The World Bank Income Support Program for the Poorest (P146520) REPORT NO.: RES30359 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF INCOME SUPPORT PROGRAM FOR THE POOREST APPROVED ON DECEMBER 16, 2014 TO PEOPLE'S REPUBLIC OF BANGLADESH SOCIAL PROTECTION & LABOR SOUTH ASIA Regional Vice President: Ethel Sennhauser Country Director: Qimiao Fan Senior Global Practice Director: Michal J. Rutkowski Practice Manager/Manager: Stefano Paternostro Task Team Leader: Aneeka Rahman, Suleiman Namara The World Bank Income Support Program for the Poorest (P146520) ABBREVIATIONS AND ACRONYMS ANC Ante Natal Care BBS Bangladesh Bureau of Statistics BPO Bangladesh Post Office CC Community Clinic CCT Conditional Cash Transfer CNCD Child Nutrition and Cognitive Development GMP Growth Monitoring and Promotion ISPP Income Support Program for the Poorest IUFR Interim Unaudited Financial Report LGD Local Government Division MIS Management Information System NHD National Household Database PMU Project Management Unit PSP Payment Service Provider SNC Safety Net Cell UNO Upazila Nirbahi Officer The World Bank Income Support Program for the Poorest (P146520) BASIC DATA Product Information Project ID Financing Instrument P146520 Investment Project Financing Original EA Category Current EA Category Not Required (C) Not Required (C) Approval Date Current Closing Date 16-Dec-2014 30-Jun-2020 Organizations Borrower Responsible Agency PEOPLE'S REPUBLIC OF BANGLADESH Local Government Division Project Development Objective (PDO) Original PDO The Project Development Objective is to provide income support to the poorest mothers in selected Upazilas, while (i) increasing the mothers’ use of child nutrition and cognitive development services, and (ii) enhancing local level government capacity to deliver safety nets. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-55530 16-Dec-2014 09-Feb-2015 16-Apr-2015 30-Jun-2020 300.00 8.61 286.08 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank Income Support Program for the Poorest (P146520) I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A. Project Status 1. The Project’s progress towards achievement of development objective and overall implementation progress are currently rated Moderately Unsatisfactory. Of the original financing amount of US$300 million, 3 percent has been disbursed to date. The Project is behind its implementation targets given initial procurement delays and ongoing data unavailability from the Bangladesh Bureau of Statistics. 2. Since effectiveness in April 2015, the Project has achieved the following: (a) Launch of cash transfer program: The Jawtno cash transfer program has been launched in four unions where household and poverty data was made available, with over 4,000 beneficiaries enrolled. The first tranche of unconditional cash transfer, amounting to approximately $145,000, was distributed to beneficiaries through biometric cash cards. Delivery of ante-natal care (ANC), growth monitoring and promotion (GMP) and child nutrition and cognitive development (CNCD) services started from October 2017 through the Project’s partner agencies and firms, and the conditional cash transfer payments against compliance with the first quarter of services (Oct-Dec 2017) of approximately $91,000 was transferred to beneficiaries in March 2018. The next tranche of payment for co-responsibility compliance (Jan-Mar 2018) of approximately $117,000 is expected to be transferred to beneficiary accounts in May 2018. (b) Compliance with Legal Covenants and Conditions: The Project has met all the legal covenants, which include adoption of an Operations Manual; entering into Memorandum of Understanding and Service Agreements with service partners to ensure interagency coordination; recruitment of procurement and fiduciary personnel, and compliance with the Project Governance and Accountability Action Plan. The Project has also met the disbursement condition for Category 1 following IDA approval of the Operations Manual, which lays out the modalities for cash transfer and detailed implementation arrangements. (c) Fiduciary: Following initial delays in procurement activities, the Project has completed procurement of the four service contracts that are critical for program implementation: all partner firms are on board and have commenced fieldwork and services. The Project’s financial management performance has been satisfactory, with no outstanding audits. The Project will be considered suitable to move to Interim Unaudited Financial Report (IUFR)-based reporting modality once all financial reports are generated through an automated system, which is expected by the end of this fiscal year. (d) Implementation timeline, staffing and training: The Project has prepared a detailed implementation timeline, which includes phasing of locations, scheduling outreach activities and preparing the tentative enrollment calendar. The Project Management Unit (PMU) is fully-staffed and field-level staffing has also been completed for Phase 1 and 2 locations. Training has also been completed to all central and field staff, including those of partner agencies and firms, on the overall program Operations Manual; use of systems and hardware, and the CNCD curriculum. (e) Development and deployment of systems: The program management information system (MIS) has been developed, tested and deployed at the field and central level. The MIS forms the foundational structure of the program by providing an automated system across all program processes, from beneficiary identification; The World Bank Income Support Program for the Poorest (P146520) enrollment and registration; compliance monitoring; payments and reconciliation, and case management and grievances. The MIS is linked to the National Household Database (NHD), from which it would draw all potential households and associated poverty and demographic information, and the Bangladesh Post Office (BPO) information system, from which it draws co-responsibility compliance data as well as financial transaction and reconciliation data. 3. The Project is fully prepared to roll out the cash transfer program, pending household and poverty data from the NHD, developed by the Bangladesh Bureau of Statistics (BBS). B. Rationale for Restructuring 4. As per the Financing Agreement, the Project is to select beneficiaries from households falling within the bottom two expenditure quintiles, as identified by the Bangladesh Poverty Database [re-named National Household Database] and households that include pregnant women and/or mothers of children below the age of sixty months. NHD data, which would provide the list of households belonging to the bottom two expenditure quintiles and demographic information on the number and age of children in the household, has been delayed and is not expected to be available to the Project before June 30, 2018. While NHD data collection activities have been completed in all Project locations, delays in procurement and installation of NHD hardware mean that the data cannot be processed to generate household poverty scores and secure transmission of personal information to the ISPP program MIS is not possible. This prevents the Project from identifying eligible beneficiaries as per original design parameters and delays the rollout of the cash transfer program significantly, impacting disbursement and ultimately, the Project’s ability to meet its development objective and associated results targets. 5. The Government, in a letter dated March 5, 2018, requested a Project restructuring that would allow identification of potential beneficiaries from poor households based on alternative targeting mechanisms that have been jointly agreed upon between the Project and Bank teams. Specifically, this would require an amendment of the Financing Agreement paragraph 1(b)(i) of Section I.D. of Schedule 2, which stipulates only the use of the NHD targeting system in the selection of beneficiaries. Under the proposed restructuring, implementation would follow a phased targeting approach, using alternative mechanisms until such time as NHD data is available to the program, following which it would move back to original design principles. 6. Through the adoption of a phased targeting approach, the PMU would be able to implement, obtain feedback and make necessary adjustments to other innovative features under the Project, ensuring that the current delays to NHD data availability, does not hinder the Project’s capacity to achieve a reliable implementation design which is effective in the long run. Implementation in the first four unions has already provided valuable lessons which have allowed the Project to modify and adapt processes and systems to be in line with ground realities. These are also reflected in the section below on proposed changes. II. DESCRIPTION OF PROPOSED CHANGES C. Beneficiary Selection Process The World Bank Income Support Program for the Poorest (P146520) 7. Targeting method: The Project has identified alternative mechanisms for determining eligibility of potential beneficiaries. Specifically, the Union Parishad will consolidate a list of potential households prepared at the ward level, based on a range of criteria that are closely associated with poverty, including occupation of household head, gender of household head, land ownership, etc. (list of criteria and detailed processes will be provided in the Project Operations Manual). Households that meet at least two of the criteria will be considered eligible from a poverty perspective. This is similar to current practices by other safety net programs implemented by over twenty ministries, including programs supported by other IDA-financed operations. The Union Parishad Committee will finalize the list and process for Upazila Nirbahi Officer (UNO)-level and subsequently, PMU approval. 8. Following PMU approval, demographic eligibility of listed households will be screened by the Project’s partner firm, responsible for training, outreach and enrollment activities. Once demographic eligibility has been confirmed, the final list of households will be invited to enroll in the program, which will follow the Project’s existing procedures as laid out in the Operations Manual. 9. Following the availability of NHD data, the Project will revert to its original design in using PMT-based poverty scores from the NHD in determining eligibility of households to the program. 10. Eligibility threshold: Under either targeting approach, the eligibility threshold will be revised upwards: current estimates from implementation in the four unions suggest approximately 10 percent of poor households are covered at the poverty score percentile cutoff equating to the bottom two expenditure quintiles. As the Project is being implemented in the poorest regions of Bangladesh, the eligibility threshold is proposed to be revised upwards to include all poor households in that location1, which also meet the demographic criteria. This could potentially allow an additional 300,000 poor beneficiaries to be enrolled in the program. D. Transfer Amount 11. The cash transfer amount associated with each co-responsibility is proposed to be increased by approximately 50 percent in order to ensure the adequacy of benefits for its intended purpose. This reflects the proportionate increase in household consumption and expenditure since Project preparation2. The revised benefits are shown in Table 2. Table 2: Beneficiary Co-Responsibility and Benefits Eligible Co- Benefit amount Benefit amount Payment condition Maximum beneficiary responsibility (Revised) payment per (Original) quarter 1As estimated by data from the Household Income and Expenditure Survey 2010 and Population Census 2011 2 Findings from the Household Income and Expenditure Survey 2016 indicate an increase of approximately 50 percent in rural consumption. The World Bank Income Support Program for the Poorest (P146520) Pregnant Up to four BDT 200 per visit BDT 1000 per visit No visit, no payment BDT 1000- women antenatal care 2000 visits during pregnancy All beneficiary Take child for BDT 500 per visit BDT 700 per visit Quarterly BDT 2800 mothers with height and plus a bonus of plus a bonus of BDT children aged weight check BDT 500 if all 700 if all three Payment allowed if at 0-24 months every month three visits are visits are least two visits have completed in a completed in a been completed in quarter quarter three months All beneficiary Take child for BDT 1000 BDT 1500 per visit Quarterly BDT 1500 mothers with height and children aged weight check No visit, no payment 25-60 months every 3 months All beneficiary Attend child BDT 500 per visit BDT 700 per visit Quarterly BDT 2800 women nutrition and (total of BDT 1500 (total of BDT 2100 development in one quarter, in one quarter, Payment allowed if at counseling irrespective of irrespective of least two visits have sessions every number of number of children been completed in month children enrolled) enrolled plus bonus three months BDT 700 if all three visits are completed in a quarter) E. Alternative Payment Service Provider 12. The Project, through the Local Government Division (LGD), signed a Service Agreement with the BPO to serve as the payment service provider (PSP), fulfilling one of the Project’s legal covenants. As part of its implementation of the National Social Security Strategy 2015 to promote financial inclusion of poor households and help them access a wide range of financial services, the Project will explore piloting the use of an alternate PSP for the program. In the longer term, this would also provide beneficiaries with enhanced choice on service providers. This would also allow testing of a mechanism should the BPO non-perform on its obligations under the Service Agreement. An revised legal covenant is proposed, in this respect, to reflect additional Service Agreements that would need to be signed with the selected PSP(s). F. Results Framework Targets The World Bank Income Support Program for the Poorest (P146520) 13. Due to program implementation delays, the Project has not met its annual targets on a range of PDO and intermediate outcome indicators for FY2016, FY2017 and FY2018. Targets for selected indicators are proposed to be retroactively revised and targets for FY2019 have been modified based on what is realistically expected to be achievable under the revised implementation workplan. In addition, a number of indicators have been re-worded to provide better clarity. The specific changes are noted in Table 3. Table 3: Proposed Changes to Results Framework Level Indicator Proposed revision Beneficiaries of Safety Net Programs  Targets for Years 2, 3 and 4 revised to match actual/projected achievement.  End target remains unchanged. Beneficiaries of Safety Net Programs  Targets for Years 2, 3 and 4 revised to match (CCT) actual/projected achievement.  End target remains unchanged. Beneficiaries of Safety Net Programs  Previous targets assumed 95% of beneficiaries (female) would be female. Proposed revision assumes 100% of beneficiaries are female.  Targets for Years 2, 3 and 4 revised to match actual/projected achievement.  End target remains unchanged. ISPP beneficiary households in the  Indicator revised as “Proportion of eligible bottom two expenditure quintiles households in the bottom two expenditure (percentage) quintiles of the NHD that are enrolled as beneficiaries”. PDO  The re-wording reflects the methodology by which this indicator would be calculated, while leaving the original intention of measuring targeting accuracy unchanged.  Targets remain unchanged. ISPP beneficiaries receiving at least  Indicator revised as “Proportion of ISPP 70 percent of the maximum benefit beneficiaries receiving at least 50 percent of the amount (percentage) maximum benefit amount”  The revision reflects payment condition guidelines which stipulate at least 2 out of 3 sessions must be attended for monthly GMP and monthly CNCD to entitle beneficiary to payment for compliance.  Targets for Years 4 and 5 revised downwards. Unions maintaining a single  Targets for Year 3 revised to match actual beneficiary registry of at least five achievement. safety net programs (number)  End target remains unchanged. Beneficiary mothers who fulfill  This indicator has been split into two separate Growth Monitoring and Promotion indicators: “Proportion of ISPP beneficiary mothers co-responsibility (percentage) who fulfill monthly Growth Monitoring and rme Inte diat e Promotion co-responsibility” and “Proportion of The World Bank Income Support Program for the Poorest (P146520) ISPP beneficiary mothers who fulfill quarterly Growth Monitoring and Promotion co- responsibility” to reflect the different co- responsibilities.  Targets remain unchanged. Implementing Unions/municipal  Indicator reworded as “Proportion of implementing wards addressing grievance cases Upazilas processing grievance cases” reflecting the Upazila as the Government’s primary level of grievance redressal.  Targets for Years 3, 4 and 5 revised downwards. Periodic beneficiary spot checks  Indicator reworded as “Number of surveys conducted in sample of Unions/municipal wards on which periodic Unions/municipal wards beneficiary spot checks surveys conducted” for clarity of measurement and reporting.  Targets remain unchanged. Process evaluation of project cycle  Targets for Years 3, 4 and 5 revised to “Yes”. conducted (Y/N) Impact evaluation of providing cash  Proposed to be dropped. The impact evaluation is transfers on behavioural changes not carried out under the Project. among beneficiary population conducted G. Disbursement Estimates 14. Disbursement estimates have been revised: retroactively to reflect actual disbursement, and projections based on the implementation workplan going forward following restructuring. III. SUMMARY OF CHANGES Changed Not Changed Change in Results Framework ✔ Change in Disbursement Estimates ✔ Change in Legal Covenants ✔ Other Change(s) ✔ Change in Implementing Agency ✔ Change in DDO Status ✔ Change in Project's Development Objectives ✔ The World Bank Income Support Program for the Poorest (P146520) Change in Components and Cost ✔ Change in Loan Closing Date(s) ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Change in Disbursements Arrangements ✔ Change in Overall Risk Rating ✔ Change in Safeguard Policies Triggered ✔ Change of EA category ✔ Change in Institutional Arrangements ✔ Change in Financial Management ✔ Change in Procurement ✔ Change in Implementation Schedule ✔ Change in Economic and Financial Analysis ✔ Change in Technical Analysis ✔ Change in Social Analysis ✔ Change in Environmental Analysis ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_RESULTS_TABLE RESULTS FRAMEWORK Project Development Objective Indicators PDO_IND_TABLE Beneficiaries of social safety net programs Unit of Measure: Number Indicator Type: Corporate Baseline Actual (Current) End Target Action Value 0.00 4322.00 600000.00 Revised Date 01-Dec-2014 02-Apr-2018 30-Jun-2020 Beneficiaries of Safety Nets programs - Conditional cash transfers (number) Unit of Measure: Number Indicator Type: Custom Breakdown The World Bank Income Support Program for the Poorest (P146520) Baseline Actual (Current) End Target Action Value 0.00 4322.00 600000.00 Revised Date 01-Dec-2014 02-Apr-2018 30-Jun-2020 Beneficiaries of Safety Nets programs - Female (number) Unit of Measure: Number Indicator Type: Custom Breakdown Baseline Actual (Current) End Target Action Value 0.00 4322.00 600000.00 Revised Date 01-Dec-2014 02-Apr-2018 30-Jun-2020 Proportion of eligible households in the bottom two expenditure quintiles of the NHD that are enrolled as beneficiaries Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 100.00 70.00 Revised Date 01-Dec-2014 02-Apr-2018 30-Jun-2020 Proportion of ISPP beneficiaries receiving at least 50 percent of the maximum benefit amount Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 49.28 60.00 Revised Date 01-Dec-2014 02-Apr-2018 30-Jun-2020 Unions maintaining a single beneficiary registry of at least five safety net programs Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 4.00 100.00 Revised Date 01-Dec-2014 02-Apr-2018 30-Jun-2020 Intermediate Indicators IO_IND_TABLE The World Bank Income Support Program for the Poorest (P146520) Beneficiary pregnant women and mothers who fulfill CNCD* co-responsibility Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 73.00 70.00 No Change Date 01-Dec-2014 02-Apr-2018 30-Jun-2020 Beneficiary pregnant women who fulfill ANC* co-responsibility Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 42.00 70.00 No Change Date 01-Dec-2014 02-Apr-2018 30-Jun-2020 Beneficiary mothers who fulfill monthly GMP co-responsibility Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 76.00 70.00 Revised Date 01-Dec-2014 02-Apr-2018 30-Jun-2020 Proportion of implementing Upazilas processing grievance cases Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 0.00 30.00 Revised Date 01-Dec-2014 02-Apr-2018 30-Jun-2020 Number of Unions/municipal wards on which periodic beneficiary spot checks surveys conducted Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 4.00 20.00 Revised Date 01-Dec-2014 02-Apr-2018 30-Jun-2020 Process evaluation of project cycle conducted Unit of Measure: Yes/No The World Bank Income Support Program for the Poorest (P146520) Indicator Type: Custom Baseline Actual (Current) End Target Action Value No Yes Yes Revised Date 01-Dec-2014 02-Apr-2018 30-Jun-2020 Impact evaluation of providing cash transfers on behavioural changes among beneficiary population conducted Unit of Measure: Yes/No Indicator Type: Custom Baseline Actual (Current) End Target Action Value No No Yes Marked for Deletion Date 01-Dec-2014 02-Apr-2018 30-Jun-2020 Dissemination of monitoring and evaluation reports on annual basis Unit of Measure: Yes/No Indicator Type: Custom Baseline Actual (Current) End Target Action Value No Yes Yes No Change Date 01-Dec-2014 02-Apr-2018 30-Jun-2020 Proportion of ISPP beneficiary mothers who fulfill quarterly GMP co-responsibility Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 76.00 70.00 New Date 01-Dec-2014 02-Apr-2018 30-Jun-2020 OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE DISBURSEMENT ESTIMATES Change in Disbursement Estimates Yes Year Current Proposed 2015 0.00 5,000,000.00 The World Bank Income Support Program for the Poorest (P146520) 2016 5,000,000.00 325,261.50 2017 24,000,000.00 643,640.26 2018 66,000,000.00 5,850,000.00 2019 117,000,000.00 43,530,000.00 2020 88,000,000.00 247,501,098.24 OPS_DETAILEDCHANGES_LEGCOV_TABLE LEGAL COVENANTS Loan/Credit/TF Description Status Action Finance Agreement :Program Operations Manual | Description :The Government of Bangladesh, through the LGD, shall adopt an Operations Manual, in form and substance satisfactory to the Association, which shall After delay complied IDA-55530 No Change set forth, inter alia, (i) the modalities for Cash Transfers with and (ii) detailed arrangements and procedures for institutional coordination and day-to-day execution of the Program. | Due Date: 16-Jul-2015 Finance Agreement :Interagency Coordination with Bangladesh Bureau of Statistics | Description :The Government of Bangladesh, through LGD, shall enter into, and maintain throughout implementation of the Project, a Memorandum of Understanding, on terms After delay complied IDA-55530 No Change and conditions acceptable to the Association, with the with Bangladesh Bureau of Statistics, inter alia, setting out arrangements for the provision of access to lists of poor households based on the data from the Bangladesh Poverty Database. | Due Date: 16-Jul-2015 Finance Agreement :Compliance with Governance and Accountability Action Plan | Description :The IDA-55530 Government of Bangladesh, through LGD, shall carry Complied with No Change out the Project in accordance with the Governance and Accountability Action Plan. | Frequency: CONTINUOUS The World Bank Income Support Program for the Poorest (P146520) Finance Agreement :Interagency Coordination with Directorate General of Health Services | Description :The Government of Bangladesh, through LGD, shall enter into, and maintain throughout implementation of the Project, a Service Agreement, on terms and IDA-55530 Complied with No Change conditions acceptable to the Association, with the Directorate General of Health Services, inter alia, setting out arrangements for the sharing and management of Beneficiary data and the use of community clinics for the provision of services. | Due Date: 16-Jun-2015 Finance Agreement :Interagency Coordination with Postal Directorate | Description :The Government of Bangladesh, through LGD, shall enter into, and maintain throughout implementation of the Project, a Service IDA-55530 Agreement, on terms and conditions acceptable to the Complied with Revised Association, with the Postal Directorate setting out the modalities for electronic Cash Transfer payments to be made to Beneficiaries and acceptable cash transfer fees. | Due Date: 16-Jul-2015 The Government of Bangladesh, through LGD, shall enter into, and maintain throughout implementation of the Project, a Service Agreement, on terms and conditions acceptable to the Association, with the BPO Partially complied Proposed or any other service provider acceptable to the with Association, setting out the modalities for electronic Cash Transfer payments to be made to Beneficiaries, and acceptable Cash Transfer Fees. Finance Agreement :Procurement and fiduciary staffing | Description :The Government of Bangladesh, through the LGD, shall recruit to the Project Management Unit Partially complied IDA-55530 one procurement specialist and two financial No Change with management specialists with qualifications and experience and under terms of reference acceptable to the Association. | Due Date: 16-Oct-2015 Finance Agreement :Compliance with Social Safeguards | Description :The Government of Bangladesh, through IDA-55530 the LGD, shall carry out the Project in accordance with Complied with No Change the Small Ethnic Communities Plan. | Frequency: CONTINUOUS The World Bank Income Support Program for the Poorest (P146520)