Document of The World Bank IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-44790) ON A CREDIT

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Document of The World Bank IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-44790) ON A CREDIT IN THE AMOUNT OF SDR9.3 MILLION (US$ 15 MILLION EQUIVALENT) TO THE REPUBLIC OF CAMEROON FOR A Report No: ICR2365 TRANSPARENCY AND ACCOUNTABILITY CAPACITY BUILDING PROJECT June 27, 2013 Public Sector Reform and Governance Unit, AFTP3 Country Management Unit, AFCC1 Africa Region

2 CURRENCY EQUIVALENTS (Exchange Rate Effective December 31, 2012) Currency Unit=XAF US$ 1.00 = XAF FISCAL YEAR January 1 December 31 ABBREVIATIONS AND ACRONYMS AfDB African Development Bank AFRITAC Africa Regional Technical Assistance Centers ANTILOPE Application Nationale pour le Traitement Informatique et Logistique des Personnels de l Etat (Computerized System of Administrative and Logistics Management for State Personnel) ARMP Agence de Régulation des Marchés Publics (Regulatory Agency for Public Procurement) BEAC Banque des Etats d Afrique Centrale (Bank of Central African States) CAS Country Assistance Strategy CEMAC Communauté Economique et Monétaire d Afrique Centrale(Economic and Monetary Community of Central Africa) CPIA Country Policy and Institutional Assessment CONAC Commission Nationale Anti-Corruption (National Anti-Corruption Commission) CONSUPE Contrôle Supérieur de l Etat (State Superior Audit Institution) CSO Civil Society Organization DGB Direction Générale du Budget (Budget Directorate) DGT Direction Générale du Trésor (Treasury Directorate) DRFi Direction des Affaires Financières DPL Development Policy Lending DSCE Document Stratégique pour la Croissance et l Emploi (Growth and Employment Strategic Paper) EITI Extractive Industries Transparency Initiative EoI Expression of Interest EC European Commission FM Financial Management FMIS Financial Management Information System FMS Financial Management Specialist FY Fiscal Year GDP Gross Domestic Product GIZ Deutsche Gesellschaftfür Internationale Zusammenarbeit (German International Cooperation Agency) GoC Government of Cameroon HIPC Heavily Indebted Poor Countries HRM Human Resource Management ICR Internal Completion Report ii

3 ICT Information and Communication Technology IDA International Development Association IMF International Monetary Fund INS Institut National de la Statistique (National Institute of Statistics) ISN Interim Strategy Note ISR Implementation Status and Results Reports M&E Monitoring & Evaluation MDGs Millennium Development Goals MINEPAT Ministère de l Economie et de la Planification Territoriale (Ministry of EconomicAffairs, Programming and Regional Development) MINFI Ministère des Finances (Ministry of Finance) MINFOPRA Ministère de la Fonction Publique et des Réformes Administratives (Ministry of Public Service and Administrative Reforms) MINMAP Ministère des Marchés Publics (Ministry of Public Procurement) MTEF Medium Term Expenditure Framework PAD Project Appraisal Document PDO Project Development Objective PEFA Public Expenditure & Financial Accountability PEMFAR Public Expenditure Management and Financial Accountability Review PETS Public Expenditures Tracking Survey PFM Public Financial Management PFMDSC Public Financial Management Dialogue Steering Committee PFMDTS Public Financial Management Dialogue Technical Secretariat PFMRAP Public Financial Management Reform Action Plan PFMSC Public Financial Management Steering Committee PFMTS Public Financial Management Technical Secretariat PNG Programme National de Gouvernance (National Governance Program) PPF Project Preparation Facility PRSP Poverty Reduction Strategy Paper PSM Public Sector Management SIL Sector Investment Loan SIGIPES Système Informatique de Gestion Intégrée des Personnels de 1'Etat (Computerized System of Integrated Management of State Personnel) TA Technical Assistance TACD Transparency and Accountability Capacity Development TOR Terms of Reference TTL Task Team Leader Vice President: Makhtar Diop Country Director: Gregor Binkert Sector Manager: Mark Roland Thomas Project Team Leader: Alexandre Arrobbio ICR Team Leader: Alexandre Arrobbio ICR Primary Author: Abel Paul Basile Bove iii

4 Contents 1. Project Context, Development Objectives and Design Key Factors Affecting Implementation and Outcomes Assessment of Outcomes Assessment of Risk to Development Outcome Assessment of Bank and Borrower Performance Lessons Learned Comments on Issues Raised by Borrower/Implementing Agencies/Partners Annex 1: Project Costs and Financing Annex 2: Outputs by Component Annex 3: Economic and Financial Analysis Annex 4:Bank Lending and Implementation Support/Supervision Processes Annex 5: Beneficiary Survey Results Annex 6: Stakeholder Workshop Report and Results Annex 7: Summary of Borrower's ICR and/or Comments on Draft ICR Annex 8: Comments of Cofinanciers and Other Partners/Stakeholders Annex 9: List of Supporting Documents MAP iv

5 CAMEROON TRANSPARENCY AND ACCOUNTABILITY CAPACITY BUILDING PROJECT A. Basic Information Country: Cameroon Project Name: Transparency and Accountability Capacity Building Project Project ID: P L/C/TF Number(s): IDA ICR Date: 06/27/2013 ICR Type: Core ICR Lending Instrument: TAL Borrower: GOVERNMENT OF CAMEROON Original Total Commitment: XDR 9.30M Disbursed Amount: XDR 2.67M Revised Amount: XDR 3.18M Environmental Category: C Implementing Agencies: Secrétariat Technique du Comité de Pilotage de la Réforme des Finances Publiques Cofinanciers and Other External Partners: B. Key Dates Process Date Process Original Date Revised / Actual Date(s) Concept Review: 03/31/2004 Effectiveness: 06/05/ /05/2009 Appraisal: 03/18/2008 Restructuring(s): 12/04/2012 Approval: 06/24/2008 Mid-term Review: 07/31/ /25/2011 Closing: 12/31/ /31/2012 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Risk to Development Outcome: Bank Performance: Borrower Performance: Unsatisfactory Low or Negligible Unsatisfactory Unsatisfactory C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Quality at Entry: Unsatisfactory Government: Unsatisfactory v

6 Quality of Supervision: Unsatisfactory Overall Bank Performance: Unsatisfactory Implementing Agency/Agencies: Overall Borrower Performance: Moderately Unsatisfactory Unsatisfactory C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments Indicators Performance (if any) Potential Problem Project Yes at any time (Yes/No): Problem Project at any time (Yes/No): Yes DO rating before Closing/Inactive status: Unsatisfactory Quality at Entry (QEA): Quality of Supervision (QSA): None None Rating D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) Central government administration General public administration sector Theme Code (as % of total Bank financing) Administrative and civil service reform 25 5 Other public sector governance 25 5 Public expenditure, financial management and procurement E. Bank Staff Positions At ICR At Approval Vice President: Makhtar Diop Obiageli Katryn Ezekwesili Country Director: Gregor Binkert Mary A. Barton-Dock Sector Manager: Mark Roland Thomas Anand Rajaram Project Team Leader: Alexandre Arrobbio Mamadou Lamarane Deme ICR Team Leader: Alexandre Arrobbio ICR Primary Author: Abel Paul Basile Bove F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) The project development objective (PDO) is to contribute (i) to enhance transparency and efficiency in public financial management, and (ii) to strengthen accountability in the use vi

7 of public resource. The project will play a key role in Cameroon in accelerating the pace toward a more orderly and open PFM and thus more efficient service delivery. Revised Project Development Objectives (as approved by original approving authority) (a) PDO Indicator(s) Indicator Indicator 1 : Value quantitative or Qualitative) Baseline Value Original Target Values (from approval documents) Formally Revised Target Values Actual Value Achieved at Completion or Target Years Availibility of information on resources received by service delivery units (PEFA PI-23) D (Source: PEFA Report, 2007) C (source: PETS2 report, 2011) Date achieved 06/30/ /31/ /31/2012 Comments (incl. % achievement) No new PEFA report. However, PETS2 report on 2009 budget was published in dec (NSI website in 2011). No new PETS exercize was produced in 2010, 2011 or Indicator 2 : Public access to key fiscal information (PEFA PI-10) Value quantitative or Qualitative) B (Source: PEFA Report, 2007) A (Source: PEFA Report) Date achieved 12/30/ /31/ /31/2012 Not met. Comments No new PEFA report. Assessment based on information provided by experts in (incl. % the field. Improvements are not significant enough to change the PEFA rating achievement) category. (b) Intermediate Outcome Indicator(s) Indicator Indicator 1 : Value (quantitative or Qualitative) Baseline Value Original Target Values (from approval documents) Formally Revised Target Values C B+ Actual Value Achieved at Completion or Target Years Legal and regulatory texts to enforce the new Budget Law are signed and effective. Decree on new budget Decree on new Application texts have not nomenclature budget been drafted yet (first including nomenclature not quarter 2008) programs, signed drafted. and effective Date achieved 06/30/ /31/ /31/2012 Comments (incl. % achievement) Not met. Nonetheless, in 2012 presidential circulars were published on 2013 Budget preparation and execution monitoring. They included procedures and guidelines on program budgeting. Draft decree on budget calendar was submitted vii

8 to presidency in Indicator 2 : Completeness of the financial statements (in French, Loi de Reglement) (PI-25 i) Value (quantitative or Qualitative) D (Source: PEFA Report, 2007) B (Source: PEFA Report) D+ (Source: own assessment) Date achieved 06/30/ /31/ /31/2012 Not met. No new PEFA report. Comments (Assessment based on information provided by experts in the field with regards (incl. % to LR Financial statement improved but not significantly enough to change achievement) PEFA rating) Percentage of investment projects which are domestically financed in annual Indicator 3 : budget compliant with the new project legal and procedures framework. Value (quantitative or Qualitative) Number of Projects: 0 percent Number of Project: >= 20 percent Date achieved 06/30/ /31/ /31/2012 Comments (incl. % achievement) Indicator 4 : Control steps in expeditor chain Value (quantitative or Qualitative) Date achieved 12/09/ /31/ /31/2012 Comments (incl. % No indication of change. achievement) Percentage of contracts above threshold procured through open competition, in Indicator 5 : selected ministries (Health, Education, Agriculture, Public Works, and Finance). (PI-19 i, modified). Value (quantitative or Qualitative) (To be determined by project effectiveness) In Francs CFA value N/A 100 percent N/A Date achieved 12/31/ /31/ /31/2012 Comments (incl. % Never evaluated. achievement) Indicator 6 : Timeliness of the issue of semi-annual budget reports (PI-24 ii) Value D (Source: PEFA B (Source: PEFA D (source: own (quantitative Report, 2007) Report) assessment) or Qualitative) Date achieved 06/30/ /31/ /31/2012 Comments (incl. % achievement) No PEFA report. Semi-annual budget reports are produced, but delay is superior then 8 weeks. Degree of integration and reconciliation between personnel records and payroll Indicator 7 : data. (PI-18 i) Value D (source: PEFA B (source: PEFA D+ (source: own viii

9 (quantitative or Qualitative) Report, 2007) Report) assessment) Date achieved 06/30/ /31/ /31/2012 No structural change in using the HR and Payroll databases are effective and Comments systematic yet. D+ indicate the gradual efforts since 2005 in cleaning (incl. % progressively the SIGIPES-ANTILOPES databases. Merging of the 2 databases achievement) is in preparation. Indicator 8 : Scope of the legislature scrutiny of the annual budget law. (PI-27-i) Value (quantitative or Qualitative) C (Source: PEFA Report, 2007) B (Source: PEFA Report, 2007) C (source: own assessment) Date achieved 06/30/ /31/ /31/2012 Comments No indication that value has changed from baseline at Nov parliament (incl. % session. achievement) Timeliness of the release of semi-annual budget reports on available media Indicator 9 : (government websites, national newspapers) Value (quantitative or Qualitative) No publication of semiannual budget reports in PM websites and Cameroon Tribune. Timeliness: 2 months Semi-annual budget reports published in Cameroon Tribune only; Timeliness: 3 months Date achieved 06/30/ /31/ /31/2012 Not met. Comments Semi-annual 2012 budget report was published in Cameroon Tribune newspaper (incl. % on sept Not available on PM, DGT, MINEPAT or Presidency websites achievement) however. G. Ratings of Project Performance in ISRs No. Date ISR Archived DO IP Actual Disbursements (USD millions) 1 09/05/2008 Unsatisfactory Unsatisfactory /29/2008 Moderately Satisfactory Moderately Satisfactory /29/2009 Moderately Satisfactory Moderately Satisfactory /31/2009 Moderately Moderately Unsatisfactory Unsatisfactory /23/2010 Moderately Moderately Unsatisfactory Unsatisfactory /24/2011 Unsatisfactory Unsatisfactory /28/2011 Moderately Unsatisfactory Moderately Satisfactory /20/2012 Unsatisfactory Unsatisfactory /14/2013 Unsatisfactory Unsatisfactory 4.12 ix

10 H. Restructuring (if any) Restructuring Date(s) Board Approved PDO Change ISR Ratings at Restructuring DO Amount Disbursed at Restructuring in USD millions 12/04/2012 U U 3.64 IP Reason for Restructuring & Key Changes Made The project was subject to partial fund cancellation (XDR 6.1 million). With the exception of the fund cancellation, the Project s Objective and Results remained unchanged. The proposed change required only minor adjustments with no significant impacts on expected project unsatisfactory performance, enabling the Client to reallocate the cancelled fund to other performing project. I. Disbursement Profile x

11 1. Project Context, Development Objectives and Design 1.1 Context at Appraisal Social, political and macroeconomic context 1. Cameroon has played a leading role in the Central Africa region due to its location, the size of its population, its stability and wealth. Cameroon is a bilingual country with two official languages (French and English). The country is a key member of the Economic and Monetary Community of Central Africa (Communauté Economique et Monétaire d Afrique Centrale, CEMAC) and accounts for about half of the regional community s population and wealth. Over the last 40 years, Cameroon has enjoyed relative stability in a region prone to turbulence. 2. However, at the time of appraisal, economic growth, which relied heavily on the oil sector, was faltering. The revival of the economy following major reforms in the mid-nineties including the devaluation of the local currency in 1994 was short-lived. At appraisal, real GDP had decelerated with an average annual rate of less than 3.0 percent in , down from 4.3 percent in By comparison with regional trends, inequality and poverty levels were still significant and showed few signs of improvement. In 2008, the total population was estimated at 18.5 million people with more than 40 percent living below the poverty line. Ranked 150 out of the 178 countries tracked in the Human Development Index (HDI) in 2008, Cameroon s HDI score had deteriorated over the preceding two decades. The country was not on track for meeting most of the Millennium Development Goals at the time of appraisal. Cameroon s attainment of the Heavily Indebted Poor Countries (HIPC) completion point in April 2006 had yet to translate into significant development results. The country s poor development outcomes were attributed at the time of appraisal to the persistence of governance challenges in public sector management. Governance Efforts 4. Governance constituted a major impediment to economic growth and service delivery in Cameroon. While Cameroon's Country Policy and Institutional Assessment (CPIA) rating of 3.3 in 2006 was close to the Sub-Saharan Africa average of 3.2, the country received a low rating of 2.5 for transparency, accountability, and corruption in the public sector, as well as for property rights and rule-based government. These ratings were consistent with the country s low ranking in the Worldwide Governance Indicators, in which Cameroon had featured below the 25 th percentile for the preceding decade. 5. In recognition of this, the Government of Cameroon (GoC) had embarked upon a series of governance reforms at the time of appraisal. By 2008, Cameroon had undertaken policy and institutional reforms in the following areas: (i) budget reporting and transparency; (ii) Extractive Industries Transparency Initiative (EITI); (iii) public procurement (adoption of a new law, establishment of a regulatory agency and application of sanctions for violations of procurement rules); (iv) establishment of an external audit body, the Chamber of Accounts 1

12 (Chambre des Comptes); and (v) the adoption of a revised National Governance Program (Program National de Gouvernance, PNG) in November 2005, which led to the enactment of several laws on asset disclosure and the creation of an anticorruption commission and a Constitutional Council. Public Sector Management Issues 6. Notwithstanding the Government s reform efforts, many challenges remained, particularly with respect to improving the efficiency of Public Financial Management (PFM) and enhancing transparency. The 2008 Public Expenditure and Financial Accountability Report (PEFA) highlighted areas for improvement in PFM performance in Cameroon: Budget credibility was questionable because of significant gaps between actual out-turns and originally budgeted expenditures (20 percent less in 2004 and 2005). Also, the stock of arrears was not reduced over , reflecting difficulties in controlling the budget. Comprehensiveness and transparency were limited since half of the budget operations (mostly donor-funded projects) were not properly covered, transfers to decentralized entities were not reported, and the budget reports that were made publicly available were either incomplete or unreliable. Policy-based budgeting was weak notwithstanding the application of formal budget preparation processes based on a Medium Term Expenditure Framework (MTEF) and a budget calendar. The participation of line ministries in the budget process was limited. While budget execution was more or less predictable, arrangements for controls of budget execution and stewardship in the use of funds were not fully effective. Controls over payroll, which represented more than 40 percent of the total domestically-financed spending, were weakened by the actual situation of the HR and payroll management systems. The complex and fragmented nature of the expenditure chain translated into belated spending procedures, excessive use of ad hoc regulations, and exceptional procedures such as cash budgeting and advance payments that tended to distort the processes. The procurement controls system did not prevent improper use of sole sourced services and contract splitting. Accounting, recording, and reporting were among the weakest part of the country s PFM system due to obsolescence and only partial integration of the existing Financial Management Information System (FMIS). While the Treasury Balance and Budget Settlement laws (Loi de Règlement) which represent the budget and state financial reports were regularly produced, their quality and reliability were below international standards. External scrutiny and audit were formally organized around the Chamber of Accounts and the National Assembly Finance and Budget Committee (NAFBC) but their independence and efficacy were questionable, since they lacked capacity and were still not fully operational. 7. In the lead up to appraisal, international financial and technical partners had started to closely coordinate to provide complementary support to the GoC 2

13 on PFM reform. Given the breadth and scope of the public sector development program required to improve PFM, neither the GoC nor individual donors could support the program alone. Accordingly, and in line with the Paris Declaration, development partners in Cameroon reached consensus over a joint-working agenda to (i) facilitate a broad review of PFM institutions, policy and performance; (ii) develop a shared action plan to foster fiscal discipline; (iii) consolidate the strategic allocation of resources; and (iv) to increase operational efficiency and improve service delivery. Rationale for Bank involvement 8. The rationale for Bank involvement was underpinned by the three strategic pillars of the 2006 Interim Strategy Note (ISN). In line with the ISN; the Bank intended to focus its assistance on: (i) addressing governance and corruption issues; (ii) managing for results; and (iii) strengthening partnerships, alignment, and harmonization. The proposed operation aimed at assisting the GoC in laying solid foundations for a transition towards increased budgetary assistance, including from the Bank, through Poverty Reduction Strategy Credits (PRSCs). 9. Within the context of multi-donor support and selectivity, the following three criteria were used to guide the choice of project components: (i) activities that consolidate and deepen achievements in public expenditure management and financial accountability accomplished during the preceding years (new budget legal framework, procurement reforms); (ii) cross-cutting issues of PFMRAP (FMIS, Payroll, and Oversight and Controls) in which IDA has a competitive advantage; and (iii) coordination and M&E activities, in which building capacity in reform management and leadership is critical for the country. The results of the January 2008 PEFA report and the close coordination of development partner interventions further assisted the selection of project components. 10. The IDA project formed part of Cameroon s broader PFM reform agenda. Long-term reform of Cameroon s public finances was carried out by the PFM Dialogue Steering Committee (PFMDSC) and its Technical Secretariat (PFMDTS), which development partners supported through a Multi-Donors Committee (Comité Multi-Bailleur CMB). PFMDTS was responsible for overseeing the development and implementation of a PFM Reform Action Plan (PFMRAP). The PFMRAP had not been finalized at the time of project appraisal, due to delays in the diagnostic work. However, the elaboration of the PFMRAP and implementation strategy at the end of 2008 helped the GoC to clarify its strategy on PFM reforms and spell out implementation arrangements, especially in the area of donor coordination. 1.2 Original Project Development Objectives (PDO) and Key Indicators 11. The project development objective (PDO) was to contribute (i) to enhancing transparency and efficiency in public financial management, and (ii) to strengthening accountability in the use of public resource. The project aimed to support Cameroon in accelerating the pace of reform toward more orderly and open management of public finances and thus more efficient service delivery. 3

14 Eleven (11) indicators were chosen to monitor the project s impact and outcomes. The design of the indicators relied heavily on PEFA indicators. 12. The progress toward the project s objective of enhancing transparency and efficiency in PFM was to be measured by one key PEFA indicator (Indicator PI-23). It was considered that this indicator, which addresses the availability of information on resources received by service delivery units, would help to measure the impact of the project activities on the GoC s ability to effectively implement budget allocations in two critical priority sectors, health and education. The National Statistics Institute (Institut National des Statistiques, INS) was expected to annually survey budgeted resources received by schools and health centers, with funding from the project. Cameroon received a score of D in the 2008 PEFA Report for Indicator PI-23) and this should have increased to a score of B in 2012 through the support of the project. 13. The project s objective of strengthening accountability in the use of public resources was also to be evaluated by reference to a PEFA indicator (Indicator PI-10). This indicator, which measures public access to key fiscal information, was intended to be used to capture how the project, through its support to the publication of fiscal data and reports of the National Assembly and the Ministry of Finance (MINFI), influenced the extent to which the general public and interest groups gained access to relevant and quality information on fiscal plans, positions, and performance. The country s score for this indicator was expected to progress from B in 2008 to A by the end of the project in Revised PDO (as approved by original approving authority) and Key Indicators, and reasons/justification Not Applicable. 1.4 Main Beneficiaries 14. The project s primary target beneficiary institutions were government agencies involved in financial and human resources management. These agencies included the MINFI, the Ministry of Economic Affairs, Programming and Regional Development (MINEPAT), the Ministry of Public Function and Administrative Reform (MINFOPRA), the Procurement Regulatory Agency (Agence de Régulation des Marchés Publics, ARMP), and the INS. In line ministries, the project targeted the Budget Directorate, (Direction Générale du Budget, DGB), the Treasury Directorate (Direction Générale du Trésor, DGT), the Capital Expenditures Directorate (Direction de l'investissement), the Financial Resources Management Directorate (Direction des Affaires Financières, DRFi) and the Planning Directorates (Direction de la Planification). The Finance and Budget Committee in the National Assembly and the Douala and Yaoundé Municipalities were also targeted beneficiary institutions. 1.5 Original Components 15. The PDO was to be achieved through the implementation of four project components which represented an estimated IDA financing of US$l5.0 million 4

15 (including an advance Project Preparation Facility [PPF] of US$0.7 million and a contingency fund of $0.9 million). The four components were as follows: Component 1: Improving Budget Management including Procurement (US$4.1M); Component 2: Integration and Development of the FMIS including the HRM and Payroll Management Systems (US$5.9M); Component 3: Strengthening External Oversight and M&E (US$1.9M) Component 4: Support to the Project Focal Point for PFM Reform Coordination (US$1.5M) Component l-improving Budget Management including Procurement (US$4.1M) 16. Component Objectives: In line with the recommendations of the 2006 PEMFAR, and January 2008 PEFA reports, the objective of this component was to support the implementation and further advancement of ongoing budget management reforms following the adoption of the new Organic Law in December 2007, in a bid to improve and accelerate budget execution and enhance budget controls. 17. Component Activities: Under this component, project activities primarily focused on supporting the revision of processes, methods and regulations for budget programming, budget execution including procurement, budget monitoring and controls, and Treasury accounting in the context of the new budget Organic Law. The activities were principally designed to address deficiencies in the management of capital budget and the execution rates of capital budget and investment projects. The activities envisaged under this component included: Assisting the GoC to implement the reforms introduced by the new Organic Law and by the Procurement Code (adopted in 2004); Streamlining the expenditure chain, as well as the public contract execution chain; Strengthening line ministries capacity for project identification, costing and planning, through the design and implementation of project preparation procedures and tools and project cycle training; Modernizing the Treasury through rationalization of its current organization, revision of the accounting chart and the professional development of State accountants and Treasury internal auditors. Improving the performance of the procurement system, through the implementation of the action plan derived from the 2005 Country Procurement Assessment Review (CPAR) with a focus on strengthening the capacity of 50 ministries and public bodies to plan their procurement operations and assisting the seven spending ministries and public bodies with the highest levels of public expenditure (Health, Education, Agriculture, Public Works, Finance, and the municipalities of Douala and Yaoundé) to improve the efficiency and transparency of their procurement processes Component 2-Integration and development of the FMIS including the HRM and Payroll Management (US$5.9M) 5

16 18. This component consisted of 2 sub-components related respectively to the development and integration of the FM Information Applications and to the upgrading of the HRM and Payroll systems. Sub-component 2-1: Integration and development of the FMIS (US$l.7M) 19. Sub-Component Objective: At appraisal, MINFI and more globally the entire government did not have a coherent long-term strategic framework for the development, use and maintenance of Information and Communication Technology (ICT). There was also a lack of capacity in MINFI for modern and professional management of a PFM system in a decentralized environment, where the emphasis was on virtual collaboration between various governmental teams and structures. The objective of this subcomponent was, therefore, to assist MINFI to develop and implement a coherent ICT strategy and plan for incremental upgrades and linkage of the key applications across the ministry (Treasury, Budget, Payroll, Debt, Tax, Customs, etc.) in order to enhance financial reporting and transparency. 20. The sub-component sought to assist the GoC with strategic advice for addressing critical ICT issues and solutions that were likely to be implemented within the framework of PFM reform, without duplicating existing ICT activities financed by the government or donors and without supporting the substantive creation of an online administration (in contrast to the more focused E-Governance IT projects carried out in Ghana, Rwanda, Sri-Lanka, Morocco and Vietnam). Resources for the purchase of equipment, staff training and the development of specific applications were expected to be secured from the GoC s own resources and other donors 21. Sub-Component Activities: The project was to provide technical assistance to MINFI for ICT project management and implementation; including the (i) definition and implementation of a coherent ICT strategy and an action plan for FM system applications; (ii) institutional and technical capacity building; (iii) design and installation of new systems or enhancements to existing systems; (iv) purchase of some hardware and software; (v) upgrade of, and interconnection, among critical financial applications (Treasury, Customs, Tax, Debt Management, Budget, Payroll, etc.); and (vi) training and change management. In addition, the project aimed to support the design and installation of MINFI s website and intranet in order to scale up the level of collaboration and teamwork across the Ministry and beyond. Sub-component 2-2: Modernization of the HRM and Payroll management systems (US$4.2M) 22. Sub-Component Objective: The objective of this subcomponent was primarily to enhance efficiency and transparency and strengthen the controls and checks and balances in the management of personnel and payroll through improvements to the existing information system. Another important objective of this subcomponent was to accelerate the pace of ongoing human resource management (HRM) reform, in particular the decentralization of the personnel and payroll 6

17 management database which constituted a key component of the broader PFM reform agenda. The sub-component was closely aligned to the GoC s commitment to installing a new system for HRM and payroll management. While support for complex civil servant remuneration reforms did not fall within the scope of the project, the sub-component sought to advance the analytical basis upon which future operational or development policy lending support for in-depth civil service reform could be developed. 23. Sub-Component Activities: Project activities sought to assist the MINFI and MINOPRA to properly manage and implement the existing HRM and payroll systems work program. Technical assistance was to be provided to: (i) conduct an audit of the existing HRM system (the Computerized System of Integrated Management of State Personnel or Systeme Informatique de Gestion Intégré des Personnels de 1'Etat, SIGIPES) and payroll system (the Computerized System of Administrative and Logistics Management for State Personnel or Application Nationale pour le Traitement Informatique et Logistique des Personnels de l'etat, ANTILOPE); (ii) accelerate and complete the ongoing efforts to clean up, harmonize, and secure personnel and payroll files to match budget allocations for staff salaries with the actual number of civil servants; (iii) select, set up, configure, stabilize and deploy the most adequate integrated personnel and HRM tool in most of the line Ministries; and (iv) develop on-line accessible administrative procedure manuals to increase transparency in public administration, and to strengthen collaborative work and reduce case file processing times. Training activities were to be financed to strengthen the capacity of staff involved in the implementation of the HRM reform, as well as the HR personnel of the various ministries, in the use and maintenance of new HRM and payroll systems. Some equipment was to be provided to complete the network and broaden the availability of the new HRM and payroll applications to key ministries. A very limited amount of analytical work was also envisaged. Component 3-Strengthening external oversight and M&E (US$1.9M) 24. Component Objective: The objective of this component was to enhance external oversight, communication, and M&E to improve both the effective management of public resources and the fight against corruption, whilst strengthening the capacity of the legislature and citizens to demand accountability. Given the assistance already secured from other donors with respect to oversight and M&E in many of the fiduciary services, the IDA project focused on strengthening the capacity of the National Assembly and the Capital Budget Monitoring Local Committees (Comités Locaux de Suivi des Investissements Publics) in monitoring the execution of investment projects. The component also sought to support the INS in evaluating the impact of public expenditures. 25. Component Activities: The component consisted of three principal activities: First, to strengthen the legislature s formal institutional role in overseeing the use of public resources and examining the Loi de Reglement, the component included strategic and technical support to the National Assembly, in particular the Finance and Budget Committee (NAFBC) for the development of effective procedures, the 7

18 provision of training and office equipment and the creation of a public information web-site. 26. Second, to increase demand for transparency and accountability, support was envisaged for the newly created provincial-level Capital Budget Monitoring Local Committees, which were comprised of local government authorities, elected officers and CSOs. The activities under this component focused on supporting the further development of these Committees, strengthening their capacity to monitor the execution of investment projects in local districts, and assisting the Committees in publishing their reports. 27. Finally, the component sought to address the deficit of publicly available budget and financial information by supporting the development and implementation of an M&E framework involving systematic, timely production and publication of user-friendly communications including key information, analysis, progress reporting and performance measures related to the use of public resources. The framework was intended to strengthen public expenditure tracking. Component activities included: (i) assistance to the INS to develop its methodology for public expenditure tracking surveys, and to deliver training on the methodologies to practitioners in the public sector and civil society; and (ii) support for dissemination of information via the government websites with reference to key international standards. Component 4 Support to the Project Focal Point for PFM reforms coordination (US$l.5M) 28. Component Objective: The institutional arrangements for project preparation and implementation were embedded in existing country systems in order to consolidate and sustain the GoC's leadership in, ownership of, and commitment to the reforms envisaged. The main objective of this component was to support capacity building activities for MINFI and the institutional structures leading the PFM reform agenda to enable them to properly carry out their coordination, monitoring, and leadership roles in advancing PFM reforms in line with Paris Declaration objectives. 29. Component Activities: In coordination with other partners involved in the PFM reform program, this component made provision for technical assistance, equipment and training for the PFM Technical Secretariat to manage both the project and the planned PFMRAP. In particular, the activities envisaged under this component were geared towards strengthening the capacity of the Secretariat to: (i) establish adequate and functional organizational and implementation arrangements for PFM reforms, including the coordination of donor contributions; (ii) execute its fiduciary responsibilities under the project; and (iii) coordinate and monitor project activities. 1.6 Revised Components: Not Applicable 1.7 Other significant changes 8

19 30. Project effectiveness was twice postponed due to delays in satisfying the project s effectiveness conditions. The deadline to satisfy the conditions of effectiveness was originally January 28, This was extended to April 22, 2009, with effectiveness finally declared on June 5, 2009, 13 months after Board approval of the project. 31. The project was subject to partial fund cancellation (XDR 6.1 million) on December 4, 2012, as requested by the Government of Cameroon. Following a bilateral discussion on country portfolio performance to optimize Cameroon s International Development Association (IDA) allocation, the Recipient proposed to the World Bank to close the project before the original closing date (letter from the MINFI, dated February 22, 2012). During the Bank mission of March 12-20, 2012, the Government and the Bank team explored the possibility of advancing the project closing date from December 31, 2012 to June 30, 2012 or keeping the original closing date and stopping activities after June 30, 2012 while cancelling part of the credit funds. It was agreed that the latter option was the most compliant from a legal point of view. The partial cancellation of funds (US$ 9.4 million) and the reallocation of the funds to other IDA-funded performing projects was effected on December 4, The fund cancellation required limited adjustments to the project which mostly consisted of the suspension of project activities after June 30, The fund cancellation did not require any changes to the PDO, safeguard category, project components, financial management and procurement arrangements or institutional arrangements. The suspension of project activities implied the following: no new contracts except the final audit were signed after June 30, 2012, and all on-going procurement processes were cancelled; signed contracts for which services were delivered by June 30, 2012 were executed and paid as initially planned; signed contracts for which execution was planned after June 30, 2012 were subject to cancellation; Contract cancellation costs were paid according to the applicable contract clauses. 33. The cancellation of funds and related suspension of project activities had little impact on the performance of project implementation and it enabled XDR 6.1 million in IDA funds to be reallocated to optimize the Borrower s IDA portfolio. Only few activities would have been delivered between June 30, 2012 and December 31, 2012, according to the procurement plan, and the implementation of these activities would not have changed the project s Unsatisfactory ISR rating. The financial adjustments to the components and expenditure categories related to the cancellation are presented in Annex 10 below. The cancellation amount included a margin for exchange rate risk and liability risk related to the cancellation of contracts. 9

20 2. Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design and Quality at Entry 34. The Project was approved by the World Bank s Board of Directors on June 24, The Financial Agreement between IDA and the GoC was signed on October 30, 2008, and the project was declared effective on June 9, The project had an implementation period of four years with an expected closing date of December 31, The Quality Enhancement Review of the project took place on February 19, At the time of design, the PDO was relevant and consistent with the Bank s Strategy and country program. The PDO was designed to contribute to the implementation of the three pillars of the 2006 Interim Strategy Note (report #37897-CM. Nov. 9, 2006): (i) good governance and anti-corruption, (ii) better service delivery, and (iii) enhanced cooperation with donors. The Project Appraisal Document acknowledged the lessons learned from the most recent County Portfolio Performance Review (CPPR). The PDO continued to be relevant in the context of the Country Assistance Strategy (CAS) for , which incorporated governance as a cross-cutting theme to improve service delivery and promote inclusive growth. 36. The project was aligned with ongoing PFM reform efforts in Cameroon and drew heavily upon the findings of the 2007 Cameroon PEFA report. The project built on the Organic Budget Law, which was adopted in December 2007, and a PFM Reform Action Plan, which was finalized and adopted in In addition, the PEFA report (produced at the end of 2007) provided a rigorous and documented analysis which was used extensively in the design of the project. To achieve the PDO, the project was divided into four operational components: (i) improving Budget Management including Procurement; (ii) integration and development of the FMIS (including the HRM and Payroll Management systems); (iii) strengthening External Oversight and M&E; (iv) support to the Project Focal Point for PFM reforms coordination. 37. The project s implementation arrangements were designed to strengthen coordination with beneficiaries and other donors and promote country ownership. The project design provided for the establishment of a PFM Steering Committee (PFMSC), and a PFM Technical Secretariat (PFMTS). The PFMSC, which was comprised of managerial-level representatives of all of the beneficiaries within and outside of the MINFI and which was headed by the MINFI, was given oversight and supervision responsibilities of project and PFMRAP implementation. Daily management of project activities was delegated to the PFMTS, within the MINFI. The beneficiaries were mainly agencies at the central level involved in budget preparation and execution and financial control and audit. The conferral of primary responsibility for project implementation on the MINFI was intended to further strengthen the coordination of PFM reforms in the country, particularly given that the MINFI was already playing a leading role in driving the PFM reform agenda and coordinating donor support for reform efforts. Project coordination was embedded in existing ministerial structures and 10

21 the MINFI system in order to strengthen country systems. Only the procurement and FM specialists were paid externally. 38. Despite this, the project design was too ambitious with respect to the scope of planned activities and the number of beneficiary institutions intended to be covered. The project sought to address a range of issues from procurement, to public sector reform, to budget planning and execution, to external oversight. This ultimately had the effect of fragmenting the project reform agenda and dispersing finite project resources. Budget responsibilities are divided between the MINFI and the MINEPAT. However, rather than harnessing opportunities to enhance cooperation and integration between these two ministries, the project design sought to involve an extensive array of beneficiaries within and outside the MINFI. In total the project covered 13 beneficiary institutions: 8 line ministries at the central level, the INS, ARMP, the National Assembly, and the municipalities of Yaoundé and Douala. Given the track record of inter-ministerial coordination and collaboration in Cameroon, project implementation was set to be challenging right from the outset. 39. The Project also underestimated the time necessary for the implementation of public sector reforms in Cameroon. The Project set out to implement a series of relatively ambitious reforms within a four year time frame. However, based on the track record of reform implementation in Cameroon, reforms tended to require longer implementation time frames, particularly with regards to transparencyrelated reforms as shown in Annex 11. The Presidential elections in 2011 during project implementation and the slow-down in the pace reform that is common to election periods was not factored into the project time frame. Finally, even though the project implementation period was technically aligned with the legally mandated deadline for the implementation of the new organic law ( ), it was perhaps ambitious to assume that the reform process would adhere strictly to this deadline. 40. In terms of the Project s Result Framework and M&E system, project indicators were appropriately selected but the targets were too ambitious. The indicators were essentially drawn from the latest statistical information available at the time of appraisal (the 2007 PEFA report), as well as output-based indicators such as legal and regulatory texts signed and applied, or budget and financial report produced and published (see Table 1). However, the degree of expected progress in PEFA indicators was overly ambitious. Table 1: PEFA-based TACD indicators PEFA indicator Baseline (2007) Target (2012) PI-23 D B P1-10 B A PI-25 i D B PI-24 ii D B PI-18 i D+ B PI-27 i C B 11

22 41. Finally, the Project did not take sufficiently into account the complexities of the reform process and public sector context in Cameroon. The reform project took place in a complex environment. Public administration in Cameroon is characterized by weak coordination between institutions and administrative structures and a high degree of centralization. According to some international indicators, overall performance of the public administration in Cameroon is limited. For instance, in the 2011 CPIA, Cameroon s score for public sector management fell within the lowest cluster (2.9), in contrast to the country s economic management score of 3.7 and overall score of 3.2. In retrospect, it appears that the context and enabling environment for reform was not sufficiently understood at the time the project was designed. 2.2 Implementation 42. Delays in project effectiveness were not followed by responsive restructuring. The project was approved by the Board on May 27, 2008 and the Financial Agreement on October 30, While the date of effectiveness was expected for December 31, 2008, it actually occurred on June 5, The delay was principally due to the time required for the Client to establish the adequate institutional framework, which was a condition of effectiveness (funding for this was available through the Project Preparation Facility and a PHRD grant). The PFM Steering Committee was established by decree only in February 19, 2009, and there were significant ensuing delays in the establishment of the PFM Technical Secretariat; the finalization of the Project Operational Manual; the recruitment of the procurement and FM specialists; the identification of work space within the Ministries for the PFMTS team; and the acquisition of acquiring material and equipment. However, the delays in project effectiveness did not translate into efforts to postpone the closing date of the Project early into the effective implementation phase or to readjust the implementation arrangements to take into account the emerging implementation weaknesses. 43. Major and recurrent delays in procurement processes affected project implementation. Procurement delays occurred at every step of the process from the definition of terms of reference (ToRs), to the issuance of Requests for Expressions of Interest (EoI), to the assessment of EoIs and proposals, to the signing of contracts. As shown in Annex 5, for the major contracts there was an average delay of 19 months between the originally planned date of submission of proposals in the Procurement plan and the actual date of contract signature. 44. Procurement delays were probably due in part to the limited familiarity of the Project Coordination Unit with Bank procedures. The project was one of the first projects from the Bank or other donors 1 that the Ministry of Finance was charged with implementing. As a result, the Coordination Unit team was not yet familiar with Bank policies, procurement procedures, and project management tools. This affected implementation. 1 The EC-funded project coordinated by the MINFI started earlier (PAGT ), but the project management arrangements were very different the Project s embedded project management unit within the Ministry. 12