The World Bank Report No: ISR14898 Implementation Status & Results Tajikistan Public Financial Management Modernization (P099840) Public Disclosure Copy Operation Name: Public Financial Management Modernization (P099840) Project Stage: Implementation Seq.No: 9 Status: ARCHIVED Archive Date: 13-Jun-2014 Country: Tajikistan Approval FY: 2009 Product Line: IBRD/IDA Region: EUROPE AND CENTRAL ASIA Lending Instrument: Adaptable Program Loan Implementing Agency(ies): MINISTRY OF FINANCE 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-2013 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 Satisfactory Moderately Satisfactory Overall Risk Rating Moderate Moderate Implementation Status Overview The MoF has conducted substantial preparatory work on capacity building, IT development and institutional change to implement a new TFMIS. This preparatory work included reorganization of treasury and developing new legislation, implementing a UCOA, modernizing ICT infrastructure, and progress in developing adequate HR capacities to support reform implementation. The Treasury Modernization Program, Public Sector Accounting Reform Strategy, HR Reform Strategy, and Training Strategy have been adopted, advancing key PFM reform priorities. All local financial departments have been connected to Headquarters 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. MoF has completed training of local financial departments and budget Page 1 of 7 The World Bank Report No: ISR14898 organizations on the new budget preparation and execution modules. All data for Budget 2014 were introduced into the new TFMIS budget preparation module. MoF introduced a new 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 delays with both an adequate IT program to support the UCOA and providing training for MoF staff on the new UCOA, the introduction of the UCOA was postponed till January 1, 2014. Currently all budget organizations are using the new UCOA. Public Disclosure Copy However, the new budget execution module did not become operational from April 1, 2014, in spite of the MoF’s commitment to this effect. Currently the MoF uses only the budget preparation module of the new TFMIS. Due to delays with both providing training to the staff on new budget execution module and treasury reorganization, MoF had to postpone implementing the new budget execution module. Although technically feasible to implement the budget execution module from July 1, 2014, significant data migration would be required and the field organizations would have to manage old and new databases, which is not desirable. The budget execution module is currently being piloted in four organizations. Upon successful completion of testing, it is expected that the module will be implemented from January 1, 2015. The Project development objectives and key monitoring indicators are found to be achievable, but due to delays in procurement of some consultancies in the early project implementation stage, an extension to the project closing date is required. There is progress in achieving the project intermediate results indicators. Some intermediate indicators such as improved budget preparation procedures, establishing the IT Center, and developing MoF staff capacity, have already been achieved, while others such as extension of the TSA country-wide, and purchasing and installing data center equipment, are in progress. The Project is expected to achieve its development objectives. However, a short extension of the closing date of the project is required. MoF has sent a letter to the Bank requesting an eight month extension of the project closing date until March 31, 2015. The issue is being considered by the Bank. The overall project disbursement rate has increased from 54% to 66% over the recent seven months. The Project is expected to achieve its development objectives. 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 In addition to 6 pilot 2014 budget document is streamlined business processes for budget is separated from medium- ministries, MTEF has been consistent with strategic preparation and execution term planning, current extended to local budgets. planning and macro-fiscal expenditure is planned Health and Education in the forecasts, as reflected in separately from capital Khatlon Region and MTEF for 2014-2016. investments. Procedures for Dushanbeare implementing budget execution are MTEF. The new budget underdeveloped preparation module and Public Disclosure Copy budget prepartion process were implemeted from January 1, 2014, which streamlined budget prepartion process. Streamlining budget execution processes is underway. Date 26-Mar-2009 16-May-2014 28-Aug-2014 Comments Page 2 of 7 The World Bank Report No: ISR14898 The budget is prepared and executed based on Text Value Presently the MOF uses the New UCOA was implemented Budget plan and execution an upgraded budget classification which is old chart of accounts based from Janury 1, 2014. reports are aligned with integrated with the chart of accounts on GFSM1986 and international financial accounting standards adopted statistics and international Public Disclosure Copy before 1991. Republican public sector accounting Budget is prepared based on standards a new administrative classification since 2010. Economic classification is still GFS 1986 based. Date 16-Feb-2011 16-May-2014 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 submission to Budget prepared and Law and amendments, and Quarterly and amendments are not Parliament, the Budget Law executed through an Annual budget execution reports are published published prior to approval. and amendments, and Annual upgraded information system. on the MoF's web-page by YR4 Budget execution reports are Budget Execution reports are Budget and Financial reports not regularly published. published regularly ate published on MoF's website These are not generated MoFwebsite. automatically, manual consolidation requires effort Date 26-Mar-2009 16-May-2014 28-Jun-2013 Comments The MoF has adequate technical capacity to Text Value Only 3 ICT specialists support MoF adopted a program FMIS implementation starts implement redesigned procedures and manage central MoF IT systems. An IT providing for re-training of up with active participation of existing applications, supprot users and sustain Center is planned to be to 10,000 employees of MoF MoF IT center. IT systems established by January 2011. on new budget procedures. The training of staff began in June 2013. Also 12 IT specialists have been hired who are helping MoF to Public Disclosure Copy maintain its ICT infrastructure. Also training wasprovided for 17 IT specialists, which have been deployed on the field offices. It is expected that from January 1, 2015, IT Center,which is currently financed by the Project, will be financed by MoF. Page 3 of 7 The World Bank Report No: ISR14898 Date 26-Mar-2009 28-Nov-2013 02-Sep-2013 Comments Public Disclosure Copy 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 submitted its new MoF organizational structure reforms however technical capacity to Organizational Structure to streamlined, properly staffed support implementation of the the Government for Approval. and management and PFM Strategy is low. The new structure is expected operational skills developed Structure and skills of core to enhance effectiveness of staffs poorly match management at the Ministry. organizational tasks. In addition to the Treausry, reorganization of HR Department and Training Center are expected. PFM Secretariat is helping MoF with reform coordination and management. Date 26-Mar-2009 16-May-2014 28-Aug-2014 Comments Sustainable training capacity is developed and Text Value Staff has inadequate skills to MoF is implementing a MoF's Training Center core staff in financial departments are trained implement PFM reforms, Training Program providing delivers training program in in PFM procedures permanent training capacity is for re-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. Currently around 7,000 staff of budget organization has received training on budget preparation Public Disclosure Copy and execution, accounting, and a new information system. The new Organizational Structure of the Training Center is expected to be implemented from January 1, 2015. Date 26-Mar-2009 16-May-2014 28-Aug-2014 Comments The Training Center has been renovated. Page 4 of 7 The World Bank Report No: ISR14898 Budget preparation cycle is improved and Text Value Budget cycle does not There is progress in applying 2012 budget is implemented integrates MTEF as a regular budget cycle integrate annual and medium- an MTEF in the pilot on the basis of improved phase term planning. ministries and local level. budget circular incorporating Medium-term expenditure MTEF. 2014 budget Public Disclosure Copy frameworks were developed document consistent with for 6 pilot sectors and health strategic planningand MTEF and education sectors at local level. New budget preparation calendar and procedures were implemented.The work on improving coordination in the process of preparation of capital budget is underway. Performance indicators (PI) for objective-oriented allocation of expenditure were developed in order to measure and pursue sector- related objectives. Date 26-Mar-2009 16-May-2014 28-Aug-2014 Comments Budget classification (BC) and chart of Text Value Only economic and functional UCOA based on GFS 2001 2012 budget is executed on accounts (COA) are integrated and brought in classifications are used for was implemented from the basis of the new COA line with international standards budget management. January 1, 2014. integrated with theBC Administrative classification developed for the central governmentbut not introduced . The COA is not aligned with BC Date 26-Mar-2009 16-May-2014 31-Mar-2012 Comments Procedures for budget execution through the Text Value Treasury procedures are MoF is implementing a new Integrated TSA established treasury system are improved underdeveloped and not fully organizational structure of the covering country-wide Public Disclosure Copy documented. Internal controls Treasury, which provides for operations. Budget is are weak establishing new budget executed on the basis of the execution functions such as new manual for budget cash management, execution commitment control and accounting. To support implementation of these new functions, the budget execution software is being finalized, which includes Page 5 of 7 The World Bank Report No: ISR14898 commitment management and accounting modules. A new treasury legislation is being developed. Public Disclosure Copy Date 26-Mar-2009 16-May-2014 31-Jul-2013 Comments 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 support new BC and COA center equipment has been used for 2013 budget advertised and suppliers of execution equipment have been selected. Currently MoF is conducting contract negotiations with suppliers. Date 26-Mar-2009 16-May-2014 28-Aug-2014 Comments 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 established and staffed. Staff adequately staffed with maintenance the existing has received adequate trained specialists. IT Center information system. No training. capable to support capacity for upgrading the IT implementation of FMIS system is in place Date 26-Mar-2009 16-May-2014 02-Jan-2014 Comments Data on Financial Performance (as of 16-May-2014) Financial Agreement(s) Key Dates Project Ln/Cr/Tf Status Approval Date Signing Date Effectiveness Date Original Closing Date Revised Closing Date Public Disclosure Copy 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 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 2.58 2.66 52.00 P099840 TF-92396 Effective USD 0.97 0.97 0.00 0.71 0.26 73.00 P099840 TF-96083 Effective USD 4.70 4.70 0.00 3.85 0.85 82.00 Page 6 of 7 The World Bank Report No: ISR14898 Disbursement Graph Public Disclosure Copy Key Decisions Regarding Implementation The Project is expected to achieve its development objectives. However, a short extension of the closing date of the project is required. MoF has sent a letter to the Bank requesting an eight month extension of the project closing date until March 31, 2015. The issue is being considered by the Bank. Restructuring History There has been no restructuring to date. Related Projects There are no related projects. Public Disclosure Copy Page 7 of 7