The World Bank Implementation Status & Results Report Public Financial Mgmt Enhancement Project (P152932) Public Financial Mgmt Enhancement Project (P152932) AFRICA | Zimbabwe | Governance Global Practice | Recipient Executed Activities | Investment Project Financing | FY 2016 | Seq No: 8 | ARCHIVED on 19-Oct-2019 | ISR38904 | Implementing Agencies: Ministry of Finance and Econ Devt, Republic of Zimbabwe Key Dates Key Project Dates Bank Approval Date: 24-Mar-2016 Effectiveness Date: 24-Jun-2016 Planned Mid Term Review Date: 29-Jun-2018 Actual Mid-Term Review Date: 13-Apr-2018 Original Closing Date: 30-Jun-2019 Revised Closing Date: 31-Mar-2020 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The Project development objective (PDO) is to improve control, transparency and accountability, and oversight in the use of public resource in Zimbabwe. The Project will contribute to enhancing fiscal discipline, strategic allocation of resources, and service delivery efficiency, through strengthened systems, procedures and targeted capacity- building. Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Financial Management and Accounting (including IFMIS):(Cost $5.30 M) Financial Reporting, Internal Controls and Internal Audit:(Cost $1.34 M) Enhanced Accountability through Strengthening of External Audit:(Cost $1.50 M) Strengthening the Demand Side of Transparency and Accountability:(Cost $0.86 M) PFMEP Management:(Cost $1.00 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO ►Moderately Satisfactory ►Moderately Satisfactory Overall Implementation Progress (IP) ►Moderately Satisfactory ►Moderately Satisfactory Overall Risk Rating ►Substantial ►Substantial 10/19/2019 Page 1 of 10 The World Bank Implementation Status & Results Report Public Financial Mgmt Enhancement Project (P152932) Implementation Status and Key Decisions The Public Financial Management Enhancement Project (PFMEP) was approved by the World Bank’s Africa Region Vice President on March 24, 2016 and became effective on June 24, 2016. The project restructuring, approved in June 2019, extended the closing date (from June 30, 2019 to March 31, 2020) and amended the results framework indicators for better alignment with the project scope and overall development objectives. An implementation support mission was carried out from September 23 to October 4, 2019, which resulted in the below findings and recommendations: The overall progress towards achievement of the Project Development Objective (PDO) and Implementation Progress (IP) are rated Moderately Satisfactory. Project implementation remains on track and disbursements from the Multi-Donor Trust Fund (MDTF), currently at 60 percent, continue to improve. This is due to the active engagement by the Ministry of Finance and Economic Development’s (MoFED) management in the project implementation and strong collaboration with all project beneficiaries. However, there are several critical activities across project components that require focused attention in the coming months. Component 1 (C1): Financial Management and Accounting. During the past few months, the C1 team managed to complete a number of critical procurement activities and sign new contracts, bringing the remaining uncommitted balance to less than 10 percent of the allocation for this component. While a number of key achievements have been made since the last implementation support mission (as listed below), some activities related to the Public Financial Management System (PFMS) require acceleration to be completed in the remainder of the project: • The contract for the supply and installation of hardware and network equipment at the 57 kiosks concluded in May 2019 and an implementation plan has already been submitted by the supplier. Phases 1 and 2 of the activity are expected to be completed in the coming months and discussions are being held with the service provider to complete phase 3 within the remaining project period. • The Change Management consultant has been contracted and is actively working on the ground and along with the various PFMS beneficiaries. • The activity for the development of the Reserve Bank of Zimbabwe (RBZ)/PFMS interface is at contract drafting stage, with an objective to have it signed before October 31, 2019. • On the Zimbabwe Revenue Authority (ZIMRA) interface, user acceptance tests are almost complete and go-live is expected before October 31, 2019. • The renovations for the 57 kiosks have been completed with Phase 1 kiosks nearly fully operational, while phase 2 and 3 activities are expected to complete by December 31, 2019. Component 2 (C2): Financial Reporting, Internal Controls and Internal Audit. The C2 team has made commendable progress in implementing the project activities. Majority of the activities have been completed or are at an advanced stage of execution. One of the core achievements include the timely finalization of the annual consolidated financial statements before the statutory deadline of March 31, 2019. The following are the only two activities that are still at contracting phase and require urgent attention to ensure they are successfully completed by March 31, 2020: • Developing the Accounting Procedures Manual, Accounting Policies Manual and PFM business process re-engineering. • Conducting PFMS IT audit. Component 3 (C3): Enhanced Accountability through Strengthening of External Audit. Majority of the activities have been completed or are at an advanced execution stage. It is commendable that the Office of the Auditor General (OAG) has submitted the 2018 audited annual financial statements to Parliament on June 30, 2019. With this achievement, the project has met the end target of the Project Development Objectives (PDO) level indicator C3 on completion and submission of annual audit reports to the Parliament within six months from the end of the financial year. The OAG, in collaboration with PMU, agreed to urgently action the following key activities to ensure they are implemented before project closing date: • Human resource management. Finalize the negotiation of consultancy contract on the job evaluation, grading and career path development for all staff. • SAP/IT audit. Finalize the review and signing of the consultancy contract for the configuration of the SAP audit programs, preparation of manuals and related training. • Performance audits. Conduct the performance audits of two municipalities (focusing on service delivery) by March 31, 2020, to be able to meet the end target on intermediate indicator C3.2: four performance audit reports presented to Parliament in 2019. Component 4 (C4): Strengthening the Demand Side of Transparency and Accountability. The Parliament has conducted 11 pre-budget consultations to solicit input from citizens as to their priorities for the 2020 Budget, which will inform the recommendations submitted to the Government of Zimbabwe in the pre-budget stage. The Parliament tabled the latest Public Accounts Committee (PAC) Report on compliance issues for the MoFED for 2014-17 in July 2019. In addition, PAC increased the rate at which it is disposing of the audit reports prepared by the OAG and anticipates tabling three additional reports at the beginning of the October sitting of Parliament. The tabling of these reports will provide adequate pipeline of PAC Reports for the GoZ to respond to before December 31, 2019, thereby meeting its targets under the Project. Despite good progress in increasing the rate at which the PAC is scrutinizing and reporting on the audit reports, the Treasury Minutes process has still to be fully implemented in the MoFED, which is encouraged to continue using ad hoc methods to coordinate timely Treasury Minute responses to the PAC’s reports or risk the project not achieving intermediate indicator C4.1. PFMEP Reflection Workshop. The PMU organized a successful two-day workshop with key project beneficiaries, including representatives of all project components, PFMS kiosk users and civil society organizations, among others. This event provided a unique platform to discuss the bearings of the project outputs and outcomes over their work practices, synergies in carrying out critical project activities, challenges they face in implementing the PFM reforms in the country, and key actions required to maximize the impact of such reforms. 10/19/2019 Page 2 of 10 The World Bank Implementation Status & Results Report Public Financial Mgmt Enhancement Project (P152932) Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance ►High ►High ►High Macroeconomic ►Substantial ►High ►High Sector Strategies and Policies ►Moderate ►Moderate ►Moderate Technical Design of Project or Program ►Moderate ►Substantial ►Substantial Institutional Capacity for Implementation and Sustainability ►Substantial ►Substantial ►Substantial Fiduciary ►Substantial ►Substantial ►Substantial Environment and Social ►Low ►Low ►Low Stakeholders ►Moderate ►Moderate ►Moderate Other -- ►Low ►Low Overall ►Substantial ►Substantial ►Substantial Results PDO Indicators by Objectives / Outcomes Improved Financial Management and Accounting IN00754463 ►C1: Timely preparation and reporting of annual Consolidated Revenue Fund (CRF) financial statements based on PFMS data and reporting tools, after end of financial year. (Months, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 9.00 12.00 3.00 6.00 Date 22-Nov-2017 31-May-2019 11-Oct-2019 31-Mar-2020 The Consolidated Revenue Fund (CRF) financial statement FY2018 was submitted to the Auditor General in time. Comments: Improved Financial Reporting, Internal Controls and Internal Audit IN00754464 ►C2: Completed annual internal audit work plan for the six largest spending ministries (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target 10/19/2019 Page 3 of 10 The World Bank Implementation Status & Results Report Public Financial Mgmt Enhancement Project (P152932) Value 70.00 71.00 71.00 80.00 Date 31-Dec-2018 31-May-2019 11-Oct-2019 31-Mar-2020 Challenges in implementation of the work plans were mainly attributed to: inadequate resources, staff movement, and special investigations that took precedence over planned internal audits. Data collection is underway and will be officially Comments: reported following the end of the calendar year. Enhanced Accountability through Strengthening of External Audit IN00754465 ►C3: Timely completion and submission of the previous FY's audit reports to the Parliament.(after the year end) (Months, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 12.00 9.00 6.00 6.00 Date 22-Nov-2017 31-May-2019 11-Oct-2019 31-Mar-2020 The target continued to be met as the Auditor General submitted audit reports FY2018 on 27 June 2019. Comments: Strengthened the Demand Side of Transparency and Accountability IN00754471 ►C4: PAC recommendations implemented by the MoFED (per received Treasury Minutes). (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 90.00 90.00 90.00 90.00 Date 22-Nov-2017 31-May-2019 11-Oct-2019 31-Mar-2020 The Parliament has yet to receive any Treasury Minutes from the Government in 2019. Therefore, it is difficult to assess Comments: interim performance against this target until C4.1 is addressed. Intermediate Results Indicators by Components Financial Management and Accounting (including IFMIS) IN00754472 ►C1.1: Statutory Funds Accounts collecting revenues are captured in PFMS for financial reporting (share of total flow of 90 statutory funds) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 10.00 34.00 10.00 Date 22-Nov-2017 31-May-2019 11-Oct-2019 31-Mar-2020 The number of Funds that are now live on PFMS is 34. There are however a number of challenges affecting use of the Comments: system by these Funds, which include late or no budget releases through the system and lack of user training. 10/19/2019 Page 4 of 10 The World Bank Implementation Status & Results Report Public Financial Mgmt Enhancement Project (P152932) IN00754476 ►C1.2: PFMS Grant Management module is configured to capture relevant donor funded projects. (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 2.00 7.00 7.00 10.00 Date 22-Nov-2017 31-May-2019 11-Oct-2019 31-Mar-2020 Processes to engage a consultant to roll out GMM to additional grants are now at an advanced stage. Comments: IN00754479 ►C1.3:District level entities are using PFMS Kiosks for daily operations (procurement, payments and revenue transactions) and reporting. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The 6 pilot kiosks are operational and district level end users are using them for their daily District level entities are The 6 pilot kiosks are now operations. using 30 PFMS Kiosks for live on PFMS. These are: An additional 57 kiosks daily operations Value 0.00 Murewa, Rusape, Chiredzi, are being set up through (procurement, payments Kadoma, Esigodini and the following activities: (i) and revenue transactions) Gwanda renovations, (ii) Wide and reporting. Area Network (WAN) (iii) Local Area Network (LAN) (iv) furniture and equipment. Date 22-Nov-2017 31-May-2019 11-Oct-2019 31-Mar-2020 At least 30 PFMS kiosks are set to be operational by the end of the year. While some district level users will be able to use the kiosks for their daily operations, end user training to ensure wider usage is scheduled for 2020. Contract implementation for LAN connectivity, furniture and equipment supply requires close monitoring and supervision to ensure that agreed Comments: timelines are met. IN00754483 ►C1.4:BPC and BI modules are fully operational and are used to prepare and consolidate budget and monitor the performance providing access to all MDAs through new web portal. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target New BPC and BI modules and web portal are fully Downloading of BPC Contract with TTCS to operational to the Requirements identified and elements commenced. BI supply and install BPC and satisfaction of MoFED Value procurement process was installed and BI modules is under and key users (health, initiated. implementation is now at implementation. agriculture), and 2020 74%. budget prepared using PFMS. Date 22-Nov-2017 31-May-2019 11-Oct-2019 31-Mar-2020 10/19/2019 Page 5 of 10 The World Bank Implementation Status & Results Report Public Financial Mgmt Enhancement Project (P152932) There have been major delays for BPC as the GoZ SAP portal was closed for several months and it was not possible to download the module’s components. The SAP Portal was eventually opened on the 8th of August and the downloads Comments: commenced thereafter. The module is scheduled to go live in March 2020. Financial Reporting, Internal Controls and Internal Audit IN00754473 ►C2.1: PFMS internal audit report issued. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Procurement of IDEA software was concluded and Training on CAATs installation is at an advanced (IDEA software) is stage. scheduled for Q4. In the Recruitment of an individual meantime, MoICT is PFMS internal audit Value No consultant to configure the installing the software in report issued. system, train internal auditors all Central Government and assist them on the line ministries internal maiden PFMS audit is at audit units. contract signing stage. Date 22-Nov-2017 31-May-2019 11-Oct-2019 31-Mar-2020 The following processes need to be expedited in order for the project’s target to be met: (i) Training of Internal auditors on Comments: use of the CAATs and (ii) Conducting the PFMS internal audit itself and producing the report. IN00754480 ►C2.2: Revised Accounting Procedures Manual is in place. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target It was agreed that a Procurement of a firm to consultant would be engaged conduct the work is at an Revised Accounting Existing Accounting to develop the Accounting advanced stage, however Procedures Manual is in Value Procedures Manual is Procedures Manual and the indicative costs are far place and business process outdated and requires review. Accounting policy based on higher than what was reengineering completed IPSAS accrual. budgeted. Date 22-Nov-2017 31-May-2019 11-Oct-2019 31-Mar-2020 There are delays in the progress of this indicator and there may be need to review the scope of work of the consultancy in Comments: order to implement what the budget can sustain. IN00754484 ►C2.3: A limited PEFA assessment on indicator PI 29 (Annual Financial Reports) conducted finding at least initial improvement (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 13-Apr-2018 31-May-2019 11-Oct-2019 31-Mar-2020 The indicator will be measured according to the PEFA methodology, and at least two of the three sub-indicators improve by Comments: a half-increment (e.g. from D to D+ or D+ to C) 10/19/2019 Page 6 of 10 The World Bank Implementation Status & Results Report Public Financial Mgmt Enhancement Project (P152932) Enhanced Accountability through Strengthening of External Audit IN00754474 ►C3.1: Audit recommendations for the previous FY implemented by MDAs (per the Audit Report on Appropriation Accounts, Finance and Revenue Statements) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 48.00 69.00 45.00 55.00 Date 22-Nov-2017 31-May-2019 11-Oct-2019 31-Mar-2020 According to the most recent audit report on Appropriation Accounts, Finance and Revenue Statements (FY2018) that was tabled in June 2019, out of 435 recommendations made 108 (25%) were fully implemented, 85 (20%) were partly implemented and 242 (55%) were not implemented. Implementation of recommendations is the responsibility of Comments: management of the line ministries. In some cases, failure to implement recommendations is dependent on the availability of funds IN00754477 ►C3.2: Performance audit reports presented to Parliament (annually). (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 2.00 3.00 3.00 4.00 Date 23-Nov-2017 31-May-2019 11-Oct-2019 31-Mar-2020 Two reports have been tabled before Parliament and these are: 1. Preparedness in the prevention & control of cattle diseases by the Department of Veterinary Services: Ministry of Agriculture and; 2. Management of Entities owning Radiation devices by the Radiation Protection Authority of Zimbabwe under Office of the President and Cabinet. A third report: Value for Money Audit Report on support of Small and Medium Enterprises by Small and Medium Comments: Enterprises Development Corporation (SMEDCO) was submitted to Parliament on 30th September 2019. This report awaits tabling. A fourth report on Moni toring of goods being imported into the country by the Ministry of Industry and Commerce is currently being finalized. IN00754481 ►C3.3: Audit quality and checklist procedures in place for outsourced audits to private firms. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Audit quality and Audit quality and checklist procedures have checklist procedures are in been developed. Roll out place and used for at least A consultant was recruited to Audit quality and checklist was done to Office staff 40% of the audited Value develop the audit quality and procedures are not in place. and Private Audit Firms. financial statements by checklist procedures. Champions were trained private sector auditing in August 2019 to ensure subjected to quality sustainability. checks. Date 22-Nov-2017 31-May-2019 11-Oct-2019 31-Mar-2020 After the roll out to Parastatals’ and Local Authorities’ OAG managers in August 2019, monitoring of firms under their Comments: portfolios commenced. The results and impact will be reported in June/ July 2020 after the 2019 financial year audits. 10/19/2019 Page 7 of 10 The World Bank Implementation Status & Results Report Public Financial Mgmt Enhancement Project (P152932) Therefore, the latter part of the 2019 target, i.e. use of the checklist to subject at least 40% of financial statements audited by private sector audit firms to quality checks will not be met before the end of the project. Strengthening the Demand Side of Transparency and Accountability IN00754475 ►C4.1: Number of Treasury Minutes received from the MoFED (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 2.00 3.00 0.00 4.00 Date 22-Nov-2017 31-May-2019 11-Oct-2019 31-Mar-2020 The Parliament has yet to receive a Treasury Minute from Government in 2019 Comments: IN00754478 ►C4.2: Time taken by Parliament to analyze the Government audited financial statements (in sitting months) (Months, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 9.00 8.00 7.00 7.00 Date 22-Nov-2017 31-May-2019 11-Oct-2019 31-Mar-2020 Tracking monitoring needs to improve Comments: IN00754482 ►C.4.3: Pre-budget and post-budget consultative meetings conducted by the Portfolio Committees (cumulative, supported by the project) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 18.00 19.00 37.00 38.00 Date 22-Nov-2017 31-May-2019 11-Oct-2019 31-Mar-2020 Indicator is on track. Comments: IN00754485 ►C4.4: Recommendations from pre-budget consultations taken up by the MoFED. (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 64.00 56.00 56.00 50.00 Date 22-Nov-2017 31-May-2019 11-Oct-2019 31-Mar-2020 Indicator is on track Comments: IN00754486 ►C4.5: Citizens participating in the pre-budget and post-budget consultations conducted by Parliament Committees (cumulative, supported by the project) (disaggregated by gender) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target 1285 citizens (of which 48% 1,965, of which 42% 1380 (of which 40% Value 680 (of which 30% female) female) female (cumulative for female) 10/19/2019 Page 8 of 10 The World Bank Implementation Status & Results Report Public Financial Mgmt Enhancement Project (P152932) meetings held for the 2018 and 2019 budgets) Date 22-Nov-2017 31-May-2019 11-Oct-2019 31-Mar-2020 Indicator is on track Comments: Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P152932 TF-A1783 Effective USD 10.00 10.00 0.00 6.01 3.99 60% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P152932 TF-A1783 Effective 24-Mar-2016 04-May-2016 24-Jun-2016 30-Jun-2019 31-Mar-2020 Cumulative Disbursements 10/19/2019 Page 9 of 10 The World Bank Implementation Status & Results Report Public Financial Mgmt Enhancement Project (P152932) Restructuring History Level 2 Approved on 01-Aug-2018 ,Level 2 Approved on 26-Jun-2019 Related Project(s) There are no related projects. 10/19/2019 Page 10 of 10