The World Bank Report No: ISR11960 Implementation Status & Results Honduras Social Protection (P115592) Public Disclosure Copy Operation Name: Social Protection (P115592) Project Stage: Implementation Seq.No: 6 Status: ARCHIVED Archive Date: 13-Nov-2013 Country: Honduras Approval FY: 2010 Product Line: IBRD/IDA Region: LATIN AMERICA AND CARIBBEAN Lending Instrument: Specific Investment Loan Implementing Agency(ies): PRAF, UAP-SDP Key Dates Board Approval Date 29-Jun-2010 Original Closing Date 31-Dec-2014 Planned Mid Term Review Date 08-Oct-2012 Last Archived ISR Date 07-Apr-2013 Effectiveness Date 29-Oct-2010 Revised Closing Date 31-Dec-2015 Actual Mid Term Review Date 08-Oct-2012 Project Development Objectives Project Development Objective (from Project Appraisal Document) The objectives of the Project are to: (a) improve the institutional capacity of Recipient’s institutions to manage the Conditional Cash Transfer (CCT) Program, by strengthening transparent mechanisms and instruments for targeting Program beneficiaries, monitoring compliance with Program co-responsibilities, and making payments to Program beneficiaries; (b) provide income support to Eligible Beneficiaries; (c) increase the use of preventive health services and school attendance in grades 1 to 6 among Program beneficiaries in rural areas; and (d) improve the Recipient’s capacity to respond promptly and effectively to an Eligible Emergency. Has the Project Development Objective been changed since Board Approval of the Project? � Yes No Component(s) Component Name Component Cost Institutional strengthening of the Bono 10,000 Program 8.70 Co-financing Conditional Cash Transfers (grants) 31.30 Overall Ratings Public Disclosure Copy Previous Rating Current Rating Progress towards achievement of PDO Moderately Satisfactory Moderately Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Satisfactory Overall Risk Rating Substantial Implementation Status Overview The Honduras Social Protection Project ($40 million), effective since 2010 and closing in December 2015, has already disbursed 75% of funds. The Project supports the implementation of the Conditional Cash Transfer (CCT) program “Bono 10,000�, the first nation-wide CCT in Honduras, through co-financing transfers (in the amount of $32 million, which represents 80% of the Project funds). It also includes technical assistance (TA) to strengthen institutions in charge of implementing Bono 10,000 (Secretary of Presidency and the Family Allowance Program, PRAF), as well as to the Secretary of Social Development, which is in charge of designing and implementing a national Social Protection policy, as Page 1 of 8 The World Bank Report No: ISR11960 well as the instrument to target social interventions (Unique Registry of Beneficiaries, RUB). Key expected results are that at least 80% of Program households receiving transfers in rural areas are the extreme poor, at least 80% of Program beneficiary children aged 13-15 years have completed primary school, at least 80% of Program beneficiary children have been vaccinated, and at least 76% of enrolled pregnant women have received prenatal controls in the first trimester of pregnancy. The Bono 10,000 program is also co-financed by the Inter-American Development Bank (IADB) and the Central American Bank for Economic Integration (CABEI). Public Disclosure Copy The Bono 10,000 Program's focus on the accumulation of human capital and its expanding coverage position has constituted a key pillar of the country's social protection system and an entry point for other interventions focusing on the poor and vulnerable. Since 2010, the Program has reached 350,000 poor families, with 316,000 currently receiving payments on a regular basis (251,000 in rural areas, and 65,000 in urban areas), and of which approximately 30,000 rural families are financed through the World Bank Social Protection Project. During 2013, the team has worked closely with the Government in strengthening program implementation and results, identifying and overcoming challenges in implementation, in a context of an upcoming political transition (elections are taking place in November 2013, and a new administration will start in February 2014). The program operational manual was updated to reflect changes in institutional arrangements for program implementation. The PRAF has started to pay with a more diversified menu of options, with pilots using cooperatives and cell phone payments. The program management information system (MIS) has also improved, notably in monitoring education corresponsibilities through the development of a new information technology (IT) system to upload administrative records on school enrollment (this system was supported by the Honduras Education Project), and in health by finalizing the IT geo-reference of health centers in the country. The Project has also supported the definition of the national social policy (PPS), the national evaluation system of social programs and policies (SUEPPS), and the design and implementation of the RUB within the Secretary of Social Development. The PPS was approved by the Social Cabinet in April 2012, as was the conceptual design of the RUB and the implementation of its main modules. The RUB has a coverage of 1.36 million actual and potential beneficiaries and has information of 29 databases corresponding to 18 public institutions and 17 programs and projects. Locations No Location data has been entered Results Project Development Objective Indicators Indicator Name Core Unit of Measure Baseline Current End Target Percentage of registered households of the Percentage Value 0.00 74.00 80.00 Program whose co-responsibilities are verified Date 19-May-2010 19-Oct-2012 31-Dec-2014 and reported Comments Program level indicator. Program level indicator. Baseline value recorded at Public Disclosure Copy negotiations. Percentage of students in grades 1 to 6 Percentage Value 0.00 83.00 80.00 participating in the Program who comply with Date 19-May-2010 19-Oct-2012 31-Dec-2014 the co-responsibility Comments Program level indicator. Program level indicator. Baseline value recorded at negotiations. Page 2 of 8 The World Bank Report No: ISR11960 Percentage of children, aged 0-5 years Percentage Value 98.00 participating in the Program with complete Date 19-May-2010 14-Mar-2013 31-Dec-2014 vaccination scheme Comments National level indicator. There Not available. Public Disclosure Copy was no baseline value recorded at negotiations. Intermediate Results Indicators Indicator Name Core Unit of Measure Baseline Current End Target Percentage of schools reporting compliance in Percentage Value 0.00 99.00 90.00 accordance to payments cycle Date 19-May-2010 19-Oct-2012 31-Dec-2014 Comments Program level indicator. Program level indicator, Baseline value recorded at school enrollment and negotiations. attendance reported. Percentage of Health Centers reporting Percentage Value 0.00 85.00 50.00 compliance in accordance to payment cycle Date 19-May-2010 19-Oct-2012 31-Dec-2014 Comments Program level indicator. Program level indicator, only Baseline value recorded at registration in health center negotiations. reported so far (not attendance). Monitoring and Evaluation System Developed Text Value N/A In Process System running and and publicly available information publically accessible. Date 19-May-2010 14-Mar-2013 31-Dec-2014 Comments Program level indicator. MIS design finalized. Baseline value recorded at Consultants hired and negotiations. expected to finalize implementation in December 2013. Communication Strategy Implemented Text Value N/A Completed Running: At least five national radio/TV stations broadcast Public Disclosure Copy results on Program Date 19-May-2010 10-Oct-2013 31-Dec-2014 Comments Baseline value recorded at negotiations. Program level indicator. Percentage of families registered in SIRBHO Percentage Value 3.00 3.00 50.00 with updated information Date 19-May-2010 14-Mar-2013 31-Dec-2014 Comments Baseline value recorded at Procurement contract delayed. This process will Page 3 of 8 The World Bank Report No: ISR11960 negotiations. Program level start in early 2014 with new indicator. Government administration Percentage of complaints and appeals Percentage Value 35.00 80.00 attended to and resolved Public Disclosure Copy Date 19-May-2010 19-Oct-2012 31-Dec-2014 Comments No baseline data at time of Complaints system is being negotiations. developed. Number of visits to the Progam webpage Number Value 0.00 6330.00 500000.00 Date 19-May-2010 19-Oct-2012 31-Dec-2014 Comments Baseline value recorded at PRAF is developing a new negotiations. Program level web page to replace the indicator. current one, to also include information of Program beneficiaries. Strategy for streamlining social assistance Text Value None Strategy Strategy approved by Social programs and subsidies approved and Approved by Social Cabinet Cabinet implemented Date 19-May-2010 14-Mar-2013 31-Dec-2014 Comments Baseline value recorded at Social Protection Strategy negotiations. approved in March 2012 Number of families receiving payments on a Number Value 0.00 30413.00 30000.00 regular basis Date 19-May-2010 31-Dec-2012 31-Dec-2014 Comments Baseline value recorded at WB project only. negotiations. Number of families whose complaince with co- Number Value 0.00 30413.00 30000.00 responsibilities is verified and reported Date 19-May-2010 19-Oct-2012 31-Dec-2014 Comments Baseline value recorded at WB project only. negotiations. Percentage of students in grades 5 and 6, Percentage Value 10.00 8.80 particiapting in the Program, who dropout of Date 19-May-2010 14-Mar-2013 31-Dec-2014 school Comments Baseline value recorded at No Data is Available on Public Disclosure Copy negotiations. Progress. Secretary of Presidency and PRAF will work with Ministry of Education to provide updated information. Percentage of students, participating in the Percentage Value 63.00 80.00 Program, that graduate from 5th to 6th grade Date 19-May-2010 14-Mar-2013 31-Dec-2014 Comments National level indicator. No Data is Available on Progress. Secretary of Page 4 of 8 The World Bank Report No: ISR11960 Baseline value recorded at Presidency and PRAF will negotiations. work with Ministry of Education to provide updated information. Public Disclosure Copy Percentage of pregnant women who receive Percentage Value 75.00 prenatal controls Date 19-May-2010 14-Mar-2013 31-Dec-2014 Comments National level indicator. No No Data is Available on baseline value was recorded Progress. Ministry of at negotiations. Presidency and PRAF will work with Ministry of Health to provide updated information. Data on Financial Performance (as of 25-Oct-2013) Financial Agreement(s) Key Dates Project Ln/Cr/Tf Status Approval Date Signing Date Effectiveness Date Original Closing Date Revised Closing Date P115592 IDA-47740 Effective 29-Jun-2010 02-Aug-2010 29-Oct-2010 31-Dec-2014 31-Dec-2014 P115592 IDA-52940 Not Effective 08-Aug-2013 26-Aug-2013 31-Dec-2015 31-Dec-2015 Disbursements (in Millions) Project Ln/Cr/Tf Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P115592 IDA-47740 Effective XDR 26.50 26.50 0.00 19.86 6.64 75.00 P115592 IDA-52940 Not Effective XDR 8.20 8.20 0.00 0.00 8.20 0.00 Disbursement Graph Public Disclosure Copy Page 5 of 8 The World Bank Report No: ISR11960 Public Disclosure Copy Key Decisions Regarding Implementation Upon request from the Government, the Project was restructured (Level II) in April 2013 to: (i) modify fiduciary arrangements across implementing agencies; (ii) modify description of components; (iii) revise one results indicator to reflect program changes since Project effectiveness; and (iv) reallocate resources across disbursement categories. An Additional Financing (AF) to the Project was also approved by the Board in July 2013, and ratified by Government signature in August 2013, in the amount of US$12.3 million. The additional credit will help scale-up activities and targets and strengthen regional management of program. The Project Development Objective (PDO) was also modified as part of the AF process to clarify that the Project will finance transfers in rural areas only and to reflect the incorporation of an Immediate Response Mechanism (IRM) component to allow the country to access undisbursed and uncommitted funds in the event of a national emergency. The closing date of the original Credit was also extended from December 31, 2014 to December 31, 2015, to coincide with the closing date of the additional credit. Effectiveness of the additional credit is still pending until conditions are met (conditions are that the amendment to the subsidiary agreement between PRAF and the Secretary of Presidency is signed, as well as the financial institution agreement to make payments since the new credit will allow financing bank commissions). In October 2013, the results of the first round impact evaluation of the program were presented to Government (President and Cabinet Ministers) and co-financing institutions. The Public Disclosure Copy main results show that: a) poverty among beneficiaries diminished by 3 percentage points (in a context of increasing poverty nationwide), while per capita consumption increased by 7 percent; b) enrollment in primary increased by 2.8 percentage points; c) visits to health centers for children aged 0-3 increased by 2.6 percentage points; and d) no effects on nutritional outcomes, vaccinations, or prenatal controls were found, perhaps due to limited enforcement of these health program corresponsibilities. The same month, the first social audit of the program, led by civil society organizations, were also presented to Government, combining both overall satisfaction of the program, but also highlighting key areas for attention (frequency of payments, transparency and accountability, complaint mechanisms, etc). Key challenges remain for the next Government administration, including better management of cash flows and expansion of alternative payment mechanisms to stabilize program payments (an attempt to increase frequency to bimonthly payments proved infeasible at this stage given cash flows delays), revision of the targeting model, finalization of the MIS system in PRAF, revamping of the grievance and complaint mechanisms, addressing supply-side gaps in education and health service provision in remote rural areas, and perhaps more importantly, a revision of benefits and coverage level (program should be only covering the rural extreme poor) to guarantee the program's fiscal sustainability. Cash payments. Up until now payments are made three times a year, conditional on corresponsabilities verified concurrently, and mostly delivered in cash through mobile units of a Page 6 of 8 The World Bank Report No: ISR11960 public bank (Banadesa). However, the operational cycle has not yet been able to stabilize for a variety of reasons, including delays in transferring cash from the Secretary of Finance to PRAF, operational bottlenecks in Banadesa and PRAF, and delays in verification of program corresponsibilities. A recent social audit has confirmed that unpredictability in payment receipts and long delays at payment centers are among the major sources of dissatisfaction among beneficiaries. In 2013, the Government started to diversify payment methods, which will include payment in bank agencies wherever they are available (20,000 households projected for next payment), cooperatives (13,000), and cell phones (7,000). While the Public Disclosure Copy Government revised program operational rules to increase frequency of payments to a bimonthly schedule starting in 2013, which would allow better consumption smoothing, it has not been possible to achieve and the target has moved to 2014. Targeting. The program targets moderate and extreme poor households through a formula that combines geographic targeting with household-level targeting. The recent baseline impact evaluation shows that 84% of Bono's beneficiaries are poor (and 74% extreme poor), which suggests inclusion errors very well aligned with much more mature CCT programs in the region (Brazil, Mexico, Colombia). Still, the model will be revised (with TA from WB and IADB) to minimize inclusion errors and, if the new authorities agree, start focusing targeting only on the extreme poor, given current pressures for coverage expansion and significant exclusion errors. Other sources of exclusion are: (1) lack of national identity card (it is estimated that 20% of children, most of them in extreme poverty, do not have proper IDs, and are thus unjustifiably excluded from the program); (2) exclusion of children ages 5-6 who are not covered by the health co-responsibility (age 0-5) nor the education co-responsibility (age 6-18); and (3) exclusion of households with children ages 14-18 who live in areas lacking a school for this age group. MIS. The Bank Project is also supporting the strengthening of the PRAF's MIS to handle a large number of beneficiaries : the design of the new MIS has finalized, and its implementation will be ready by end of year. In the meantime, the external audits serve an important role for oversight and controls, reviewing eligibility, payments and corresponsibilities for the beneficiary households. So far, audit findings have shown less than 4% of questionable cases (for which the Government has investigated and provided supplementary information as justi fication for eligibility). The MIS in the Ministry of Education system has been strengthened to monitor compliance with attendance rates, now moving to online reporting. The Ministry of Health has also finalized geo-referencing health centers and is carrying out proper monitoring compliance with health protocols. Coverage. Initially, the Government aimed to increase program coverage from 100,000 in early 2011 to 600,000 households by the end of the current administration. All co-financing partners recommended early on that operational complexities and financial constraints would not allow reaching such an ambitious target. The Government agreed in June 2012 to contain the expansion of program coverage to not exceed 350,000 households. However, more recently there has been pressure once again to expand the program even further. Another parameter to consider for next administration is the benefit level. At Lps. 10,000 ($500) a year, they are quite generous per international standards, representing about 25 percent of the consumption/income levels of extreme poor families. The Government agreed with the Bank and other donors on the importance of containing benefits levels to ensure financial sustainability and limit the potential for labor disincentives, and it is recommended that the next administration undertakes a thorough review of them. Institutional. The program institutional setting is complex, as it is in most CCT programs.. It involves an Intersectoral Committee that dictates the general rules and policies, such as the operational manual. The Secretary of Presidency (SDP) provides overall coordination; PRAF is the main executing agency, with Ministries of Health and Education as co- executors; and the Ministry of Social Development is in charge of the Social Protection policy targeting, and evaluation. In practice, in the past there have been duplication in roles and processes and information has not always flowed well among the multiple institutions involved. The next government administration is expected to undertake institutional reform in the social sector, and some of these arrangements may change. Regarding the subcomponent that supports the strengthening of the Secretary of Social Development, the main challenge during the Government transition is to position the RUB in Public Disclosure Copy the social protection transition agenda as a well-developed and functioning platform for the identification of beneficiaries of the social policy. This is an instrument that has been gradually used by different institutions, and should be consolidated as a key element of the implementation of the social protection policy. In particular, it could be a relevant instrument to help consolidate and target subsidies and other social assistance interventions, and thus create needed fiscal space. The Project will continue finance training and dissemination workshops in the use and data uploading of the different systems, as well as for seeking agreements on institutional and operational arrangements for its implementation during the next Government administration. Restructuring History CD Decision on 22-Apr-2013 Related Projects Page 7 of 8 The World Bank Report No: ISR11960 P144928-Honduras Additional Financing Social Protection Public Disclosure Copy Public Disclosure Copy Page 8 of 8