The World Bank Implementation Status & Results Report Project for Strengthening Public Financial Management (P161969) Project for Strengthening Public Financial Management (P161969) EAST ASIA AND PACIFIC | Micronesia, Federated States of | Governance Global Practice | IBRD/IDA | Investment Project Financing | FY 2018 | Seq No: 2 | ARCHIVED on 28-May-2019 | ISR36237 | Implementing Agencies: The Federated States of Micronesia, Department of Finance and Administration Key Dates Key Project Dates Bank Approval Date: 30-May-2018 Effectiveness Date: 01-Oct-2018 Planned Mid Term Review Date: 31-Jan-2021 Actual Mid-Term Review Date: -- Original Closing Date: 25-Sep-2023 Revised Closing Date: 25-Sep-2023 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The objective of the project is to improve tax administration and the completeness, reliability and timeliness of financial reports of the National and State Governments. Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Strengthening the PFM Environment:(Cost $0.35 M) Financial Management Information System (FMIS):(Cost $5.14 M) Revenue Management System (RMS):(Cost $1.95 M) Change Management and Human Resource Development:(Cost $1.36 M) Project Management:(Cost $2.20 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Satisfactory Satisfactory Overall Risk Rating Substantial Substantial Implementation Status and Key Decisions The Financial Management Information System (FMIS) System Requirement Study (SRS) is underway. The SRS consulting firm has delivered an Accounting and Reporting Framework Compliance Report, as well as a Business Process Design and Chart of Accounts paper which has been validated by the Technical Working Group. The Bank task team has been an active partner throughout the SRS phase and have been given the opportunity to provide technical comments on the key SRS outputs to date. A Tax Administration Specialist is onboard to review the Department of Finance and Administration's (DoFA) needs and has developed the terms of reference for an individual consultant to conduct the Revenue Management System (RMS) SRS and implementation. Project funded activities have yet to commence for Component 1 ' Strengthening the Public 5/28/2019 Page 1 of 6 The World Bank Implementation Status & Results Report Project for Strengthening Public Financial Management (P161969) Financial Management (PFM) environment'. However DoFA has been progressing reform in this area with the updated national Financial Management Regulations (FMR) approved by the President in February 2019. Focal points are in place in each of the four States and are making a positive impact to facilitate project implementation. Work needs to commence to develop and implement a change management plan and a PFM competency framework. The Project Implementation Manual was adopted in January 2019 by resolution of the Project Steering Committee, and approved by the Bank. This enabled the lifting of the disbursement condition over category one of the financing agreement. An initial annual project work plan and budget must be submitted to the Bank (due end January 2019). A Project Report covering the period to end December 2018 also needs to be submitted and was due mid February 2019. The disbursement rate is behind the level expected, however it will pick up as key current consultancies are delivered and paid, and expenditures from the programmatic Project Preparation Advance are properly recorded against the project. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance Substantial Substantial Substantial Macroeconomic Moderate Moderate Moderate Sector Strategies and Policies Moderate Moderate Moderate Technical Design of Project or Program Moderate Moderate Moderate Institutional Capacity for Implementation and Sustainability Substantial Substantial Substantial Fiduciary Substantial Substantial Substantial Environment and Social Low Low Low Stakeholders Substantial Substantial Substantial Other -- -- -- Overall Substantial Substantial Substantial Results PDO Indicators by Objectives / Outcomes To improve completeness, reliability and timeliness of financial reports of National and State Govts IN00677580 ►PDO-1: In-year budget reports prepared and published by National and all four State governments (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target In-year budget reports prepared and cleared for publication by all In-year budget reports five Govts meeting Value not prepared and not -- No change criteria for timing, published accuracy, coverage and comparability to meet criteria of “B” 5/28/2019 Page 2 of 6 The World Bank Implementation Status & Results Report Project for Strengthening Public Financial Management (P161969) score for PI-28 based on PEFA Framework Date 29-Jun-2018 16-Aug-2018 29-Apr-2019 30-Jun-2023 IN00677657 ►PDO-3: New FMIS used by all five govts for recording and reporting budget, revenue and expenditure (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target New FMIS used for preparation of budget for FY2024 and FundWare accounting recording of revenue Value -- No change system being phased out and expenditure transactions by National and all State governments Date 29-Jun-2018 16-Aug-2018 29-Apr-2019 31-Jul-2023 To improve tax administration IN00677656 ►PDO-2: Revenue Management System installed and in use by CTA for improved revenue accounting (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target “C” score in 2016 self- Criteria for “B” score of Value -- No change assessment for PI-20.3 PI-20.3 met Date 29-Jun-2018 16-Aug-2018 29-Apr-2019 31-Mar-2023 Intermediate Results Indicators by Components Strengthening the Public Financial Management Environment IN00677658 ►IR-1: New chart of accounts for all govts for better management, financial and statistical reporting (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target "C" score in 2016 self- “A” score criteria for Value assessment. Functional -- No change PI-4 met classification lacking. Date 29-Jun-2018 16-Aug-2018 29-Apr-2019 31-Mar-2023 IN00677662 ►IR-2: Procedures Manuals updated with detailed guidance for all five governments (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Procedures Manuals in place with detailed guidance for budget Operations Procedure formulation, Value not covering all required -- No change accounting, internal areas controls, payroll, fixed assets, cash management and financial reporting 5/28/2019 Page 3 of 6 The World Bank Implementation Status & Results Report Project for Strengthening Public Financial Management (P161969) Date 29-Jun-2018 16-Aug-2018 29-Apr-2019 31-Dec-2020 Financial Management Information System (FMIS) IN00677659 ►IR-3: Financial data integrity maintained to meet “B” score for PI-27 (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target “B+” score for PI-27 in “B+” score for PI-27 Value -- No change 2016 self-assessment maintained Date 29-Jun-2018 16-Aug-2018 29-Apr-2019 31-Jul-2023 Revenue Management System (RMS) IN00677660 ►IR-4: Taxpayer accounting in Customs and Tax Administration (CTA) automated (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target All modules of RMS Value No RMS in place -- No change implemented and in use Date 29-Jun-2018 16-Aug-2018 29-Apr-2019 01-Oct-2022 Change Management and Human Resource Development IN00677661 ►IR-5: Competency framework specifying minimum skillsets adopted and used for all PFM related jobs (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Competency framework specifying minimum skillsets required adopted for PFM related jobs No competencies defined across National and Value -- No change for PFM related roles State governments and used for recruitment and training to build gender-balanced workforce Date 29-Jun-2018 16-Aug-2018 29-Apr-2019 31-Jul-2023 IN00677663 ►IR-6: External training program partnerships for PFM related certification and degree courses (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Four (4) external training program No external training partnerships for Value program partnerships in -- No change certification and place degree courses in PFM related disciplines 5/28/2019 Page 4 of 6 The World Bank Implementation Status & Results Report Project for Strengthening Public Financial Management (P161969) Date 29-Jun-2018 16-Aug-2018 29-Apr-2019 30-Sep-2023 IN00677664 ►IR-7: Number of staff completing external training programs in PFM related disciplines (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 50.00 Date 29-Jun-2018 16-Aug-2018 29-Apr-2019 29-Sep-2023 IN00677665 ►IR-8: Gender-sensitive communication conducted for the project for awareness and building ownership (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target DoFA website enhanced and No communication regularly updated with strategy; regular updates information for Value and information not -- No change government staff and released for government citizens with staff and citizens functionality developed for capturing and summarizing feedback Date 29-Jun-2018 16-Aug-2018 29-Apr-2019 31-Mar-2023 IN00677666 ►IR-9: Transparency and citizen engagement in budget preparation and execution by National government (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target DoFA website includes functionality to capture citizen feedback. Information on budget preparation stages, final budget and quarterly updates on DoFA website exists but budget execution does not provide platform posted regularly Value -- No change for receiving citizen including: feedback. a) summary presented in a citizen-friendly format understandable by non-technical audience; b) summary of citizen- feedback received and government response. Date 30-Apr-2018 16-Aug-2018 29-Apr-2019 30-Jun-2023 Data on Financial Performance Disbursements (by loan) 5/28/2019 Page 5 of 6 The World Bank Implementation Status & Results Report Project for Strengthening Public Financial Management (P161969) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P161969 IDA-D3240 Effective USD 11.00 11.00 0.00 0.50 10.09 4.7% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P161969 IDA-D3240 Effective 30-May-2018 01-Aug-2018 01-Oct-2018 25-Sep-2023 25-Sep-2023 Cumulative Disbursements Restructuring History There has been no restructuring to date. Related Project(s) There are no related projects. 5/28/2019 Page 6 of 6