Public Disclosure Copy The World Bank Implementation Status & Results Report Public Financial Management Modernization (P099840) Public Financial Management Modernization (P099840) EUROPE AND CENTRAL ASIA | Tajikistan | Public Sector Governance Global Practice | IBRD/IDA | Adaptable Program Loan | FY 2009 | Seq No: 10 | ARCHIVED on 21-Nov-2014 | ISR17094 | Implementing Agencies: MINISTRY OF FINANCE Key Dates Key Project Dates Board Approval date:14-May-2009 Effectiveness Date:12-Feb-2010 Planned Mid Term Review Date:20-Jun-2012 Actual Mid-Term Review Date:10-Sep-2012 Original Closing Date:31-Aug-2014 Revised Closing Date:31-Mar-2015 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 Objective? No PHRPDODEL Components Name Capacity Building for PFM:(Cost $4.18 M) Budget management procedures:(Cost $3.95 M) Automation of PFM operations:(Cost $4.67 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO  Moderately Satisfactory  Satisfactory Overall Implementation Progress (IP)  Moderately Satisfactory  Satisfactory Overall Risk Rating  --  Substantial 12/9/2014 Page 1 of 10 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Public Financial Management Modernization (P099840) Implementation Status and Key Decisions There is a high commitment to and ownership of reforms by MoF, which gives hope that all key project development objectives will be achieved. Top MoF management is actively involved in reform implementation. Activity leaders are in charge of reform implementation in their specific areas and regularly report on reform progress to the MoF top management. Several working groups are established in MoF, which are well coordinated by MoF and project management. Due to a delay in approval of a new organizational structure of MoF by the Government, the progress in reorganization of HR Department and the Training Center has been slow. A new organizational structure of MoF, which will be soon submitted to the Government for approval, provides for both mechanisms for effective integration of HR management and training and improved management structures of the HR Department and the Training Center. After implementing a new organizational structure of the Treasury, MoF has finalized new treasury legislation. With the help of an IMF Advisor, MoF is finalizing methodologies on commitment control and cash management. It is expected that all legislation, except for the Law on Treasury which has longer procedures for adoption, will be adopted by the end of 2014. More than 600 treasury workers throughout the country received training on the new TFMIS information system. By order of the Minister, the Treasury staff and staff of budget organizations are jointly testing a new budget execution module, which will finish by December 27, 2015. After summarizing testing results, the system will be implemented from January 1, 2015. There has been noticeable progress towards the objective of a treasury single account since the last supervision mission in May 2014. MoF has brought 8 more local treasury accounts to the TSA increasing the total number of accounts to 14. It is expected that all remaining 59 local treasury accounts will be brought into the TSA by the end of 2014. The account of the Social Protection Fund in the TSA will be opened in 2016. TFMIS is available for utilization throughout Tajikistan but is still in pilot mode until January 1, 2015. For the 2014 and 2015 budgets, the TFMIS budget preparation module has exclusively produced the budget amounts. By January 2015 the budget execution module will be used for both the Republican budget and all local budgets. The IT team remains adamant that the system has now been fully tested and is ready for production status on January 1, 2015. Secure access to the TFMIS system and appropriate in-flight encryption are in place. Secure access to the system is in place with the deployment of security tokens and certificates for approximately 80 units. The certificate administration is in place with the State Security organization and training in the use of the certificates and tokens is taking place in December for the units that will be on-line in January. Computing and Network capacity appear to be adequate to meet the demand for the system through the first quarter of 2015 based upon the results of the piloting that has been done using production data. However, after March 2015 if the new Data Centre is not operational there will be a lack of server capacity that will invoke a contingency strategy that is being developed (i.e.: a co-location of TFMIS servers in another building is the likely contingency). The Data Center will likely not be fully operational until late March 2015 due to construction delays in specifying the structure to support the air conditioners. This is delaying the fit-up of the data center. The IT team believes that the decision about how the structure will be constructed will be made by the Minister of Finance this month. The data center facilities can then proceed with a timely deployment of its fit-up and installation of server and network equipment and should result in the center being fully operational by March 2015. The IT team confirms that there is sufficient computing and network capacity on hand to run the TFMIS applications until the end of March 2015 although use of this contingency facility will likely result in impact on processing times experienced by the users. A suggestion to allow users extended time (i.e.: beyond normal working hours) was proposed as one way to lessen the impact of the limited computing resources. MoF has included funding for the new IT Center and its associated IT team in the 2015 budget but staff remuneration remains an issue. Work is being done by the IT Center staff to support the proposed salary package through reference to competitive market rates. Resolution of this issue will allow for the current project IT staff to be transferred to the Center in 2015 but absence of resolution and the potential inability to hire appropriate IT staff could put the entire TFMIS at risk. 12/9/2014 Page 2 of 10 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Public Financial Management Modernization (P099840) Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance  --  --  Substantial Macroeconomic  --  --  Substantial Sector Strategies and Policies  --  --  Substantial Technical Design of Project or Program  --  --  Moderate Institutional Capacity for Implementation and Sustainability  --  --  Substantial Fiduciary  --  --  Substantial Environment and Social  --  --  Low Stakeholders  --  --  Substantial Other  --  --  -- Overall  --  --  Substantial Results Project Development Objective Indicators PHINDPDOTBL  The MoF and budget organizations practice streamlined business processes for budget preparation and execution (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target In addition to 6 pilot In addition to 6 pilot ministries, MTEF has ministries, MTEF has been extended to local been extended to local budgets. Health and budgets. Health and Education in the Education in the Khatlon 2014 budget Preparation of annual Khatlon Region and Region and Dushanbe document is budget is separated from Dushanbe are are implementing MTEF. consistent with medium-term planning, implementing MTEF. The new budget strategic current expenditure is The new budget preparation module and planning and Value planned separately from preparation module budget prepartion macro-fiscal capital investments. and budget prepartion process were forecasts, as Procedures for budget process were implemeted from reflected in execution are implemeted from January 1, 2014, which MTEF for 2014- underdeveloped January 1, 2014, which streamlined budget 2016. streamlined budget prepartion process. prepartion process. Streamlining budget Streamlining budget execution processes is execution processes is underway. underway. Date 26-Mar-2009 16-May-2014 19-Nov-2014 28-Aug-2014 12/9/2014 Page 3 of 10 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Public Financial Management Modernization (P099840) Comments PHINDPDOTBL  The budget is prepared and executed based on an upgraded budget classification which is integrated with the chart of accounts (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Presently the MOF uses Budget plan the old chart of accounts and execution based on GFSM1986 and reports are accounting standards aligned with adopted before 1991. New UCOA was New UCOA was international Value Republican Budget is implemented from implemented from financial prepared based on a new Janury 1, 2014. Janury 1, 2014. statistics and administrative international classification since 2010. public sector Economic classification is accounting still GFS 1986 based. standards Date 16-Feb-2011 16-May-2014 19-Nov-2014 01-Jan-2014 Comments PHINDPDOTBL  Budget submission to Parliament, the Budget Law and amendments, and Quarterly and Annual budget execution reports are published on the MoF's web-page by YR4 (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Budget Draft Budget Law or prepared and amendments are not Budget submission to Budget submission to executed published prior to approval. Parliament, the Budget Parliament, the Budget through an Budget execution reports Law and amendments, Law and amendments, upgraded Value are not regularly published. and Annual Budget and Annual Budget information These are not generated Execution reports are Execution reports are system. Budget automatically, manual published regularly ate published regularly ate and Financial consolidation requires MoF website. MoF website. reports effort published on MoF's website Date 26-Mar-2009 16-May-2014 19-Nov-2014 28-Jun-2013 Comments 12/9/2014 Page 4 of 10 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Public Financial Management Modernization (P099840) PHINDPDOTBL  The MoF has adequate technical capacity to implement redesigned procedures and manage existing applications, supprot users and sustain IT systems (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target MoF adopted a MoF adopted a program program providing for providing for re-training re-training of up to of up to 10,000 10,000 employees of employees of MoF on MoF on new budget new budget procedures. procedures. The The training of staff training of staff began began in June 2013. in June 2013. Also 12 Also 12 IT specialists IT specialists have have been hired who are FMIS Only 3 ICT specialists been hired who are helping MoF to maintain implementation support central MoF IT helping MoF to its ICT infrastructure. starts with Value systems. An IT Center is maintain its ICT Also training was active planned to be established infrastructure. Also provided for 17 IT participation of by January 2011. training was provided specialists, which have MoF IT center. for 17 IT specialists, been deployed on the which have been field offices. It is deployed on the field expected that from offices. It is expected January 1, 2015, IT that from January 1, Center, which is 2015, IT Center, which currently financed by the is currently financed by Project, will be financed the Project, will be by MoF. financed by MoF. Date 26-Mar-2009 28-Nov-2013 19-Nov-2014 02-Sep-2013 Comments Overall Comments Intermediate Results Indicators PHINDIRITBL  Improved capacity of the MoF to manage reforms (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target MoF has submitted its MoF has submitted its new Organizational new Organizational Structure to the Structure to the MoF PFM Council established, Government for Government for organizational however technical capacity Approval. The new Approval. The new structure to support implementation structure is expected to structure is expected to streamlined, Value of the PFM Strategy is low. enhance effectiveness enhance effectiveness properly staffed Structure and skills of core of management at the of management at the and staffs poorly match Ministry. In addition to Ministry. In addition to management organizational tasks. the Treausry, the Treausry, and operational reorganization of HR reorganization of HR skills developed Department and Department and Training Center are Training Center are 12/9/2014 Page 5 of 10 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Public Financial Management Modernization (P099840) expected. PFM expected. PFM Secretariat is helping Secretariat is helping MoF with reform MoF with reform coordination and coordination and management. management. Date 26-Mar-2009 16-May-2014 19-Nov-2014 28-Aug-2014 Comments PHINDIRITBL  Sustainable training capacity is developed and core staff in financial departments are trained in PFM procedures (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target MoF is implementing a Training Program MoF is implementing a providing for re-training Training Program of up to 10,000 providing for re-training employees of MoF of up to 10,000 (more than 60% of employees of MoF MoF staff) and budget (more than 60% of MoF MoF's Training organizations on new staff) and budget Center delivers budget procedures. organizations on new training The program budget procedures. The program in implementation started program implementation PFM Staff has inadequate skills in June 2013. Currently started in June 2013. procuredures. to implement PFM reforms, around 7,000 staff of Currently around 7,000 Training Value permanent training budget organization staff of budget courses capacity is absent has received training organization has developed and on budget preparation received training on local trainers and execution, budget preparation and trained. 60% of accounting, and a new execution, accounting, the core information system. and a new information PFMstaff The new system. The new trained Organizational Organizational Structure Structure of the of the Training Center is Training Center is expected to be expected to be implemented from implemented from March 1, 2015. January 1, 2015. Date 26-Mar-2009 16-May-2014 19-Nov-2014 28-Aug-2014 Comments 12/9/2014 Page 6 of 10 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Public Financial Management Modernization (P099840) PHINDIRITBL  Budget preparation cycle is improved and integrates MTEF as a regular budget cycle phase (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target There is progress in There is progress in applying an MTEF in applying an MTEF in the the pilot ministries and pilot ministries and local local level. Medium- level. Medium-term term expenditure expenditure frameworks frameworks were were developed for 6 developed for 6 pilot pilot sectors and health 2012 budget is sectors and health and and education sectors at implemented education sectors at local level. New budget on the basis of local level. New budget preparation calendar improved preparation calendar and procedures were budget circular and procedures were Budget cycle does not implemented. The work incorporating implemented. The work Value integrate annual and on improving MTEF. 2014 on improving medium-term planning. coordination in the budget coordination in the process of preparation document process of preparation of capital budget is consistent with of capital budget is underway. Performance strategic underway. indicators (PI) for planningand Performance indicators objective-oriented MTEF (PI) for objective- allocation of expenditure oriented allocation of were developed and expenditure were implemented in order to developed in order to measure and pursue measure and pursue sector- related sector- related objectives. objectives. Date 26-Mar-2009 16-May-2014 19-Nov-2014 28-Aug-2014 Comments PHINDIRITBL  Budget classification (BC) and chart of accounts (COA) are integrated and brought in line with international standards (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Only economic and functional classifications 2012 budget is are used for budget executed on management. UCOA based on GFS UCOA based on GFS the basis of the Value Administrative 2001 was implemented 2001 was implemented new COA classification developed for from January 1, 2014. from January 1, 2014. integrated with the central governmentbut theBC not introduced . The COA is not aligned with BC Date 26-Mar-2009 16-May-2014 19-Nov-2014 31-Mar-2012 Comments 12/9/2014 Page 7 of 10 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Public Financial Management Modernization (P099840) PHINDIRITBL  Procedures for budget execution through the treasury system are improved (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target MoF is implementing a MoF is implementing a new organizational new organizational structure of the structure of the Treasury, which Treasury, which provides for provides for establishing establishing new Integrated TSA new budget execution budget execution established functions such as cash functions such as cash covering management, management, country-wide Treasury procedures are commitment control and commitment control operations. underdeveloped and not accounting. To support Value and accounting. To Budget is fully documented. Internal implementation of these support implementation executed on controls are weak new functions, the of these new functions, the basis of the budget execution the budget execution new manual for software is being software is being budget finalized, which includes finalized, which execution commitment includes commitment management and management and accounting modules. A accounting modules. A new treasury legislation new treasury legislation is being developed. is being developed. Date 26-Mar-2009 16-May-2014 19-Nov-2014 31-Jul-2013 Comments PHINDIRITBL  Central and local ICT systems modernized in YR3 (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The nation-wide MoF Information ICT network has been The nation-wide MoF systems for extended. ICB package ICT network has been budget for purchasing modern Existing Information extended. MoF signed preparation and network and data Systems for budget contracts for delivery execution center equipment has preparation and execution and installation of data supproting Value been advertised and have limited capabilities center and IT newBC and suppliers of equipment and do not support new infrastructure COA are have been selected. BC and COA equipment. Currently operational and Currently MoF is MoF is installing used for 2013 conducting contract equipment. budget negotiations with execution suppliers. Date 26-Mar-2009 16-May-2014 19-Nov-2014 28-Aug-2014 Comments 12/9/2014 Page 8 of 10 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Public Financial Management Modernization (P099840) PHINDIRITBL  MoF's IT Center established, adequate number of specialists recruited and trained (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target IT Center established and No IT Center. Only 3 staff adequately MoF IT Center has provide support to MoF IT Center has been staffed with been established and maintenance the existing established and staffed. trained Value staffed. Staff has information system. No Staff has received specialists. IT received adequate capacity for upgrading the adequate training. Center capable training. IT system is in place to support implementation of FMIS Date 26-Mar-2009 16-May-2014 19-Nov-2014 02-Jan-2014 Comments Overall Comments Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P099840 IDA-H4630 Effective USD 5.00 5.00 0.00 3.65 1.49 73% P099840 TF-92396 Effective USD 0.97 0.97 0.00 0.79 0.18 82% P099840 TF-96083 Effective USD 4.70 4.70 0.00 4.17 0.52 89% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P099840 IDA-H4630 Effective 14-May-2009 27-May-2009 12-Feb-2010 31-Aug-2014 31-Mar-2015 P099840 TF-92396 Effective 21-Aug-2009 21-Aug-2009 12-Feb-2010 31-Aug-2014 31-Mar-2015 P099840 TF-96083 Effective 09-Feb-2010 10-Feb-2010 12-Feb-2010 31-Aug-2014 31-Mar-2015 Cumulative Disbursements 12/9/2014 Page 9 of 10 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Public Financial Management Modernization (P099840) Restructuring History Level 2 Approved on 09-Jul-2014 Related Project(s) There are no related projects. 12/9/2014 Page 10 of 10 Public Disclosure Copy