The World Bank Report No: ISR15763 Implementation Status & Results Nepal NP: Strengthening the Office of the Auditor General (P127040) Public Disclosure Copy Operation Name: NP: Strengthening the Office of the Auditor General Project Stage: Implementation Seq.No: 2 Status: ARCHIVED Archive Date: 06-Aug-2014 (P127040) Country: Nepal Approval FY: 2012 Product Line: Recipient Executed Activities Region: SOUTH ASIA Lending Instrument: Specific Investment Loan Implementing Agency(ies): Key Dates Board Approval Date 16-Aug-2011 Original Closing Date 30-Jun-2015 Planned Mid Term Review Date Last Archived ISR Date 21-Apr-2014 Effectiveness Date 23-Feb-2012 Revised Closing Date 30-Jun-2015 Actual Mid Term Review Date 26-Jan-2014 Project Development Objectives Project Development Objective (from Project Appraisal Document) The project development objective (PDO) is to enhance the quality and impact of public sector audit in Nepal Has the Project Development Objective been changed since Board Approval of the Project? Yes No Component(s) Component Name Component Cost Component 1: Enhancing the quality of financial statement audits 0.00 Component 2: Upgrading the capacity to conduct performance audits 0.00 Component 3: Enhancing the impact of audits 0.00 Component 4: Project Management 0.00 Overall Ratings Public Disclosure Copy Previous Rating Current Rating Progress towards achievement of PDO Moderately Satisfactory Moderately Satisfactory Overall Implementation Progress (IP) Moderately Unsatisfactory Moderately Satisfactory Overall Risk Rating Substantial Moderate Implementation Status Overview The project got off to a slow start, and by the date of the Mid Term Review (MTR) in January 2014, Implementation Progress had to be downgraded to Moderately Unsatisfactory, primarily due to continued slippages in components 1 (enhancing the quality of financial statement audits) and 3 (enhancing the impact of audits) and due to weaknesses in project management. Although OAG has proposed that the government request a restructuring of the project in order to adopt a revised Results Framework as agreed during the MTR, a Page 1 of 5 The World Bank Report No: ISR15763 formal government request had not been received by the date of the June 23-27, 2014 implementation review and support mission. As such, because of the continued difficulty in obtaining accurate data to measure results against the original Results Framework, Monitoring and Evaluation (M&E) has been downgraded to Moderately Unsatisfactory. However, virtually all of the implementation issues identified during the MTR have been satisfactorily addressed, and accordingly, overall Implementation Progress has been upgraded to Moderately Satisfactory. Public Disclosure Copy There has been significant progress under all components of the project since the date of the MTR. In particular, pilot financial audits had been completed, software had been procured and configured to enable OAG to complete its current annual audit planning exercise using a new customized Nepal Audit Management System, and at the time of the June 2014 review, a team from the SAI of India was in the process of conducting a peer review of OAG. In addition, the end-of project target for the number of in-depth performance audits to be reported to parliament in a year has already been achieved. OAG was further noted to have enhanced public performance in the performance audit practice. Further, the Auditor General had transmitted a high quality annual report to the President, and for the first time in over two years, a Public Accounts Committee has been constituted to scrutinize that report. Locations No Location data has been entered Results Project Development Objective Indicators Indicator Name Core Unit of Measure Baseline Current End Target In-depth performance audit reports submitted Number Value 1.00 2.00 3.00 to Parliament in year Date 30-Jun-2012 30-Jun-2014 30-Jun-2015 Comments 4 performance audits reported + 1 for next year’s annual report Current year audit observations implemented Percentage Value 35.00 45.00 50.00 by the Executive within 1 year Date 30-Jun-2012 30-Jun-2014 30-Jun-2015 Comments Not possible to determine. Ministry wise data of audit observations is not being kept. Also no record kept of the replies Public Disclosure Copy received from the various audit entities. Audits substantially meeting OAG financial Percentage Value 35.00 50.00 60.00 statement auditing standards Date 30-Jun-2012 30-Jun-2014 30-Jun-2015 Comments Data not available except for 13 pilot audits. On first 3 pilot audits, average quality assurance weighted score = 54.5%, and Page 2 of 5 The World Bank Report No: ISR15763 on second round of 10 pilot audits, average score is 71%. Intermediate Results Indicators Public Disclosure Copy Indicator Name Core Unit of Measure Baseline Current End Target Office-wide audit plan implements risk-based Text Value No Partly Yes concepts Date 30-Jun-2012 30-Jun-2014 30-Jun-2015 Comments Annual audit plan for 2014-15 is under preparation, and will be completed using NAMS module 1 which computerizes the exercise and uses some risk-based considerations Numbers of financial audit teams included in Number Value 0.00 10.00 15.00 pilot audits Date 30-Jun-2012 30-Jun-2014 30-Jun-2015 Comments Pilot financial statement audit entities clarified with review team. Pilot audits to be planned and conducted during August – November 2014. Peer review recommendations by an SAI Text Value No Accepted Implemented Date 30-Jun-2012 30-Jun-2014 30-Jun-2015 Comments Peer review is underway as of June 26, 2014. Draft final report expected by end July and final report to be discussed at dissemination workshop Sep 3, 2014. Strategic plan for performance audit division Yes/No Value No Yes Yes Public Disclosure Copy prepared and updated Date 30-Jun-2012 30-Jun-2014 30-Jun-2015 Comments Lessons learned from current year pilots Yes/No Value No Yes Yes documented and reflected in revised audit Date 30-Jun-2012 30-Jun-2014 30-Jun-2015 guides and training materials Comments Workshop held in Daman May 9-10, 2014 to review lessons learned from financial pilots. Similar workshop for performance audit Page 3 of 5 The World Bank Report No: ISR15763 pilotexperiences scheduled for July 25-26, 2014. Current year audit observations accepted by Percentage Value 60.00 70.00 75.00 the Executive within 35 days Public Disclosure Copy Date 30-Jun-2012 30-Jun-2014 30-Jun-2015 Comments Not possible to determine as the replies from the audit entities are not monitored systematically. Strategy document prepared with actions for Yes/No Value No Yes Yes improving relations with Executive, PAC, media Date 30-Jun-2012 31-Dec-2013 30-Jun-2015 and other stakeholders Comments A paper suggesting how to develop internal and internal communications strategy submitted and discussed in a workshop. OAG to take policy decisions. Computerized databank of audit observations Yes/No Value No No Yes produces monthly status reports Date 30-Jun-2012 30-Jun-2014 30-Jun-2015 Comments System is under development Annual work plan approved by Steering Yes/No Value No Yes Yes Committee Date 30-Jun-2012 30-Jun-2014 30-Jun-2015 Comments Inception report approved by Steering Text Value No N/A N/A Committee Date 30-Jun-2012 30-Jun-2014 30-Jun-2015 Comments Mid Term Report approved by Steering Text Value No Yes N/A Committee Date 30-Jun-2012 30-Jun-2014 30-Jun-2015 Comments Final Report approved by Steering Committee Yes/No Value No No Yes Public Disclosure Copy Date 30-Jun-2012 30-Jun-2014 30-Jun-2015 Comments Not due Data on Financial Performance (as of 14-Nov-2013) Financial Agreement(s) Key Dates Project Ln/Cr/Tf Status Approval Date Signing Date Effectiveness Date Original Closing Date Revised Closing Date P127040 TF-10455 Effective 23-Feb-2012 23-Feb-2012 23-Feb-2012 30-Jun-2015 30-Jun-2015 Page 4 of 5 The World Bank Report No: ISR15763 Disbursements (in Millions) Project Ln/Cr/Tf Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P127040 TF-10455 Effective USD 2.30 2.30 0.00 0.99 1.31 43.00 Public Disclosure Copy Disbursement Graph Key Decisions Regarding Implementation A level two project restructuring will be processed once a formal request from the Government of Nepal is received to restructure the project with a revised Results Framework. Restructuring History There has been no restructuring to date. Public Disclosure Copy Related Projects There are no related projects. Page 5 of 5