The World Bank Implementation Status & Results Report ARTF - Recurrent and Capital Costs (P091258) ARTF - Recurrent and Capital Costs (P091258) SOUTH ASIA | Afghanistan | Governance Global Practice | Recipient Executed Activities | Investment Project Financing | FY 2002 | Seq No: 18 | ARCHIVED on 03-May-2019 | ISR33996 | Implementing Agencies: Islamic Republic of Afghanistan, Ministry of Finance Key Dates Key Project Dates Bank Approval Date: 13-May-2002 Effectiveness Date: 13-May-2002 Planned Mid Term Review Date: -- Actual Mid-Term Review Date: -- Original Closing Date: 30-Jun-2006 Revised Closing Date: 31-Mar-2019 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The development objective of the recurrent cost component of the ARTF is to provide a coordinated financing mechanism so that the Government of Afghanistan can make predictable, timely, and accurate payments for approved recurrent costs related to: i) salaries and wages of civil servants, and ii) government operating and maintenance expenditures, except security. Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Civil service salary payments:(Cost $2267.00 M) O&M payments:(Cost $608.00 M) Incentive Program:(Cost $29.30 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Satisfactory Satisfactory Overall Risk Rating Moderate Moderate Implementation Status and Key Decisions IP overall progress. Overall, seven technical reviews of the 2015 – 18 Incentive Program (IP) have been undertaken. The macro-fiscal policy framework remains adequate for continued disbursement, despite the risks associated with political and security environments and international aid. The seventh technical review assessed the program performance as satisfactory in supporting the authorities' resolute efforts to mobilize revenue and improve expenditure management. Progress on Operations and Maintenance (O&M) Management. The Cabinet approved a revised O&M policy on November 14, 2018 to be piloted in select ministries with large O&M expenditures through the 1398 budget. There have been efforts to strengthen O&M management, mainly: 5/3/2019 Page 1 of 5 The World Bank Implementation Status & Results Report ARTF - Recurrent and Capital Costs (P091258) (i) 40 out of 50 government budget units received training in O&M budgeting and implementation policies from 2016 to 2018; (ii) The Provincial Budget Unit at the Ministry of Finance drafted provincial budget manuals and O&M implementation guidelines in 2017, to improve provincial departments’ understanding of the O&M budget process; (iii) a new Public Investment Management process incorporating aspects of O&M expenditure planning and management is underway in the Ministries of Finance and Economy. While there has been some progress, management of O&M spending remains weak. Challenges related to planning, costing and coordination continue to persist given the low capacity in both the central coordinating ministries and the implementing line ministries. Progress on Tranche Release Conditions (TRC). The World Bank and ARTF donors assessed the achievement of all seven Tranche Release Conditions (TRCs) from technical and legal aspects, based on evidence provided by the Government. All seven TRCs were met leading to a disbursement of $210 million: e-payments and Mobile Money; Power Utility Reform; Water Productivity and Climate Resilience; Improving Planning and Appraisal of Projects; Improving Tax Administration – Electronic Taxpayer Management; Improving Tax Administration – Taxpayer Registry; Strengthened Expenditure Control. Prior to this review, disbursements of the 2018 IP DPG amounted to USD 90 million. Following the achievement of all TRCs, full disbursement of the 2018 IP DPG program was achieved. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance -- Moderate High Macroeconomic -- Substantial High Sector Strategies and Policies -- Low Low Technical Design of Project or Program -- Low Low Institutional Capacity for Implementation and Sustainability -- Low Low Fiduciary -- Moderate Moderate Environment and Social -- Low Low Stakeholders -- Low Low Other -- Low Low Overall -- Moderate Moderate Results PDO Indicators by Objectives / Outcomes To provide a coordinated financing mechanism for predictable, timely, and accurate payments IN00515692 ►Goods and services procured with ARTF funds are used exclusively for authorized purposes. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 100% 100% 100% 100% Date 15-Dec-2005 30-Jun-2017 31-Dec-2018 31-Dec-2019 5/3/2019 Page 2 of 5 The World Bank Implementation Status & Results Report ARTF - Recurrent and Capital Costs (P091258) Intermediate Results Indicators by Components Baseline recurrent cost financing, Incentive Program and Ad hoc Payments IN00515688 ►Percentage of eligible payroll expenditures reviewed by the MA vs submitted (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 84.9% 97% 95% 95% Date 15-Dec-2005 30-Jun-2017 31-Dec-2018 31-Dec-2019 A 100% target would represent a sample covering the entire population of payroll transactions with the only exception Nooristan, Paktika and Uruzgan - where security concerns prohibit. These provinces represent about 3% of the total covered 97% of the population but was unable to physically verify 100% of the employees in the sample. In 2018, wi Comments: physical verification of employees was 95%. The definition of "reviewed " in the indicator is "subject to sampling". IN00515686 ►Percentage of withdrawal applications reviewed and approved by the MA (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 100% 100% 100% 100% Date 15-Dec-2005 30-Jun-2017 31-Dec-2018 31-Dec-2019 IN00515689 ►Percentage of eligible O&M expenditures reviewed by the MA vs submitted (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 72.1% 98% 98% 98% Date 15-Dec-2005 30-Jun-2017 31-Dec-2018 31-Dec-2019 Applying the same approach as for payroll, a 100% target would represent a sample covering the entire population of O&M transactions (including Pensions) with the only exception being the provinces of - Nooristan, Paktika and Uruzgan - where security concerns prohibited. These provinces represent about Comments: 2% of the total O&M and Pension expenditures and so the MA covered 98%. The definition of "reviewed " in the indicator is "subject to sampling". IN00515691 ►ARTF Recurrent Cost Audit reports/opinions accepted by the Bank (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Qualified Adverse Value 100% Unqualified Opinion Unqualified Opinion opinion Date 15-Dec-2004 30-Jun-2017 31-Dec-2018 31-Dec-2019 5/3/2019 Page 3 of 5 The World Bank Implementation Status & Results Report ARTF - Recurrent and Capital Costs (P091258) Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P091258 TF-50577 Closed USD 5,107.42 5,107.42 0.00 5,096.21 11.21 100% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P091258 TF-50577 Closed 13-May-2002 13-May-2002 13-May-2002 30-Jun-2006 31-Mar-2019 Cumulative Disbursements Restructuring History Level Approved on 28-Sep-2014 ,Level 2 Approved on 26-Jun-2018 ,Level 2 Approved on 19-Dec-2018 ,Level 2 Approved on 28-Mar-2019 Related Project(s) There are no related projects. 5/3/2019 Page 4 of 5 The World Bank Implementation Status & Results Report ARTF - Recurrent and Capital Costs (P091258) 5/3/2019 Page 5 of 5