PNPM) in Indonesia is a national flagship program internationally recognized for its community driven development approach and long-standing work with communities in both urban and rural areas. 35. The World Bank’s Global Partnership for Social Accountability (GPSA) directly supports CSO social accountability initiatives such as the Concerned Citizens of Arab for Good Government (CCAGG) in the Philippines, which was recently awarded in September 2013 for its proposed efforts to promote community-level mechanisms for transparency, accountability and citizen participation. From the Palestinian territories, valuable lessons can be drawn from CSOs engagement in terms of improving service delivery. Another key lesson that has been integrated into the project design has been the need and know-how to promote CSOs’ self-regulation and internal governance. For example, the proposed CSO-Support project will build on the experience of the World Bank-supported Palestinian Non- Governmental Organization Project, particularly as it relates to linking grant utilization with capacity building. Additionally, based on lessons from this project, consideration will be given to, including both upward and downward accountability as essential components in curriculum 13 See, for example, the World Bank’s “Civil Society Engagement Review for Fiscal Years 2010-2012”; and “An OED Review of Social Development in World Bank Activities” (2004), for instance. 12 design of the fourth module on social accountability. 14 36. On the training approach, lessons learned from similar experiences (West Bank/Gaza, Kosovo, Lebanon), show that using an approach that focuses on individuals is more effective in introducing the concept of social accountability when receptive individuals in leadership positions or relevant functions carry that knowledge back to their colleagues. IV. IMPLEMENTATION A. Institutional and Implementation Arrangements 37. Details of the roles and responsibilities of the various parties in project implementation have been discussed with counterparts and validated by the Minister of Planning and International Cooperation (MOPIC), as well as the Minister of Social Affairs. 38. MoPIC is the Bank’s counterpart to the Grant Agreement. Social Fund for Development (SFD) will have the overall project implementation responsibilities and will provide both fiduciary and procurement oversight. Having executed previous World Bank and other donor funded projects, SFD will be the Project Implementation Entity (PIE). The Financing Agreement (FA) will be signed between the World Bank and MoPIC. MoPIC will make the proceeds of the Grant Available to SFD under a Subsidiary Agreement between MoPIC and SFD. MoPIC is also responsible for compliance of implementation of covenants and other agreements as detailed in FA and for ensuring the timely submission of Bi-annual Progress reports and annual audit reports. 39. For Component One, SFD will work in close coordination with MoSAL which is the Ministry responsible for oversight of CSOs operating in Yemen. MoSAL will sign a Memorandum of Understanding (MoU) with SFD for implementation of activities under Component-1. Before effectiveness, MoSAL will assign dedicated technical and administrative personnel to the project in the Ministry and its offices in selected five Governorates. Two individual local consultants will be hired to provide “in-house” support to MoSAL teams in terms of coordinating and overseeing different activities. The first consultant will be responsible for coordinating dialogue around the regulatory reform options, ministry outreach, and the implementation and information dissemination on the E-registration process while the second consultant will be an ‘IT specialist’ coordinating between MoSAL staff and the IT firm contracted to design and deploy the E-registration system. 40. For Component Two, SFD will work in close coordination with the Centre for Business Administration (CBA) of University of Sana’a as a subcontractor which will manage the program at Sana’a University, and supervise activities at the University of Aden (targeting CSOs in South Yemen). SFD will contract CBA and monitor their activities. CBA will have an additional responsibility of convening the Grant Making Committee responsible for evaluation and processing of approval for Small Grant proposals received from CSOs. 14 The fourth phase of additional financing for the Palestinian Non-Governmental Organization (NGO) Project (GZ-Palestinian P. NGO IV [P117444]) was approved in June 30, 2013, building on the successes and lessons learned from over a decade of experience working with civil society. 13 CBA will also monitor the implementation of the small grants through Mentors as the second part of the training (action learning). The disbursement of the Grants will be undertaken by SFD to avoid any conflict of interest. A dedicated department at the CBA in Sana’a has been operating for two years while the unit in Aden has operated for one year. The universities are well regarded by CSOs and have significant assets in terms of technical expertise and physical facilities. Implementation of the proposed project will benefit from the established administrative and management support provided by USAID over the last 24 months to both Sana’a and Aden universities. This support helped the universities improve their own internal management systems, the status of their physical premises, and the expertise of their trainers and mentors. The proposed project will build on these developments and USAID’s creation of a management unit within the CBA and in Aden to provide complementary CSO training. 41. SFD will be responsible for all financial management and procurement activities for the project. SFD will have the overall responsibility for project implementation of all activities under the aforesaid components which includes but are not limited to (a) procurement control, including the approval of consultant recruitment, contracts, review and approval of procurement; (b) financial management, including payments of small grants to approved CSOs, contractors, consultants and other miscellaneous procurements, operational costs, IEC communications, workshops, and or other payments approved under the project; (c) appointment and management of technical consultants to assist with project activities; (d) appointment of external auditor; (e) administration of financial audits and requisite reporting to the Bank; (f) maintenance of Management Information System (MIS), oversight of expenditure carried out by the implementing agencies under Component Two; (g) ensuring compliance with agreed implementation procedures and other Bank guidelines (Procurement, Financial, Environment, Social, etc.) and (h) coordination between implementing agencies and monitoring of project implementation. 42. Financial management arrangements for the recipients of Small Grants through sub-grants agreements are included in the Operations Manual. The CSOs that will be eligible for receiving small grants for action learning from the Project’s funds will be required to maintain acceptable FM arrangements. The CBA will invite proposals from CSOs that have successfully completed the training. The Grant Making Committee will select the grantees from the CSOs project proposals received after evaluating them based on the selection criteria included in the operations manual and following a transparent process. B. Results Monitoring and Evaluation 43. The PDO-level results indicators will be monitored to evaluate project’s performance towards the objectives. Monitoring and evaluation of project activities will be integrated into implementation plan for each of the project components through a detailed M&E plan to be developed at the start of implementation. SFD as the PIE will be responsible for results (both output and results) monitoring based on the results matrix, and will submit an M&E report to the World Bank on a yearly basis. Details of the type of information and the sources for the M&E of the project are included in Annex 1. The Bank will provide support for the development of the project’s M&E system through technical advice provided by the Bank staff and consultants. 14 44. In addition to integrating the M&E into each project component, CSO satisfaction surveys of the registration process will be rolled out at the beginning, mid implementation and at the end of the project to collect additional CSO feedback. The satisfaction survey and online feedback mechanisms will be gender and demographic-sensitive, designed to provide disaggregated data that can help inform the design of interventions impacting women and youth. Participants’ evaluations of the various training modules will also inform the project M&E. 45. The Bank will also execute an independent evaluation on the results of the project using various methods as appropriate, including citizens online and offline feedback on both components activities: registration process and capacity building. C. Sustainability 46. The CSO Support Project is one part of a programmatic approach to strengthening civil society in Yemen and facilitating spaces for dialogue and exchange between Government and CSOs to support institution building and improved service delivery. The proposed project will invest in awareness raising, building capacity, and networking amongst CSOs and Government. The Project will facilitate a platform for CSO knowledge exchange and peer learning which will form the basis for CSO self-regulation, and improved governance in the CSO community in the future. 47. A stronger civil society sector will be complemented by increased transparency and capacity of MoSAL. Through Component 1- on Institutional and Enabling Environment, MoSAL will streamline CSO registration. This will improve transparency throughout the registration process, allowing CSOs ease of entry into the sector. This component will also increase MoSAL’s outreach to CSOs, impact positively MoSAL’s operations in a sustainable way. Through the Capacity Building, Networking and Action Learning Component, the Universities of Sana’a and Aden will have delivered training of trainers courses and provided mentoring and as such will become fully equipped with the skillset to continue the program roll-out. The high performing certified CSOs could potentially serve as mentors and trainers in the future. Given the substantial level of donor activity in Yemen and the importance CSOs role in effective development, it is likely that the small grants and capacity building program would be continued by other donors, upon project completion. Looking ahead, a planned Local Government Project will benefit from the CSOs’ enhanced capacity and increased collaboration between Government and CSOs at the local level. Building MoSAL staff capacity is a two-pronged approach to ensure sustainability: (i) strengthening consultation capacity and outreach which will build sustainable dialogue channels with CSOs; and (ii) the E-registration system will be maintained as a result of MoSAL’s enhanced IT capacity. V. KEY RISK AND MITIGATION MEASURES A. Risk Ratings Summary Table Risk Category Rating Stakeholder Risk Moderate 15 Implementing Agency Risk -Capacity Substantial -Governance High Project Risk -Design Moderate -Social and Environmental Moderate -Program and Donor Low -Delivery Monitoring and Sustainability High Overall Implementation Risk Moderate B. Overall Risk Rating Explanation 48. Given the country context, the overall risk for this operation is moderate. The volatility of the political, security, governance, and civil society environment may impact negatively the implementation of the project. The dialogue on the reform of the regulatory framework can also be hampered by potential shifts in the political transition. 49. Specific risks that need to be addressed include: (a) political risks due to inadequate commitment to the broader transition process which may lead to renewed instability and violence; (b) the inability for Bank staff to travel to implementing sites outside of Sana’a (due to security constraints) may restrict its ability to monitor progress of activities to accomplish the PDO; (c) a perception that there is widespread corruption, mismanagement and elite capture of project activities; (d) weak capacity of implementing agencies; (e) partial dependence on USAID’s training program that may decrease the numbers of CSOs eligible for World Bank-funded capacity building activities; and (f) disagreement or lack of ownership and buy-in by CSOs/networks. Political and security risks are exogenous and beyond the control of the team. The team will propose specific risk mitigation measures for the other risks and will embrace those proposed in the ISN for the overall country program and that are relevant to the project. A thorough overview of risks and risk mitigation measures is presented in the Operational Risk Assessment Framework (ORAF) (Annex 4). VI. APPRAISAL SUMMARY A. Economic and Financial (if applicable) Analysis 50. Yemen is facing complex development challenges that need to be addressed collectively by Government institutions as well as the civic sector. This project proposes targeted support to strengthen Civil Society Organizations (CSOs) and their constructive approach to development and institutions building in this critical period of transition. While public institutions are seeking to build their legitimacy, CSOs have a key role as social intermediaries in restoring trust and credibility with citizens and therefore reducing the risk of conflict. 51. Project benefits are not amenable to direct monetization but the potential development impact of this support is far reaching, and significantly outweighs the small scale of the investment. It is based on a good governance approach with the aim of improving CSO capacity and contributing to a more conducive institutional and legal framework within which 16 CSOs operate. By so doing, the project will contribute to strengthening the role of CSOs as effective development partners promoting participation and inclusion and will reinforce the state building process. Development results will by the same token be improved which will recompense citizens and beneficiaries, the civic community, and the government with important benefits in the form of: • Enhanced development effectiveness through integrating social accountability approach in development programs; • Improved efficiency in national development programming; • Increased probability of associational reforms to succeed in the long term; • Enhanced opportunities for civil society growth, promoting positive spillover effects as a result of community benefiting from a vibrant civic sector and trained citizens in various development fields; • Increased and sustainable organizational CSO capacity to network and to build constructive partnership with development stakeholders. 52. This intervention will also enhance the potential role that a capable civil society sector can play, in partnership with the government, to improve transparency and public expenditure outcomes. Further, fostering a more inclusive, participatory approach to development is likely to contribute to a wide range of development outcomes: enhanced poverty targeting and more effective poverty reduction measures, improved service delivery, expanded livelihood opportunities, greater voice and increased demand for good governance, among others. 53. The economic outcomes of capacity changes, legal adjustments and reform, and growth potential are nearly impossible to quantify, and will only be visible at the completion of the project. However, the overall associated costs of training and accrediting the CSOs can be examined and represent approximately 50 percent of the total project budget, including indirect activities such as project management and M&E activities. Using scale effects during identification stage, screening and training activities for reaching 300 CSOs, the individual cost will average around US$500 per institutional beneficiary, of which over 70 percent will be directly spent on training and coaching. Given institutional learning and improved capacity, the cost per institutional beneficiary will be higher in the first year and decrease afterwards. These costs are in line with similar projects in other countries, which have an average cost per beneficiary between US$500-2,000. 54. Without a more conducive legal and institutional environment and greater operational capacities for CSOs, the benefits of a diverse and vibrant civil society may well remain unrealized. The challenges of addressing market and government failures are well-understood and provide one of the drivers for this intervention. However, this project also seeks to address the risk of civil society failure – a situation in which access to the CSO sector is constrained, civic action is disorganized, and citizen-state interface is fractious and the risk of conflict is higher. 55. The importance of harnessing the reach and latent capacity of civil society is especially important for Yemen during its ongoing transition period. As noted in the 2011 WDR on Conflict, Security and Development, political transitions are followed by a period where the risk of resurgence in conflict is elevated. Conflict stifles development and deepens poverty. Not a single low-income, fragile state has achieved any of the MDGs. Such countries account for more than 60 percent of the world’s poor and their return to pre-crisis economic conditions 17 is a long and slow process, often marked by deprivation and reduced service provision. Supporting Yemen’s CSOs helps put in place one essential element of Yemen’s transition that would potentially have significant development dividends. Since such initiatives are not amenable to private or other sources of financing, public sector financing is considered critical and justified. 56. Over the last decade the World Bank has allocated almost US$85 billion in support of participatory government at the local level. Some of these programs have been scaled up and are now fully owned government programs. The experience of one such program — Indonesia’s Program Nasional Pemberdayaan Masyarakat Mandiri (National Program for Community Empowerment) — will be shared with the Yemeni Government and CSOs under this project. 57. Along with its financing, the project encapsulates the rather unique value that the World Bank can bring about in support of Yemen’s sustainable development including its convening power to facilitate constructive partnership between CSOs and government institutions. The project is also aligned with the World Bank Group’s twin goals of reducing poverty and promoting shared prosperity. Specifically, the project will contribute to reducing poverty by (i) enhancing the environment for a more vibrant and effective CSO sector by simplifying their ability to operate, and (ii) by strengthening their capacity to delivery services. The project will promote shared prosperity by empowering citizens, through social intermediaries (CSOs), to more accurately identify their priorities in service delivery, budget allocations, and monitor service delivery at the local level, contributing to a more equitable distribution of services. 58. For the ex-post analysis, economic and financial cost-benefit of the training and accreditation activities will form part of the monitoring and evaluation framework. The required data will be collected through a baseline and additional monitoring data, which will help reduce the complexity of measuring the costs and especially benefits of the capacity training. For the economic analysis the final independent project evaluation will be useful as it will provide insight into increases of better structured and longer term CSOs and a sustainable delivery of services. B. Technical 59. The project is appropriate to Yemen’s needs in the current transition context and technically viable. The design is informed by lessons learned from World Bank as well as global experiences, particularly, from countries that went through similar transition. For example, on Component One, the E-registration system will be built by a specialized firm that will also provide capacity building to staff on utility and maintenance. On Component Two, the module on social accountability will be informed by World Bank experts, building from existing training curriculum that has been developed for and delivered in similar contexts but which will be customized in the local Yemeni context. 18 C. Financial Management 60. The Financial Management (FM) Assessment for the CSO Support Project was conducted by Bank staff in accordance with the policies and guidelines for assessment of FM arrangements in World Bank-Financed projects. It takes into account the capacity and experience of the implementing agency and the nature of the project related risks. The project’s financial management arrangements, including the mitigating measures at the SFD are acceptable to the Bank. The FM risk is “Moderate”. The project would make use of the country systems, as it will be implemented by the SFD with close coordination with MoSAL, Sanaa University/CBA and CSOs selected for small grants. 61. Disbursement Arrangements: Similar to operations implemented by the SFD, this project will follow the Advance Disbursement method using Interim Financial Reporting (IFR) and funds will be channeled through a segregated Designated Account maintained by the SFD at a commercial bank acceptable to the World Bank. D. Procurement 62. Procurement for the proposed additional financing will be carried out in accordance with the World Bank “Guidelines: Procurement of Goods, Works and Non-consulting Services under IBRD Loans and IDA Credits and Grants by World Bank Borrowers" dated January 2011; and "Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers" dated January 2011; World Bank Anti- Corruption Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants” dated October 15, 2006 and revised January 2011; and the provisions stipulated in the Project Agreement. All procurement activities of this project will be carried out by SFD. SFD has long experience in implementing procurement activities for a number of donor organizations, including the World Bank. The SFD has a qualified procurement team that can perform procurement activities planned under the project. Most of the procurement activities are in the form of consulting services and national competitive bidding for Strengthening Capacity of NGO Sector. Annex 3 provides the details and results of the project’s procurement management assessment. The overall project risk for procurement is “Moderate”. E. Social (including Safeguards) 63. Subprojects implemented by grantee CSOs will not be designed or executed in a manner that will trigger Bank safeguards policies. A positive list of eligible small grant proposals will reflect that the project will not support any activity that involves involuntary resettlement impacts or has any adverse impacts on people’s livelihood, which includes any small-scale construction works. A safeguards screening checklist will be included in the operational manual to ensure that funded sub-projects are within the scope of technical assistance, institutional development, and training. This will be in line with the Subsidiary Agreement executed on behalf of the Recipient and the Project Implementing Entity. 64. The proposed project will ensure gender inclusion. The project will help establish a more transparent and easier process for registration of new women and youth CSOs, provide 19 equal opportunity for capacity training and access to small grants to integrate social accountability tools in their development projects. F. Environment (including Safeguards) 65. This is a Category C project. No safeguards policies are triggered, and the proposed project activities are likely to have minimal or no adverse environmental and social impacts. The proposed project will help with enhancing the institutional capacity of CSOs in Yemen. Requirements that apply for social safeguards also apply for environmental. As such, a positive list of eligible small grant proposals will reflect that project activities will not trigger safeguard policies. The project implementing agency, Social Fund for Development (PIE), has demonstrated its ability to screen and monitor small sub-projects with respect to social and environmental safeguards. 20 Annex 1: Results Framework and Monitoring . Country: Yemen, Republic Project Name: Yemen Civil Society Organization Support Project (P146312) . Results Framework . Project Development Objectives . PDO Statement The objective of the project is to increase transparency and ease of entry in the CSO sector and enhance CSO capacity in social accountability. These results are at Project Level . Project Development Objective Indicators Data Responsibility Cumulative Target Values Source/ for Unit of End Methodolog Data Collection Indicator Name Core Baseline YR1 YR2 YR3 YR4 Frequency Measure Target y PIE Direct project Semi- Number 0.00 0.00 100.00 2000.00 3000.00 6000.00 Progress PIE beneficiaries annually Reports Percentage Female Sub-Type 0.00 0.00 20.00 30.00 40.00 40.00 beneficiaries Supplemental CSOs using e- PIU Semi- registration Number 0.00 0.00 200.00 500.00 1000.00 1000.00 progress PIU annually system to reports 21 register with MoSAL [Disaggregated by geography (governorate/ district), and sector which includes focus on gender] Reports from the PIE and SU-CBA CSOs that which integrate social collect self- accountability PIE and SU- Number 0.00 0.00 50.00 120.00 200.00 200.00 Annually reported approach and CBA data from tools into their CSOs and projects validate it through spot- checks. . Intermediate Results Indicators Data Responsibility Cumulative Target Values Source/ for Unit of End Methodolog Data Collection Indicator Name Core Baseline YR1 YR2 YR3 YR4 Frequency Measure Target y Establishment of PIU Yes/No No No Yes Yes Yes Yes Once PIU a CSO e- progress 22 registration report system Share of registered CSOs whose PIE information will Percentage 0.00 0.00 65.00 75.00 95.00 95.00 Annually progress PIE be publicy report available via the CSO database Backlog of Registered PIE CSOs whose Semi- Number 1500.00 1500.00 1000.00 500.00 250.00 250.00 progress PIE information is annually reports not entered into the database Government officials trained in implementing PIE the new Number 0.00 20.00 100.00 150.00 150.00 150.00 Once Progress PIE streamlined report registration process CSO availing of PIE Semi- helpdesk Number 0.00 0.00 20.00 40.00 60.00 60.00 progress PIE annually support reports Establishment of PIE and a CSO capacity- SU-CBA PIE and SU- Yes/No No No Yes Yes Yes Yes Once building and progress CBA certification reports 23 program that integrates social accountability approaches and tools CSOs that are PIE and trained and SU-CBA certified in progress social reports accountability Six- disag by PIE and SU- practices Number 0.00 50.00 185.00 210.00 300.00 300.00 monthly geography CBA [disaggregated and sector, by geography including and sector, CSO focus including focus on gender on gender] CSOs that are provided small action learning Reports grants from the PIE and SU- [Disaggregated Number 0.00 0.00 30.00 60.00 85.00 85.00 Annually PIE and CBA by geography SU-CBA and sector including focus on gender] . *This includes CSOs trained, that have received grants through the project and that continue to implement social accountability activities in their own programs, as well as constituencies benefiting from the CSO programs funded through the Action Learning Small Grants being implemented on social accountability. The precise nature of what will be counted as a social accountability activity will be detailed in the M&E plan, but will include activities such as consultation with and feedback from civil society constituencies, dedicated processes for raising the voices of marginalized groups, feedback from Government authorities, amongst others. 24 Annex 2: Detailed Project Description Republic of Yemen Civil Society Organizations Support Project I. Project Context A. Project Description 1. The project is part of a phased, programmatic approach to supporting and strengthening the role of CSOs as effective service providers and partners in the state building process. In response to the Government of Yemen’s request to the World Bank to support the CSO sector, the Bank initiated a three phased strategic approach. First, a CSO Mapping and Capacity Assessment was conducted, presented and disseminated in July 2013 at a conference which brought together more than 100 participants representing CSOs, donors and the Government. The participants endorsed the findings and operational recommendations of the study. Second, based on the study’s preliminary findings the Government-CSO Partnership Project was developed with financing of the MENA Transition Fund, to enhance government-CSOs partnerships in implementation and monitoring of sector development programs. Finally, this proposed CSO Support Project builds on the study’s operational recommendations and existing support to civil society by the international community and will help address the main constraints faced by the CSO sector in Yemen. It complements the ongoing Government-CSO Partnership Project by providing programmatic and sequenced support to strengthen CSOs in Yemen and improve the enabling environment. 2. The CSO community is strong in its geographic diversity and multi-sector approach as well as in terms of its field presence. However, CSOs continue to face fragmentation and capacity challenges as well as constraints linked to the legal and institutional environment. On the one hand, CSOs have a high potential for channeling the voices of citizens to Government and promoting more inclusion and participation. On the other hand, poor internal governance and a lack of transparency and consistency in administrative and financial processes inhibit effectiveness, knowledge sharing, and coordination in the CSO community. A weak enabling environment among Government institutions related to CSO functions also limits CSOs ability to operate as effective development partners. 3. The project will consist of two mutually reinforcing components that will strengthen the enabling environment at the national level and build capacities of CSOs in their work at the sub- national level. Component One: Increase transparency and ease of entry in the CSO sector (US$3.3million) Background 4. The 2013 CSOs Mapping and Capacity Assessment study undertaken by the Bank and extensive follow-up consultations held with CSOs in preparation for this project reveal various shortcomings in the implementation of the present Law of Association. The most common complaint 25 of CSOs continues to relate to inconsistencies in registration. For instance, despite the 30-day turn- around time stipulated in the Law, in practice registration processing times vary from a few days to over a year. CSOs also suggest that the Law itself is restrictive and some bylaws are ambiguous. As a result of these issues and others described, there is a growing consensus in the CSO community, as reflected in the current National Dialogue discussions that the process of CSO interaction with Yemen Government counterparts needs to be improved and the Law of Association needs to be reformed. 5. Currently data on registered CSOs are entered into MoSAL’s CSO database at the IT unit in MoSAL’s main offices in Sana’a. The time consuming processing presents several weaknesses including the highly centralized process, outdated equipment and database and lack of human resource capacity. There have been significant delays in updating the database. For instance, MoSAL officials inform that there is currently a backlog of over 1,500 applications yet to be entered into the database, including applications that are over two-years old. On average, during the years 2010, 2011 and 2012, MoSAL had registered nearly 2000 applications annually (exact numbers are not available). Of those less than 50 percent (n=896) were entered into the central database. The following figure shows the breakdown of applications entered into the database for the year 2012. CSOs Registration Entered into MoSAL Database in 2012 (Total=896 out of + /- 2000 applications) 450 400 350 300 250 200 150 100 50 0 Ibb Al-Hodeidah Ministry HO Dhamar Rymah Al-Jawf Hadramout Shabwah Aden Mareb Al-Mahweet Sana'a Laheg Abyan Sana'a City Taiz Hajja Al-Mahara Al-Baida Sa'adah Amran Al-Daleh 6. The overwhelming majority of CSOs registered at the Ministry’s Head Office reflects some of the bottlenecks encountered in regional offices. The proposed streamlining of the registration process is expected to address some of these challenges by simplifying the steps required leading to a more proportionate spread across governorates. Additionally, the proposed E-registration process will significantly speed up registration by allowing the data entry to take place at a decentralized level via the networked five governorate-level offices thereby reducing the load at MoSAL's HO. For CSOs registering online, the data will automatically populate the database without requiring entry by MoSAL officials. In addition to increasing efficiency, this would also increase the transparency of the process. 26 7. Component One will support MoSAL to 1) streamline the registration process for CSOs operating in Yemen by simplifying and digitalizing the registration process, strengthening MoSAL’s communication capacity and by improving the information flow between MoSAL and CSOs with the objective of enhancing the operating environment for CSOs; and 2) strengthen the consultative process between the Government, CSOs and other stakeholders on reforming the CSO Law. 8. The primary activities of the project will revolve around firstly streamlining the existing CSO registration process, introducing an E-registration system with supplementary offline procedures in order to simplify and decentralize the current lengthy and highly centralized registration process. Secondly activities will support the development of a CSOs communications, strategy, information dissemination and outreach activities and facilitate a process of knowledge sharing and awareness raising around efforts being made to reform the CSO law (Law Concerning Associations and Foundations). 15 The activities focus on informing the dialogue reform of the Law of Association through technical assistance by analyzing the current law as well as improving the consultation process and the participation of CSOs in the design of the reform of Association Law. This two- pronged process will not only improve the relevance of the provisions of the reform but will also build the buy-in and ownership of the reform by CSOs thereby improving compliance during implementation. 9. An in-house consultant will be placed within MoSAL for the duration of the project to coordinate the different activities. The Terms of Reference for the consultant has been drafted in consultation with MoSAL. a) Sub-component A: Simplifying and Digitalizing the CSO Registration and Relicensing Process (US$ 2.17 million) 10. Activities will include providing support to MoSAL to simplify and streamline the existing CSO registration process by facilitating on-line and similar off-line registration and relicensing. This component would also include providing relevant hardware, software and technical expertise to create a user-friendly and accessible online registration interface (including a website, database and helpdesk) and the back-end network integrating MoSAL’s Head Office and five governorate-level offices (in Sana’a, Aden, Hodeida, Taiz and Hadramaot). The standardizing of procedures and developing an operating manual to mainstream such procedures would help streamline the CSO registration and relicensing process in all governorates. i) Streamlining the existing CSO registration process and creating an operating manual As a first step, broad consultations will be held within MoSAL—including governorate-level offices—to understand the workflow and current procedures relating to CSO registration and to explore ways in which the existing process may be streamlined. These consultations will also contribute towards standardizing practices and help devise uniform procedures throughout all MoSAL offices. An operating manual will then be developed and the new procedures mainstreamed among all MoSAL offices through a comprehensive staff training program. The 15 Law No. 1 for the Year 2001 27 manual will be updated accordingly if reforms to these registration or relicensing processes or the CSO Law take place over the life of the project. ii) Systems development and deployment The standardized practices and procedures devised through broad internal consultations within MoSAL will provide the basis for developing an on-line E-registration systems and the complementary off-line system for more rural CSOs. The E-registration system will entail an integrated network linking MoSAL’s head office with additional ministry offices in Sana’a, Aden, Hodeida, Taiz and Hadramaut. This system will be integrated with an upgraded version of MoSAL’s CSOs database, allowing real-time updating and retrieval of information. 11. Additionally, the E-registration software will enable CSOs to submit their registration applications and the required background material online. The web interface for E-registration would also allow citizens, donors and other stakeholders to obtain key information and provide feedback on CSOs and their activities. 12. A helpdesk function will be set up to respond to CSOs inquiries and feedback. The helpdesk will be two-tier, with the first-tier in the MoSAL office in Sana’a. It will respond to requests submitted through email, mail, telephone or mobile. A second-tier helpdesk will be established in the additional ministry offices in Sana’a, Aden, Hodeida, Taiz, and Hadramout. Each of these helpdesk offices will act as a hub supporting its governorate and surrounding governorates. The tier-one helpdesk will oversee the response rate and support provided by the second-tier helpdesk. 13. Due to extremely low capacity of many of the MoSAL offices at the governorate-level, the E- registration will be established at the central level and among five governorate offices- those with the greatest capacity to manage such a system at this time. The project will also embed an in-house IT consultant for the duration of the project to train MoSAL staff in Sana’a and the governorates on the basic skills necessary to use the E-registration system. This decentralization will contribute significantly to speeding-up the registration process. The offline process will revolve around the operating manual. It will be mainstreamed in all MoSAL offices to ensure uniformity of the process. New procedures adopted in the manual will be made widely available to CSOs through pamphlets and other print materials. They will clearly outline the step-by-step procedures related to registration and the associated turn-around time for each step. In addition to submitting applications and supporting documents to MoSAL offices by hand, the offline registration process will offer options to submit the same via fax and mail. CSOs that register through the off-line process will receive a confirmation and update on the process via email, SMS or phone. A hotline to the tier-two help desk will be provided for CSOs that are using the off-line processes to report any inappropriate response or delayed update from the MoSAL officer. The project will provide support to strengthen MoSAL’s outreach and communication capacity through support on the development of a CSOs communications strategy, information dissemination and outreach activities. A comprehensive communications and outreach strategy is essential to improve the registration process as well as strengthen the consultative process between the Ministry and CSOs, in particular in the Law of Association reform process. The Information Management unit in MoSAL’s NGOs department is currently responsible for providing information on the registration process, processing all requests, and maintaining the CSOs database. Currently, there are no outreach 28 or information dissemination efforts by the unit. Pamphlets and documents produced and printed in 2005 are available in the MoSAL office in Sanaa’ and the five main Governorates. However, they are only available by request and rarely disseminated without informal payments. During the consultations with CSOs, it became clear that only CSOs with strong relationship with the Ministry were aware of these materials. 14. Guidance will be needed in crafting an effective communications and outreach strategy to improve MoSAL’s ability to share information and engage constructively with CSOs. Effective and timely dissemination of MoSAL’s information will be an important component of a strategy to effectively inform the public on its activities and strengthen its relationship with CSOs. The project will finance hiring a local firm to develop a CSOs communications strategy for MoSAL, support its implementation including producing all outreach materials and providing the training needed to package and disseminate the CSOs related information The Company will be responsible for preparing a detailed design for the CSOs awareness activity, through the development of a communications strategy and an implementation plan. The Company will also be responsible for designing, preparing and printing all necessary materials, including fliers, brochures, posters, TV/ Radio Spots (on video tapes/CDs), website content and any other required material. The messages that will be presented will be developed in consultation with the project coordinator, SFD as the PIE and MoSAL. The main emphasis of the campaign will be on the systematic registration process and mechanisms available for complaints and dispute resolution. It will emphasize the importance of systematic CSO registration in general and particularly for CSOs in governorates with low capacity. Information will be disseminated electronically through the proposed E-registration website, as well as information booths that will target governorates with low capacity. Detailed terms of reference for the firm have been developed in consultation with MoSAL. 15. The subcomponent will finance: • E-registration design, software development and training manuals • Development of off-line registration materials • Procurement of equipment and software • Training and capacity building on the E-registration system • Development of complementary off-line systems of relicensing and registration • Troubleshooting and Technical support • Outreach and communications materials to raise awareness of the new opportunities to register CSOs. • The hiring of a local PR firm to develop a CSOs communications strategy for MoSAL b) Sub-component B: Knowledge Sharing & Awareness Raising on Law of Association Reforms (US$1.13 million) 16. Activities will include demand-based analytical and advisory support and knowledge exchange events focusing on comparative legal experiences and international practices relating to CSO Laws and independent reviews of the current laws, bylaws and implementing arrangements. To the extent possible, this support will be facilitated around activities under the MAF framework sponsored by the Prime Minister’s office (with support from UNDP). However, activities under this sub-component will not be contingent upon the progress/success of the MAF activities and can be implemented as a stand- alone package aimed at improving consultations between the Government and CSOs related to 29 reforming the Law of Association. A series of interactive workshops, seminars, and South-South learning events will be organized to share knowledge and raise awareness on comparative legal experiences and international practices on the Law of Association reforms and to create space for a constructive dialogue between MoSAL and CSOs. i) Technical support on comparable experiences and the current Law The Project will provide demand-based analytical and advisory support based on comparable experiences and independent reviews of the current CSO Law of Association, bylaws and implementing mechanisms, specifically around the discussions of the Supreme Council and the process of Law reforms. Activities proposed under this section will facilitate consultations between different stakeholders involved in this process. To ensure that discussions around reforms are well informed by comparable international experiences the Project will leverage Bank’s global experience in supporting CSO legal reforms by coordinating knowledge exchange events, which allow key government and CSO representatives to seek firsthand experience of local governance efforts from other countries that have gone through comparable experiences. In this regard, Indonesia, West Bank/Gaza, and South Africa can offer rich lessons in the context of both the conducive environment they provide for CSOs and the transitions that provided the space for changes in the Law. 16 ii) Building local awareness and outreach Working with MoSAL, CSOs, academic institutions and think tanks, facilitate an informal forum employing an innovative communications campaign using print, electronic and social media where key stakeholder groups can exchange ideas, engage with each other and allow open information sharing on the Law reform process and the content of the Law. Component Two: CSO Capacity Building, Certification & Small Grants for Action Learning (US$3.6 million) 17. Component two will consist of a three-step CSO capacity building program to be implemented by the University of Sana’a Center for Business Administration (CBA), and also by the University of Aden’s CSO Management Unit (CSO/MU). Management oversight will remain with the CBA in Sana’a, with Aden’s CSO/MU a satellite implementing office of the CBA in order to give access to southern CSOs. 16 South Africa’s current legislation is generally considered as being enabling and supportive of CSO activity. However, during South Africa’s apartheid regime fundraising activities of certain organizations were severely suppressed. This situation was changed when the Nonprofit Organizations Act (NPO Act) was promulgated in 1997 “designed to promote, support and enhance the capacity of NPOs to perform their functions” and repealing the previous Law. In Indonesia, CSOs were given little room by the authoritarian Suharto government. Freedom of association and freedom of expression were constrained by the regulatory framework. The situation changed significantly after Suharto stepped down in May 1998. Since then, many important reforms have been introduced and supported by civil society, including the constitutional amendment of 1999-2002 and the building of a productive partnership with some CSOs working together with certain state institutions, such as the Supreme Court and the police, in conducting institutional reform projects (based on ICNL assessments). 30 18. Step one (US$2.1 million) will entail classroom instruction that will provide four modules of training in: (a) project cycle management; (b) monitoring and evaluation; (c) fundraising; (d) and social accountability concepts, principles and tools. In Step two (US$1.5 million), successful graduates of the classroom-based training will be provided a certificate of completion. Those certified will be invited to submit grant proposals to compete for grants up to US$20,000 for social accountability activities that demonstrate their mastery of social accountability principles and practices. CSOs choosing to apply for small grants will receive feedback on their proposals mid-way through the drafting process to maximize learning opportunities for CSOs while engaging in the proposal-writing. In Step three, small grant awards for implementing social accountability activities will be awarded and these CSOs will receive on-site field mentoring and monitoring assistance during implementation of their social accountability initiatives. 19. The Bank’s envisioned CSO capacity building work in Yemen complements a similar USAID funded “Responsive Governance Program (RGP)” implemented by the University of Sana’a and Aden. It also builds on the Social Fund for Development (SFD) CSO training program. The Bank will leverage these basic skills programs in Yemen to offer additional capacity building skills and opportunities, particularly, in social accountability concepts and tools. Intake criteria for component two training will be used to assess whether applicant CSOs from these other capacity-building programs have the requisite skills to participate in component two activities. The SFD and USAID intend to continue basic CSO capacity-building activities, ensuring a broad, eligible pool of candidate CSOs from their programs for the envisioned curriculum in component two. Most – but not all - of the CSOs entering the Bank-funded CSO capacity-building track are expected to come from these USAID and SFD-managed basic skills building programs. The envisioned coursework in the capacity building provided within component two is designed to add to, complement and leverage – not duplicate or overlap – these basic skills building programs. The selection criteria for awarding the small grants (detailed in the Operational Manual), will include the following: i). The CSO should have completed and obtained certification of successful completion of the four training modules executed by the Universities (the classroom-based learning part of capacity building program); ii). The CSO has experience implementing projects either directly financed by the Bank or other donors or through MoPIC and or its representative agencies. (We would avoid categorizing funding sources with a list of financiers in development activities–either as lead or partners or subcontractor) iii). The CSO must have been working with the communities in development before. iv). CSOs must have adequate staff in the field for implementation of social accountability practices; v). Proof of inclusion of gender equity in CSOs’ activities with the communities; vi). Must have an up to date Annual Financial Statement (AFS); 20. The small grants will be provided to approximately 85 CSOs during the four year duration of the proposed Project. The Grant Making Scheme will be structured through a competitive and transparent process with clear selection criteria. The grants will build on new/planned projects and ongoing ones being implemented by grantee CSOs. 31 21. The Small Grants recipients will be selected by a Grant Making Committee (GMC). The GMC will be convened and chaired by the University of Sana’a CBA, but unlike other members of the GMC, the University will not have voting authority. The composition of the GMC has already been agreed upon; it will be composed of a multi-stakeholder group representing four constituencies- the Government, academics private sector and donors. SFD will have observer status, but not be able to vote. CSO representatives may also be invited as observers, but will not be able to vote. The Terms of Reference for the GMC have been developed and agreed upon in consultation with MoSAL and University of Sana’a Center for Business Administration (CBA), and will be detailed in the Operational Manual. The GMC will convene twice every grant cycle and will operate under provisions for transparency and conflict of interests, and will have a dedicated grievance redress mechanism for handling of complaints by grantees and other CSOs. 22. Sub grant agreements for the award of the Small Grant s for Action learning will be signed by the SFD and the grantees. In terms of how the actual payments for small grants will be made, this will be specified in the sub-grant agreements based on tranches for outputs achieved through the activities funded by the grants. Table I: CSO Capacity-Building Program • Eligibility for entry into the proposed capacity building program requires demonstrated basic skills and capacities assessed through intake criteria. • The target number of CSOs for intake into the proposed capacity building program will average 100 Intake organizations per year for an expected life of program total of 300 CSOs. • Four modules of the proposed class-room-based training part of the capacity-building program will offer trainings designed to fill these gaps. These are : a) Project Cycle Management; b) Fund Raising; c) Monitoring and Evaluation; and d) Social Accountability training. Of these modules, the social accountabiity Classroom Based training is the lengthiest. CSOs will receive certification upon sucessful completion of all training modules. learning • At the conclusion of the classroom training, interested CSOs will be encouraged to submit grant proposals for social accountability action learning grants through a competetive process. Sana'a University's CBA and Small Grants Aden's CSO/MU will review the grant proposals and coach applicants as they apply their fundraising skills. Program • Final grant proposals are then evaluated in a competitive process using transparent criteria by a panel of CSO, donor Government and private sector representatives convened by CBA and CSO/MU. A total of 85 grants are expected to be made over the life of the program with a maximum value of $20,000 each. Field Based • CBA and CSO/MU mentors are then assigned to work, on site, with CSOs that have received grant funding to Mentoring and Monitoring facilitate and monitor grant implementation. 32 23. The proposed capacity building program will augment the basic skills trainings offered elsewhere (e.g. USAID and SFD) with classroom training, experiential learning, mentoring and small grants for action learning. Project cycle management, fund-raising, and monitoring and evaluation skills are especially valued in the civic sector. 17 CSOs in Yemen are less familiar with the social accountability approach, but in consultation with CSOs in validation exercises, once “social accountability” was unpackaged as a development concept and described using local examples, the policy and community level implications - and the utility of social accountability tools - were recognized and appreciated. 18 24. The proposed program will focus on the training of individuals rather than training of institutions. Given that social accountability is a new concept in Yemen, there was a need to work on introducing the concept to selected individuals within the eligible CSOs, who are working in a function that is most relevant to instituting social accountability approaches. The candidates selected from the CSOs would be chosen based on clear criteria, and further, the individual would be required to commit to training other staff in their CSO so as to ensure that the benefits of the training are disseminated more widely. Lessons learned from similar experiences (West Bank/Gaza, Kosovo, Lebanon), show that using an approach that focuses on individuals is more effective in introducing the concept of social accountability when receptive individuals in leadership positions or relevant functions carry that knowledge back to their colleagues. Many CSOs in Yemen are charismatic entities driven by the personalities of key individuals rather than deep organizational staffing and expertise. Focusing on individuals also recognizes that CSOs can often not afford – and neither can most donors – to have large numbers of staff simultaneously spend significant amounts of time in trainings. 25. A technical assistance package to train local Yemeni trainers on Social Accountability approaches and tools will be provided to Universities of Sana'a and Aden to ensure a high level of delivery. The package will entail a Training of Trainers that will combine face to face and on-line sessions. These trainings will be conducted by 3-4 trainers from ANSA-Arab World that will be paired with international social accountability trainers/consultants. The training will introduce participants to the concept of social accountability and its position within the broader governance framework, and its importance in the governance agenda. It will focus on the practical application of the approach, providing participants with the skills necessary to design effective, context-specific social accountability interventions in CSO’s current work. The Social Accountability Tools training would focus on the 'how-to' of social accountability by introducing some of the most commonly used tools that may be relevant to the Yemeni context. These tools have been tried and tested by the World Bank in other contexts, and those that will be introduced may include, inter alia, the following: community radio, public hearings, citizen report cards, community score cards and other media-based tools. While the social accountability approaches and tools are important for successful social accountability approaches, they remain “instruments.” Trainers and trainees will learn that tools should be selected according to the context such as the specific aim, the capacity of users and target audiences and how to make this kind of assessment. 17 See, for example, RGP’s own CSO satisfaction surveys, the Bank’s CSO Mapping Survey that cited these skills as necessary to improve CSO capacity. 33 26. The on-location mentoring envisioned for small grants awardees provides a just in time technical expertise and an action-learning opportunity to apply acquired skills in social accountability. On-site mentoring services also help ensure regular supervision of small grants implementation and risk mitigation. This component finances: 1. Administrative staffing/support for the CBA in Sana’a and CSO/MU in Aden; 2. Training of Trainers, as required; 3. Curriculum development and design 4. Recruitment of instructors/trainers for classroom training 5. Office equipment for both training facilities 6. CSO classroom based training and CSO and Trainer support costs 7. Certification of the training’s successful completion 8. Support for consultants and mentors to provide guidance on grant writing and, after grant awards, oversight of social accountability grant activity; 9. A small grants fund to be competitively awarded to CSOs completing classroom- based “Track Two” training on an ongoing basis. Component Three – Project Management (US$1.1 million) 27. This component will facilitate project implementation by providing effective and efficient management support including auditing, monitoring and evaluation, and safeguard compliance. The activities financed by this component will include but not be limited to: (a) The costs of establishment and operation of a dedicated project IT unit that will be the CSOs E-registration data control center. (b) Costs towards remuneration of a Project Coordinator and Accountant recruited through a competitive process following Bank procurement guidelines, to support project management, accounting and progress reporting, compliance with safeguard compliance and other fiduciary requirements of the project. (c) Travel, per diem, communication, printing and reporting costs of project management team; (d) Consulting fee of external auditors and consultants for the project administration; (e) Consultancies required for the impact assessment of the broad systematic improvements achieved in the life of the project. (f) Monitor progress of the project, respond to emerging challenges and to measure results through pilots to explore affectivity of the new E-registration system. Impact evaluations will include surveys at inception and completion, as well as targeted stakeholder and institutional assessments. 28. The proposed CSO Support Project through its dual track will also support MoSAL in building a sequenced and coordinated outreach program to ensure a transparent and regular flow of information towards all stakeholders. Outreach and sustainable dialogue channels will be embedded in all project activities cross components, using strategic offline and online communications. The consultations on the legal framework will give voice to CSOs in different geographic areas and will enhance the dialogue with the MoSAL and the Yemeni Government around legal and institutional to CSOs engagement. 34 29. The PDO-level results indicators will be monitored to evaluate project’s performance towards the objectives. Monitoring and evaluation of project activities will be integrated into each of the project components’ implementation. The Project Implementation Unit will be responsible for results monitoring and will submit an M&E report to the World Bank on a six months basis. The Bank will provide support for the development of the project’s M&E system through technical advice provided by the Bank staff and consultants. 30. In addition to integrating the M&E into each project component, a CSO satisfaction survey of the registration process will be rolled out at the beginning, mid implementation and at the end of the project to collect additional CSO feedback. The satisfaction survey and online feedback mechanisms will be gender and demographic-sensitive, designed to provide disaggregated data that can help inform the design of interventions impacting women and youth. 35 Annex 3: Implementation Arrangements Yemen: Civil Society Organizations Support Project I. Project Institutional and Implementation Arrangements A. Project Stakeholders 1. The following describes the main stakeholders and their expected role in the project: a) Government Counterparts: The Minister of MoSAL expressed interest in the proposed project’s approach following the validation of the CSO Mapping and Capacity Assessment study, pointing to the need for a project that supports the regulatory function, streamlines the registration process, and builds capacity of CSOs. The Minister indicated that CSO registration process should be internet-based as well as offline to ensure registration access to CSOs that may have limited connectivity. The MoPIC also endorsed the study’s findings and confirmed their willingness to support the proposed CSO Support Project. They also expressed interest to ensure close coordination with the Government-CSO Partnership Project activities. b) Sana’a and Aden Universities: The University of Sana’a though its Center for Business Administration (CBA) has been running successfully since 2010 with USAID technical support and funding the Program for CSO Management. The program aims at providing capacity building to CSOs in good governance, financial management, outreach, advocacy, strategic management and communications. Over 100 CSOs have received a CSO Management Diploma upon completing the course and their performance has been assessed. In 2013, a CBA branch was opened in Aden, and staff is recruiting potential applicants to the course. CBA has a high capacity and experience in working with CSOs. They have expressed strong interest in the World Bank transferring knowledge on social accountability approaches and tools. c) European Union: is the leading donor for non-state actors in Yemen. Since 2005, the EU has facilitated dialogue and closer partnership between the Government and CSOs through its Sharaka program, focusing on promoting democracy and human rights. Currently, several projects are being implemented in different parts of the country, each working with CSOs for increased participation. The EU is also leading a dialogue with the Ministry of Social Affairs and Labor (MoSAL) on re-structuring the MoSAL CSO department to improve services and outreach to CSOs. The EU team expressed their interest in the proposed project and highlighted its timeliness. A close coordination will be put in place throughout the project implementation, particularly, on Component One to jointly leverage all efforts and funding to support re- structuring MoSAL’s CSO Department towards a streamlined CSOs registration and an improved MoSAL outreach to the CSO community. d) UNDP Leading the Mutual Accountability Framework Task Force on CSOs: UNDP is leading the work to create a partnership framework between CSOs, government, and donors. This is one of thirteen priorities identified in a high-level donors meeting held in Sana’a, Yemen, on June 19, 2013 to discuss progress on the Mutual Accountability Framework (MAF). 36 Specifically, UNDP prepared in September 2013, a document that serves as a compact between CSOs, government and donors led by a Task Force comprised of MoPIC, MoSAL, the Prime Minister’s and the President’s Office, CSOs, and INGOs. The compact would describe the nature of the relationship between CSOs, GoY and donors and would develop an action plan to operationalize this partnership. The World Bank team has liaised with UNDP and is coordinating closely with their team during this process as the Government-CSO Partnership Project complements the work on the CSOs-GoY-Donors partnership building. e) INGO Forum: Several consultations were conducted with INGOs in Sana’a throughout the preparation of the CSO Mapping and Capacity Assessment study. The team presented, discussed and validated the study’s key findings and operational recommendation with INGOs representatives. The study was very well received, and the INGO Forum expressed its willingness to support the operationalization of the study’s recommendations. The proposed project design was also discussed and INGO representatives confirmed their interest to contribute technical support through both of the projects components. B. Institutional and Implementation Arrangements 2. MoPIC represents the Credit Recipient. MoPIC signs the Financing Agreement on behalf of the Republic of Yemen and makes the proceeds of the grant available to the SFD under the Subsidiary Agreement between MoPIC and SFD. 3. The project implementing entity will be the Social Fund for Development (PIE). The SFD will be responsible for the overall coordination and monitoring of the Project and will manage the fiduciary functions. 4. For Component One, SFD will work in close coordination with MoSAL which is the Ministry responsible for oversight of CSOs operating in Yemen. MoSAL has four directorates: Associations, Institutions, Cooperatives and Finance. MoSAL also has 22 regional offices in Yemen. These offices conduct site field visits and regular inspections, request reports and occasionally attend CSO meetings. MoSAL was also the counterpart ministry for the FY10 Stakeholder Mapping Study, having already expressed interest to work with CSOs as development partners. Due to the weak in- house capacity on project supervision and implementation, an individual local consultant will be hired to provide “in-house” support to MoSAL teams in terms of overseeing the dialogue around the regulatory study and outreach and the E-registration process, including follow up actions and liaison with the Social Fund for Development the PIE which will be responsible for all financial and procurement management aspects for the project. 5. For Component Two, SFD will contract University of Sana’a to manage the learning and capacity building program in Sana’a and Aden. The Sana’a University has developed a curriculum that specifically targets CSOs capacity building. A dedicated department (the CBA) has been operating for two years in Sana’a and has recently opened a similar department in Aden University. For the purposes of this project, the better-developed CBA will be the implementing entity with the CSO/MU at Aden University being a satellite implementing facility to the CBA. The Universities are strong in terms of substance and technical expertise. The World Bank will facilitate knowledge transfer on project cycle management, monitoring and evaluation, fundraising, and social accountability to both universities to develop the four envisioned modules of capacity building. The 37 project team will also support both Aden and Sana’a Universities to develop an operations manual to standardize the selection criteria for intake into the program and for small grant awards, as well as a small grants operation manual. The university will provide a list of certified CSOs that will have applied for the small grant program and their projects evaluated and selected by the universities teams based. Social Fund for Development as the PIE will subsequently oversee the disbursement, financial management, and reporting of the small grants for action learning sub component. C. Project Administration Mechanisms 6. The SFD was established in 1997 as an autonomous State organization under the Council of Ministers. The Prime Minister is the Chairman of its Board of Directors. Since its establishment, SFD has become one of Yemen’s main development actors, with support from the Government and the donor community. The main executive agency is the SFD Head Office in Sana’a and it has nine Branch Offices. The SFD Head Office is headed by its Managing Director who is also a member and secretary of the SFD’s Board. The Head Office has 14 units dealing with all SFD’s affairs on the national level. 7. The Finance Department is in the Head Office and is managed by a Financial Manager who reports directly to the Managing Director. The Financial Manager is supported by a deputy and six accountants with no material staff turnover in the department. This department is responsible for managing all the FM and Disbursement activities of the SFD with significant support from accountants at the SFD’s nine branch offices. 8. Additionally, the SFD has an Internal Audit Department (IAD) headed by a qualified Manager who is supported by 4 staff with adequate experience and qualifications that are relevant for the proposed project. The IAD is responsible for conducting regular audits on the SFD’s Programs as required by the Program Management but at least on a quarterly basis, including performing audits for the SFD’s Branch Offices, preparing all required documents for annual external audits, and reviewing and investigating in case of any irregularities found. If there are findings that require action, the internal auditor gets responses from the related branches, departments or units. The internal auditor follows-up on any actions agreed upon with the concerned branches, departments or units. The IAD submits its audit reports to the SFD’s Managing Director. D. Financial Management, Disbursements and Procurement Project Financial Management Arrangements 9. SFD will be responsible for the overall coordination and monitoring of the Project and will manage the fiduciary functions relating to (FM and Procurement). The current FM arrangements, which are working satisfactorily, are appropriate for the proposed Project and will be kept, with the caveat that SFD will maintain separate accounting records and banking arrangements for the proposed project, and establish procedures related to implementation of the small grants component in the project. The existing staff in the Finance Department at Sana’a and SFD’s branch offices in the project governorates will be utilized for financial management of the project. Any additional augmentation requirements will be met through recruitment of consultants, as approved from time to time. 38 10. A Financial Management (FM) assessment was conducted with the objective to determine whether: (i) the SFD has adequate FM arrangements to ensure Project funds will be used for the purposes intended in an efficient and economical way; (ii) the controls and processes at the SFD can be relied upon; and (iii) the FM system in place is able to generate reliable and accurate project reports on a timely basis. 11. The FM assessment confirmed that SFD has adequate FM capacity to implement the Project subject to the establishment of the procedures related to the implementation of the small grants component of the project. The SFD has a very strong and long experience in implementing a number of World Bank-financed projects, including SFD I, II, III and IV, thus, they have in place strong FM systems. The SFD departments, units and staff including the financial staff will be utilized to implement this project. The SFD FM Department based in Sana’a is adequately staffed with a qualified financial manager assisted by a deputy financial manager and six accountants. Besides the SFD’s office in Sana’a, there are nine branch offices country-wide. The branch offices are adequately staffed with operational staff and accountants. The flow-of-funds procedures including the controls over cash balances and transfers to the field offices are acceptable and will be used under the project. The SFD has developed an Operational Manual setting out the structure of the several programs, including fiduciary arrangements and the relation with the branch offices which are deemed to be adequate, but will be updated to reflect the specifications of the CSO Support Project. The SFD will be issuing, on a quarterly basis, Interim Unaudited Financial Reports (IFRs) reviewed by an external auditor acceptable to the Bank, and on an annual basis, Project Financial Statements (PFS) and overall Entity’s Financial Statements, audited by an external auditor acceptable to the Bank. Unqualified annual audit reports have been received in a timely manner. The audit report for the year ending 2012 has been received with no major issues raised. The audit report submission requirement remains the same, with the audit report being due within six months from the end of the fiscal year of December 31. Organization and Staffing 12. SFD was established in 1997 as an autonomous State organization under the Council of Ministers. The Prime Minister is the Chairman of its Board of Directors. Since its establishment, SFD has become one of Yemen’s main development actors, with support from the Government and the donor community. The main executive agency is the SFD Head Office in Sana’a and it has nine Branch Offices. The SFD Head Office is headed by its Managing Director who is also a member and secretary of the SFD’s Board. The Head Office has 14 units dealing with all SFD’s affairs on the national level. 13. The Finance Department is in the Head Office and is managed by a Financial Manager who reports directly to the Managing Director. The Financial Manager is supported by a deputy and six accountants with no material staff turnover in the department. This department is responsible for managing all the FM and Disbursement activities of the SFD with significant support from accountants at the SFD’s nine branch offices. 14. Additionally, the SFD has an Internal Audit Department (IAD) headed by a qualified Manager who is supported by 4 staff with adequate experience and qualifications that are relevant for the proposed project. The IAD is responsible for conducting regular audits on the SFD’s Programs as 39 required by the Program Management but at least on a quarterly basis, including performing audits for the SFD’s Branch Offices, preparing all required documents for annual external audits, and reviewing and investigating in case of any irregularities found. If there are findings that require action, the internal auditor gets responses from the related branches, departments or units. The internal auditor follows-up on any actions agreed upon with the concerned branches, departments or units. The IAD submits its audit reports to the SFD’s Managing Director. Accounting System & Internal Controls 15. The SFD has an internally developed automated accounting system which has been in operation for years and is deemed adequate for this project. The accounting system is capable of recording project financial transactions, including allocation of expenditures in accordance with respective components, activities, disbursement categories and sources of funds. The system has controls over the preparation and approval of transactions ensuring all transactions are correctly made and adequately explained. The system is sufficiently flexible to design separate chart of accounts adequate to properly account for and report on project activities and disbursement categories. The system is capable of proper record keeping and has a backup system in the SFD’s server. 16. The SFD has an Operational Manual setting out the structure of the several programs implemented by the SFD, including procedures for proper segregation of duties in terms of authorizing and recording transactions, and custody of assets, descriptions of the roles of the SFD’s staff including the internal audit department, the project’s accounting policies and procedures and internal controls. The Manual will be updated to reflect the specifications of the CSO Support Project. 17. The SFD prepares monthly bank reconciliations, prepared by the accountants and reviewed and approved by the Financial Manager or his deputy. The SFD prepares quarterly IFRs showing the source and use of funds by component, expenditure category, activities and the reconciliation of the DA. Additionally, the SFD prepares semi-annual progress reports detailing the physical progress made for each project. 18. The SFD maintains a fixed assets register for the assets financed by the Bank, GOY and other donors. The internal auditors conduct a yearly physical count of the equipment (computers, printer, vehicle, etc.) financed from the Project. 19. Complaints Handling Mechanism (CHM) in SFD: The SFD has developed a CHM through which SFD manages, responds and monitors complaints within its activities as part of an ongoing process to improve its accountability. The complaints are received by branch managers/ unit's heads, units’ heads, project officers, and consultants, directly, or by fax and mail, or through some complaint boxes in some SFD programs. The SFD gives the priority to investigate complaints of financial nature and classify them as sensitive complaints. Complaints which are not resolved in the branch offices or become a dispute are usually dealt with at the HQ level with the full support of the Technical Unit and the SFD's attorney. Types of complaints received by SFD offices (according to their sources):  Complaints of beneficiaries/possible beneficiaries (related to projects implementation activities)  Complaints of contractors/suppliers/ consultants (implementation)  Complaints on behalf of groups/communities 40  Behavior of a SFD staff member  Behavior of a partner staff member Investigation: Depending on the subject of complaint investigation takes place at the office level and field verification as needed. Response is made accordingly and complainants get informed. Complaints related to procurement and contractual issues are dealt with as per the standard bid documents. SFD staff exchange experience related to complaints and disputes handling through their meetings and workshops, and through direct contact with the technical unit which is in charge of dealing with complaints and disputes. 20. Recipients of Small Grants’ FM arrangements: The CSOs which will be eligible for receiving small grants from the Project’s funds will be required to maintain acceptable FM arrangements. The eligibility of CSOs to receive such small grants are defined in the project’s operational manual. 21. The current FM arrangements at SFD being satisfactory and are appropriate for the proposed Project, the same will be continued. However, this project being new to SFD and in Yemen, a number of additional risks are identified and the following relevant mitigating measures are agreed upon as described below: (a) SFD will maintain separate accounting records and banking arrangements for the proposed project, and establish operational and control systems related to the project with focus on the procedures related to implementation of the small grants component in the project; (b) The existing staff and accountants in the Finance Department at Sana’a and SFD’s branch offices in the project governorates will be utilized for financial management of the project; (c) The fund flow procedures and controls over cash balances and transfers to the field offices currently followed by SFD will be adopted for management of project funds; (d) The existing Operational Manual setting out the structure for several programs currently managed by SFD, including fiduciary arrangements and FM arrangements with the branch offices will be updated to reflect the specifications of the CSO Support Project; (e) Ensure Interim Unaudited Financial Reports (IFRs) reviewed by an external auditor acceptable to the Bank on a quarterly and annual basis; (f) Project Financial Statements (PFS) and overall Entity’s Financial Statements, will be audited by an external auditor recruited on a competitive basis and acceptable to the Bank. (g) Any additional augmentation requirements will be met through recruitment of consultants, as approved from time to time. 22. Project FM Risk: The overall residual FM risk is “Moderate”. The current project’s financial management arrangements with the aforesaid enhanced mitigating measures at SFD are acceptable to the Bank and adequate to assure that project funds are used for the intended purposes. Flow of Funds and Disbursement Arrangements 23. Funds Flow: The funds requirement for the project will be based on annual work plans, supported by quarterly Interim Financial Reports (IFRs). For each project component, the SFD will be responsible for making the payments to all beneficiaries and suppliers. All payments under the 41 project will be made directly to the contractors, consultants, SU, CBA, CSOs, etc. by SFD based on certified bills/invoices. The Project funds will be channeled through the SFD and deposited into a separate segregated USD Designated Account (DA) in a commercial bank acceptable to the World Bank, to be opened and maintained by the SFD and under conditions acceptable to the World Bank. 24. Disbursements: The Project funds will be channeled through the SFD and deposited into a separate segregated USD Designated Account (DA) in a commercial bank acceptable to the World Bank, to be opened and maintained by the SFD and under conditions acceptable to the World Bank. Advance method will be the main disbursement method, along with Reimbursement, and direct payment. An initial advance would be deposited into the segregated Designated Account maintained SFD. The name of the commercial bank to hold the Designated Account should be communicated to the Bank by the signing date. Withdrawals from the designated account will be on the basis of requests for payments from the Grant funds initiated through use of the Bank’s Withdrawal Applications (WAs) supported by Interim Unaudited Financial Reports (IFRs) and List of Payments against contracts subject to the World Bank’s Prior Review, for each quarter as provided in the IFRs. Disbursement to the beneficiaries from the SFD’s segregated DA will follow the SFD’s Operational Manual and the World Bank Guidelines. SFD will compile the expenditures in the project and prepare a consolidated IFR and submit to World Bank not later than 45 days after the end of two quarters. 25. The chart below describes the flow of funds and process for requests for payments. SFD Flow of funds Chart Project DA $ SFD pays eligible Grant Funds SFD receives expenditures from requests for DA SFD prepares WAs supported by IFRs payments 42 Eligible Expenditures Categories Category Amount of the Financing Percentage of Allocated (expressed in Expenditures to be SDR) Financed (inclusive of Taxes) (1) Goods, non- 4,225,000 consulting services, consultants’ services, 100% Training and Operating Costs for Parts A, B.1, B.2 and C of the Project (2) Small Grants for 975,000 100% Action Learning under Part B.3 of the Project TOTAL AMOUNT 5,200,000 Project Financial Reporting & Budgeting 26. The SFD provides regular quarterly budget reports, which are included in the IFRs provided to the Bank. The SFD Finance Department has a planning system with an accountant in charge of receiving the related information (contracts, Procurement Plan, etc.) from the SFD Procurement Specialist. Based on these, the related budget reports are prepared on a quarterly basis and included in the quarterly reports sent to the Bank. The SFD submits the IFRs generated from their accounting system on a quarterly basis. These reports will be submitted to the World Bank timely with the external auditor's review report. 27. Interim Financial Reports (IFRs) arrangement: IFRs will be prepared by the SFD and submitted to the World Bank no later than 45 days after the end of each quarter. The IFRs will be reviewed by an independent external auditor acceptable to the World Bank and the reports will consist of: (a) source and uses of funds by Component and Expenditure Category, (b) a reconciliation of the DA and advances to the sub-accounts, and (c) Cash forecast for two quarters. External Audit 28. Annual Audited Financial Statements of SFD are required to be sent to the World Bank as the SFD is a Continuing Entity. Such reports should be submitted to the World Bank within six months of the end of the Recipient’s fiscal year (December 31). 29. Annual Audited Financial Statements of the project are required to be sent to the World Bank within six months from the end of the Recipient’s fiscal year (December 31). 43 • The annual financial statements will be audited by an independent external auditor acceptable to the World Bank and based on TORs acceptable to the Bank. Each report will cover the period of each fiscal year-end and is due to the Bank within six months from the end of each fiscal year. • The external auditor report (in English) shall encompass all Project’s components and activities and shall be in accordance with internationally accepted auditing standards e.g., International Standards on Auditing (ISA). The audit report and opinion will cover the Project’s financial statements, reconciliation and use of the Designated Account (DA) and sub-accounts, use of direct payments, and withdrawals based on Interim Financial Reports. • The auditor is required to prepare a “management letter” identifying any observations, comments and deficiencies, in the system and controls, that the auditor considers pertinent, and shall provide recommendations for their improvement. • The cost for the external auditors will be funded from the proceeds of the Project. Supervision Plan 30. The project's FM arrangements will be supervised by the Bank’s Financial Management Specialist, in conjunction with the Bank’s overall supervision of the project, which will be performed at least on a semi-annual basis. The supervision will be carried out to ensure adequate FM arrangements continue to be in place and the capacity of the FM unit is adequate. Procurement Arrangements Assessment of the agency’s capacity to implement procurement 31. The Bank procurement team has carried a procurement capacity assessment of SFD. SFD has successfully managed implementation of procurement activities up to now through a robust MIS system for procurement linked to financial management. Despite the large number of contracts that SFD handles, the MIS system is flexible to accommodate changes as and when needed. The existing procurement capacity confirms its adequacy to meet the needs of the Project. 32. Procurement activities under the proposed project will be the responsibility of the SFD (PIE). The assessment noted the sufficient capacity of SFD to undertake procurement for the Project and identified steps to further strengthen the capacity of staff in procurement through: (i) Hiring of an additional procurement staff provide help to the exist procurement department (ii) development of a ‘Procurement Manual’ to guide the team in its daily procurement activities; and (iii) ensuring that complete records are maintained for each procurement package. 33. Procurement activities under the project will be carried out in accordance with “Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants”, dated October 15, 2006 and revised January 2011 (“Anti-Corruption Guidelines”). Procurement for the project will be administered in accordance with the World Bank’s Guidelines: Procurement of Goods, Works and non-consulting services under IBRD Loans and IDA Credits dated January 2011 and Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers dated January 2011 and the provisions stipulated in the Financing Agreement. 44 34. Procurement of Goods and Non-consulting Services: Goods procured under this project would include but will not be limited to supply of equipment and furniture and soft wear to MOSAL with an estimated value of US$573,000. All goods under the project will be procured using the Bank’s Standard Bidding Documents (SBD) for all ICB, and for NCB, the standard bidding document agreed with or satisfactory to the Bank will be used. Goods contracts valued above US$ 500,000 or equivalent would be awarded through ICB procedures. Goods estimated to cost less than US$ 500,000 may be awarded following NCB procedures. Goods contracts valued below the equivalent of US$ 50,000 may be procured through shopping procedures by soliciting at least three responsive quotations. All goods contracts valued equal to or above US$ 500,000 equivalent would be subject to prior review and approval by IDA. 35. For goods and non- consultancy services contracts below the threshold for international procurement, financed by the World Bank, national competitive bidding (NCB) method shall use the procedures set forth in Law No. 23 of 2007, concerning government tenders, auctions and stores, and related regulations, subject to the following additional provisions: (1) a Recipient-owned enterprise in the Republic of Yemen shall be eligible to bid only if it can establish that it is legally and financially autonomous, operates under commercial law, and is not a dependent agency of the Recipient; (2) Bidding (or pre-qualification, if required) shall not be restricted to any particular class of contractors or suppliers, and non-registered contractors and suppliers shall also be eligible to participate; (3) The modified national standard bidding documents approved by the Association shall be used; (4) Registration shall not be used to assess bidders’ qualifications; qualification criteria (in case pre-qualification was not carried out) and the method of evaluating the qualification of each bidder shall be stated in the bidding documents, and before contract award the bidder having submitted the lowest evaluated responsive bid shall be subject to post-qualification; (5) A foreign bidder shall not be required to register or to appoint an agent as a condition for submitting its bid and, if determined to be the lowest evaluated responsive bidder, shall be given reasonable opportunity to register, without let or hindrance; the registration process shall not be applicable to sub-contractors; (6) No bidder shall be requested or permitted to modify its bid after the bid closing date shall have elapsed and bids submitted after the deadline for submission of bids shall be returned to the bidder unopened; (7) Post-bidding negotiations with the lowest or any other bidder shall not be permitted; (8) Under exceptional circumstances, the procuring entity may, before the expiration of bid validity, request all bidders in writing to extend the validity of their bids, in which case 45 bidders shall not be requested nor permitted to amend the price or any other condition of their bids; a bidder shall have the right to refuse to grant such an extension without forfeiting its bid security, but any bidder granting such extension shall be required to provide a corresponding extension of its bid security; (9) rejection of all bids is justified when there is lack of effective competition, or bids are not substantially responsive, however, lack of competition shall not be determined solely on the basis of the number of bidders; and (10) each contract financed from the proceeds of the Grant shall provide that the supplier shall permit the Association, at its request, to inspect their accounts and records relating to the performance of the contract and to have such accounts and records audited by auditors appointed by the Association. 36. Selection of Consultants: Consultancy Services procured under this Project would be provided by firms and individuals, and could include, but will not be limited to the following: (i) institutional analysis of CSO registration system within MOSAL and development of manuals, (ii) various training and capacity building activities; (iii) TA support for MoSAL - Consultation, awareness raising services; (iv) Consulting services for development and establishment of E-registration system; (v) Consulting services for project management unit - monitoring and evaluation; and (vi) recruitment of external audit services. 37. Consultant firms and individuals will be selected in accordance with IDA Guidelines for Selection and Employment of Consultants (dated January 2011). For firms, all contracts above US$300,000 will be procured using Quality and Cost Based Selection method (QCBS). Least Cost- Based Selection (LCS), Single source selection (SSS), and selection based on Consultant Qualification procedures (CQS) would be used for small contracts of standard or routine nature estimated to cost less than US$300,000 or equivalent. Shortlist of consulting firms for services estimated to cost less than US$300,000 equivalent per contract may be composed entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines. All consulting services contracts above US$200,000 will be subject to IDA’s prior review. All individual consulting assignments will be selected in accordance with Section V of the Guidelines for Selection of Consultants paragraphs 5.2, 5.3 and 5.4 of the Consultant Guidelines for the Selection of Individual Consultants; and (g) Single-source procedures for the Selection of Individual Consultants. Training activities 38. Training activities will include but will not be limited to: conducting workshops, South-South Exchanges (Immersion learning- tour study), professional training for 120 CSOs in 14 Governorates to be trained in Sana'a & Aden CSO-MU number of CSOs. 39. Prior Review Threshold: Thresholds for applicable procurement methods (not limited to the list below): Procurement Method Contract Value Prior Review Threshold US$ 1. ICB (Goods) >= 500,000US$ >=500,000 2. NCB (Goods) <500,000 US$ 46 3. Shopping (Goods) <50,000 US$ Selection of consultants 40. Prior Review Threshold: Selection decisions subject to Prior Review by IDA as stated in Appendix 1 to the Guidelines: Selection and Employment of Consultants: Selection Method Prior Review Comment : Threshold 1. Consulting Firms (Competitive) >200,000 US$ 2. Consulting Firms (Sole Source) All contacts 3. Individual Consultants (Competitive) > 50,000 US$ 4. Individual Consultants (Sole Source) All contacts Procurement Plan 41. The Borrower has developed a procurement plan (dated January 21, 2014) for project implementation that provides the basis for the procurement methods. The Procurement Plan will be updated in agreement with the Project Team annually or as required to reflect the actual project implementation needs, including improvements in institutional capacity. 42. Prior review by the Bank for goods: All ICB contracts and the first two NCB contract of goods from SFD and subsequent contracts above US$500,000 and above for goods; and all contracts awarded on direct contracting method irrespective of value will be subject to prior review by the Bank. 43. Prior review by the Bank for consultancy services: First contract of any value each from SFD; subsequent contract valued over US$200,000 equivalent for firms including CSOs/NGOs, and above US$50,000 equivalent for individuals; and all contracts to be awarded on single source selection basis irrespective of value will be subject to prior review by the Bank. 44. Post Review by the Bank: All contracts not covered under prior review will be subject to post review during supervision missions, and/or review by consultants to be appointed by the by Bank. 45. Summary of the planned procurement packages for the first 18 months after project effectiveness: Proposed Package Category Estimated Comments Start Date End Date Cost in USD Supply of computers and Goods 575, 000 Multiple April Sep.2014 equipment to MOSAL Contracts 2014 Institutional analysis of CSO Consulting Multiple May 2014 Dec. 2016 registration system within Services Packages MoSAL + development of 297,400 Manuals The study on the Law- Consulting Multiple May 2014 Dec. 2014 47 comparative experiences Services 81,550 Trainings TA support for MoSAL - Consulting 5 May 2014 Dec. 2016 Consultation, awareness raising Services 50,000 Workshops Consulting services for Consulting Multiple May 2014 Dec. 2014 development and establishment Services Trainings 250,000 of E-registration system Training and capacity building Consulting May 2014 Dec. 2016 for use of E-registration system, Services and consultations and awareness raising 300,000 Project Baseline and mid-term Consulting May 2014 Dec. 2014 and final Survey Services 150,000 Consulting services for project Consulting Multiple May 2014 Dec. 2015 management unit - monitoring Services Packages and evaluation 150,000 Consulting May 2014 Dec. 2016 Media and Outreach Services External audit Consulting 30,000 May 2014 Dec. 2017 Services 46. Short list comprising entirely of national consultants: Short list of consultants for services, estimated to cost less than US$300,000 equivalent per contract, may comprise entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines. Frequency of Procurement Supervision 47. In addition to the prior review of contracts, supervision to be carried out from World Bank offices. The capacity assessment of the Implementing Agency has recommended two annual supervision missions to visit the field to carry out post review of procurement actions. E. Social (including Safeguards) 48. Subprojects implemented by grantee CSOs will not be designed or executed in a manner that will trigger Bank safeguards policies. A positive list of eligible small grant proposals will reflect that the project will not support any activity that involves involuntary resettlement impacts or has any adverse impacts on people’s livelihood, which includes any small-scale construction works. A safeguards screening checklist is included in the operational manual to ensure that funded sub-projects are within the scope of technical assistance, institutional development, and training. This will be in line with the Subsidiary Agreement executed on behalf of the Recipient and the Project Implementing Entity. 49. The proposed project will ensure gender inclusion. The project will help establish a more transparent and easier process for registration of new women and youth CSOs, provide equal opportunity for capacity training and access to small grants to integrate social accountability tools in their development projects. 48 F. Environment (including Safeguards) 50. This is a Category C project. No safeguards policies are triggered, and the proposed project activities are likely to have minimal or no adverse environmental and social impacts. The proposed project will help with enhancing the institutional capacity of CSOs in Yemen. Requirements that apply for social safeguards also apply for environmental. As such, a positive list of eligible small grant proposals will reflect that project activities will not trigger safeguard policies. The project implementing agency, Social Fund for Development (PIE), has demonstrated its ability to screen and monitor small sub-projects with respect to social and environmental safeguards. G. Monitoring & Evaluation 51. The PDO-level results indicators will be monitored to evaluate project’s performance towards the objectives. Monitoring and evaluation of project activities will be integrated into each of the project components’ implementation. The Project Implementation Unit will be responsible for results monitoring and will submit an M&E report to the World Bank on a six months basis. The Bank will provide support for the development of the project’s M&E system through technical advice provided by the Bank staff and consultants. 52. In addition to integrating the M&E into each project component, A CSO satisfaction survey of the registration process will be rolled out at the beginning, mid implementation and at the end of the project to collect additional CSO feedback. The satisfaction survey and online feedback mechanisms will be gender and demographic-sensitive, designed to provide disaggregated data that can help inform the design of interventions impacting women and youth. 53. The Bank will also execute an independent evaluation on the results of the project using various methods as appropriate, including citizens online and offline feedback on both components. 49 Annex 4: Operational Risk Assessment Framework (ORAF) Yemen, Republic: Yemen Civil Society Organizations Support Project (P146312) Stage: Board . Risks . Project Stakeholder Risks Stakeholder Risk Rating Moderate Risk Description: Risk Management: CSOs/Government Relations: The project will provide support to MoSAL for the organization of extensive consultations with key (i) Government stakeholders and other stakeholders stakeholders. A continuous process of engagement through online consultations will be maintained to may have different views on the content and involve as many voices as possible in the preparation process and to strengthen the consensus on the process of CSO regulation reforms; (ii) rationale for and the guiding principles for regulation reforms. disagreement or lack of ownership Consultations with a broad base of CSOs in and outside Sana’a will be organized at the beginning of the project implementation and examples of reforms of laws of association from the MENA region as well as other countries will be presented and discussed to draw on lessons learnt and adapt these to the Yemen context. This process will help build consensus on key challenges and proposed reforms to ensure buy-in. Since the project was conceived on the request of two government agencies (MoSAL & MOPIC) the need for proposed activities is clearly felt by government agencies. Also, the close coordination with the Bank’s support to Yemen’s transition and the National Dialogue process will ensure that the project implementation is well guided by the emerging political consensus. Resp: Both Status: In Stage: Imple Recurrent: Due Freque Monthly Progres menta Date: ncy: s tion 50 Implementing Agency (IA) Risks (including Fiduciary Risks) Capacity Rating Substantial Risk Description: Risk Management: Availability of competent staff with adequate skills, A confirmed, in-house consultant (with experience and knowledge in management and implementation organizational knowledge to implement the project of Bank financed projects in Yemen) will be based in MoSAL to support implementation and coordination of various project activities including the implementation of the consultations process as Counterpart have limited implementation capacity, well as regular and transparent outreach and communication with various stakeholders. little experience of Bank operational requirements The CSO capacity building and certification process will be implemented by Sana’a University and (including FM and procurement) and may have University of Aden. It will build upon and enhance the contents of the successful CSO training program difficulties hiring qualified staff; implemented by the Center for Business Administration (CBA) at University of Sana’a. The successful implementation of this program by CBA in Sana’a reflects on their capacity to undertake proposed CSOs have limited capacity, which may lead to activities. inadequate utilization of funds, low uptake of The disbursement of grant funding will be conducted by the Social Fund for Development project PIE as capacity support and low disbursement, and/or non- they have extensive procurement and financial management experience. However, the decision-making compliance with safeguards regarding the grantee selection will be led by a multi-stakeholder Grant Making Committee ) that will be convened and chaired by the Sana’a University but for which it will not have voting authority in order to maintain its independence. Resp: Client Status: Not Stage: Imple Recurrent: Due 15-Jul-2014 Frequ Yet menta Date: ency: Due tion Governance Rating High Risk Description: Risk Management: Clarity and adequacy of responsibilities and Technical support will be provided to MoSAL throughout the project implementation through expert oversight processes: (a) Weak systems and capacity consultants. Specific focus will be put on establishing transparent consultation processes and outreach to for internal and external oversight; (b) Limited build key stakeholders buy-in. scrutiny and oversight from citizen (c) Non Special attention will be paid to local organizations in remote and rural areas to ensure they are included transparent processes and non-inclusive during consultative processes and have open access to knowledge, capacity building, and accountability consultation processes preventing reforms from tools. Many of these organizations are community-based and led by women and youth hence providing taking place; Marginalization of local organizations new pathways for promoting social inclusion. (particularly led by women and youth) that serve The Grant Making Committee will be established at the University of Sanaa and will comprise of donors, communities in underserved remote areas given private sector, academicians and government officials. An independent group will be convened to ensure their limited access to historically centralized independence from external influence. systems of governance. The risk of political capture of the project by interested parties is mitigated by the clear division of roles 51 and responsibilities that was endorsed by Ministers of MoPIC and MoSAL as well as SFD and the Universities of Sana’a and Aden. The transparent process for selecting beneficiary CSOs, the clear terms of reference, and the multi-stakeholder composition of the Grant Making Committee (GMC) also helps mitigate capture of the small-grants subcomponent. This risk is therefore moderate. Wherever possible, the Bank will utilize third parties to monitor the impact of the program outside of areas accessible to Bank staff. Monitoring and Evaluation consultants will be recruited who will conduct annual impact assessments and submit reports in addition to PIE’s monthly project review and Bank’s Review Missions. Resp: Both Status: Not Stage: Imple Recurrent: Due 15-Jul- Frequ Due ment Date: 2014 ency: Yet ation Project Risks Design Rating Moderate Risk Description: Risk Management: The inability for Bank staff to travel to project sites The Social Fund for Development, which counts with extensive experience in project management, will outside of Sana’a (due to security constraints) may be responsible for overall project management and will review, supervise and coordinate implementation restrict its ability to monitor progress of activities of all activities under the two project components. to accomplish the PDO. A training of trainers activity and tailored mentoring program is embedded in the project design to strengthen University of Sanaa and Aden’s capacity to implement and learn by doing. Resp: Client Status: Not Stage: Imple Recurrent: Due 15-Jul-2014 Frequ Yet menta Date: ency: Due tion Social and Environmental Rating Moderate Risk Description: Risk Management: Subprojects implemented by grantee CSOs will not A positive list of eligible small grant proposals will reflect that the project will not support any activity be designed or executed in a manner that will that involves involuntary resettlement impacts or has any adverse impacts on people’s livelihood, which trigger Bank safeguards policies. includes any small-scale construction works. A safeguards screening checklist is included in the operational manual to ensure that funded sub-projects are within the scope of technical assistance, institutional development, and training. This will be in line with the Subsidiary Agreement executed on behalf of the Recipient and the Project Implementing Entity. 52 Resp: Both Status: Not Stage: Imple Recurrent: Due 15-Jul-2014 Freq Yet menta Date: uenc Due tion y: Program and Donor Rating Low Risk Description: Risk Management: Weak coordination and dialogue with other donors The project will build on the ongoing and successful coordination and dialogue with INGOs and donors : that was initiated with the CSO Mapping and Capacity Assessment study and is continuing under the Government-CSO Partnership Project. The project will still support counterparts in establishing a close Risk of diverging views with counterparts on the coordination at an early stage of the project implementation with development partners and donors. inclusion, consultation and outreach to the community which could undermine partnership Regular discussions with donor community during all stages of preparation and implementation, as well arrangements. as in the context of the Mutual Accountability Framework and CSO-Government-Donor Partnership Framework preparation. Resp: Bank Status: Not Stage: Imple Recurrent: Due Frequ Monthly Yet menta Date: ency: Due tion Delivery Monitoring and Sustainability Rating High Risk Description: Risk Management: Lack of sufficient data collection and analytical Strong emphasis of M&E with robust baseline survey will be prepared, including CSO satisfaction capacity of CSOs: Limited measurability of project survey, consultations and validation processes throughout project implementation; outputs and outcomes due to insufficient reporting systems within CSOs. Training would be provided as part of preparation and as an integral component of the project during implementation to ensure effective delivery of programs. Difficult supervision and monitoring of small grants projects Hiring of a local firm to support project monitoring and reporting on small grants project activities. Replicating USAID’s ex-post evaluation of CSO capacity gains from certification course A critical element of improved measurability and reporting would be supported under the project through several initiatives:(i) development and establishment of a standard integrated MIS system for procurement, finance, monitoring and reporting system Benefit Monitoring & Evaluation surveys & validation of MIS data; assessment of project innovations; 53 and regular project reviews. Introduction of systematic and practical feedback mechanisms to facilitate internal and external channels of communication. Resp: Client Status: Not Stage: Imple Recurrent: Due 15-Jul-2014 Frequ Yet menta Date: ency: Due tion 6. Overall Risk Overall Implementation Risk: Moderate Risk Description: The risk at implementation is deemed as moderate in view of the diversity of stakeholders drawn from a large and geographic spread of the CSOs and their relative inexperience of streamlining operations with greater accountability and transparency which could affect the progress in implementation. 54 Annex 5: Implementation Support Plan 1. The World Bank will support the implementation of this project through a combination of fiduciary and technical supervision, technical assistance, monitoring and evaluation, as well as coordination. Teams composed of Bank staff, consultants, and experts in outreach, consultations and social accountability will support the implementation of these activities. 2. Through a complimentary approach, the project will strengthen transparency and governance in the CSO sector and enhance CSO capacity to integrate social accountability into development programs through two mutually reinforcing components. On the one hand, it will support a more enabling institutional and legal environment for CSOs through facilitating dialogue spaces between MoSAL and CSOs, and will establish an E-registration process and streamline off line registration procedures for CSOs. The focus on CSO and line ministries capacity building, will strengthen the project’s sustainability and will have an overall effect on mitigating the risk linked with the project implementation in a sensitive transition period. 3. The project will also address key capacity gaps of CSOs and will build on and expand the successful program for CSOs funded by USAID by working with the University of Sana’a and CSO Management Unit/University of Aden for a sustainable program. Specifically, the project will provide extensive training of trainers for facilitators and teachers in the Universities to ensure adequate transfer of knowledge on social accountability. 4. Regarding implementing agency risk, SFD as the PIE has proved its capacity to implement projects taking into consideration targeted groups’ needs and constraints as well as the ability to report in a timely manner to different donors. Where required, the CSOs participating in the capacity building program will be provided targeted support to ensure the maximum learning is achieved. The Project will support the MoSAL in establishing clear and transparent communication channels with project stakeholders to ensure a regular flow of information throughout the project preparation and implementation that will help address issues upfront. Implementation Support Plan 5. Technical inputs needed: MoSAL will need technical inputs and support to design a transparent and consensus building process. Capacity building on social accountability will be provided to the trainers in University of Sana’a and Aden and adjustments to the program roll out will be made as needed during supervision. In addition, small grants administration will be closely monitored by an experienced team at SFD, and design of the M&E system, as well as training of MoSAL staff on M&E principles and implementation will be provided. 6. Fiduciary requirements and inputs: World Bank fiduciary staff will provide implementation support including capacity building as needed (both on procurement and financial management issues). 7. Safeguards: Social and environmental safeguards are not expected to be triggered. 55 The main focus points in terms of support to implementation during the project include: Time Focus Skills Needed Partner Role First twelve Building adequate Experts on laws of Coordination and months capacity of MoSAL associations; experts outreach through a and University of on social transparent process Sanaa accountability Adapting design to Consensus building volatile circumstances expertise 12-48 months Monitoring Communications Coordination and effectiveness of E- experts; social outreach through a registration process, accountability and transparent process adapting design as grant management required; refining course roll out; monitoring grants Adapting design to volatile circumstances Other Ensuring full alignment Project Coordination and with other CSO related management and outreach through a initiatives in Yemen outreach transparent process Skills Mix Required Skills Needed Number of Staff Weeks Number of Trips Comments Social Development 1-2 weeks of time for each 2-4 *This is subject to change Specialists due to security considerations Fiduciary Specialists 1-2 weeks of time for each 2-4 M&E Specialist 1-2 weeks of time for each 2-4 Impact Evaluation 1-2 weeks of time for each 2-4 Specialists Outreach Specialist 1-2 weeks of time for each 2-4 Partners Name Institution/Country Role USAID Yemen Basic Skills capacity building program in the University of Sanaa UNDP Yemen Coordination with CSOs Supreme Council of Prime Minister’s Office EU Yemen Coordination on re-structuring and strengthening MoSAL’s CSO Department 56 Annex 6: Action Learning Small Grants Proposed Intake Criteria and Composition of Grant Making Committee General Guidelines CBA will convene and Chair the committee, manage the process and meeting, take the minutes, and act as observer, but not vote. Similarly, SFD will be part of the committee as an observer, and will not vote. The World Bank would not be included as a member of the Grant Making Committee. The Committee would meet twice per selection cycle - at the selection time, and at the end to evaluate progress. The formation of the committee will include transparency and conflict of interest provisions. Lastly, all online and offline outreach materials must include information to contact CBA if there are issues. Committee Composition Total composition: 9 (7 voting members; 2 observers) (1- Chair, SFD, Government, Donors, private sector, and academia) 1. Chair: CBA (CSO-Management Unit) 2. SFD (1) 3. Representatives of selected Donors (2) 4. Private sector (suggesting a membership of the “Yemen Business Club” a CSO-based organization of Yemen Businesses ) (1) 5. Independent academia (1) 6. Government representatives (3 – MoPIC, MoSAL, Vocational Training) A CSO representative may be represented as an observer. They would not be able to participate in the grants program. (TBC) PROCESS: 1. Weighted matrix procedures will be established. Filled by above committee (Individually averaged or based on collective agreement) 2. The matrix will be publicized and CSOs will be allowed to obtain feedback and use it as lessons learned 3. CSOs are allowed to repeat the trial with another intake of grants if they believe that they could be eligible and have overcome their weaknesses SELECTION CRITERIA 1. CSOs that have successfully completed the classroom Capacity Building program and are certified. These CSOs will already have met the entry criteria to the Capacity Building Program such as: registered, possess basic organizational structure requirements, satisfactory 57 previous project executed; basic strategic factors are clearly spelled out such as vision and objectives 2. Complete proposal submitted (all components of a successful proposal are present) 3. Ability to effectively manage the resources 4. Ability to comply with the grant conditions (reporting / performance monitoring, etc.) Satisfactory performance record (CSO is to present proof of successful previous projects) CSO Verification To verify CSO capacity, the following information will be requested from CSOs: • Proof of bank account, • Proof of registration, • Prior training certifications (that may list multiple staff members) • Evidence of any prior grant agreements with funders, • Organizational chart, • One-page annual budget summaries Technical evaluation: 1. Level and effectiveness of using basic skills training 2. Level of integration of social accountability principles in proposed activities 3. Level of Volunteer / Community involvement (level of field work with constituency) 4. Level of networking (with other CSOs, youth initiatives, women CSOs/groups) 5. Outcome significance (impact) 6. Measurable and effective expected Outputs 7. Geographical focus or span 8. Level of outreach and advocacy (to what extent does the grant raises awareness of social accountability approach) 9. M & E measures the degree that the proposed activity aggregates and advocates interest toward government and service providers. Complaints Handling • A basic grievance redress/complaints mechanism would be developed with key categories/points of potential conflict such as: (i) grant selection, (ii) grant disbursement process, (iii) inadequacy of mentoring support, etc. • Grievance redress mechanism will involve a three stage process: (1) Verbal notification of CSO- MU Staff, (2) Formal Notification of CBA management (and possibly the selection committee), (3) SFD the PIE is notified. 58