The World Bank Report No: ISR10679 Implementation Status & Results Tajikistan Public Financial Management Modernization (P099840) Public Disclosure Copy Operation Name: Public Financial Management Modernization (P099840) Project Stage: Implementation Seq.No: 7 Status: ARCHIVED Archive Date: 22-Jun-2013 Country: Tajikistan Approval FY: 2009 Product Line: IBRD/IDA Region: EUROPE AND CENTRAL ASIA Lending Instrument: Adaptable Program Loan Implementing Agency(ies): Key Dates Board Approval Date 14-May-2009 Original Closing Date 31-Aug-2014 Planned Mid Term Review Date 20-Jun-2012 Last Archived ISR Date 22-Dec-2012 Effectiveness Date 12-Feb-2010 Revised Closing Date 31-Aug-2014 Actual Mid Term Review Date 10-Sep-2012 Project Development Objectives Project Development Objective (from Project Appraisal Document) The objectives of the Project are: (a) to establish basic processes for efficient and transparent management of public expenditures; and (b) to develop adequate institutional capacity to support the implementation and sustained functioning of an automated financial management information system (FMIS). Has the Project Development Objective been changed since Board Approval of the Project? Yes No Component(s) Component Name Component Cost Capacity Building for PFM 4.18 Budget management procedures 3.95 Automation of PFM operations 4.67 Overall Ratings Previous Rating Current Rating Public Disclosure Copy Progress towards achievement of PDO Moderately Satisfactory Moderately Satisfactory Overall Implementation Progress (IP) Moderately Unsatisfactory Moderately Satisfactory Overall Risk Rating Moderate Moderate Implementation Status Overview The recent Bank supervision mission on April 8-17, 2013 concluded that the MoF had conducted substantial preparatory work on capacity building and institutional change. The preparatory work included improving legislation, modernizing ICT infrastructure and developing adequate HR capacities to support reform implementation. In particular, the Treasury Modernization Program, Public Sector Accounting Reform Strategy, HR Reform Strategy, Training Strategy, and a Unified Chart of Accounts have been adopted, which indicate MOF key PFM reform priorities. All local financial departments have been connected to Headquarter through a common network. The IT Center has been established and staffed. In addition, a group of IT specialists, who provide services to local offices, were trained and deployed in the field. Currently MoF is implementing key PFM reforms, including the Page 1 of 9 The World Bank Report No: ISR10679 introduction of a UCOA from January 1, 2014. MoF approved a new UCOA in June 2012, which was expected to be introduced from January 1, 2013. However, due to the delay with both adopting an adequate IT program to support UCOA and providing training for MoF staff on the new UCOA, the introduction of UCOA was postponed till January 1, 2014. To successfully introduce the UCOA, MoF should (i) adopt a new organizational structure of the Treasury, (ii) complete customization of budget execution modules of SGB.NET information system, and (iii) conduct training of appropriate MoF staff on UCOA and SGB.NET. There are a number of parallel ongoing interdependent activities, which have to be Public Disclosure Copy completed by specific times. This includes establishment of new treasury functions, developing training materials and software customization. MoF is working on the above issues and has committed to comply with the specified deadlines. After signing three large contracts with consulting firms, the project disbursement rate has increased from 31% to 44% during the recent six months. The only remaining procurement activity includes the purchase of data center and ICT network equipment, which is in progress. Locations No Location data has been entered Results Project Development Objective Indicators Indicator Name Core Unit of Measure Baseline Current End Target The MoF and budget organizations practice Text Value Preparation of annual budget MoF has selected a 2014 budget document is streamlined business processes for budget is separated from medium- consulting company to help consistent with strategic preparation and execution term planning, current with implementation of MTEF planning and macro-fiscal expenditure is planned and capital expenditure forecasts, as reflected in separately from capital planning. Currently the MTEF for 2014-2016. investments. Procedures for company is helping MoF with budget execution are streamlining budget underdeveloped preparation process. MoF adopted a five-year Treasury Modernization Program. Currently the consulting company is helping MoF with implementation of the Treasury Modernization program. MoF has already issued a Decree on Reorganization of the Treasury. Public Disclosure Copy Date 26-Mar-2009 21-May-2013 28-Aug-2014 Comments The budget is prepared and executed based on Text Value Presently the MOF uses the MoF adopted the new budget Budget plan and execution an upgraded budget classification which is old chart of accounts based classification on UCOA based reports are aligned with integrated with the chart of accounts on GFSM1986 and on GFSM 2001 on June 2012. international financial accounting standards adopted Although it was expected to statistics and international before 1991. Republican implement UCOA in2013, due public sector accounting Budget is prepared based on to delays with implementing a standards a new administrative training program and Page 2 of 9 The World Bank Report No: ISR10679 classification since 2010. developing an IT solution it Economic classification is still has been decided to postpone GFS 1986 based. until 2014. The budget 2014 is being drafted based on a Public Disclosure Copy new budget classification and UCOA. MoF is committed to implement a new budget classification and UCOA from January 1, 2014. Date 16-Feb-2011 21-May-2013 01-Jan-2014 Comments New Budget Classification and Chart of Accounts are fully introduced and used for implementation of FMIS Budget submission to Parliament, the Budget Text Value Draft Budget Law or Budget Law, quarterly and Budget prepared and Law and amendments, and Quarterly and amendments are not annual budget execution executed through an Annual budget execution reports are published published prior to approval. reports are published upgraded information system. on the MoF's web-page by YR4 Budget execution reports are regularly on MoF web-site. Budget and Financial reports not regularly published. MoF is intending to published on MoF's website These are not generated modernizeits web-site to add automatically, manual some new functions. The consolidation requires effort upgraded budget preparation and execution information systems will be implemented from January 1, 2014. Date 26-Mar-2009 21-May-2013 28-Jun-2013 Comments The MoF has adequate technical capacity to Text Value Only 3 ICT specialists support MoF adopted a Training FMIS implementation starts implement redesigned procedures and manage central MoF IT systems. An IT Program providing for re- with active participation of existing applications, supprot users and sustain Center is planned to be training of up to 10,000 MoF IT center. IT systems established by January 2011. employees of MoF on new budget procedures. The training of staff began in June Public Disclosure Copy 2013. Also 12 IT specialists have been hired who are helping MoF to maintain its ICT infrastructure. Also training has been provided for 17 IT specialists, which have been deployed on the field offices. It is expected that from January 1, 2014, IT Center, which is currently Page 3 of 9 The World Bank Report No: ISR10679 financed by the Porject, will be financed by MoF. Date 26-Mar-2009 21-May-2013 02-Sep-2013 Public Disclosure Copy Comments Intermediate Results Indicators Indicator Name Core Unit of Measure Baseline Current End Target Improved capacity of the MoF to manage Text Value PFM Council established, MoF has approved the MoF organizational structure reforms however technical capacity to Optimization Plan on its streamlined, properly staffed support implementation of the Board. Currently MoF is and management and PFM Strategy is low. implementing new operational skills developed Structure and skills of core organizational structures of staffs poorly match the Treasury, HR Department, organizational tasks. and Training Center. New training modules are been finalized, which will provide training to MoF staff on new procedures. PFM Secretariat is helping MoF with reform coordination and management. Date 26-Mar-2009 21-May-2013 28-Aug-2014 Comments We would like to ask to change the monitoring indicator "Organizational structure of the MoF is streamlined, properly staffed, and core staff has relevant skills" to "Organizational structure of the Central Treasury is streamlined, properly staffed, and core Public Disclosure Copy staff has relevant skills". Sustainable training capacity is developed and Text Value Staff has inadequate skills to MoF adopted a Training MoF's Training Center core staff in financial departments are trained implement PFM reforms, Program providing for re- delivers training program in in PFM procedures permanent training capacity is training of up to 10,000 PFM procuredures. Training absent employees of MoF (more than courses developed and local 60% of MoF staff) and budget trainers trained. 60% of the organizations on new budget core PFMstaff trained procedures. The program implementation started in June 2013. Page 4 of 9 The World Bank Report No: ISR10679 Date 26-Mar-2009 21-May-2013 28-Aug-2014 Comments The Training Center has been renovated. Public Disclosure Copy Budget preparation cycle is improved and Text Value Budget cycle does not Up to July 2011 EU had been 2012 budget is implemented integrates MTEF as a regular budget cycle integrate annual and medium- providing support in improving on the basis of improved phase term planning. budget preparation budget circular incorporating procedures. After the MTEF. 2014 budget completion of EU assistance, document consistent with PFMMP has taken over the strategic planningand MTEF assignment. MoF has signed a contract with the consulting company to help with improving budget preparationprocedures. Currently the company is helping with streamlining budget preparation process, which includes among others the utilization of baseline and new policy proposal methodologies, drafting a Strategic Plan for Integration of Investment Budgeting with Medium-term budget approach, and etc. Date 26-Mar-2009 21-May-2013 28-Aug-2014 Comments Budget classification (BC) and chart of Text Value Only economic and functional MoF adopted the new budget 2012 budget is executed on accounts (COA) are integrated and brought in classifications are used for classification on UCOA based the basis of the new COA line with international standards budget management. on GFSM 2001 on June 2012. integrated with theBC Administrative classification Although it was expected to developed for the central implement UCOA in2013, due governmentbut not to delays with implementing a Public Disclosure Copy introduced . The COA is not training program and aligned with BC developing an IT solution it has been decided to postpone until 2014. The budget 2014 is being drafted based on a new budget classification and UCOA. MoF is committed to implement a new budget classification and UCOA from January 1, 2014. Page 5 of 9 The World Bank Report No: ISR10679 Date 26-Mar-2009 21-May-2013 31-Mar-2012 Comments The MoF has adopted the Administrative Classification. Public Disclosure Copy The work on integrating the Chart of Accounts with the Economic Classification were approved in June 2012. Procedures for budget execution through the Text Value Treasury procedures are From April 1, 2011 all Integrated TSA established treasury system are improved underdeveloped and not fully transitional accounts of the covering country-wide documented. Internal controls budget organizations on operations. Budget is are weak republican level in commercial executed on the basis of the banks were closed and new manual for budget transferred to TSA execution So far only 10 local budgets closed their transition accounts. The remaining local budgets are expected to close their accounts in 2014. New legislation and instructions on budget execution have been drafted, which will be implemented from January 1, 2014. MoF adopted a five-year Treasury Modernization Program. Currently the consulting company is helping MoF to implement the program. Budget execution reports are published at the MoF web-site Date 26-Mar-2009 21-May-2013 31-Jul-2013 Public Disclosure Copy Comments The Treasury Modernization Program has been adopted. The program implementation has already started. On May 6, 2013 MoF approved a new organizational structure of the Treasury. Central and local ICT systems modernized in Text Value Existing Information Systems The nation-wide MoF ICT Information systems for YR3 for budget preparation and network has been extended. budget preparation and execution have limited ICB package for purchasing execution supproting newBC capabilities and do not modern network and data and COA are operational and Page 6 of 9 The World Bank Report No: ISR10679 support new BC and COA center equipment has been used for 2013 budget advertised. execution Budget preparation and execution systems supporting Public Disclosure Copy a new UCOA are being upgraded. It is expected to be implemented fromJanury 2014. Date 26-Mar-2009 21-May-2013 28-Aug-2014 Comments MoF has developed a SGB. NET Implementation Plan, which is expected to be completed by December 2013. The Plan provides for developing and implementing the budget preparation and accounting modules. MoF's IT Center established, adequate number Text Value No IT Center. Only 3 staff MoF IT Center has been IT Center established and of specialists recruited and trained provide support to registered and its organization adequately staffed with maintenance the existing structure has been adopted. trained specialists. IT Center information system. No The construction of IT Center capable to support capacity for upgrading the IT has been completed. implementation of FMIS system is in place 12 IT specialists have been hired. IT Advisor has developed a capacity development program for hired IT specialists, which is being implemented. In addition, 17 IT specialists were trained to help with maintaining information systems at local level throughout the country. Date 26-Mar-2009 21-May-2013 02-Jan-2014 Public Disclosure Copy Comments The MOF needs to hire a lead consultant, as well as appoint a director of the IT Center to ensure coordinated work of the IT consultants. Data on Financial Performance (as of 22-May-2013) Financial Agreement(s) Key Dates Page 7 of 9 The World Bank Report No: ISR10679 Project Ln/Cr/Tf Status Approval Date Signing Date Effectiveness Date Original Closing Date Revised Closing Date P099840 IDA-H4630 Effective 14-May-2009 27-May-2009 12-Feb-2010 31-Aug-2014 31-Aug-2014 P099840 TF-92396 Effective 21-Aug-2009 21-Aug-2009 12-Feb-2010 31-Aug-2014 31-Aug-2014 Public Disclosure Copy P099840 TF-96083 Effective 09-Feb-2010 10-Feb-2010 12-Feb-2010 31-Aug-2014 31-Aug-2014 Disbursements (in Millions) Project Ln/Cr/Tf Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P099840 IDA-H4630 Effective USD 5.00 5.00 0.00 1.33 3.82 27.00 P099840 TF-92396 Effective USD 0.97 0.97 0.00 0.61 0.36 63.00 P099840 TF-96083 Effective USD 4.70 4.70 0.00 2.68 2.02 57.00 Disbursement Graph Public Disclosure Copy Key Decisions Regarding Implementation Although it was expected that MoF would introduce UCOA in January 1, 2013, MOF postponed introduction of the UCOA due to serious organizational and technical challenges. To implement the UCOA successfully from January 1, 2014, MoF should complete and test the accounting module of SGB.NET, conduct a nation-wide training for budget organizations and implement the new structure of the Treasury. Currently MoF is working on all these issues and is highly committed to introduce UCOA from January 1, 2014. The budget 2014 is drafted based on a new UCOA. Restructuring History There has been no restructuring to date. Page 8 of 9 The World Bank Report No: ISR10679 Related Projects There are no related projects. Public Disclosure Copy Public Disclosure Copy Page 9 of 9